[Federal Register Volume 76, Number 88 (Friday, May 6, 2011)]
[Proposed Rules]
[Pages 26342-26362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10681]



[[Page 26341]]

Vol. 76

Friday,

No. 88

May 6, 2011

Part II





Department of Health and Human Services





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 Centers for Medicare & Medicaid Services



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42 CFR Part 447



 Medicare Program; Methods for Assuring Access to Covered Medicaid 
Services; Proposed Rule

  Federal Register / Vol. 76 , No. 88 / Friday, May 6, 2011 / Proposed 
Rules  

[[Page 26342]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 447

[CMS 2328-P]
RIN 0938-AQ54


Medicaid Program; Methods for Assuring Access to Covered Medicaid 
Services

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would create a standardized, transparent 
process for States to follow as part of their broader efforts to 
``assure that payments are consistent with efficiency, economy, and 
quality of care and are sufficient to enlist enough providers so that 
care and services are available under the plan at least to the extent 
that such care and services are available to the general population in 
the geographic area'' as required by section 1902(a)(30)(A) of the 
Social Security Act (the Act). This proposed rule would also recognize, 
as States have requested, electronic publication as an optional means 
of communicating State plan amendments (SPAs) proposed rate-setting 
policy changes to the public.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. July 5, 2011.

ADDRESSES: In commenting, please refer to file code CMS-2328-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address only: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-2328-P, P.O. Box 8016, 
Baltimore, MD 21244-8016. Please allow sufficient time for mailed 
comments to be received before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-2328-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal Government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-7195 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by following the 
instructions at the end of the ``Collection of Information 
Requirements'' section in this document.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Jeremy Silanskis, (410) 786-1592.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following Web site as soon as possible after they have been 
received: http://www.regulations.gov. Follow the search instructions on 
that Web site to view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background

A. General Information

    Title XIX of the Social Security Act (the Act) authorizes the 
Secretary of the Department of Health and Human Services (the 
Secretary) to provide grants to States to help finance programs 
furnishing medical assistance (State Medicaid programs) to specified 
groups of eligible individuals in accordance with an approved State 
plan. ``Medical Assistance'' is defined at section 1905(a) of the Act 
as payment for part or all of the cost of a list of specified care and 
services, or the care and services themselves, or both.
    Federal law provides a broad framework for State Medicaid programs, 
within which States have considerable flexibility. Details concerning 
the scope of covered services, the groups of eligible individuals, the 
payment methodologies for covered services, and all other information 
necessary to assure that the plan can be a basis for Federal Medicaid 
funding must be set forth in the approved Medicaid State plan. To be 
approved by the Department of Health and Human Services, the Medicaid 
State plan must comply with requirements set forth in section 1902(a) 
of the Act, as implemented and interpreted in applicable regulations 
and guidance issued by CMS. The Secretary has delegated overall 
authority for the Federal Medicaid program, including State plan 
approval, to CMS.
    Medicaid services are jointly funded by the Federal and State 
governments in accordance with section 1903(a) of the Act. Section 
1903(a)(1) of the Act provides for payments to States of a percentage 
of expenditures under the approved State plan for covered medical 
assistance. For general medical assistance, the ``Federal medical 
assistance percentage'' (FMAP) varies among the States based on a 
formula set forth in section 1905(b) of the Act that takes into 
consideration State specific information under a formula set forth in 
section 1905(b) of the Act. Beginning in 2014, the Federal Government 
will assume all or a higher share of costs for certain beneficiaries 
made eligible under the Patient Protection and Affordable Care Act of 
2010, (Pub. L.

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111-148, enacted March 23, 2010) (the Affordable Care Act).
    The Medicaid statute requires that States provide coverage to 
certain groups of individuals, and also requires that such coverage 
include certain minimum benefits. In addition, States may elect to 
cover other populations and benefits. In order to give meaning to 
coverage requirements and options, beneficiaries must have meaningful 
access to the health care items and services that are within the scope 
of the covered benefits, as required by section 1902(a)(30)(A) of the 
Act. Many factors affect whether beneficiaries have access to Medicaid 
services, including but not limited to, the beneficiaries' health care 
needs and characteristics, State or local service delivery models, 
procedures for enrolling and reimbursing qualified providers, the 
availability of providers in the community, and Medicaid service 
payment rates to providers.
    States have broad flexibility under the Act to establish service 
delivery systems for covered health care items and services, to design 
the procedures for enrolling providers of such care, and to set the 
methods for establishing provider payment rates. For instance, many 
States provide medical assistance primarily through capitated managed 
care arrangements, while others use fee-for-service payment 
arrangements (with or without primary care case management). 
Increasingly, States are developing service delivery models that 
emphasize medical homes, health homes, or broader integrated care 
delivery systems to provide and coordinate medical services. The 
delivery system design and accompanying payment methodologies can 
significantly shape beneficiaries' abilities to access needed care by 
facilitating the availability of such care. In addition, the delivery 
system model and payment methodologies can improve access to care by 
making available care management teams, physician assistants, community 
care coordinators, telemedicine and telehealth, nurse help lines, 
health information technology and other methods for providing 
coordinated care and services and support in a setting and timeframe 
that meet beneficiary needs.
    As State delivery system models have evolved, so too have their 
provider payment systems. Many States develop rates based on the costs 
of providing the service, a review of the amount paid by commercial 
payers in the private market, or as a percentage of rates paid under 
the Medicare program for equivalent services. Often, rates are updated 
based on specific trending factors such as the Medicare Economic Index 
or a Medicaid trend factor that incorporates a State-determined 
inflation adjustment rate. Rates may include supplemental or incentive 
payments that encourage providers to serve Medicaid populations. For 
instance, some States have authorized Medicaid providers to receive 
supplemental payments for care coordination and care management, or for 
achieving certain specified quality measures.
    The flexibility in designing service delivery systems and provider 
payment methodologies, as described above, is consistent with the 
requirement in section 1902(a)(30)(A) of the Act that State Medicaid 
plans must ``provide such methods and procedures relating to the 
utilization of, and the payment for, care and services available under 
the plan * * * as may be necessary to safeguard against unnecessary 
utilization of such care and services and to assure that payments are 
consistent with efficiency, economy, and quality of care and are 
sufficient to enlist enough providers so that care and services are 
available under the plan at least to the same extent that such care and 
services are available to the general population in the geographic 
area.''
    Consistent with the requirement in section 1902(a)(30)(A) of the 
Act to provide payment for care in an effective and efficient manner 
consistent with quality of care, States are empowered to seek the best 
value through their rate-setting policies and may tailor their access 
strategies to take into account local conditions including geographic 
disparities in the availability of providers and demand for particular 
services. Achieving best value has been a key strategy for some States 
that have attempted to reduce costs in the Medicaid program in these 
difficult fiscal times. We do not intend to impair States' ability to 
pursue that goal, or their ability to explore innovative approaches to 
providing services and lowering costs for other reasons. Indeed, the 
Secretary and CMS, including through the new Center for Medicare and 
Medicaid Innovation, is actively engaged in helping States achieve 
better value and better care while lowering per-person costs.

B. Discussion

    Medicaid payment rate changes are a function of the State budget 
process in many States. We recognize that payment reductions or other 
adjustments to payment rates are legitimate tools to manage Medicaid 
program costs and achieve overall budget objectives. However, payment 
rate changes made without consideration of the potential impact on 
access to care for Medicaid beneficiaries or without effective 
processes for assuring that the impact on access will be monitored, may 
lead to access problems. Payment rate changes are not in compliance 
with the Medicaid access requirements if they result in a denial of 
sufficient access to covered care and services.
    Budget-driven payment changes have led to confusion about the 
analysis required to demonstrate compliance with Medicaid access 
requirements at section 1902(a)(30)(A) of the Act. States attempting to 
reduce Medicaid costs through payment rate changes have increasingly 
been faced with litigation challenging payment rate reductions as 
inconsistent with the access provisions of section 1902(a)(30)(A) of 
the Act. Resulting court decisions have not offered consistent 
approaches to compliance with the access requirement. These decisions 
have left States without clear and consistent guidelines and have 
subjected them to considerable uncertainty as they move forward in 
designing service delivery systems and payment methodologies.
    For instance, the United States Court of Appeals for the Ninth 
Circuit Court, in Orthopedic Hospital v. Belshe, 102 F.3d 1481, 1496 
(1997), cert. denied, 522 U.S. 1044 (1998) required the State agency to 
set provider payment rates that ``bear a reasonable relationship'' to 
provider costs, based on ``responsible cost studies.'' This ruling was 
reaffirmed by the Ninth Circuit in Independent Living v. Maxwell-Jolly, 
572 F.3d 644 (2009). In contrast, the United States Court of Appeals 
for the Seventh Circuit, in The Methodist Hospitals, Inc. v. Sullivan, 
91 F.3d 1026, 1030 (1996) did not find any requirement for prior cost 
studies or other procedural requirements. While other Federal Courts of 
Appeals have also addressed the issue, there is no consensus among the 
circuits.
    Significantly, in 2009, the Congress created the Medicaid and CHIP 
Payment and Access Commission (MACPAC) (Pub. L. 111-3, section 506) 
specifically to study and make recommendations on beneficiary access to 
care in Medicaid and the Children's Health Insurance Program (CHIP). 
With members appointed by the non-partisan U.S. Comptroller General, 
MACPAC reviewed 30 years of research and consulted extensively with key 
stakeholders to develop a recommendation on how to measure access to 
care for Medicaid beneficiaries. This recommendation was in MACPAC's 
first report to the Congress, published on March 15, 2011.

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The MACPAC report sets out the three-part framework for analyzing 
access to care which, as we discuss below in this section of the 
proposed rule, we propose to adopt as part of a State-level review 
strategy. The MACPAC-recommended framework considers: (1) Enrollee 
needs; (2) the availability of care and providers; and (3) utilization 
of services.
    In this proposed rule, we recognize that States must have some 
flexibility in designing the appropriate measures to demonstrate and 
monitor access to care, which reflects unique and evolving State 
service delivery models and service rate structures. At this point, a 
singular approach to meeting the statutory requirement under section 
1902(a)(30)(A) of the Act could prove to be ineffective given current 
limitations on data, local variations in service delivery, beneficiary 
needs, and provider practice roles. For these reasons, we are proposing 
Federal guidelines to frame alternative approaches for States to 
demonstrate consistency with the access requirement using a 
standardized, transparent process, rather than setting nationwide 
standards. We are soliciting comments on this basic approach.
    It is important to note that, if adopted, this proposed rule would 
not directly require States to adjust payment rates, nor to take any 
steps that would not be consistent with efficiency, economy, and 
quality of care. We believe that even if access issues are discovered 
as a result of the analysis that would be required under this rule, 
States may be able to resolve those issues through means other than 
increasing payment rates. Rather, these rules proposed to clarify that 
beneficiary access must be considered in setting and adjusting payment 
methodologies for Medicaid services. If a problem is identified, any 
number of steps might be appropriate, such as redesigning service 
delivery strategies, or improving provider enrollment and retention 
efforts. It has always been within the regulatory authority of CMS to 
make SPA approval decisions based on sufficiency of beneficiary service 
access and this proposed rule merely provides a more consistent and 
transparent way to gather and analyze the necessary information to 
support such reviews.

