[Federal Register Volume 82, Number 1 (Tuesday, January 3, 2017)]
[Rules and Regulations]
[Pages 37-40]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31650]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 431, 433, 438, 440, 457, and 495

[CMS-2390-F3]
RIN-0938-AS25


Medicaid and Children's Health Insurance Program (CHIP) Programs; 
Medicaid Managed Care, CHIP Delivered in Managed Care, and Revisions 
Related to Third Party Liability; Corrections

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

ACTION: Final rule; correcting amendment.

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SUMMARY: This document corrects technical errors that appeared in the 
final rule published in the May 6, 2016 Federal Register (81 FR 27498 
through 27901) entitled, ``Medicaid and Children's Health Insurance 
Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in 
Managed Care, and Revisions Related to Third Party Liability.'' The 
effective date for the rule was July 5, 2016.

DATES: Effective Date: This correcting document is effective December 
30, 2016.
    Applicability Date: The corrections indicated in this document are 
applicable beginning immediately.

FOR FURTHER INFORMATION CONTACT:
    John Giles, (410) 786-1255, Medicaid Managed Care Operations.
    Heather Hostetler, (410) 786-4515, Medicaid Managed Care Quality.
    Melissa Williams, (410) 786-4435, CHIP.
    Nancy Dieter, (410) 786-7219, Third Party Liability.

SUPPLEMENTARY INFORMATION:

I. Background

    In FR Doc. 2016-09581 (81 FR 27498 through 27901), the final rule 
entitled, ``Medicaid and Children's Health Insurance Program (CHIP) 
Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, and 
Revisions Related to Third Party Liability'' there were technical 
errors that are identified and corrected in this correcting document. 
These corrections are applicable immediately.

II. Summary of Errors

A. Summary of Errors in the Preamble

    On page 27560 we made a technical error in the response to comments 
of Sec.  438.6(e). In this response, we inadvertently identified the 
effective date and the date by which we would enforce compliance for 
the regulation, which is correctly identified in the Compliance section 
on page 27499.
    On page 27679 we made a technical error in the preamble text of 
Sec.  438.330 (Quality Assessment and Performance Improvement Program) 
in a response to comment. We stated, ``Note that standards for risk 
adjustment are provided in Sec. Sec.  438.5(g) and 438.7(b)(5).'' We 
inadvertently omitted the words ``for payment purposes'' after ``risk 
adjustment'' in this sentence to clarify that these cross-referenced 
sections are related to risk adjustment for payment purposes.
    On page 27708 we made a technical error in the preamble text of 
Sec.  438.358 (Activities Related to External Quality Review) in a 
response to comment about Sec.  438.358(b)(iv) (Validation of MCO, 
PIHP, or PAHP validation of network adequacy). We inadvertently 
included PIHPs and PAHPs in a statement about the match rate for this 
EQR-related activity for MCOs. We stated, ``. . . the validation of 
MCOs, PIHPs, and PAHPs would be eligible for the 75 percent match rate 
under Sec.  438.370(a).'' This was in error, as it conflicts with Sec.  
438.370 of the final rule and the preamble discussion of that section 
on pages 27715 through 27717.
    On page 27712 we made a technical error in the preamble text of 
Sec.  438.360 (Nonduplication of mandatory activities with Medicare or 
accreditation review) in a response to comment about updating the EQR 
protocols to incorporate data from a Medicare or private accrediting 
entity review. We referenced three of the mandatory EQR-related 
activities using the citation from the proposed rule (Sec.  
438.358(b)(1) to (b)(3)), rather than the citation from the final rule 
(Sec.  438.358(b)(1)(i) to (b)(1)(iii)).
    On page 27738 we made a technical error in the response to comments 
of Sec.  438.242(b)(2). In this response, we inadvertently mistyped 
``T-MSIS.''
    On page 27766 we made a technical error in the preamble text of 
Sec.  457.1233. We inadvertently did not note that CHIP is also 
adopting the changes discussed in the Medicaid preamble to include PCCM 
entities as subject to Sec.  438.230 in

[[Page 38]]

response to public comments and consideration of a managed care plan's 
subcontracted or delegated obligations, services, or activities.

