[Federal Register Volume 81, Number 145 (Thursday, July 28, 2016)]
[Notices]
[Pages 49660-49662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17923]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)

Centers for Medicare & Medicaid Services


Notice of Opportunity for Hearing on Compliance of Arkansas State 
Plan Provisions Concerning Provision of Benefits During a Reasonable 
Opportunity Period With Titles XI and XIX (Medicaid) of the Social 
Security Act

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

ACTION: Notice of Opportunity for a Hearing Compliance of Arkansas 
Medicaid State Plan--Provision of Benefits During a Reasonable 
Opportunity Period.

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CLOSING DATE: Requests to participate in the hearing as a party must be 
received by the presiding officer by August 29, 2016.

FOR FURTHER INFORMATION CONTACT: Benjamin R. Cohen, Hearing Officer, 
Centers for Medicare & Medicaid Services, 2520 Lord Baltimore Drive, 
Suite L, Baltimore, MD 21244.

SUPPLEMENTARY INFORMATION: This notice announces the opportunity for an 
administrative hearing concerning the finding of the Administrator of 
the Centers for Medicare & Medicaid Services (CMS) that the State of 
Arkansas is not providing Medicaid benefits during a reasonable 
opportunity period.
    Section 1902(a)(46) of the Social Security Act (the Act) requires 
state plans for medical assistance to provide ``that information is 
requested and exchanged for purposes of income and eligibility 
verification in accordance with a State system which meets the 
requirements of section 1137 of this Act.'' Section 1137(d) of the Act 
and regulations at 42 CFR 435.911(c) require that the state agency 
provide a reasonable opportunity period to individuals who are 
determined otherwise eligible for Medicaid but for whom the state 
agency is unable to promptly verify satisfactory immigration status. In 
its approved State Plan Amendment (SPA) 13-0018, the Arkansas 
Department of Human Services (DHS) provides assurance that it provides 
Medicaid to citizens and nationals of the United States and to certain 
non-citizens, including during a reasonable opportunity period pending 
verification of their citizenship, national status or satisfactory 
immigration status, in accordance with the requirements of sections 
1902(a)(46), 1902(ee), 1903(x) and 1137(d) of the Act. Despite such 
assurance in the Medicaid state plan, it is CMS' understanding based on 
numerous discussions and interactions with the state that Arkansas is 
not providing Medicaid benefits to individuals who declared under 
penalty of perjury that they are in a satisfactory immigration status, 
have met all other eligibility requirements for Medicaid in the state, 
and are pending verification of their immigration status.
    With a formal determination by the CMS Administrator that the 
Arkansas DHS has failed to comply substantially with these 
requirements, made after a hearing or absent a hearing request, CMS 
will begin this FFP withholding and it will continue until the Arkansas 
DHS comes into compliance with the requirement to provide Medicaid 
benefits during a reasonable opportunity period for otherwise eligible 
non-citizens who have declared under penalty of perjury that they are 
in a satisfactory immigration status.
    Arkansas submitted state plan amendment (SPA) Transmittal Number 
13-0018 on September 23, 2013, which described the Arkansas DHS's 
policies and practices related to citizenship and non-citizen 
eligibility, including the assurance that the Arkansas DHS provides 
Medicaid benefits during the reasonable opportunity period to 
individuals who have declared under penalty of perjury that they are in 
a satisfactory immigration status pending verification of such status. 
During the review of this SPA, CMS learned that the Arkansas DHS was 
not providing Medicaid benefits during a reasonable opportunity period 
to individuals who have declared under penalty of perjury that they are 
in a satisfactory immigration status and who meet all other eligibility 
requirements in the state, pending verification of such status. 
Throughout 2014 and 2015, CMS and Arkansas engaged in extensive 
technical assistance discussions. CMS sent a letter to the Arkansas DHS 
on April 1, 2015, reiterating the requirement for Arkansas to comply 
with the statute and regulations. During this time, CMS received 
multiple draft corrective action plans (CAPs) from Arkansas that set 
out schedules to come into compliance with section 1137(d) of the Act 
by July 1, 2014, October 2015, April 2016, and, most recently, August 
2016.
    On November 3, 2015, CMS approved Arkansas' SPA 13-0018. At the 
same time, CMS issued a companion letter informing Arkansas that, if it 
did not demonstrate compliance with these requirements within 30 days 
of the date of the letter, CMS would initiate formal compliance 
proceedings. To date, CMS