II. Proposed State Level Review Strategy for Compliance With Access 
Requirements

    We are not aware of any standardized, transparent methodology that 
is broadly accepted to definitively measure access to health care and 
services. Partly as a result, there has been no prior Federal 
rulemaking or guidance previously on this subject. As a consequence, in 
implementing their programs, States lack the guidance that they need to 
understand the types of information that they are expected to analyze 
and monitor in determining compliance with statutory access 
requirements. This issue has come to light recently, both in litigation 
and in our review of proposed Medicaid State plan amendments (SPAs) 
that would reduce provider payment rates. Two Governors and several 
State Medicaid directors have sought Federal guidance in this area, and 
the Congress, by establishing MACPAC, has also expressed its interest 
in promoting more information analysis and guidance with respect to 
these important matters. MACPAC's March report is significant in that 
it offers the first Congressionally-authorized expert recommendation on 
standards and methodologies for defining access to health care and 
health services.
    We have a responsibility under the Act to ensure sufficient 
beneficiary access to covered services and are aware of the 
uncertainties and problems that arise for States in the absence of 
Federal guidance on methods and standards for States to demonstrate 
compliance with this requirement. At the same time, we are mindful that 
the landscape of health care delivery systems and associated payment 
methodologies is undergoing significant change, the relevant data are 
not always available, and that MACPAC, the entity established by the 
Congress to consider these issues, may adapt its first set of 
recommendations.
    As such, the strategy we are now proposing is designed to allow for 
State and Federal review of beneficiary access to evolve over time and 
for States to implement effective and efficient approaches and 
solutions that are appropriate to their local and perhaps changing 
circumstances. The proposed strategy would be a consistent and ongoing 
State-level review to demonstrate sufficient beneficiary access to 
services covered under the Medicaid State plan that is not solely 
focused on provider payment rate changes and the State plan process, 
but assesses ongoing performance.
    We note that section 1902(a)(30)(A) of the Act, and the 
requirements of this proposed rule, discuss access to care for all 
Medicaid services paid through a State plan under fee-for-service and 
do not extend to services provided through managed care arrangements. 
Managed care entities are subject to separate access review procedures 
that are set forth in 42 CFR part 438 to ensure network sufficiency and 
procedures for beneficiaries to obtain needed services. We are 
currently undertaking a review of State managed care access standards 
and are considering future proposals to address access issues under 
managed care delivery systems. The access requirements under section 
1902(a)(30)(A) of the Act, apply equally to States that are not 
changing provider payment rates and those that are. The proposed State 
reviews, however, will provide an analytic framework to consider the 
impact of any proposed Medicaid State plan rate reductions on service 
access.
    More specifically, we propose to require States to determine 
appropriate data elements that focus on the MACPAC-recommended three-
part framework, which include information on: Enrollee needs, 
availability of care and providers, and utilization of services. This 
and other information that the State believes to be relevant, will be 
periodically analyzed by States to demonstrate and monitor sufficient 
access to care. The data and analysis will be made available to the 
public and furnished to CMS as requested in the context of a SPA that 
reduces provider rates or restructures provider payments in 
circumstances that could result in access issues, or as part of ongoing 
program reviews.
    The MACPAC-recommended framework does not focus on one particular 
data element, such as the relationship of provider payment rates to 
provider costs, but recognizes that access to covered services is 
affected by multiple factors. Though cost may be one consideration 
affecting access to care, there are other factors such as local market 
conditions, variable provider costs, administrative burden for 
providers, and demographic differences. Depending upon State 
circumstances, cost-based studies may not always be informative or 
necessary. In addition, because many State payment rates are not 
specifically calculated based on provider cost considerations, it can 
be burdensome and not particularly productive to rely solely on that 
one factor as a measure of access.
    The proposed State-level review strategy would recognize an ongoing 
responsibility to conduct periodic reviews of compliance with access 
requirements for all Medicaid services and also a particular 
responsibility to review and monitor sustained service access after 
implementing a change in provider payment rates. While we are proposing 
to allow States some discretion to determine appropriate measures to 
demonstrate and monitor access to care within the three-part framework, 
this proposal provides consistent steps for States to follow in

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demonstrating and monitoring Medicaid access.
    To ensure continuing compliance review, we propose that States must 
conduct access reviews for a subset of services each calendar year and 
release the results through public records or a web site developed and 
maintained by the State, by January 1st of each year. We have chosen to 
base the requirement on the calendar year because State fiscal years 
vary. We note that States may issue the access reviews prior to, but no 
later than January 1 of each year, with the first review completed by 
no sooner than 12 months after the effective date of the final rule. 
States may determine the services that they will review each year, 
provided that each service is reviewed at least once every 5 years. The 
reviews must include the specific measures that the State used to 
analyze access to care by geographic location, discuss the measures in 
the context of the MACPAC three-part framework, discuss any issues with 
access that were discovered as a result of the review, and make a 
recommendation about the consistency with the requirements of section 
1902(a)(30)(A) of the Act.
    We propose that, prior to submission of a SPA to reduce rates or 
alter the structure of provider payment rates in circumstances that 
could result in access issues for a covered service, the State would 
need to submit information from an access review that had been 
conducted within the year prior to submission of the SPA as applicable. 
We are proposing this requirement so that CMS and the States will have 
the information necessary to assess consistency with section 
1902(a)(30)(A) of the Act before a rate reduction or restructuring 
proposal is processed. Since it may be difficult to predict the impact 
that a provider rate reduction or restructuring of provider payments 
will have on access, we are also proposing that States develop special 
procedures to monitor access to services after such a change has been 
implemented. These procedures would result in a periodic review of 
State-determined indices that demonstrate sustained access to care that 
would be made available to CMS and the public.
    To address potential issues that develop in service access, we are 
proposing that States implement an ongoing mechanism that allows 
beneficiary feedback. This feedback mechanism could be based on 
beneficiary hotlines or surveys, an ombudsman program, or other 
equivalent mechanisms. In addition, we are proposing that each State 
specify a process to address any access issues that are discovered 
through the ongoing access reviews and monitoring, through a corrective 
action plan that would be submitted to CMS and would include specific 
steps and a timeline for State action to address such issues. As 
proposed under this proposed rule, States would need to submit their 
action plan to CMS within 90 days of discovering an access issue. 
Below, in section II.C. of this proposed rule, we offer some examples 
of actions that States may take to address access issues.

A. Data Measures To Demonstrate Sufficiency of Access

    We propose to provide States with discretion in determining the 
appropriate data measures to demonstrate whether access is sufficient 
through access reviews and monitoring efforts in the context of the 
MACPAC-recommended framework. We are offering specific suggestions on 
trends and factors that States could use to measure enrollee needs, the 
availability of care and providers, and utilization, but we would allow 
States to develop alternative approaches and improve on these 
suggestions within each of these categories of required data. We are 
soliciting public comments on additional data measures that may be 
useful in measuring access in the context of the proposed framework and 
whether it is appropriate to require certain data measures as part of 
State access reviews.
    We note at the outset that the data States would review under this 
rule will explicitly address Medicaid beneficiary access. However, the 
required statutory test is a comparison between Medicaid beneficiary 
access and access to medical services by the general population in the 
geographic area. While it is neither desirable nor feasible to require 
that States develop new data sources on general access to medical 
services, the data measures for Medicaid beneficiary fee-for-service 
access may, in some cases, require that States compare information from 
commercial insurance standards or Medicaid managed care. We welcome 
public comment on any existing data sources that address general access 
to medical services that might be relevant. In general, we are 
confident that the Medicaid data will implicitly address general access 
standards in the geographic area. For example, data on beneficiary 
experience and satisfaction will take into account expectations based 
on community standards, and the percentage of community providers 
enrolled and accepting Medicaid patients will necessarily indicate the 
availability of such providers in the community.
    We believe the meeting of enrollee needs should be the primary 
driver to determine whether access to care is sufficient. Measurable 
data on the beneficiaries' experiences and needs, however, may be 
difficult for States to attain. States may need to rely upon 
qualitative information that is received through beneficiary surveys or 
other means, such as hotlines or beneficiary Ombudsman offices that 
some States may have in place, and may request that community-based 
organizations, primary care providers, hospitals, case management, and 
other providers assist in soliciting the information from 
beneficiaries. Once a State determines the most efficient means to 
reach beneficiaries, it has a number of options for data elements that 
could be significant in assessing whether their needs are met:
     Extent of knowledge that a service is covered by the 
Medicaid program;
     Success in scheduling a service appointment with a 
provider, including after hours as necessary;
     Satisfaction with the availability of service providers 
within a reasonable distance from home;
     Ability to obtain transportation to and from a scheduled 
appointment;
     Number and reasons for emergency room services received in 
the year;
     Number and reasons for missed appointments and means;
     Ability to either schedule an appointment or receive 
services in light of limited English language proficiency;
     Turnover in providers such as with homecare workers or 
personal care attendants; and
     Means and ability to seek help in scheduling service 
appointments.
    The connection between the number of enrolled providers and the 
availability of services is seemingly obvious, but there are many 
qualifications that affect the meaningfulness of such data. It may be 
important to know the number of enrolled providers in relation to the 
overall number of providers in the community. And, in order to 
contribute to beneficiary access, it is significant to know whether 
enrolled providers have ``open panels'' which means that they are 
accepting Medicaid patients.
    Data on the availability of care and providers is likely more 
easily obtainable by States, measurable and able to be monitored on a 
consistent basis. Many of the elements that we suggest below are likely 
available through current State information systems, while some of the 
information may require a survey of the providers within the State. 
With that in mind,

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States could review the following data elements:
     The availability of care and services through Medicaid 
fee-for-service as compared to access standards established under 
Medicaid managed care;
     The availability of care and services through Medicaid 
fee-for-service as compared to commercial managed care or other 
commercial insurance access standards.
     The number of providers with open panels who are accepting 
new Medicaid patients;
     The extent to which timely follow-up visits occur after an 
emergency visit or inpatient stay;
     Provider Medicaid enrollment (with open panels) compared 
to licensed providers in the preceding rate year applicable to each 
covered service;
     Provider Medicaid enrollment compared to actual provider 
Medicaid participation (as measured by claims submitted) in the 
preceding rate year applicable to each covered service;
     Provider Medicaid enrollment (with open panels) compared 
to provider enrollment in one of the four largest commercial insurers 
in the State in the preceding rate year applicable to each covered 
service;
     Provider loss and retention in the preceding rate year 
applicable to each covered service;
     The average amount of time from provider application for 
enrollment to the approval of the provider agreement; and
     The average amount of time from provider claim submission 
to payment of the claim by the Medicaid agency.
    Beneficiary service utilization data is relevant because changes in 
beneficiary service utilization can indicate access problems. In 
particular, drops in service utilization that coincide with payment 
changes may indicate access problems. In addition, patterns of 
beneficiaries obtaining access to care through hospital emergency rooms 
may be an indication of the access problems for certain categories of 
services.
    Beneficiary utilization data is readily available through State 
information claims systems and relatively easy for States to review and 
monitor. For purposes of reviewing utilization, States could focus on 
Medicaid utilization of applicable covered Medicaid State plan services 
in the preceding rate year on a per capita basis and also take into 
account that some services apply to subsets of the population (such as 
pediatric services and obstetrics services). States could also look at 
avoidable emergency room visits and hospital admissions to determine if 
there are issues with preventive hospital use that may suggest a 
corresponding access issue.
    Consistent with the performance standard measures described under 
the Affordable Care Act, we are actively working, with input from State 
partners to develop a coordinated and streamlined data solution aimed 
at reducing redundancy, administrative burden, and to maximize business 
value. As we propose to have States review data to measure Medicaid 
access to care, we are mindful that our broader data improvement and 
streamlining efforts that aim to inform program performance and 
compliance may also be useful to States in informing access to care. As 
part of this proposed rule, we are asking States to consider how 
measures of access to care may align with current program oversight and 
review activities so that the access reviews build upon existing State 
data collection efforts that are used to improve overall program 
efficiency and quality. In addition, through our data efforts, we will 
work to identify and highlight data available within CMS and States 
that can inform the State access review under this proposed rule and 
monitor access on a national basis.
    We also will offer States technical assistance in identifying 
available data resources and facilitate cross-State collaboration as 
they undertake the access review procedures proposed under this 
proposed rule. To initiate our technical assistance, we have worked 
with our Federal partners to develop a matrix of potential Federal and 
State data resources which may be helpful to States in developing their 
access reviews. These resources are listed below in section IV. of this 
proposed rule.
    The resources presented in section IV. do not address each data 
element identified in this proposed rule and much of the data will need 
to be obtained from existing or developed State sources. We are 
soliciting public comments and suggestions on these and other existing 
sources of data that may help States inform their rate-setting policies 
and their efforts to ensure service access. We will also develop a 
standardized template for States to report and make publically 
available the data analysis identified under this proposed rule. The 
template will be designed to focus on the data elements that a State 
has reviewed to measure access to care within the MACPAC recommended 
framework, any issues that the State has identified as a result of the 
review, and the State agency's recommendation on the sufficiency of 
access to care based on the review. We are soliciting public comments 
on the content of the access template and specifically, the important 
areas that States should address in their reviews. We believe the 
reviews should address, minimally, the data elements reviewed under the 
MACPAC recommended framework, including the information gathered on 
beneficiary experience, and the Medicaid payment rate comparison. 
However, we are interested in exploring additional topics that should 
be standardized through the template.

