[Federal Register Volume 78, Number 70 (Thursday, April 11, 2013)]
[Notices]
[Pages 21608-21610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-08524]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Maine State 
Plan Amendments (SPA) 12-010

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing to be held on 
May 23, 2013, at the CMS Boston Regional Office, JFK Federal Building, 
15 N. Sudbury Street, Room 2050, Boston, Massachusetts 02203-0003 to 
reconsider CMS' decision to disapprove Maine SPA 12-010.

DATES: Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by (15 days after 
publication).

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

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider CMS' decision to disapprove Maine SPA 12-010 
which was submitted on August 1, 2012, and disapproved on January 7, 
2013. The SPA proposed changes to eligibility for parents, caretaker 
relatives, and children whose income is at or below 133 percent of the 
federal poverty level (FPL). The proposal would make eligibility 
standards, methods, and procedures more restrictive than those in 
effect on March 23, 2010.
    CMS disapproved this SPA after consulting with the Secretary as 
required by 42 CFR 430.15(c)(2) because it appeared the proposal would 
have eliminated Medicaid eligibility for parents and caretaker 
relatives eligible under sections 1902(a)(10)(A)(i)(I) and 1931 whose 
incomes are between 100 percent and 133 percent of the FPL, and 
Medicaid eligibility of certain individuals considered ``children'' 
under Maine's state Medicaid plan. Both proposals constituted more 
restrictive eligibility standards than those in effect in Maine as of 
March 23, 2010, that could not be excepted from the maintenance-of-
effort (MOE) mandate that Maine is subject to under section 1902(a)(74) 
and (gg) of the Social Security Act (hereafter ``the Act''). At issue 
in this appeal are the following issues.
    While states generally have authority to modify Medicaid 
eligibility rules, sections 1902(a)(74) and (gg) of the Act require 
that states maintain eligibility standards, methodologies, and 
procedures that are no more restrictive than those in effect under a 
state's plan as of the date of enactment of the Patient Protection and 
Affordable Care Act (March 23, 2010). This MOE requirement applies to 
adults until a state's health insurance exchange is operational 
(January 1, 2014) and to children until October 1, 2019.
    Section 1902(gg)(3) of the Act offers a partial non-application of 
the MOE requirement during the period between January 1, 2011, and 
December 31, 2013, when a state certifies to the Secretary that it has 
a budget deficit during the fiscal year for which it is seeking a non-
application, or projects a budget deficit during the succeeding fiscal 
year. This provision limits the non-application to ``nonpregnant, 
nondisabled adults who are eligible for medical assistance under the 
state plan or under a waiver of the plan at the option of the state and 
whose income exceeds 133 percent of the poverty line.''
    Maine certified a projected budget deficit for state fiscal year 
2013 in December 2011 and requested a non-application of the MOE 
requirement for the period of July 1, 2012, through June 30, 2013. On 
February 10, 2012, CMS notified Maine that it qualified for the non-
application for the requested period.
    Maine submitted SPA 12-010 on August 1, 2012, which 
proposed changes to its Medicaid eligibility rules for parents, 
caretaker relatives, children, and to Medicare savings programs (MSPs). 
Specifically, Maine proposed: Reducing the income eligibility limit 
from 150 percent of the FPL to 100 percent for parents and caretaker 
relatives who may qualify under section 1902(a)(10)(A)(i)(I) and 1931 
of the Act; lowering the age limit of eligibility from 20 to 18 for 
children who meet the eligibility requirements for the aid to families 
with dependent children (AFDC) state plan but who would not have 
received AFDC based on age; and reducing income eligibility for the 
MSPs through the elimination of certain income disregards. Maine 
eventually split the SPA into two, with the proposal relating to 
families, caretaker relatives, and children identified as SPA 
12-010, and the proposal relating to MSPs identified as SPA 
12-010A.
    On January 7, 2013, CMS approved SPA 12-010A, but 
disapproved SPA 12-010. CMS determined that Maine's SPAs 
proposed eligibility rules more restrictive than Maine's rules in 
effect on March 23, 2010. However, due to Maine's FY 2013 budget 
deficit