B. Summary of Errors in Regulation Text

    On page 27860 we made a technical error in the regulation text of 
Sec.  438.6(c)(2)(i). In this paragraph, we inadvertently omitted 
``actuarial'' before ``principles and practices.''
    On page 27862 we made a technical error in the regulation text of 
Sec.  438.8(e)(1). In this paragraph, we inadvertently referenced fraud 
reduction activities instead of fraud prevention activities.
    On page 27863 we made a technical error in the regulation text of 
Sec.  438.8(f)(2)(i). In this paragraph, we inadvertently included an 
extra word ``to.''
    On page 27867 we made a technical error in the regulation text of 
Sec.  438.10(g)(2)(xiii). In this paragraph, we inadvertently included 
an extra word ``in.''
    On page 27879 we made a technical error in the regulation text of 
Sec.  438.210(a)(2). In this paragraph, we inadvertently referenced 
part 440 instead of part 441.
    On page 27884 we made a technical error in the regulation text of 
Sec.  438.350(d). We incorrectly cross-referenced Sec.  
438.364(a)(1)(i) through (iv) instead of Sec.  438.364(a)(2)(i) through 
(iv).
    On page 27885 we made a technical error in the regulation text of 
Sec.  438.358(a)(2) (Activities related to external quality review). We 
incorrectly cross-referenced Sec.  438.364(a)(i) through (iv) instead 
of Sec.  438.364(a)(2)(i) through (iv).
    On page 27885 we made a technical error in the regulation text of 
Sec.  438.358(c)(3) (Activities related to external quality review). We 
incorrectly cross-referenced Sec.  438.358(b)(2) instead of Sec.  
438.358(b)(1)(ii).
    On page 27885 we made a technical error in the regulation text of 
Sec.  438.358(c)(4) (Activities related to external quality review). We 
incorrectly cross-referenced Sec.  438.358(b)(1) instead of Sec.  
438.358(b)(1)(i).
    On page 27891 we made a technical error in the regulation text of 
Sec.  438.604(a)(2). In this paragraph, we inadvertently referenced 
Sec.  438.3 instead of Sec.  438.4.
    On page 27898 we made a technical error in the regulation text of 
Sec.  457.1201(l). In this paragraph, we inadvertently cross-referenced 
the Medicaid requirements related to MHPAEA at Sec.  438.3(n) instead 
of CHIP MHPAEA requirements at Sec.  457.496. Both the Medicaid and 
CHIP MHPAEA provisions were issued on March 30, 2016, at 81 FR 18390, 
18436 and 18442. They are parallel provisions and the change in the 
cross-reference will not result in any substantive change in the 
applicable requirements.
    On page 27898 we made a technical error in the regulation text of 
Sec.  457.1201(n)(2). In this paragraph, we inadvertently omitted a 
cross-reference to Sec.  438.330(b)(2) as we discussed in the preamble 
on page 27757.
    On page 27898 we made a technical error in the regulation text of 
Sec.  457.1203(a). In this paragraph, we inadvertently included a 
parenthesis before the word ``implementing.''
    On page 27898 we made a technical error in the regulation text of 
Sec.  457.1203(e). In this paragraph, we inadvertently did not include 
a comma after the word ``MCOs'' and we inadvertently included the word 
``to'' after the word ``under.''
    On page 27899 we made a technical error in the regulation text of 
Sec.  457.1210(c)(2) and Sec.  457.1210(c)(4). In this paragraph, we 
incorrectly used the word ``Explains'' instead of the word ``Explain.''
    On page 27899 we made a technical error in the regulation text of 
Sec.  457.1214. In this section, we referenced Sec.  438.58, the 
conflict of interest safeguards required for Medicaid managed care 
plans. However, we inadvertently did not specify that references to 
Sec.  438.54(b) (relating to the Medicaid managed care enrollment 
processes) in Sec.  438.58 should refer to the enrollment processes for 
CHIP described in Sec.  457.1210(a).
    On page 27899 we made a technical error in the regulation text of 
Sec.  457.1228. We inadvertently omitted the words ``and 
poststabilization care'' before the word ``services.'' Additionally, we 
are replacing the cross-reference to Sec.  457.10 with a cross 
reference to Sec.  438.114 to reflect the intended alignment with 
Medicaid definitions that was clearly expressed in the preamble on page 
27764 in discussing Sec.  457.1228. In that preamble discussion, we 
expressly indicated that we would be adopting the definitions at Sec.  
438.114.
    On page 27899 we made a technical error in the regulation text of 
Sec.  457.1230(c). We inadvertently did not provide that the 
applicability date for the Medicaid requirements in Sec.  438.208(d) 
does not apply to CHIP.
    On page 27899 we made a technical error in the regulation text of 
Sec.  457.1230(d). We inadvertently did not provide the applicability 
date for the Medicaid requirements in Sec.  438.210(f) does not apply 
to CHIP.
    On page 27900 we made a technical error in the regulation text of 
Sec.  457.1233(b). As indicated in the preamble on page 27766, we 
intended to align the structure and operation standards for CHIP 
managed care entities with parallel Medicaid standards, but we 
inadvertently omitted PCCM entities from the list of managed care 
entities that the state must ensure are in compliance with Sec.  
438.230.
    On page 27900 we made technical errors in the regulation text of 
Sec.  457.1240(e). We inadvertently left in an obsolete cross reference 
from the proposed rule to Sec.  438.340(e).
    On page 27900 we made technical errors in the regulation text of 
Sec.  457.1240(f). In this paragraph, we incorrectly spelled ``PCCM 
entities'' as ``PPCM entities.''
    On page 27900 we made technical errors in the regulation text of 
Sec.  457.1250(a), relating to external quality review. We 
inadvertently did not provide that while the terms of Medicaid external 
quality review provisions at Sec.  438.350 applies to PCCM entities, 
Sec.  438.362, which is cross-referenced in Sec.  438.350, does not 
apply to PCCM entities in CHIP.
    On page 27900 we made technical errors in the regulation text of 
Sec.  457.1260. We inadvertently did not include an exception to the 
Medicaid applicability date as described in Sec.  438.400(c).