[[Page 49661]]

has not received evidence of compliance with the requirement to provide 
Medicaid benefits to non-citizens during a reasonable opportunity 
period.
    The notice to Arkansas containing the details concerning this 
compliance issue, the proposed withholding of FFP, opportunity for a 
hearing, and possibility of postponing and ultimately avoiding 
withholding by coming into compliance, reads as follows:
Dear Ms. Stehle:
    This letter provides notice that the Centers for Medicare & 
Medicaid Services (CMS) has found a serious issue of noncompliance 
because the Arkansas Department of Human Services (DHS) is not 
providing Medicaid benefits during a reasonable opportunity period as 
required by section 1137(d) of the Social Security Act (the Act) and 
regulations at 42 CFR. Sec.  435.911(c).
    Pursuant to section 1904 of the Act and 42 CFR 430.35, a portion of 
the federal financial participation (FFP) of the administrative costs 
associated with the operation of the Arkansas Medicaid program will be 
withheld. However, CMS is first providing the Arkansas DHS with an 
opportunity for a hearing on this withholding decision. With a formal 
determination by the CMS Administrator that the Arkansas DHS has failed 
to comply substantially with these requirements, made after a hearing 
or absent a hearing request, CMS will begin this FFP withholding and it 
will continue until the Arkansas DHS comes into compliance with the 
requirement to provide Medicaid benefits during a reasonable 
opportunity period for otherwise eligible non-citizens who have 
declared under penalty of perjury that they are in a satisfactory 
immigration status. The details of the finding, proposed withholding, 
opportunity for the Arkansas DHS to request a hearing on the finding, 
and possibility of postponing, and ultimately avoiding, withholding by 
coming into compliance are described below.
    CMS learned of the Arkansas DHS' non-compliance with section 
1137(d) of the Act and regulations at 42 CFR 435.911(c) during the 
review of State Plan Amendment (SPA) Transmittal Number 13-0018. 
Section 1902(a)(46) of the Act requires state plans for medical 
assistance to provide ``that information is requested and exchanged for 
purposes of income and eligibility verification in accordance with a 
State system which meets the requirements of section 1137 of this 
Act.'' Section 1137(d) of the Act requires that the state agency 
provide a reasonable opportunity period to individuals who are 
determined otherwise eligible for Medicaid but for whom the state 
agency is unable to promptly verify satisfactory immigration status. 
See also, 42 CFR. Sec.  435.911(c). In the approved SPA 13-0018, the 
Arkansas DHS provides assurance that it provides Medicaid to citizens 
and nationals of the United States and to certain non-citizens, 
including during a reasonable opportunity period pending verification 
of their citizenship, national status or satisfactory immigration 
status, in accordance with the requirements of sections 1902(a)(46), 
1902(ee), 1903(x) and 1137(d) of the Act. Despite such assurance in the 
Medicaid state plan, it is our understanding that the Arkansas DHS is 
not providing Medicaid benefits to individuals who declare under 
penalty of perjury that they are in a satisfactory immigration status, 
meet all other eligibility requirements for Medicaid in the state, and 
are pending verification of such status.
    In processing SPA 13-0018, CMS and the Arkansas DHS discussed this 
issue on October 10, 2013, and again on December 9, 2013, and the 
Arkansas DHS acknowledged that it is not furnishing benefits during the 
reasonable opportunity period to individuals who declare under penalty 
of perjury that they are in a satisfactory immigration status. A formal 
Request for Additional Information (RAI) was issued on December 20, 
2013, which requested a description of the steps the Arkansas DHS would 
take to implement the change, a timeline by which the steps would be 
accomplished and a date by which the changes will be completed to be in 
compliance with section 1137(d) of the Act. CMS also sent a letter to 
the Arkansas DHS on April 1, 2015, reiterating the requirement for the 
Arkansas DHS to comply with the statute and regulations.
    Throughout 2014 and 2015, CMS and the Arkansas DHS engaged in 
extensive technical assistance discussions. During this time, CMS 
received multiple draft corrective action plans (CAPs) from the 
Arkansas DHS that set out schedules for compliance with section 1137(d) 
of the Act, including dates of compliance by July 1, 2014, October 
2015, and April 2016. The Arkansas DHS formally responded to the 
December 20, 2013, RAI on October 7, 2015. The RAI response included a 
revised schedule for compliance with section 1137(d) of the Act by 
April of 2016. On November 3, 2015, CMS approved Arkansas' SPA 13-0018, 
which describes the Arkansas DHS's policies and practices related to 
citizenship and non-citizen eligibility, including the assurance that 
the Arkansas DHS is providing Medicaid benefits during the reasonable 
opportunity period to individuals who have declared under penalty of 
perjury that they are in a satisfactory immigration status pending 
verification of such status. At the same time, CMS issued a companion 
letter informing the Arkansas DHS that, if it did not demonstrate 
compliance with these requirements within 30 days of the date of the 
letter, CMS would initiate formal compliance proceedings. The Arkansas 
DHS did not come into compliance by the specified date and on February 
23, 2016, submitted a revised timeline for compliance with section 
1137(d) of the Act, with a compliance date of August 2016.
    The Arkansas DHS' submission of its quarterly expenditure reports 
through the CMS-64 includes a certification that the Arkansas DHS is 
operating under the authority of its approved Medicaid state plan. 
However, at this time, CMS has not received information from the 
Arkansas DHS providing evidence of compliance with its approved state 
plan, section 1137(d) of the Act and regulations at 42 CFR 435.911(c).
    In light of the Arkansas DHS' non-compliance with section 1137(d) 
of the Act, CMS is moving forward with a formal determination of 
substantial noncompliance with federal requirements described in 
section 1137(d) of the Act and the regulations at 42 CFR 435.911(c) to 
provide Medicaid coverage to otherwise eligible non-citizens pending 
verification of their satisfactory immigration status during a 
reasonable opportunity period if the individual meets all other 
eligibility criteria for Medicaid. Subject to the state's opportunity 
for a hearing, CMS will withhold a portion of federal financial 
participation (FFP) from the Arkansas DHS' quarterly claim of 
expenditures for administrative costs until such time as the Arkansas 
DHS is and continues to be in compliance with the federal requirements. 
The withholding will initially be three percent of the federal share of 
the Arkansas DHS' quarterly claim for administrative expenditures, an 
amount that was developed based on the proportion of total state 
Medicaid expenditures that are used for expenditures for eligibility 
determinations, as reported on Form CMS-64.10 Line 50. The withholding 
percentage will increase by two percentage points (i.e. 5 percent, 7 
percent, etc.) for every quarter in which the Arkansas DHS remains out 
of compliance, up to a maximum withholding percentage of 100 percent 
(of total administrative expenditures). The withholding will end when 
the Arkansas DHS fully and satisfactorily