B. Public Process To Involve Stakeholders

    In addition to the access rate review, we propose to require a 
public process that States would conduct prior to submitting State plan 
amendments that propose Medicaid provider payment rate reductions or 
changes in the provider payment structure. We are not prescribing a 
specific form for that public process, but we would require that the 
State describe the process that they have developed in their State 
plan. We are soliciting public comments on whether specific elements 
regarding that process should be required. We also encourage States to 
conduct the public process in any instance when the State data 
collection and monitoring process uncovers an access issue. The purpose 
of the public process would be to provide a meaningful opportunity for 
beneficiaries, providers, and other interested parties to provide input 
and feedback on the impact that the proposed rate reductions will have 
on efficiency, economy, and access to care, offer ideas to enhance 
service delivery models and other innovative solutions to address 
access issues, discuss strategies to encourage continued provider 
participation, and develop the procedures that States will use to 
monitor access to care after implementation of the proposed rate 
reductions.
    We are proposing to require this public process in part because we 
have found that States that worked with affected stakeholders prior to 
implementing rate reductions often maintained a commitment from 
providers to continue to serve Medicaid beneficiaries. States have 
frequently held these discussions with the affected provider community. 
We are proposing that States also discuss the impact of proposed rate 
reductions with beneficiaries and other interested parties. As stated 
earlier in section II.A. of this proposed rule, we believe that 
beneficiaries' experiences in receiving services are a primary driver 
in determining the sufficiency of service access and it is important 
that their

[[Page 26347]]

views concerning changes that could directly affect their care be 
solicited.
    Moreover, it is also important to have a public process that 
obtains feedback from all affected stakeholders because each may have 
unique approaches to mediating Medicaid service access issues, 
promoting provider participation in the program, and assuring the 
program operates in an efficient and economical way. As proposed, the 
public process requirements will solicit feedback from stakeholders in 
determining the monitoring and oversight procedures that a State will 
implement to ensure access is sustained after the implementation of a 
rate reduction.

C. Monitoring Access and Corrective Action To Address Access

    As States review their service access data and monitor access after 
implementing rate reductions, it is important to have a process in 
place to address access issues that are uncovered through the new 
process. While we, through official compliance procedures, may address 
issues by requiring the State to develop a corrective action plan 
detailing action steps and timelines to address access issues, we are 
also proposing to allow States to identify access issues and submit a 
corrective action plan within 90 days of discovering the problem. When 
a State develops a corrective action plan on its own, we would not 
treat it as a finding of non-compliance, but as evidence of a good 
faith effort by the State to remain in compliance. Action plans may 
also be developed to improve the State's information base going 
forward, regardless of whether a particular access problem is 
identified.
    While a corrective action plan may have longer term action steps, 
it should set a target for compliance with access requirements that is 
no longer than one year from the submittal of the plan to CMS. We are 
also encouraging States to work with stakeholders through the public 
process to develop monitoring indices to ensure sustained access to 
care and remediation plans that address known access issues. 
Stakeholders can provide valuable input and assistance in the 
identification and implementation of measurable efforts that could 
increase access as appropriate for their local health delivery 
infrastructure, service delivery system, and other factors.
    The precise nature of needed corrective action depends on 
individual State circumstances. For instance, a State could submit 
action steps and a timeline to reduce administrative burdens on 
providers or to implement and oversee a program through which 
beneficiaries receive assistance in finding a service appointment. We 
understand that some States have ``ombudsman'' programs to aid 
beneficiaries in finding service appointments as part of their managed 
care systems and we offer that these programs could serve as one step 
in alleviating fee-for-service access issues or could help pinpoint the 
access issues with great precision. Alternatively, or perhaps in 
addition, a State might seek to incentivize the development or 
expansion of clinics in underserved areas where access is of particular 
concern. States could also structure their service reimbursement rates 
to address particular geographic disparities in service access or to 
offer incentives for available evening and weekend appointments to 
working individuals who may not have flexible schedules to accommodate 
regular work hour appointments. A State could also review, modify or 
implement transportation, telemedicine or integrated models of care 
(such as health homes or primary care case management) policies that 
serve to make care available in efficient and effective ways.
    In proposing to address access to care issues through any of these 
approaches, it would be important for States to describe their process 
for monitoring program effectiveness in improving or maintaining 
service access through use of these action steps so that the State will 
ultimately comply with the requirements at section 1902(a)(30)(A)of the 
Act.

D. Clarification and Electronic Publication of State Public Notice

    In addition to establishing a framework for documenting access to 
covered Medicaid services, this proposed rule would update the public 
notice requirement in Sec.  447.205 by recognizing electronic 
publication as a means to notify the public of payment policy changes. 
We are proposing this change at the request of States to relieve State 
burden. The current regulatory language, which requires publication in 
a State register similar to the Federal Register, the newspaper of 
widest circulation in each city with a population of 50,000 or more, or 
the newspaper of widest circulation in the State, if there is no city 
with a population of 50,000 or more, was drafted prior to widespread 
accessibility of the web and development of State government web sites 
and we are updating the regulation to consider electronic methods of 
publication.
    We are also soliciting public comment on the use of the term 
``significant'' in Sec.  447.205(a). The current public notice 
regulation calls for notice of ``significant'' changes in methods and 
standards, which has resulted in some confusion among States in 
determining when it is appropriate to publish notice. Because the term 
``significant'' is not defined, and because the impact of payment 
changes is not always objectively clear, States are not always clear on 
when it is appropriate to notify the public of changes to rate-setting 
methods and standards.
    Longstanding CMS policy has been to require public notice for any 
change in payment methods and standards because there is no definable 
threshold for a ``significant'' change that can apply across services, 
service providers, beneficiaries and other stakeholders. A change that 
may be significant for one individual or group of stakeholders may not 
be significant to another. Therefore, the historic interpretation has 
been applied because it is important for providers, beneficiaries and 
stakeholders to be aware of all changes in State rate policies and 
evaluate how those changes impact the delivery of Medicaid services. In 
addition, given that the process for amending the approved State plan 
to change provider payment rates is somewhat complex, we do not believe 
that States go through that process for changes that are not 
significant.
    We are soliciting public comments to determine if it is appropriate 
to clarify the public notice requirement at this time. One option to 
clarify the requirement is to remove the reference to significance and 
clarify that any changes in rates, methods and standards require public 
notice as has been consistent with CMS policy. We could also establish 
a threshold for significance.

III. Specific Proposed Regulatory Changes

A. Existing Authorities

    Section 1902(a)(30)(A) of the Act requires that, in order to 
receive Federal Financial Participation (FFP), States must set Medicaid 
service payment rates that are consistent with efficiency, economy, and 
quality of care and are sufficient to enlist enough providers so that 
services are available to Medicaid eligible individuals to the extent 
that they are available to the general population in the geographic 
area. The regulations located at 42 CFR part 447 subpart B (Payment 
Methods: General Provisions) sets forth the implementation requirements 
that States must follow when establishing Medicaid payment rates.

[[Page 26348]]

    Regulations at Sec.  447.203 establish certain documentation 
requirements that the State Medicaid agency must maintain and make 
available to the Department of Health and Human Services upon request. 
Specifically, for any increase in payment rates, the State Medicaid 
agency is required to record an estimate of the percentile of the range 
of customary charges to which the revised payment structure applies, a 
description of the methods used to make the estimate and an estimate of 
the composite average percentage increase of the revised payment rates 
of the preceding rates. This information is recorded in State manuals 
or other official files and applies to individual practitioner 
services.
    As currently described, Sec.  447.203 requires that States document 
a comparison of increased payment rates to customary charges and 
preceding rates at the time that the increase occurs and only for 
practitioner service rates. The documentation requirement does not 
contemplate rate decreases or include a process or timeframe for States 
to update the methodology and make a rate comparison using contemporary 
data. Further, the documentation process does not account for all 
Medicaid provider payments and could be interpreted to exclude payment 
increases for hospital, clinic, long-term care facilities, hospice, 
home health care, durable medical equipment, and other Medicaid service 
rates that encompass costs beyond practitioner services. Clearly, the 
regulation was intended to document potential overpayments for a subset 
of Medicaid service rates and is insufficient, in its current scope, to 
ensure the collection of information on efficiency, economy, and 
adequacy of current payment rates across all services and to measure 
service access.
    Regulations at Sec.  447.204 implement, in part, section 
1902(a)(30)(A) of the Act by adopting into the CFR the statutory 
requirement for comparable general population service availability. The 
regulation replicates the statute, stating that payments must be 
sufficient to enlist enough providers to ensure that services under the 
plan are available to recipients at least to the extent that those 
services are available to the general public. However, the regulation 
does not provide additional guidance to States on standards to 
demonstrate sufficient access to Medicaid services. Without specific 
guidance, States have attempted to comply with this regulation through 
a variety of methods. As discussed in more detail in section III.A. of 
this proposed rule, these methods include: stated assurances, public 
processes, and/or data reviews, each of which may not fully demonstrate 
that rates are sufficient to provide for Medicaid service access 
equivalent to service access available to the general public consistent 
with the statute.
    Regulations at Sec.  447.205 require, with certain exceptions, that 
the State agency provide public notice of any significant proposed 
change in methods and standards for setting Medicaid payment rates. 
Prior to the effective date of a change in methodology, which must be 
submitted to CMS for review through a Medicaid SPA, States are required 
to notify the public of the proposed change through publication of a 
public notice that is published in: a State register similar to the 
Federal Register, or the newspaper of widest circulation in each city 
with a population of 50,000 or more. If there is no city with a 
population of 50,000 or more within the State, the publication must be 
made in the newspaper of widest circulation within the State. The 
regulation specifies that the content of the public notice describe the 
proposed change in methods and standards, explain the reason for the 
change, identify the local agencies where the changes are available for 
public review, provide an address where comments may be sent and 
reviewed by the public, and give the location, date and time for any 
public hearings on the change. The public notice requirement is meant 
to notify stakeholders of rate-setting policy changes that have already 
been determined and does not require that States examine and provide 
the public with any information on the resulting impact on service 
access that the proposed changes may have once such changes have taken 
effect.