III. Waiver of Proposed Rulemaking and Delay in Effective Date

    Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA), 
the agency is required to publish a notice of the proposed rule in the 
Federal Register before the provisions of a rule take effect. In 
addition, section 553(d) of the APA mandates a 30-day delay in 
effective date after issuance or publication of a rule. Sections 
553(b)(B) and 553(d)(3) of the APA provide for exceptions from the APA 
notice and comment, and delay in effective date requirements. Section 
553(b)(B) of the APA authorizes an agency to dispense with normal 
notice and comment rulemaking procedures for good cause if the agency 
makes a finding that the notice and comment process is impracticable, 
unnecessary, or contrary to the public interest; and includes a 
statement of the finding and the reasons for it in the notice.
    In our view, this correcting document does not constitute a 
rulemaking that would be subject to these requirements. This document 
merely corrects technical errors in the Medicaid and Children's Health 
Insurance Program (CHIP) Programs; Medicaid Managed

[[Page 39]]

Care, CHIP Delivered in Managed Care, and Revisions Related to Third 
Party Liability final rule. The corrections contained in this document 
are consistent with, and do not make substantive changes to, the 
policies and payment methodologies that were adopted subject to notice 
and comment procedures in the Medicaid and Children's Health Insurance 
Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in 
Managed Care, and Revisions Related to Third Party Liability final 
rule. As a result, the corrections made through this correcting 
document are intended to ensure that the Medicaid and Children's Health 
Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP 
Delivered in Managed Care, and Revisions Related to Third Party 
Liability final rule accurately reflects the policies adopted in that 
rule.
    Even if this were a rulemaking to which the notice and comment and 
delayed effective date requirements applied, we find that there is good 
cause to waive such requirements. Undertaking further notice and 
comment procedures to incorporate the corrections in this document into 
the Medicaid and Children's Health Insurance Program (CHIP) Programs; 
Medicaid Managed Care, CHIP Delivered in Managed Care, and Revisions 
Related to Third Party Liability final rule or delaying the effective 
date of the corrections would be contrary to the public interest 
because it could result in a period of confusion about the 
applicability of the rules while those procedures are pending. Further, 
such procedures would be unnecessary, because the corrections in this 
document do not make substantive changes in the underlying policies but 
are limited to elimination of typographical errors, incorrect cross 
references, confusing or inconsistent language, and obvious errors. 
This correcting document is intended solely to ensure that the Medicaid 
and Children's Health Insurance Program (CHIP) Programs; Medicaid 
Managed Care, CHIP Delivered in Managed Care, and Revisions Related to 
Third Party Liability final rule accurately reflects the final policy 
determinations that were set forth in the overall rulemaking record. 
For these reasons, we believe there is good cause to waive the 
requirements for notice and comment and delay in effective date.