[[Page 49662]]

implements a corrective action plan to bring its procedures to process 
eligibility determinations under its Medicaid program into compliance 
with the federal requirements.
    The state has 30 days from the date of this letter to request a 
hearing. As specified in the accompanying Federal Register notice, the 
Arkansas DHS has an opportunity for an administrative hearing prior to 
this determination becoming final. However, the Arkansas DHS must 
request a hearing. If a request for a hearing is submitted timely, the 
hearing will be convened by the Hearing Officer designated below no 
later than 60 days after the date of the Federal Register notice, or a 
later date by agreement of the parties and the Hearing Officer, at the 
CMS Regional Office in Dallas, Texas, in accordance with the procedures 
set forth in federal regulations at 42 CFR part 430, subpart D. The 
issue in any such hearing will be whether benefits are being provided 
during a reasonable opportunity period to individuals who have declared 
under penalty of perjury that they are in a to a satisfactory 
immigration status pending verification of such status, if they meet 
all other eligibility requirements, in accordance with the state plan 
and 42 CFR 435.911(c). Any request for such a hearing should be sent to 
the designated Hearing Officer. The Hearing Officer also should be 
notified if the Arkansas DHS requests a hearing but cannot meet the 
timeframe expressed in this notice. The Hearing Officer designated for 
this matter is: Benjamin R. Cohen, Hearing Officer, Centers for 
Medicare & Medicaid Services, 2520 Lord Baltimore Drive, Suite L, 
Baltimore, MD 21244.
    If the Arkansas DHS plans to come into compliance with the approved 
state plan, the Arkansas DHS should submit, within 30 days of the date 
of this letter, an explanation of how the Arkansas DHS plans to come 
into compliance with federal requirements and the timeframe for doing 
so. If that explanation is satisfactory, CMS may consider postponing 
any requested hearing, which could also delay the imposition of the 
withholding of funds as described above. Our goal is to have the 
Arkansas DHS come into compliance, and CMS continues to be available to 
provide technical assistance to the Arkansas DHS in achieving this 
outcome.
    Should you not request a hearing within 30 days, a notice of 
withholding will be sent to you and the withholding of federal funds 
will begin as described above.
    If you have any questions or wish to discuss this determination 
further, please contact: Bill Brooks, Associate Regional Administrator, 
Division of Medicaid and Children's Health Operations, CMS Dallas 
Regional Office, 1301 Young Street, Suite 714, Dallas, TX 75202, 214-
767-4461.
Sincerely,
Andrew M. Slavitt
Acting Administrator

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


    Dated: July 22, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2016-17923 Filed 7-27-16; 8:45 am]
 BILLING CODE 4120-01-P