B. State Plan Review Process Changes

    Since 2008, as more States sought to amend Medicaid State plan 
payment methodologies by instituting significant provider rate changes, 
we have requested that States provide information to help the agency 
determine that the changes to rates resulting from State plan 
amendments will continue to provide for access to care consistent with 
the Act and the implementing regulations. As part of the SPA review 
process, we requested this information either informally or through a 
formal request for additional information. Though we did not develop a 
standard set of questions for all SPA information requests, similar 
concerns over adherence to the provisions of Sec.  447.204 were raised 
in many of the rate reduction SPA reviews. Without clear standards or 
processes for determining sufficient rates that will maintain access 
and encourage provider participation, States were offered a variety of 
means to satisfy the statutory requirement.
    Based on our current review methods, all States that propose to 
implement rate reductions through a SPA submittal, or change payment 
rate structures during the rate year, respond with a statement assuring 
that access would not be affected by the changes in the amendment. When 
asked for additional detail on the methodology that States used to 
determine compliance with the access requirement, only a few States 
indicated that they relied upon actual data to make the determination. 
Of the States that relied upon data, most focused on historical levels 
of provider enrollment and their belief that providers would not 
disenroll based on a reduction in payments. A few States also looked at 
rates as compared to cost, Medicare rates, or payment rates in 
surrounding States to determine the impact of the reductions. Some 
States noted that historic reductions had no discernible impact on 
provider participation and so they did not anticipate access issues as 
a result of additional reductions.
    Nearly every State held a public meeting that invited some or all 
of the providers to discuss the proposed changes or at least held 
informal discussions with providers and policy-makers. Approximately 
half of the States also included consumer groups and other affected 
stakeholders as part of the rate proposal hearings or discussions. Many 
of these public hearings, however, seemed focused on awareness of the 
coming rate changes, rather than a discussion on the potential impact 
to service access.
    Finally, when asked how they intended to monitor the impact of the 
rate changes on access, a few States indicated that they would review 
data submitted to their Medicaid Management Information Systems to 
determine if services utilization or provider participation levels 
dropped after the changes were implemented. Some States have hotlines 
or other mechanisms to record consumer complaints, although it is not 
clear how widely known these mechanisms are among beneficiaries or how 
the complaints are considered or evaluated over time. The majority of 
States did not offer any plan to monitor the impact of the rate 
reduction on an on-going basis or to make rate adjustments or other 
changes based on the monitoring activities.
    Absent data on the sufficiency of State efforts, including State 
plan rates, to

[[Page 26349]]

achieve access consistent with efficiency, economy, and quality and 
without a defined process for involving stakeholders in rate setting 
determinations, we have generally relied upon State assurances and 
these disparate State approaches to make decisions on proposed rate 
reduction SPAs. It should be noted that in one instance, we informed a 
State that based upon the persistent, widespread negative reaction by 
providers in response to a proposed significant rate reduction of an 
already low rate (by comparison to commercial rates and other State 
Medicaid rates for the same service), that we could not approve a 
reduction amendment as submitted because of concerns that Medicaid 
eligible individuals would no longer have adequate access to care. In a 
similar situation, where a State also failed to provide any information 
or analysis on whether the rate proposal would negatively impact access 
after the implementation of proposed reductions, we have denied the 
relevant SPAs.
    We agree with MACPAC that it is more consistent with the statute to 
make such decisions in the context of a consistent framework for 
evaluating access, informative data and a transparent process that 
assures stakeholder involvement. Therefore, we are proposing clear 
guidelines on data collection efforts and public processes that all 
States must implement in order to demonstrate that rate-setting is 
informed by sustained access to services consistent with the 
requirements of section 1902(a)(30)(A) of the Act.
    We are also proposing to require that States should submit to CMS, 
in support of State plan amendments that reduce payment rates or 
restructure provider payments in circumstance when the resulting 
changes could create access issues, an analysis based on access data 
collected during the prior year. The data itself would be available to 
CMS for review upon request.

C. Standards for CMS Review of Compliance With Access Requirements and 
State Plan Amendments Affecting Access

    As discussed above, we are proposing a State-level ongoing access 
review process that will generate analysis and data concerning access 
issues, and will provide a framework for ongoing monitoring and 
corrective action. We would consider State compliance with these 
procedural requirements, including both the access review process and 
the need for identification of access issues and corrective action 
plans, to be essential to a demonstration of compliance when we review 
proposed State plan amendments that affect access to services, such as 
provider payment reductions or restructuring. When a State has not 
complied with the access review requirements, we would not approve such 
a State plan amendment.
    We have considered and declined to propose setting a single uniform 
Federal standard for reviewing substantive compliance with access 
requirements because we believe that determination of such compliance 
is very fact-specific and data-specific, taking into consideration 
local circumstances.
    In our review of compliance with access requirements, we intend to 
focus on working with States to improve beneficiary access mindful of 
legitimate efforts to ensure that State policies are consistent with 
efficiency and economy, as well as to the potential advantages of 
innovative methods of service delivery, provider payment, and case 
management. However, we will have a perspective in reviewing State-
level access reviews and underlying data that States themselves will 
not have. This is because we will have the advantage of having seen 
similar access reviews from other States and will recognize best 
practices and analytic methodologies based on that experience.
    Federal review will be based on the statutory standard that the 
State must have methods and procedures ``to assure that payments are 
consistent with efficiency, economy, and quality of care, and 
sufficient to enlist enough providers so that care and services under 
the plan are available under the plan at least to the extent that such 
care and services are available to the general population in the 
geographic area.'' We believe that application of this standard 
requires a review and analysis of data in light of local circumstances. 
Determinations of compliance will necessarily involve judgments as to 
how to weigh the data States develop on access measures, and at least 
without more experience and analysis we do not believe those judgments 
can be readily reduced to procedural or substantive formulas. We invite 
comment on possible national or State-specific access threshold tests, 
particularly given that the statutory requirement to measure access to 
care in relation to the availability of care and services to ``the 
general population in the geographic area'' suggests a State-specific 
CMS review.
    In Federal oversight of State-level reviews to determine ongoing 
compliance with the statutory access requirement, we do not intend to 
develop independent analyses of beneficiary access to services, but 
instead will review State analyses to ensure that the State-level 
review process operated to reasonably demonstrate substantive 
compliance with the access requirements. Our review will generally be 
limited to the issues of whether the State collected relevant data on 
each of the required elements, and reasonably analyzed that data to 
find substantive compliance with access requirements. While we intend 
to conduct a case-by-case review of these State-level reviews, we may 
also issue guidance on State-level review practices and may integrate 
such guidance into our Federal oversight review.
    Such guidance may direct the State with respect to the analysis of 
the required data, and we may consider a State analysis to be deficient 
if those practices are not applied. For example, such guidance might 
inform States about how to appropriately weigh different types of data 
to ensure that the resulting analysis reflects overall access. If we 
conclude that a State-level review and analysis is deficient and 
therefore does not reasonably demonstrate compliance with the statutory 
access requirements, we intend to initiate a compliance process (which 
could involve requiring a corrective action plan pursuant to these 
regulations) or, for a pending SPA, we would disapprove the SPA. In 
that latter instance, we note that the State would have an opportunity 
during the reconsideration process to correct deficiencies in the 
State-level review and access analysis.
    We note that Federal oversight of State reviews will likely be more 
stringent when the State proposes changes in provider payment of 
significant magnitude, or when we have other evidence, either through 
data or other sources, of an access problem.
    While we are not proposing any single Federal standard for 
reviewing access issues, we are inviting public comment on whether 
there should be particular indicators that we would regard as an 
irreducible minimum standard. We have not proposed such a minimum 
standard for several reasons. First, it is not clear whether any 
particular indicator is going to be determinative of access issues in 
every circumstance. The access reviews will examine a number of 
indicators, and we believe they are best examined in the aggregate. In 
most cases, we believe that the different indicators that a State 
examines will confirm each other, but in some cases there may actually 
be a reason for a variation in the results that is based on a State-
specific characteristic. In any case, we believe that the overall 
access review process should make serious

[[Page 26350]]

access problems obvious and easily addressed in a case-by-case review. 
We also invite comment from States and others on whether a single or 
small set of Federally determined indicators is preferable 
administratively to a broader set of State determined indictors.

IV. State Use of National Data Resources To Fulfill Proposed Data 
Requirements

    As discussed previously in this proposed rule, we have worked 
closely with our partners within the Federal Government, the MACPAC, 
and a number of experts in an attempt to identify potential sources of 
data that States may use to fulfill their responsibilities under the 
proposal. We recognize that much of the information necessary to 
evaluate access may require States to use existing State data or 
develop or implement new resources, such as a beneficiary survey. We 
also recognize that data from different sources have distinct 
definitions, timeframes for collection, and therefore, challenge and 
limitations exist to trending data reliably. We are soliciting public 
comments on existing sources of data that States may use to ensure that 
they are fulfilling their responsibility to assure access to care and, 
if States are already analyzing data to measure access to care, that 
they share their sources and methods of data collection with other 
States either through public comment to this proposed rule or through 
MACPAC.
    At the Federal level, the Health Resources and Services 
Administration (HRSA) publishes the Uniform Data System, which includes 
patient count, diagnosis and expense data at the grantee, State and 
national levels for HRSA's Federally Qualified Health Center grantees, 
which are funded under section 330 of the Public Health Service Act. 
This information is available at http://www.hrsa.gov/data-statistics/health-center-data/index.html#what. The HRSA also publishes State data 
on shortages in primary care, dental and mental health providers on the 
Health Areas Shortage Designation web site (http://hpsafind.hrsa.gov/HPSASearch.aspx). This information may be of particular use to States 
in targeting specific State locations where access problems are a known 
issue in that geographic area, without regard to payer. The Agency for 
Healthcare Research and Quality (AHRQ) has developed a Medical 
Expenditures Panel Survey, available at http://www.meps.ahrq.gov/mepsweb/data_stats/onsite_datacenter.jsp, which offers surveys of 
families and individuals, medical providers, and employers to document 
cost and use of health care and health insurance coverage. The Centers 
for Disease Control and Prevention (CDC), produces the National 
Ambulatory Medical Care Survey, which describes data on utilization and 
the provision of ambulatory care services in hospital emergency and 
outpatient departments, (http://www.cdc.gov/nchs/ahcd.htm), and the 
National Health Interview Survey, which tracks health status and health 
care access: (http://www.cdc.gov/nchs/nhis.htm).
    We publish a number of Medicare and Medicaid data measures through 
a contractor, the Research Data Assistance Center (RESDAC), (http://www.resdac.org/). In addition, we have developed the Medicare Current 
Beneficiary Survey, which States may find of use in developing surveys 
that track beneficiary experience (https://www.cms.gov/). States may 
also find the U.S. Census Bureau's Current Population Survey of use for 
developing beneficiary questionnaires, http://www.census.gov/.
    For external resources, the State Health Access Data Assistance 
Center (SHADAC) Web site, http://www.shadac.org/, which includes access 
data measures for each State. Finally, as part of MACPAC's three part 
approach to measuring access to care, the Commission offers a number of 
useful survey resources that States may find helpful in their first 
published report to the Congress, which was issued on March 15, 2011, 
(http://www.macpac.gov/reports).
    We are working to improve upon Medicaid data collection and 
analyses more generally and will be soon reaching out to States to help 
us identify the data and measures that are most important to guide 
State and Federal administration of the Medicaid program. We believe 
these broader data and performance measures will ultimately provide new 
resources for States to use as they carry out their important 
responsibilities to assure access to care consistent with the 
principles of efficiency, economy, and quality of care.

V. Provisions of the Proposed Regulations

    The provisions of this proposed rule aim to create a consistent 
national approach to analyze and document Medicaid service access that 
allows States to formulate their own processes, metrics, and approaches 
in light of the range of local factors and circumstances that influence 
access in their State. In addition, the provisions seek to clarify and 
modernize the public notice regulation. As discussed previously in this 
proposed rule, we are proposing to address State processes for setting 
payment rates by amending existing regulations at Sec.  447.203, Sec.  
447.204, and Sec.  447.205. Together, these changes better inform 
States and CMS on beneficiary access as States develop their service 
delivery and payment policies and potentially implement initiatives to 
address access issues.