Corrections of Errors

    In FR Doc. 2016-09581 of May 6, 2016 (81 FR 27498), make the 
following corrections:
    1. On page 27560, in the first column; in the second full 
paragraph, line 13, the phrase ``for contracts starting on or after 
July 1, 2017'' is corrected to read ``no later than the effective date 
of this rule''.
    2. On page 27679, in the third column; in the first full paragraph, 
line eight, the phrase ``Note that standards for risk adjustment . . . 
.'' is corrected to read ``Note that standards for risk adjustment for 
payment purposes. . . .''.
    3. On page 27708, in the second column; in the first full 
paragraph, beginning at line seven, the phrase ``validation of MCOs, 
PIHPs, and PAHPs'' is corrected to read ``validation of MCOs''.
    4. On page 27712, in the second column; in the fourth full 
paragraph, line 20, the phrase ``Sec.  438.358(b)(1) to (b)(3)'' is 
corrected to read ``Sec.  438.358(b)(1)(i) to (b)(1)(iii)''.
    5. On page 27738, in the third column; in the fifth full paragraph, 
line 11, the term ``TSIS'' is corrected to read ``T-MSIS''.
    6. On page 27766, in the second column; in the second full 
paragraph, beginning with line one, the sentence ``After consideration 
of the public comments, we are adding a cross reference to Sec.  
457.1110 in a new paragraph (e), and otherwise finalizing Sec.  
457.1233 as proposed.'' is corrected to read ``After consideration of 
the public comments, we are adding a cross reference to Sec.  457.1110 
in a new paragraph (e) and adopting the changes to Sec.  438.230 to 
include PCCM entities as discussed in the Medicaid preamble above. The 
remaining provisions of Sec.  457.1233 are finalized as proposed.''.

List of Subjects

42 CFR Part 438

    Grant programs-health, Medicaid, Reporting and recordkeeping 
requirements.

42 CFR Part 457

    Administrative practice and procedure, Grant programs-health, 
Health insurance, Reporting and recordkeeping requirements.

    Accordingly, 42 CFR chapter IV is corrected by making the following 
correcting amendments to parts 438 and 457:

PART 438--MANAGED CARE

0
1. The authority citation for part 438 continues to read as follows:

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


Sec.  438.6   [Amended]

0
2. In Sec.  438.6 amend paragraph (c)(2)(i) by removing the phrase 
``accepted principles and practices'' and adding in its place the 
phrase ``accepted actuarial principles and practices''.


Sec.  438.8   [Amended]

0
3. In Sec.  438.8--
0
a. Amend paragraph (e)(1) by removing the phrase ``fraud reduction 
activities'' and adding in its place the phrase ``fraud prevention 
activities''.
0
b. Amend paragraph (f)(2)(i) by removing the phrase ``under to Sec.  
438.6(d).'' and adding in its place the phrase ``under Sec.  
438.6(d).''.


Sec.  438.10   [Amended]

0
4. In Sec.  438.10 amend paragraph (g)(2)(xiii) by removing the phrase 
``in in alternative formats or languages.'' and adding in its place the 
phrase ``in alternative formats or languages.''.


Sec.  438.210   [Amended]

0
5. In Sec.  438.210 amend paragraph (a)(2) by removing the phrase ``of 
part 440'' and adding in its place ``of part 441''.


Sec.  438.350   [Amended]

0
6. In Sec.  438.350 amend paragraph (d) by removing the reference 
``Sec.  438.364(a)(1)(i) through (iv).'' and adding in its place the 
reference ``Sec.  438.364(a)(2)(i) through (iv).''.


Sec.  438.358   [Amended]

0
7. In Sec.  438.358 amend paragraph (a)(2) by removing the reference 
``Sec.  438.364(a)(i) through (iv).'' and adding in its place the 
reference ``Sec.  438.364(a)(2)(i) through (iv).''.


Sec.  438.358   [Amended]

0
8. In Sec.  438.358 amend paragraph (c)(3) by removing the reference 
``Sec.  438.358(b)(2)'' and adding in its place the reference ``Sec.  
438.358(b)(1)(ii)''.


Sec.  438.358   [Amended]

0
9. In Sec.  438.358 amend paragraph (c)(4) by removing the reference 
``Sec.  438.358(b)(1)'' and adding in its place the reference ``Sec.  
438.358(b)(1)(i)''.


Sec.  438.604   [Amended]

0
10. In Sec.  438.604 amend paragraph (a)(2) by removing the reference 
``Sec.  438.3'' and adding in its place the reference ``Sec.  438.4''.