[[Page 21609]]

certification, CMS determined that non-application of the MOE 
requirement could apply to the changes to the MSP eligibility rules in 
SPA 12-010A. (The SPA will be effective only through June 30, 
2013, unless the state certifies that in the fiscal year beginning July 
1, 2013, it again projects a budget deficit.) CMS concluded that SPA 
12-010A did not reduce eligibility for any group of 
individuals eligible for Medicaid on the basis of a disability, 
pregnancy, or status as a child. (On February 20, 2013, Louis Bourgoin 
and others filed suit in the United States District Court for the 
District of Maine against the U.S. Department of Health & Human 
Services seeking to set aside the agency's approval of Maine SPA 
12-010A.)
    However, CMS determined that Maine was not permitted an exception 
from the MOE for the eligibility rule changes proposed by SPA 
12-010. The changes proposed by SPA 12-010 applied to 
individuals who are exempted from the non-application provisions of the 
MOE requirement, specifically, adults whose incomes are below 133 
percent of the FPL and children.
    Section 1116 of the Act and federal regulations at 42 CFR part 430, 
establish Department procedures that provide an administrative hearing 
for reconsideration of a disapproval of a state plan or plan amendment. 
CMS is required to publish a copy of the notice to a State Medicaid 
agency that informs the agency of the time and place of the hearing, 
and the issues to be considered. If we subsequently notify the agency 
of additional issues that will be considered at the hearing, we will 
also publish that notice.
    Any individual or group that wants to participate in the hearing as 
a party must petition the presiding officer within 15 days after 
publication of this notice, in accordance with the requirements 
contained at 42 CFR 430.76(b)(2). Any interested person or organization 
that wants to participate as amicus curiae must petition the presiding 
officer before the hearing begins in accordance with the requirements 
contained at 42 CFR 430.76(c). If the hearing is later rescheduled, the 
presiding officer will notify all participants.
    The notice to Maine announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Mary C. Mayhew, Commissioner
Department of Health and Human Services
Commissioner's Office
221 State Street
11 State House Station
Augusta, ME 04333-0011
    Dear Ms. Mayhew:
    I am responding to your request for reconsideration of the decision 
to disapprove the Maine State Plan Amendment (SPA) 12-010 which was 
submitted on August 1, 2012, and disapproved on January 7, 2013. The 
SPA proposed changes to eligibility for parents, caretaker relatives, 
and children whose income is at or below 133 percent of the federal 
poverty level (FPL). The proposal would make eligibility standards, 
methods, and procedures more restrictive than those that were in effect 
on March 23, 2010.
    I disapproved Maine SPA 12-010 because the proposal would have 
eliminated Medicaid eligibility for parents and caretaker relatives 
eligible under sections 1902(a)(10)(A)(i)(I) and 1931 whose incomes are 
between 100 percent and 133 percent of the FPL, and Medicaid 
eligibility of certain individuals considered ``children'' under 
Maine's state Medicaid plan. Both proposals constituted more 
restrictive eligibility standards than those in effect in Maine as of 
March 23, 2010, that could not be excepted from the maintenance-of-
effort (MOE) mandate that Maine is subject to under section 1902(a)(74) 
and (gg) of the Social Security Act (hereafter ``the Act''). At issue 
in this appeal are the following issues, which are more detailed than 
set out in the disapproval letter:
    While states generally have authority to modify Medicaid 
eligibility rules, sections 1902(a)(74) and (gg) of the Act require 
that states maintain eligibility standards, methodologies, and 
procedures that are no more restrictive than those in effect under a 
state's plan as of the date of enactment of the Patient Protection and 
Affordable Care Act (March 23, 2010). This MOE requirement applies to 
adults until a state's health insurance exchange is operational 
(January 1, 2014) and to children until October 1, 2019.
    Section 1902(gg)(3) of the Act offers a partial non-application of 
the MOE requirement during the period between January 1, 2011, and 
December 31, 2013, when a state certifies to the Secretary that it has 
a budget deficit during the fiscal year for which it is seeking a non-
application, or projects a budget deficit during the succeeding fiscal 
year. This provision limits the non-application to ``nonpregnant, 
nondisabled adults who are eligible for medical assistance under the 
state plan or under a waiver of the plan at the option of the state and 
whose income exceeds 133 percent of the poverty line.''
    Maine certified a projected budget deficit for state fiscal year 
2013 in December 2011 and requested a non-application of the MOE 
requirement for the period of July 1, 2012, through June 30, 2013. On 
February 10, 2012, the Centers for Medicare & Medicaid Services (CMS) 
notified Maine that it qualified for the non-application for the 
requested period.
    Maine submitted SPA 12-010 on August 1, 2012, which 
proposed changes to its Medicaid eligibility rules for parents, 
caretaker relatives, children, and to Medicare savings programs (MSPs). 
Specifically, Maine proposed: reducing the income eligibility limit 
from 150 percent of the FPL to 100 percent for parents and caretaker 
relatives who may qualify under section 1902(a)(10)(A)(i)(I) and 1931 
of the Act; lowering the age limit of eligibility from 20 to 18 for 
children who meet the eligibility requirements for the aid to families 
with dependent children (AFDC) state plan but who would not have 
received AFDC based on age; and reducing income eligibility for the 
MSPs through the elimination of certain income disregards. Maine 
eventually split the SPA into two, with the proposal relating to 
families, caretaker relatives and children identified as SPA 
12-010, and the proposal relating to MSPs identified as SPA 
12-010A.
    On January 7, 2013, CMS approved SPA 12-010A, but 
disapproved SPA 12-010. CMS determined that Maine's SPAs 
proposed eligibility rules more restrictive than Maine's rules in 
effect on March 23, 2010. However, due to Maine's FY 2013 budget 
deficit certification, CMS determined that non-application of the MOE 
requirement could apply to the changes to the MSP eligibility rules in 
SPA 12-010A. (The SPA will be effective only through June 30, 
2013, unless the state certifies that in the fiscal year beginning July 
1, 2013, it again projects a budget deficit.) CMS concluded that SPA 
12-010A did not reduce eligibility for any group of 
individuals eligible for Medicaid on the basis of a disability, 
pregnancy, or status as a child. (On February 20, 2013, Louis Bourgoin 
and others filed suit in the United States District Court for the 
District of Maine against the U.S. Department of Health & Human 
Services seeking to set aside the agency's approval of Maine 
SPA12-010A.)
    However, CMS determined that Maine was not permitted an exception 
from the MOE for the eligibility rule changes proposed by SPA 
12-010. The changes proposed by SPA 12-010 applied to 
individuals who are exempted from the non-application provisions of the 
MOE requirement, specifically, adults whose incomes are below 133 
percent of the FPL and children.