A. Documentation of Access to Care and Service Payment Rates

    The proposed revisions at Sec.  447.203(b) would require State 
Medicaid agencies to demonstrate access to care by considering: 
Enrollee needs, the availability of care and providers, and the 
utilization of services. We believe that the experiences of 
beneficiaries should be a primary determinant of whether access is 
sufficient and we are soliciting public comments that will serve to 
help States narrow the focus of the data review to core elements that 
will demonstrate sufficient access to care. If beneficiaries are able 
to gain access to care (as required by the Act as equivalent to the 
general population in a geographic area), then clearly the standards of 
the Act have been met regardless of other factors, including payment 
levels. However, if beneficiaries experience difficulty in scheduling 
service appointments or otherwise accessing needed care, then data on 
rates of provider participation and retention, analyses of care 
delivery systems, as well as other relevant factors, including levels 
of payment are important for States to review and potentially adjust.
    We have structured this proposed rule to require that States 
collect information on each of three parts of the MACPAC-recommended 
framework, leaving States the discretion to determine which particular 
metrics they can and should examine. However, we are soliciting public 
comments as to whether the data review should be required on an ongoing 
basis if the beneficiary data demonstrates adequate access to care. In 
part, this may depend on how accurate the beneficiary data may be, and 
we are particularly interested in public comments on the most reliable 
ways to gather beneficiary input across diverse groups of people, some 
with significant physical and mental health problems, language and 
other barriers.
    As proposed, States would be required to review these data elements 
on an ongoing basis and specifically with respect to an affected 
service prior to submitting a Medicaid SPA that proposes service 
payment rate reductions. In terms of the ongoing review, we are 
proposing that States

[[Page 26351]]

would develop a schedule for reviewing each covered service at least 
once every 5 years, looking at a subset of services each calendar year. 
We considered a mandatory schedule for all States to follow to promote 
cross State collaborations and so that comparative data would be 
available. For example, all States would examine access to physician 
services in year one, and hospital services in year two. However, in 
this proposed rule, we are allowing States the discretion to determine 
the timeline and the organization of the review in recognition of 
unique State delivery systems and to allow States to prioritize their 
reviews based on their own sense of urgency, potential issues, or 
anticipated rate modifications. Further, this proposed rule proposes 
that all States have some process in place to hear from beneficiaries 
on access issues, for example, beneficiary survey, a hotline, or an 
ombudsman that is either internal to the agency or a contracted 
community partner. In addition, in this proposed rule, we are proposing 
that States set procedures for their review that will be informed by a 
public process, to monitor sustained access to care after a rate 
reduction is implemented and submit a corrective action plan to CMS to 
address access issues within 90 days of their discovery.
    The data collection requirements are discussed in the proposed 
regulation text at Sec.  447.203(b)(1)(i) through (iii). These 
provisions would require States to review and make publically 
available, data trends and factors that measure: Enrollee needs, 
availability of care and providers, and utilization of services. 
Consistent with the statutory requirement, we have proposed that States 
review this data by State designated geographic location.
    The proposed changes to the regulation text at Sec.  
447.203(b)(1)(iii)(B) would require that the review must include: (1) 
An estimate of the percentile which Medicaid payment represents of the 
estimate average customary provider charges; (2) an estimate of the 
percentile which Medicaid payment represents of one, or more, of the 
following: Medicare payment rates, the average commercial payment 
rates, or the applicable Medicaid allowable cost of the services, and 
(3) an estimate of the composite average percentage increase or 
decrease resulting from any proposed revision in payment rates. We have 
developed this list of comparable payment structures based on our 
experience in how States set rates and the availability of the data in 
the interest of easing the administrative burden associated with the 
data collection effort. In our experience, most States set Medicaid 
rates based on one of the three above-noted structures to which we are 
requiring a comparison and the comparable data should be easily 
obtained. We believe that the payment comparisons are consistent with 
the MACPAC-recommended framework and particularly may be informative of 
the availability of providers, though as discussed, may not be the 
primary indicator or provider participation. We are soliciting public 
comments on these measures.
    We have further clarified the regulation text, at Sec.  
447.203(b)(1)(iii)(B)(3), to state that the Medicaid payment rates must 
include both base and supplemental payments for Medicaid services. It 
is important to include supplemental payments because the supplements 
are tied to the provision of a Medicaid service and will more 
accurately reflect total provider reimbursement. Should States target a 
subset of providers with supplemental payments, this should be noted 
and the targeted amounts recorded in the methodology required at Sec.  
447.203(b)(1)(iii)(B). Since States often reimburse service providers 
according to different payment schedules based on governmental status, 
we have included a provision at Sec.  447.203(b)(1)(iii)(C) that has 
States stratify the access review data by State government owned or 
operated, non-State government owned or operated and private providers. 
Presenting the data in this manner should inform States as to whether 
payments are consistent with efficiency, economy, and quality and 
sufficient to enlist providers consistent with the availability of care 
and services in the geographic area.
    In the proposed regulation text at Sec.  447.203(b)(1)(iii)(D), we 
have described the minimum content that must be included in the rate 
review. Specifically, we require that States describe the measures that 
were used to conduct the review and their relationship to enrollee 
needs, the availability of care and providers, service utilization and 
Medicaid payment rates as compared to other payment structures. We also 
require that States discuss any access issues that were discovered as a 
result of the review and the State agency's recommendation on the 
sufficiency of access to care based on the data review.
    The proposed regulation text at Sec.  447.203(b)(2) describe the 
timeframe for States to conduct the data review and make the 
information available to the public through accessible public records 
or web sites on an on-going basis for all covered services. We propose 
such annual reviews begin no later than 2013, so that States would have 
the discretion to determine a timeframe to review each covered Medicaid 
service, as long as the State reviews a subset of services each year 
and each covered service is reviewed at least once every 5 years. We 
provided States this 5-year cycle to reduce the burden while 
accommodating the need for review to assure compliance with section 
1902(a)(30)(A) of the Act.
    Because of the need to demonstrate service access in the context of 
a payment rate reduction, we describe at Sec.  447.203(b)(3)(i) that 
States will need to conduct its review relevant to the affected service 
prior to submission of a State plan amendment implementing a reduction. 
We believe this is appropriate so that States consider the impact that 
such proposals may have on access to care and demonstrate compliance 
with section 1902(a)(30)(A) of the Act. If the State has already 
reviewed access relating to the types of services that are subject to 
the rate reduction within 12 months prior to the proposed rate 
reduction, and maintains an ongoing monitoring mechanism with respect 
to beneficiary complaints, its review relative to the rate reduction 
can reference the previous review.
    In order to ensure sustained access to care, we have included 
provisions at Sec.  447.203(b)(3)(ii) that require States to develop 
ongoing monitoring procedures through which they periodically review 
indices to measure sustained access to care. The periodic reviews helps 
a State to fulfill its ongoing responsibility to assure access to 
covered services consistent with the Act and forms a solid, informed 
basis by which a State and CMS can consider how any proposed changes 
might impact access. Along with monitoring the review data, it is 
important for States to continue to engage beneficiaries to understand 
their concerns and access issues on an ongoing basis. We have proposed 
to require States to have a mechanism for beneficiary input on access 
to care, such as hotlines, surveys, ombudsman or other equivalent 
mechanisms, at Sec.  447.203(b)(4). Additionally, proposed regulation 
text at Sec.  447.203(b)(5) would institute a corrective action 
procedure requiring States to submit a remediation plan should access 
issues be discovered through the access review or monitoring processes. 
These requirements intend to ensure that States will oversee and 
address any future access concerns.
    After careful consideration, we developed the data elements 
discussed in this provision based on coordination with our Federal 
partners, in light of the MACPAC-recommended three-part

[[Page 26352]]

approach, and in an effort to minimize the administrative burden 
associated with the requirement. Though we recognize that no 
methodology to gauge access to care is flawless, we believe that these 
measures are appropriate to inform whether the Medicaid access 
requirements are met and that the MACPAC-recommended framework has been 
developed after study and based on public and expert input. We are 
soliciting public comments and alternatives to the framework and data 
elements that we have proposed in this proposed rule, the timeline for 
the data review and the process for monitoring and remediating access 
issues.
    We note that the data analysis activities are claimable as 
administrative claiming activities, and reimbursable at the general 50 
percent FFP rate for administrative expenditures, insofar as they are 
necessary for the proper and efficient administration of the Medicaid 
State plan, as described at section 1903(a)(7) of the Act. More 
specifically, utilization review is identified as an allowable Medicaid 
administrative activity in guidance that we issued in a State Medicaid 
Director Letter dated December 20, 1994. We also believe that States 
may be collecting some of this information as part of current review 
efforts for various purposes, including program administration and 
oversight, quality activities, integrity and payment, and are likely to 
be collecting such information by 2014 as part of other performance 
standards and measures required under the Affordable Care Act.

B. Medicaid Provider Participation and Public Process To Inform Access 
to Care

    Regulations at Sec.  447.204 implement the statutory requirement 
that Medicaid rates must be consistent with efficiency, economy, and 
quality and sufficient to enlist enough providers so that services 
under the plan are available to beneficiaries at least to the extent 
that those services are available to the general population. As 
discussed, the sufficiency requirement has been difficult to measure 
due to lack of consistent data, variables in delivery systems, and 
inconsistent State approaches to involving stakeholders in the rate 
development process.
    To address these issues, we are proposing to amend the regulation 
text at Sec.  447.204(a)(1) through (a)(2) to require that States 
consider, when proposing to reduce or restructure Medicaid payment 
rates, the data collected through the proposed requirement at Sec.  
447.203 and undertake a public process that solicits input on the 
potential impact of the proposed reduction of Medicaid service payment 
rates on beneficiary access to care. We have also clarified, at Sec.  
447.204(b) that we may disapprove a proposed rate reduction or 
restructuring SPA that does not include or consider the data review and 
a public process. As an alternative, we may take a compliance action, 
in accordance with regulation text at 42 CFR 430.35 in these instances.

C. Public Notice of Changes in Statewide Methods and Standards for 
Setting Payment Rates

    We are also taking this opportunity to propose clarifying and 
modernizing changes the public notice requirement at Sec.  447.205. The 
substance of the notice is not affected by this action. However, a few 
States have expressed confusion in the past as to when a notice is 
required insofar as the current regulation calls for notice of 
``significant'' changes in payment methods and standards. At this time 
we are soliciting public comments on whether it is advisable to delete 
the term ``significant'' from the paragraph at Sec.  447.205(a) and 
explicitly state that notice is required for any change in rates. 
Alternatively, we are soliciting comments on whether to adopt a 
threshold for significance and what that threshold might be.
    Further, we are proposing to recognize electronic publication as an 
optional means of publishing payment notice. To do so, we are adding 
Sec.  447.205(d)(iv), which would allow notice to be published on a web 
site developed and maintained by the single State Medicaid Agency or 
other responsible State agency that is accessible to the general public 
on the Internet.
    Given the dynamic nature of electronic media, we are proposing the 
following requirements for Internet notices: The notices are published 
on a regular and known basis; the issued notice includes the date that 
it was released to the public on the web site, and that the content of 
the notice is not altered after the initial publication. Based on 
discussions with States, we believe this will reduce State costs and 
allow for a more efficient means to notify the public of changes to 
Medicaid payment methods and standards.

VI. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. ICRs Regarding Documentation of Access to Care and Service Payment 
Rates (Sec.  447.203(b))

    Section 447.203(b) would require that States review and make public 
information that demonstrates sufficient Medicaid access to care, 
through a review of: Enrollee needs, the availability of care and 
providers, utilization of services and service payment rates. States 
would also be required under this provision to monitor data and 
beneficiary input on an ongoing basis and address known access issues 
through corrective action. Through this proposed rule, we would provide 
States with the discretion to determine appropriate data sources that 
will be used to conduct the review. We believe that most of the data 
that will be used to inform access is available to States and may 
already be collected by States as part of Medicaid program reviews and 
payment rate-setting procedures. We also note that States would have 
flexibility to compare Medicaid rates to one or more of Medicare rates, 
commercial rates, or Medicaid cost, as may be appropriate to the 
service under review. The burden associated with these requirements 
would be time and effort associated with analyzing this information, 
making it available to the public, and periodically updating the 
information relative to activities States are already undertaking. We 
have attempted to mitigate any new burden associated with this section 
by identifying data that States are likely to currently possess, by 
identifying other data sources that might be informative to State 
access reviews, and by phasing in the broader service review over 5-
year intervals.