PART 457--ALLOTMENTS AND GRANTS TO STATES

0
11. The authority citation for part 457 continues to read as follows:

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

[[Page 40]]

Sec.  457.1201   [Amended]

0
12. In Sec.  457.1201--
0
a. Amend paragraph (l) by removing the reference ``Sec.  438.3(n).'' 
and adding in its place the reference ``Sec.  457.496.''.
0
b. Amend paragraph (n)(2) by removing the phrase ``(cross-referencing 
Sec.  438.330(b)(3), (c),'' and adding in its place the phrase 
``(cross-referencing Sec.  438.330(b)(2), (b)(3), (c),''.


Sec.  457.1203  [Amended]

0
13. In Sec.  457.1203--
0
a. Amend paragraph (a) by removing the open parenthesis ``('' before 
the word ``implementing''.
0
b. Amend paragraph (e) by adding a comma ``,'' after the term ``MCOs'' 
and by removing the word ``to'' after the word ``under''.


Sec.  457.1210   [Amended]

0
14. In Sec.  457.1210--
0
a. Amend paragraph (c)(2) by removing the word ``Explains'' and adding 
in its place the word ``Explain''.
0
b. Amend paragraph (c)(4) by removing the word ``Explains'' and adding 
in its place the word ``Explain''.

0
15. Section 457.1214 is revised to read as follows:


Sec.  457.1214  Conflict of interest safeguards.

    The State must have in effect safeguards against conflict of 
interest in accordance with the terms of Sec.  438.58 of this chapter, 
except that references to Sec.  438.54(b) should be read to refer to 
the enrollment processes described in Sec.  457.1210(a).

0
16. Section 457.1228 is revised to read as follows:


Sec.  457.1228  Emergency and poststabilization services.

    The State must ensure that emergency and poststabilization care 
services are available and accessible to enrollees in accordance with 
the terms of Sec.  438.114 of this chapter.

0
17. Section 457.1230 is amended by revising paragraphs (c) and (d) to 
read as follows:


Sec.  457.1230  Access Standards

* * * * *
    (c) Coordination and continuity of care. The State must ensure, 
through its contracts, that each MCO, PIHP and PAHP complies with the 
coordination and continuity of care requirements in accordance with the 
terms of Sec.  438.208 of this chapter, except that the applicability 
date in Sec.  438.208(d) does not apply.
    (d) Coverage and authorization of services. The State must ensure, 
through its contracts, that each MCO, PIHP or PAHP complies with the 
coverage and authorization of services requirements in accordance with 
the terms of Sec.  438.210 of this chapter, except that the following 
do not apply: Sec.  438.210(a)(5) of this chapter (related to medical 
necessity standard); Sec.  438.210(b)(2)(iii) of this chapter (related 
to authorizing LTSS), and Sec.  438.210(f) (relating to the 
applicability date).


Sec.  457.1233   [Amended]

0
18. In Sec.  457.1233 amend paragraph (b) by removing the phrase ``and 
PAHP'' and adding in its place the term ``PAHP, and PCCM''.

0
19. Section 457.1240 is amended by revising paragraph (e) and 
correcting the heading for paragraph (f) to read as follows:


Sec.  457.1240  Quality measurement and improvement.

* * * * *
    (e) Managed care quality strategy. The State must draft and 
implement a written quality strategy for assessing and improving the 
quality of health care and services furnished CHIP enrollees as 
described in Sec.  438.340 of this chapter.
    (f) Applicability to PCCM entities. * * *

0
20. Section 457.1250 is amended by revising paragraph (a) to read as 
follows:


Sec.  457.1250  External quality review.

    (a) Each State that contracts with MCOs, PIHPs, or PAHPs must 
follow all applicable external quality review requirements as set forth 
in Sec. Sec.  438.350 (except for references to Sec. Sec.  438.362), 
438.352, 438.354, 438.356, 438.358, 438.360 (only with respect to 
nonduplication of EQR activities with private accreditation) and Sec.  
438.364 of this chapter. In the case of a contract with a PCCM entity 
described in Sec.  457.1240(f), Sec.  438.350 (except for references to 
Sec.  438.362) of this chapter applies.
* * * * *

0
21. Section 457.1260 is revised by adding a sentence at the end of the 
section to read as follows:


Sec.  457.1260  Grievance system.

    * * * The applicability date in Sec.  438.400(c) does not apply to 
CHIP.

    Dated: December 21, 2016.
Wilma M. Robinson,
Deputy Executive Secretary to the Department, Department of Health and 
Human Services.
[FR Doc. 2016-31650 Filed 12-30-16; 8:45 am]
 BILLING CODE 4120-01-P