[[Page 21610]]

    In its letter of disapproval, CMS responded to Maine's claim that 
National Federation of Independent Business v. Sebelius, 567 U.S. ----, 
132 S. Ct. 2566 (2012), directed approval of the SPA. CMS pointed out 
that the Supreme Court did not strike down any provision of the Patient 
Protection and Affordable Care Act, including the MOE requirement, and 
that the MOE requirement is unrelated to the Medicaid eligibility 
expansion.
    I am scheduling a hearing on your request for reconsideration to be 
held on May 23, 2013, at the CMS Boston Regional Office, JFK Federal 
Building, 15 N. Sudbury Street, Room 2050, Boston, Massachusetts 02203-
0003 to reconsider CMS' decision to disapprove Maine SPA 12-
010.
    If this date is not acceptable, I would be glad to set another date 
that is mutually agreeable to the parties. The hearing will be governed 
by the procedures prescribed by federal regulations at 42 CFR Part 430.
    I am designating Mr. Benjamin Cohen as the presiding officer. If 
these arrangements present any problems, please contact Mr. Cohen at 
(410) 786-3169. In order to facilitate any communication that may be 
necessary between the parties prior to the hearing, please notify the 
presiding officer to indicate acceptability of the hearing date that 
has been scheduled and provide names of the individuals who will 
represent the state at the hearing.
    Sincerely,
Marilyn Tavenner
Acting Administrator
    Section 1116 of the Social Security Act (42 U.S.C. 1316; 42 CFR 
430.18)

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

    Dated: April 4, 2013.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2013-08524 Filed 4-10-13; 8:45 am]
BILLING CODE 4120-01-P