[[Page 26353]]

1. Access to Care Review Timeline
    Section 1902(a)(30)(A) of the Act requires that States ensure that 
access to care is available to Medicaid beneficiaries equivalent to 
care provided to the general population in a geographic area. Since 
this obligation is ongoing and service access may change over time, 
Sec.  447.203(b)(2) requires that States conduct their reviews for a 
subset of services each calendar year and review all covered Medicaid 
services at least once every 5 years. States would have the discretion 
to determine the appropriate services to review each year over the 5-
year period in order to manage their review priorities and resources. 
As an exception to the 5-year timeline, Sec.  447.203(b)(3)(i) would 
require States to conduct the access review in the context of a SPA to 
reduce payment rates or restructure provider payments in circumstance 
when the resulting changes could create access issues prior to the 
submission of a SPA that implements the changes. In this way, States 
would consider the impact that such proposals may have on access to 
care and demonstrate compliance with section 1902(a)(30)(A) of the Act. 
States may complete this review within the prior 12 months of the SPA 
submission.
2. Access to Care Review Framework
    The data analysis activities described under the proposal are 
claimable as administrative claiming activities, and reimbursable at 
the general 50 percent FFP rate for administrative expenditures, 
insofar as they are necessary for the proper and efficient 
administration of the Medicaid State plan, as described at section 
1903(a)(7) of the Act. More specifically, utilization review is 
identified as an allowable Medicaid administrative activity in guidance 
that we issued in a State Medicaid Director Letter dated December 20, 
1994. We also believe that States may be collecting some of this 
information as part of current review efforts for various purposes, 
including program administration and oversight, quality activities, 
integrity and payment, and are likely to be collecting such information 
by 2014 as part of other performance standards and measures required 
under the Affordable Care Act.
    The provisions at Sec.  447.203(b)(1) through (3) would require 
States to review and make publically available, data trends and factors 
that measure: Enrollee needs, availability of care and providers, 
utilization of services, and service payment information. Consistent 
with the statutory requirement, we have proposed that States review 
this data by State designated geographic location. After careful 
consideration, we developed the review framework based on coordination 
with our Federal partners, in light of the MACPAC-recommended three-
part approach, and in an effort to minimize the administrative burden 
associated with the requirement. Though we recognize that no 
methodology to gauge access to care is flawless, we believe that the 
framework, as supported by State data sources, are appropriate to 
inform whether the Medicaid access requirements are met.
    Section 447.203(b)(1)(iii)(B) would require that the review 
include: (1) An estimate of the percentile which Medicaid payment 
represents of the estimate average customary provider charges; (2) an 
estimate of the percentile which Medicaid payment represents of one, or 
more, of the following: Medicare payment rates, the average commercial 
payment rates, or the applicable Medicaid allowable cost of the 
services; and (3) an estimate of the composite average percentage 
increase or decrease resulting from any proposed revision in payment 
rates. We have developed this list of comparable payment structures 
based on our experience in how States set rates and the availability of 
the data in the interest of easing the administrative burden associated 
with the data collection effort. In our experience, most States set 
Medicaid rates based on one of the three above-noted structures and the 
comparable data should be easily obtained. We believe that the payment 
comparisons are consistent with the MACPAC-recommended framework and 
particularly may be informative of the availability of providers, 
though as discussed, may not be the primary indicator or provider 
participation.
    In Sec.  447.203(b)(1)(iii)(B)(3), we clarified that both base and 
supplemental payments for Medicaid services must include supplemental 
payments because the supplements are tied to the provision of a 
Medicaid service and will more accurately reflect total provider 
reimbursement. Should States target a subset of providers with 
supplemental payments, this should be noted and the targeted amounts 
recorded in the methodology required at Sec.  447.203(b)(1)(iii)(B).
    Since States often reimburse service providers according to 
different payment schedules based on governmental status, we have 
included a provision at Sec.  447.203(b)(1)(iii)(C) that has States 
stratify the access review data by State government owned or operated, 
non-State government owned or operated and private providers. 
Presenting the data in this manner should inform States as to whether 
payments are consistent with efficiency, economy, and quality and 
sufficient to enlist providers consistent with the availability of care 
and services in the geographic area.
    In Sec.  447.203(b)(1)(iii)(D), we describe the minimum content 
that must be in included in the rate review. Specifically, we require 
that States describe the measures that were used to conduct the review 
and their relationship to enrollee needs, the availability of care and 
providers, service utilization and Medicaid payment rates as compared 
to other payment structures. We also require that States discuss any 
access issues that were discovered as a result of the review and the 
State agency's recommendation on the sufficiency of access to care 
based on the data review.
    Section 447.203(b)(2) describes the timeframe for States to conduct 
the data review and make the information available to the public 
through accessible public records or web sites on an on-going basis for 
all covered services. We propose such annual reviews begin no later 
than 2013, so that States would have the discretion to determine a 
timeframe to review each covered Medicaid service, as long as the State 
reviews a subset of services each year and each covered service is 
reviewed at least once every 5 years. We provided States this 5-year 
cycle to reduce the burden while accommodating the need for review to 
assure compliance with section 1902(a)(30)(A) of the Act.
    We estimate that the requirements to review and make publically 
available, data trends and factors that measure: Enrollee needs, 
availability of care and providers, utilization of services, and 
Medicaid rate comparisons under Sec.  447.203(b)(1) through (3) would 
affect all States. We have allowed States the flexibility to choose the 
services that they review annually based on available resources and 
State priorities. As such, we assume that States will conduct reviews 
in the context of rate reductions or restructuring payment rates as 
part of their annual ongoing reviews and we consider the burden 
associated with rate reduction reviews as part of the ongoing estimate 
burden.
    An employee equivalent to the Federal Salary Classification of GS 
13 Step 1 could be responsible for gathering review data and developing 
and publishing the content of the data review. An employee equivalent 
to the Federal Salary Classification of a GS 15 Step 1 would be 
responsible for overseeing and approving the data

[[Page 26354]]

review. We have taken these employee assumptions and utilized the 
corresponding employee hourly rates for the locality pay area of 
Washington, DC as published by the U.S. Office of Personnel Management, 
to calculate our cost estimates. We have also calculated the cost by 
assuming that a State expends 36 percent of an employee's hourly wages 
on benefits for the employee. We have concluded that a 36 percent 
expenditure on benefits is an appropriate estimate because it is the 
routine percentage used by HHS for contract cost estimates. Our 
calculations are expressed in Tables 1 and 2.

                                                      Table 1--Access Data Review: Burden per State
                                                                        [Annual]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Cost of
                                                                                                             Employee        employee      Cost per data
            Proposed requirement                          Employee equivalent              Burden hours     hourly wage    benefits per       review
                                                                                                               rate            hour
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gathering Review Data.......................  GS 13 Step 1..............................             160          $42.66          $15.35       $9,281.60
Developing Content of Review................  GS 13 Step 1..............................             100           42.66           15.35        5,801.00
Publishing Content of Review................  GS 13 Step 1..............................              40           42.66           15.35        2,320.40
Reviewing and Approving Review..............  GS 15 Step 1..............................              10           59.30           21.35          806.50
                                                                                         ---------------------------------------------------------------
    Total Burden per State..................  ..........................................             310  ..............  ..............       18,209.50
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Table 2--Access Data Review: Total Burden
                                                    [Annual]
----------------------------------------------------------------------------------------------------------------
                                                                              Cost of review       Total cost
          Anticipated number of State reviews               Total hours         per State         estimate ($)
----------------------------------------------------------------------------------------------------------------
50.....................................................            15,500         $18,209.50        $910,475.00
----------------------------------------------------------------------------------------------------------------

B. ICRs Regarding Monitoring Access (Sec.  447.203(b)(3)(ii))

    Section 447.203(b)(3)(ii) would require States to develop ongoing 
monitoring procedures after reducing or restructuring payments through 
which they periodically review measures of sustained access to care for 
the affected service(s). The periodic reviews are intended to help a 
State fulfill its ongoing responsibility to assure access to covered 
services consistent with the Act and form a solid, informed basis by 
which a State and CMS can consider how any proposed changes might 
affect access. Along with monitoring the review data, it is important 
for States to continue to engage beneficiaries to understand their 
concerns and access issues on an ongoing basis.
    We estimate that the requirement under Sec.  447.203(b)(3)(ii) 
would affect all States that implement a rate reduction or restructure 
payment rates. We are estimating that approximately 22 States will 
implement these rate changes based on the number of States that 
proposed such reductions in FY 2010. An employee equivalent to the 
Federal Salary Classification of a GS 13 Step 1 could develop the 
monitoring procedures and periodically review the monitoring results. 
An employee equivalent to the Federal Salary Classification of a GS 15 
Step 1 would be responsible for overseeing and approve the monitoring 
process. We have taken these employee assumptions and utilized the 
corresponding employee hourly rates for the locality pay area of 
Washington, DC as published by the U.S. Office of Personnel Management, 
to calculate our cost estimates. We have also calculated the cost by 
assuming that a State expends 36 percent of an employee's hourly wages 
on benefits for the employee. We have concluded that a 36 percent 
expenditure on benefits is an appropriate estimate because it is the 
routine percentage used by HHS for contract cost estimates. Our 
calculations are expressed in Tables 3 and 4.

                                                 Table 3--Access Monitoring Procedures: Burden per State
                                                                        [Annual]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Cost of
                                                                                                             Employee        employee      Cost per data
            Proposed requirement                          Employee equivalent              Burden  hours    hourly wage    benefits per       review
                                                                                                               rate            hour
--------------------------------------------------------------------------------------------------------------------------------------------------------
Develop Monitoring Procedures...............  GS 13 Step 1..............................              40          $42.66          $15.35       $2,320.40
Periodically Review Monitoring Results......  GS 13 Step 1..............................              24           42.66           15.35        1,392.24
Approve Monitoring Procedures...............  GS 15 Step 1..............................               3           59.30           21.35          241.95
                                                                                         ---------------------------------------------------------------
    Total Burden per State..................  ..........................................              67  ..............  ..............        3,954.59
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 26355]]


                               Table 4--Access Monitoring Procedures: Total Burden
                                                    [Annual]
----------------------------------------------------------------------------------------------------------------
                                                                              Cost of review       Total cost
          Anticipated number of State reviews               Total hours         per State         estimate ($)
----------------------------------------------------------------------------------------------------------------
22.....................................................             1,474          $3,954.59         $87,000.98
----------------------------------------------------------------------------------------------------------------

C. ICRs Regarding Beneficiary Feedback (Sec.  447.203(b)(4))

    Section 447.203(b)(4) would require States to have a mechanism for 
obtaining beneficiary feedback on access to care, such as hotlines, 
surveys, ombudsman or other equivalent mechanisms.
    We estimate that the requirement under Sec.  447.203(b)(4) would 
affect all States that do not currently have a means of beneficiary 
feedback. Since we currently do not know which States have implemented 
these mechanisms, we are assuming in our estimate that all States will 
need to develop new mechanisms. An employee equivalent to the Federal 
Salary Classification of a GS 9 Step 1 could develop and oversee the 
feedback effort. An employee equivalent to the Federal Salary 
Classification of a GS 15 Step 1 would be responsible for approving the 
feedback effort. We have taken these employee assumptions and utilized 
the corresponding employee hourly rates for the locality pay area of 
Washington, DC as published by the U.S. Office of Personnel Management, 
to calculate our cost estimates. We have also calculated the cost by 
assuming that a State expends 36 percent of an employee's hourly wages 
on benefits for the employee. We have concluded that a 36 percent 
expenditure on benefits is an appropriate estimate because it is the 
routine percentage used by HHS for contract cost estimates. Our 
calculations are expressed in Tables 5 and 6.

                                                Table 5--Beneficiary Feedback Mechanism: Burden per State
                                                                        [Annual]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Cost of
                                                                                                             Employee        employee      Cost per data
            Proposed requirement                          Employee equivalent              Burden hours     hourly wage    benefits per       review
                                                                                                               rate            hour
--------------------------------------------------------------------------------------------------------------------------------------------------------
Developing Feedback Effort..................  GS 9 Step 1...............................             100          $24.74           $8.90       $3,364.00
Monitoring Feedback Results.................  GS 9 Step 1...............................              24           24.74            8.90          807.36
Approve Feedback Effort.....................  GS 15 Step 1..............................               5           59.30           21.35          403.25
                                                                                         ---------------------------------------------------------------
    Total Burden per State..................  ..........................................             129  ..............  ..............        4,574.61
--------------------------------------------------------------------------------------------------------------------------------------------------------



                              Table 6--Beneficiary Feedback Mechanism: Total Burden
                                                    [Annual]
----------------------------------------------------------------------------------------------------------------
                                                                              Cost of review       Total cost
          Anticipated number of State reviews               Total hours         per State         estimate ($)
----------------------------------------------------------------------------------------------------------------
50.....................................................             6,450          $4,574.61        $228,730.50
----------------------------------------------------------------------------------------------------------------

D. ICRs Regarding Corrective Action Plan (Sec.  447.203(b)(5))

    Section 447.203(b)(5) would institute a corrective action procedure 
that requires States to submit to CMS a remediation plan should access 
issues be discovered through the access review or monitoring processes. 
The requirement is intended to ensure that States will oversee and 
address any future access concerns.
    We estimate that the requirement under Sec.  447.203(b)(5) would 
affect all States that identify access issues. We are estimating that 
approximately 10 States will identify access issues and submit 
corrective action plans to CMS. This is a new requirement and we have 
no basis to determine how many States will identify access issues as 
they conduct the data reviews and monitoring activities. We assume that 
many States currently have mechanisms in place to monitor access to 
care and identify issues. However, we are careful not to under-estimate 
the burden associated with this provision and we believe that a maximum 
of 10 States may identify access issues per year. An employee 
equivalent to the Federal Salary Classification of a GS 13 Step 1 could 
identify issues that require corrective action and develop the plan to 
submit to CMS. An employee equivalent to the Federal Salary 
Classification of a GS 15 Step 1 would be responsible for review and 
approving the plan. We have taken these employee assumptions and 
utilized the corresponding employee hourly rates for the locality pay 
area of Washington, DC as published by the U.S. Office of Personnel 
Management, to calculate our cost estimates. We have also calculated 
the cost by assuming that a State expends 36 percent of an employee's 
hourly wages on benefits for the employee. We have concluded that a 36 
percent expenditure on benefits is an appropriate estimate because it 
is the routine percentage used by HHS for contract cost estimates. Our 
calculations are expressed in Tables 7 and 8.

[[Page 26356]]



                                                    Table 7--Corrective Action Plan: Burden per State
                                                                        [Annual]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Cost of
                                                                                                             Employee        employee      Cost per data
            Proposed requirement                          Employee equivalent              Burden hours     hourly wage    benefits per       review
                                                                                                               rate            hour
--------------------------------------------------------------------------------------------------------------------------------------------------------
Identifying Issues for Action...............  GS 13 Step 1..............................              20          $42.66          $15.35       $1,160.20
Developing the Corrective Plan..............  GS 13 Step 1..............................              40           42.66           15.35        2,320.40
Approve Corrective Plan.....................  GS 15 Step 1..............................               3           59.30           21.35          241.95
                                                                                         ---------------------------------------------------------------
    Total Burden Per State..................  ..........................................              63  ..............  ..............       $3,722.55
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                  Table 8--Corrective Action Plan: Total Burden
                                                    [Annual]
----------------------------------------------------------------------------------------------------------------
                                                                              Cost of review       Total cost
          Anticipated number of state reviews               Total hours         per state         estimate ($)
----------------------------------------------------------------------------------------------------------------
10.....................................................               630          $3,722.55         $37,225.50
----------------------------------------------------------------------------------------------------------------

E. ICRs Regarding Public Process to Engage Stakeholders (Sec.  447.204)

    Section 447.204 implements the statutory requirement specifying 
that Medicaid rates must be consistent with efficiency, economy, and 
quality and must also be sufficient to enlist enough providers so that 
services under the plan are available to beneficiaries at least to the 
extent that those services are available to the general population. As 
discussed in section I. of this proposed rule, the sufficiency 
requirement has been difficult to measure due to lack of consistent 
data, variables in delivery systems, and inconsistent State approaches 
to involving stakeholders in the rate development process.
    To address these issues, Sec.  447.204(a)(1) and (a)(2) would 
require that States consider (when proposing to reduce Medicaid payment 
rates) the data collected through Sec.  447.203 and undertake a public 
process that solicits input on the potential impact of the proposed 
reduction or restructuring of Medicaid service payment rates on 
beneficiary access to care. We have also clarified, at Sec.  447.204(b) 
that we may disapprove a proposed rate reduction or restructuring SPA 
that does not include or consider the data review and a public process. 
As an alternative, we may take a compliance action, in accordance with 
regulation text at Sec.  430.35 in these instances.
    We are estimating that approximately 22 States will implement these 
rate changes that would require a public process based on the number of 
States that proposed such reductions in FY 2010. An employee equivalent 
to the Federal Salary Classification of a GS 9 Step 1 could develop and 
oversee the public process effort. An employee equivalent to the 
Federal Salary Classification of a GS 15 Step 1 would be responsible 
for approving the public process effort. We have taken these employee 
assumptions and utilized the corresponding employee hourly rates for 
the locality pay area of Washington, DC as published by the U.S. Office 
of Personnel Management, to calculate our cost estimates. We have also 
calculated the cost by assuming that a State expends 36 percent of an 
employee's hourly wages on benefits for the employee. We have concluded 
that a 36 percent expenditure on benefits is an appropriate estimate 
because it is the routine percentage used by HHS for contract cost 
estimates. Our calculations are expressed in Tables 9 and 10.

                                                        Table 9--Public Process: Burden per State
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Cost of
                                                                                                             Employee        employee      Cost per data
            Proposed requirement                          Employee equivalent              Burden hours     hourly wage    benefits per       review
                                                                                                               rate            hour
--------------------------------------------------------------------------------------------------------------------------------------------------------
Develop the Public Process..................  GS 9 Step 1...............................              20          $24.74           $8.90         $672.80
Oversee the Public Process..................  GS 9 Step 1...............................              40           24.74            8.90         1345.60
Approve Public Process......................  GS 15 Step 1..............................               3           59.30           21.35          241.95
                                                                                         ---------------------------------------------------------------
    Total Burden Per State..................  ..........................................              63  ..............  ..............        2,260.35
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                     Table 10--Public Process: Total Burden
                                                    [Annual]
----------------------------------------------------------------------------------------------------------------
                                                                              Cost of review       Total cost
          Anticipated number of state reviews               Total hours         per state         estimate ($)
----------------------------------------------------------------------------------------------------------------
22.....................................................             1,386          $2,260.35         $49,727.70
----------------------------------------------------------------------------------------------------------------


[[Page 26357]]

F. ICRs Regarding Public Notice of Changes in Statewide Methods and 
Standards for Setting Payment Rates (Sec.  447.205)

    The proposed provisions at Sec.  447.205 would clarify when States 
must issue public notice to providers and would allow for the 
electronic publication of those notices. Section 447.205(d)(2)(iv)(A) 
through (C) would allow those notices to be published on the single 
State Medicaid Agency or other State developed and maintained web site 
that is accessible to the general public via the Internet.
    The burden associated with developing and issuing public notice at 
Sec.  447.205 is not affected by this proposed action since the 
revision would simply allow for an additional (in this case, 
electronic) means of notification. Consequently, we do not include the 
electronic notice activity in our burden analysis.

[[Page 26358]]

[GRAPHIC] [TIFF OMITTED] TP06MY11.000

    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    1. Submit your comments electronically as specified in the

[[Page 26359]]

ADDRESSES section of this proposed rule; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
CMS-2328-P Fax: (202) 395-6974; or Email: [email protected]

VII. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

VIII. Regulatory Impact Statement

A. Statement of Need

    This proposed rule would revise regulatory provisions in Sec.  
447.203 and Sec.  447.204 to create a standardized, transparent process 
for States to follow as part of their broader efforts to assure that 
payments are consistent with efficiency, economy, and quality of care 
and are sufficient to enlist enough providers so that care and services 
are available to the general population in the geographic area, as 
required by section 1902(a)(30)(A) of the Act. This proposed rule would 
also clarify and amend the regulations at Sec.  447.205, which require 
States to issue public notice to their providers when changing Medicaid 
payment methods and standards. The proposed changes to the public 
notice requirement intend to alleviate confusion on when States must 
issue notice to providers and recognize electronic media as a means to 
issue the notices.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA)) (September 
19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 and 13563 direct agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). We do not 
believe that there is potential for this provision to surpass the 
threshold for economic significance because the proposed data analysis 
effort is generally consistent with current State oversight and review 
activities and States have flexibility within the reviews to use their 
existing data or build upon that data when reviewing access to care.
    In fact, the guidance provided under the proposal intends to focus 
disparate State efforts in monitoring and overseeing data and 
beneficiary concerns, which offers a clear framework to comply with 
section 1902(a)(30)(A) of the Act. In the absence of Federal guidance, 
States have likely misspent resources in efforts to interpret and 
comply with section 1902(a)(30)(A) of the Act. We will also make every 
effort, in collaboration with State and Federal partners, to identify 
resources and tools that States may use to review and monitor access to 
care within their State Medicaid programs. In this proposed rule, we 
are soliciting public comments to begin identifying data sources and 
will continue to provide assistance as States develop their reviews and 
monitoring procedures.
    We estimate that even if these data collection efforts were, in 
fact, totally new to a State and each State were to either bid a 
contract to gather and publish the data collection effort and public 
process required under this proposed rule or conduct the collection and 
public process with State agency resources, the economic effects would 
not surpass $100 million or more in any 1 year.
    Further, we are not requiring that States directly adjust payment 
rates as a result of the provisions of this proposed rule, nor to take 
any steps that would not be consistent with efficiency, economy, and 
quality of care. Rather, these rules propose to make clear that 
beneficiary access must be considered in setting and adjusting payment 
methodology for Medicaid services. If a problem is identified, any 
number of steps might be appropriate, such as redesigning service 
delivery strategies, or improving provider enrollment and retention 
efforts. It has always been within the regulatory authority of the CMS 
to make SPA approval decisions based on sufficiency of beneficiary 
service access and this proposed rule merely provides a more consistent 
and transparent way to gather and analyze the necessary information to 
support such reviews.
    The RFA requires agencies to analyze options for regulatory relief 
for small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small government 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
$7.0 million to $34.5 million in any 1 year. For details, see the Small 
Business Administration's Web site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=2465b064ba6965cc1fbd2eae60854b11&rgn=div8&view=text&node=13:1.0.1.1.16.1.266.9&idno=13. Individuals and States are not included 
in the definition of a small entity. We are not preparing an analysis 
for the RFA because we and the Secretary have determined that this 
proposed rule would not have a significant economic impact on a 
substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area for Medicare payment regulations and has fewer than 
100 beds. We are not preparing an analysis for section 1102(b) of the 
Act because we and the Secretary have determined that this proposed 
rule would not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2011, that 
threshold is approximately $136 million.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this regulation does not impose costs above $135 
million or more on

[[Page 26360]]

State or local governments, the requirements of E.O. 13132 are not 
applicable.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

C. Regulatory Alternatives Considered

    This section provides an overview of regulatory alternatives that 
CMS considered for this proposed rule. In determining the appropriate 
approach to guide States in their efforts to meet the requirements of 
section 1902(a)(30)(A) of the Act and demonstrate sufficient access to 
Medicaid services, we consulted with State Medicaid directors, Federal 
agency policy officials and the MACPAC. Based, in part, on these 
discussions we arrived at the provisions proposed in this proposed 
rule, which seek to balance State obligations to meet the statutory 
requirement of section 1902(a)(30)(A) of the Act and potential new 
burden associated with the proposal. To achieve this balance, we have 
set forth a process that provides a framework for States to demonstrate 
access to Medicaid services using available data resources and in 
consideration of unique and evolving health care delivery systems. We 
have also emphasized the importance of considering beneficiary input in 
determining and monitoring access to Medicaid services throughout the 
process as discussed in this proposed rule.
1. Access Data Review
    The process for documenting access to care and service payment 
rates described at Sec.  447.203 would require States to publish access 
data reviews that discuss, as recommended by MACPAC, the extent to 
which enrollee needs are met, the availability of care and providers, 
and changes in beneficiary utilization of covered services. The review 
would also include a comparison of Medicaid payment rates to customary 
charges and Medicare, commercial payments, or provider cost. The 
reviews are to be conducted over 5-year periods for all services 
covered in a State's Medicaid State plan or, in the context of a State 
plan amendment proposal to reduce provider rates or restructure 
provider rates in circumstance that may negatively impact access to 
care, within 12 months of implementing the State plan amendment.
    As an alternative to the MACPAC-recommended framework for reviewing 
access to care, we considered requiring States to report standard data 
measures to demonstrate sufficient access to care and section 
1902(a)(30)(A) of the Act. We also considered setting national access 
thresholds or requiring States to establish and demonstrate access 
thresholds. As we have highlighted throughout this proposed rule, there 
are no standardized, transparent methodologies for demonstrating access 
to care that would be appropriate to adopt at this time. A singular 
approach to demonstrating access may not consider differences in 
Medicaid benefits and State or local delivery models. For instance, the 
appropriate data to measure access to Medicaid long-term care services 
provided through personal care providers could be very different from 
data used to measure access to acute care services delivered in a 
hospital facility that offers outpatient care.
    Rather than prescribe data measures that may not align with all 
services or set threshold standards, we have adopted the MACPAC-
recommended framework, which sets forth a three-part review that 
applies across services and delivery systems and will allow States the 
flexibility to determine, through current or new data sources, 
appropriate measures of access to care. As States analyze their 
existing data sources and those that we identify through work with 
MACPAC and our Federal partners, we believe that States may arrive at 
best practices for determining sufficient Medicaid access to care which 
could be replicated across State delivery systems and will evolve with 
new approaches to delivering health care to Medicaid beneficiaries.
2. Access Review Timeframe and Monitoring Procedures
    In this proposed rule, we are proposing that access data reviews be 
conducted over 5-year periods for all services covered in a State's 
Medicaid State plan or, in the context of a provider rate reduction or 
restructuring of provider rates that may negatively affect access to 
care, within 12 months of implementing the State plan amendment. We 
have arrived at the 5-year ongoing review to allow States to determine 
the best use of available State resources in conducting the access 
review and to prioritize the review in light of program changes or 
particular access concerns.
    We considered requiring the review on an annual basis or a review 
period that is more frequent than 5 years. However, the burden 
associated with an annual review would likely be high and may not 
demonstrate any changes in access to care if the payment rates and 
service delivery systems remain stable. We believe that, absent rate 
reductions or restructuring of payments, the 5-year review periods, 
combined with ongoing solicitation of information about access from 
beneficiaries, are sufficient to identify access issues that may occur 
over time, while also allowing the States the flexibility to prioritize 
the reviews. We also considered prescribing the services that States 
would be required to review each year so that there is national 
consistency in the access reviews. However, since the objective of this 
proposed rule is to provide States with a framework to demonstrate 
access to care consistent with section 1902(a)(30)(A) of the Act rather 
than to conduct a national study of access, we determined it 
appropriate to allow States the flexibility to choose which services to 
review each year based on their priorities.
    This proposed rule would require that States develop monitoring 
procedures after implementing provider rate reductions or restructuring 
rates in ways that may negatively impact access to care. We require 
these monitoring procedures because the impact of rate changes on 
access to care may not be apparent at the time the changes are adopted. 
We considered not requiring States to monitor access after implementing 
the changes and to continue to rely on the 5-year reviews to ensure 
that access is maintained. However, we believe that it is important for 
States to identify and address access issues that arise from specific 
SPA actions, such as reimbursement rate reductions.
3. Beneficiary Input on Access to Care
    The proposed changes to Sec.  447.203 and Sec.  447.204 emphasize 
the importance of involving beneficiaries in determining access issues 
and the impact that State rate changes will have on access to care. 
Specifically, we require that States implement an ongoing mechanism for 
beneficiary input on access to care (through hotlines, surveys, 
ombudsman, or another equivalent mechanism) and receive input from 
beneficiaries (and affected stakeholders) on the impact that proposed 
rates changes will have through a public process. We believe that 
beneficiaries' experiences in accessing Medicaid services is the most 
important indicator of whether access is sufficient and beneficiary 
input will be particularly informative in identifying access issues.
    We also considered a requirement that States consult with 
beneficiaries when developing their corrective action plans in 
instances when the access data reviews or monitoring procedures 
identify access issues. While we

[[Page 26361]]

encourage States to solicit beneficiary input on corrective action 
plans, we did not make this a specific regulatory requirement and we 
leave this to the States' discretion to develop the corrective action 
plans as part of their current policy development methods.

List of Subjects in 42 CFR Part 447

    Accounting, Administrative practice and procedure, Drugs, Grant 
programs--health, Health facilities, Health professions, Medicaid, 
Reporting and recordkeeping requirements, and Rural areas.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services would amend 42 CFR chapter IV as set forth below:

PART 447--PAYMENTS FOR SERVICES

    1. The authority citation for part 447 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

Subpart B--Payment Methods: General Provisions

    2. Section 447.203 is amended by--
    A. Revising the section heading.
    B. Revising paragraph (b).
    The revisions read as follows:


Sec.  447.203  Documentation of access to care and service payment 
rates.

* * * * *
    (b) The agency must record and update, medical assistance access 
reviews for each covered benefit, in accordance with timeline describe 
in paragraph (c) of this section. Such reviews must be published or 
promptly made available upon request to the public and furnished, upon 
request, to CMS. The access reviews must include the items specified in 
this section, as well as trends and factors, which may vary by 
geographic location within the State, which will be used to inform 
State policies affecting access to Medicaid services, such as provider 
payment rates.
    (1) Access review data requirements. States must document in their 
access review, using data trends and factors, an analysis that 
demonstrates sufficient access to care, considering, at a minimum:
    (i) The extent to which enrollee needs are met;
    (ii) The availability of care and providers; and
    (iii) Changes in beneficiary utilization of covered services. The 
access review must also include the following information:
    (A) Beneficiary information. Relevant beneficiary information as 
described in paragraph (b)(4) of this section.
    (B) Access review medicaid payment data. The review must include 
all of the following:
    (1) An estimate of the percentile, which Medicaid payment 
represents of the estimated average customary provider charges.
    (2) An estimate of the percentile, which Medicaid payment 
represents of one, or more, of the following: Medicare payment rates, 
the average commercial payment rates, or the applicable Medicaid 
allowable cost of the services.
    (3) An estimate of the composite average percentage increase or 
decrease resulting from any proposed revision in payment rates. The 
review must also include a description of the methods used to make the 
estimates described above. The data on Medicaid payment rates must 
include all base and supplemental payments to providers described under 
the Medicaid State plan.
    (C) Stratification requirement. Data on provider payment rates in 
the access review must be stratified to the extent that payments vary 
by the following categories of providers: State government-owned or 
operated, non-State government owned or operated, privately owned or 
operated.
    (D) Content of the review. The review must, at a minimum, describe: 
the specific measures that the State uses to analyze access to care, 
how the measures relate to the framework described in paragraph (b)(1) 
of this section, any issues with access that are discovered as a result 
of the review, and the State agency's recommendations on the 
sufficiency of access to care based on the review.
    (2) Access review timeframe. Beginning January 1 of the year 
beginning no sooner than 12 months after the effective date of the 
final rule, for all covered services, the State agency must complete 
the access review on a State-determined timeframe, provided that:
    (i) The State completes its reviews a subset of services each 
calendar year by January 1 of each year;
    (ii) All covered services undergo a full review at least once every 
5 years; and
    (iii) The results of the review are made available to the public 
(which could include a web site developed and maintained by the single 
State agency or other responsible State agency), and to CMS upon 
request through public records.
    (3) Special provisions for proposed provider rate reductions or 
restructuring--(i) Compliance with access requirements. To demonstrate 
compliance with the access requirements at section 1902(a)(30)(A) of 
the Act, the State must submit with any State plan amendment that would 
reduce provider payment rates or restructure provider payments in 
circumstance when the changes could result in access issues, an access 
review described under paragraph (b)(1) of this section completed 
within the prior 12 months. That access review must demonstrate 
sufficient access for any service for which the State agency proposes 
to reduce payment rates or restructure provider payments in 
circumstance when the changes could result in access issues.
    (ii) Monitoring procedures. A State must develop procedures to 
monitor continued access to care after implementation of State plan 
service rate reduction or payment restructuring. The procedures must 
define a periodic review of State determined indices that will serve to 
demonstrate sustained service access, consistent with efficiency, 
economy, and quality of care.
    (4) Mechanisms for ongoing input. States must have ongoing 
mechanisms for beneficiary input on access to care (through hotlines, 
surveys, ombudsman or another equivalent mechanism), consistent with 
the access requirements and public process described in Sec.  447.204 
of this subpart. States must maintain a record of the volume and nature 
of the response to such input.
    (5) Addressing access questions and remediation of access issues. 
If a State's access review or monitoring procedures determine access 
issues, regardless of whether the issue would indicate non-compliance 
with the statutory standard, the State agency is responsible for 
submitting a corrective action plan to CMS with specific steps and 
timelines to address the issue within 90 days of discovery. While the 
corrective action plan may include longer-term measures, the goal for 
remediation of the access deficiency should be no longer than 12 
months.
    3. Section 447.204 is revised to read as follows:


Sec.  447.204  Medicaid provider participation and public process to 
inform access to care.

    (a) The agency's payments must be consistent with efficiency, 
economy, and quality of care and sufficient to enlist enough providers 
so that services under the plan are available to recipients at least to 
the extent that those services are available to the general population. 
In reviewing payment sufficiency, States are required to consider, 
prior to the submission of

[[Page 26362]]

any State plan amendment that proposes to reduce or restructure 
Medicaid service payment rates:
    (1) The data collected through the process described in Sec.  
447.203 of this subpart.
    (2) Input from beneficiaries and affected stakeholders in 
determining the extent of beneficiary access to the affected services 
and the impact that the proposed rate change will have, if any, on 
continued service access. The State should maintain a record of the 
volume and nature of the response to such input.
    (b) The State must submit to CMS with any such proposed State plan 
amendment, an analysis reflecting consideration of the information and 
procedure described in paragraph (a) of this section. If CMS determines 
that service rates are modified without such an analysis, the agency 
may disapprove a proposed State plan amendment using the authority and 
procedures described at part 430 Subpart B of this title or may take a 
compliance action using the authority and procedures described at Sec.  
430.35 of this title.
    4. Section 447.205 is amended by adding paragraph (d)(2)(iv) to 
read as follows:


Sec.  447.205  Public notice of changes in Statewide methods and 
standards for setting payment rates.

* * * * *
    (d) * * *
    (2) * * *
    (iv) A web site developed and maintained by the single State agency 
or other responsible State agency that is accessible to the general 
public, provided that:
    (A) The site is updated for bulletins on a regular and known basis 
(for example, the first day of each month);
    (B) The issued notice includes the actual date it was released to 
the public on the web site; or
    (C) The content of the issued notice is not modified after the 
initial publication.


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

    Dated: April 13, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: April 27, 2011.
Kathleen Sebelius,
Secretary, Health and Human Services.
[FR Doc. 2011-10681 Filed 4-29-11; 4:15 pm]
BILLING CODE 4120-01-P