[Federal Register Volume 83, Number 57 (Friday, March 23, 2018)]
[Proposed Rules]
[Pages 12696-12706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05898]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 447

[CMS-2406-P]
RIN 0938-AT41


Medicaid Program; Methods for Assuring Access to Covered Medicaid 
Services--Exemptions for States With High Managed Care Penetration 
Rates and Rate Reduction Threshold

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the process for states to 
document whether Medicaid payments in fee-for-service systems are 
sufficient to enlist providers to assure beneficiary access to covered 
care and services consistent with the statute. States have raised 
concerns over the administrative burden associated with the current 
requirements, particularly for states with high rates of Medicaid 
managed care enrollment. This proposed rule would provide burden relief 
and address those concerns.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on May 22, 2018.

ADDRESSES: In commenting, please refer to file code CMS-2406-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three 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-2406-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-2406-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Jeremy Silanskis, (410) 786-1592, 
[email protected].

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 website as soon as possible after they have been 
received: http://www.regulations.gov. Follow the search instructions on 
that website to view public comments.

I. Executive Summary and Background

A. Executive Summary

1. Purpose
    Current regulations at 42 CFR 447.203(b) require states to develop 
and submit to CMS an access monitoring review plan (AMRP) for Medicaid 
services provided through a fee-for-service (FFS) delivery system. The 
AMRP must be updated at least every 3 years and address the following 
categories of Medicaid services: Primary care services (including those 
provided by a physician, federally qualified health center (FQHC), 
clinic or dental care); physician specialist services (for example, 
cardiology, radiology, urology); behavioral health services (including 
mental health and substance use disorder); pre- and post-natal 
obstetric services (including labor and delivery); and home health. The 
AMRP must identify a data-driven process to review access to care and 
address: The extent to which beneficiary needs are fully met; the 
availability of care through enrolled providers; and changes in 
beneficiary service utilization. Additionally, when states reduce rates 
for other Medicaid services, they must add those services to the AMRP 
and monitor the effects of the rate reductions for 3 years. Section 
447.204 requires states to undertake a public process and submit 
specific information regarding access to care when proposing to reduce 
or restructure Medicaid provider payment rates. This proposed rule 
would provide an exemption to the regulatory requirements in Sec. Sec.  
447.203(b)(1) through (6) and 447.204(a) through (c) for states with 
comprehensive, risk-based Medicaid managed care enrollment rates above 
85 percent of the total covered population under a state's Medicaid 
program, including managed care comprehensive risk contracts under a 
state's section 1115 Medicaid demonstration. The proposed rule would 
also provide an exemption to the regulatory requirements in Sec. Sec.  
447.203(b)(6) and 447.204(a) through (c) for states that submit state 
plan amendments (SPAs) to reduce rates or restructure payments where 
the overall reduction is 4 percent or less of overall spending within 
the affected state plan service category for a single state fiscal year 
(SFY) and 6 percent or less over 2 consecutive SFYs. Additionally, the 
proposed rule would modify the requirements in Sec.  447.204(b)(2) so 
that, for SPAs that reduce or restructure Medicaid payment rates, 
states would be required to submit to CMS an assurance that data 
indicates current access is consistent with

[[Page 12697]]

requirements of the Social Security Act (the Act) instead of an 
analysis anticipating the effects of a proposed change in payment rates 
or structure.

B. Background

    Section 1902(a)(30)(A) of the Act requires states 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.'' Until 2011, we had not defined through federal regulation a 
framework to guide states in meeting this statutory requirement and 
reviewed state proposals to reduce provider payment rates on a case-by-
case basis. We historically relied on state certifications and 
available supporting information that reductions in Medicaid payments 
met the statutory standards.
    In the November 2, 2015 Federal Register (80 FR 67576) we published 
the ``Methods for Assuring Access to Covered Medicaid Services'' final 
rule with comment period that outlined a data-driven process for states 
to document whether Medicaid payments are sufficient to enlist 
providers to assure beneficiary access to covered care and services 
consistent with section 1902(a)(30)(A) of the Act. The final rule with 
comment period included a new Sec.  447.203(b)(1) through (8) and 
revisions to Sec.  447.204. These regulations established that states 
must develop and submit to CMS an AMRP, that is updated at least every 
3 years, for the following services: (1) Primary care (including those 
provided by a physician, FQHC, clinic or dental care); (2) physician 
specialist services (for example, cardiology, urology, radiology); (3) 
behavioral health services (including mental health and substance use 
disorder); (4) pre- and post-natal obstetric services, (including labor 
and delivery); (5) home health services; (6) any additional types of 
services for which a review is required under Sec.  447.203(b)(6) 
because of a proposed payment rate reduction or restructuring; (7) 
additional types of services for which the state or CMS has received a 
significantly higher than usual volume of beneficiary, provider or 
other stakeholder access complaints for a geographic area; and (8) 
additional types of services selected by the state.
    The AMRP must document the state's consideration of access to care 
in setting and adjusting payment methodologies for Medicaid services 
and in informing state policies affecting access to Medicaid services. 
The state must address, through data driven analysis: The extent to 
which beneficiary needs are fully met; the availability of care through 
enrolled providers; changes in beneficiary service utilization; the 
characteristics of the beneficiary population (including considerations 
for care, service and payment variations for pediatric and adult 
populations and for individuals with disabilities); and actual or 
estimated levels of provider payment available from other payers, 
including other public and private payers. Additionally, Sec.  
447.203(b)(6) requires a state to add services to its AMRP when 
reducing payment rates or restructuring provider payment for such 
Medicaid services in circumstances when the changes could result in 
diminished access, as well as to develop a plan to monitor the effects 
of the rate reduction or restructuring for at least 3 years.
    Furthermore, under Sec.  447.204(a) through (c), when proposing to 
reduce or restructure Medicaid payment rates, states must consider the 
data collected through the AMRP and undertake a public process that 
solicits input on the potential impact of proposed reduction or 
restructuring of Medicaid payment rates on beneficiary access to care. 
States must submit related analysis to CMS along with any proposed rate 
reduction or restructuring SPA, and we may disapprove such a proposed 
SPA that does not include documentation supporting compliance with the 
required AMRP review and public process.
    In the November 2, 2015 final rule with comment period, we 
solicited comments on Sec.  447.203(b)(5), concerning the access 
monitoring review plan timeframe. Specifically, we solicited comments 
on the scope of services that should be subject to ongoing review under 
the AMRP, the required elements of review, whether we should allow 
exemptions from certain requirements of the final rule based on state 
program characteristics (for example, high managed care enrollment), 
and the timeframe for submission. In response to the comments we 
received, in the April 12, 2016 Federal Register (81 FR 21479), we 
published the ``Deadline for Access Monitoring Review Plan 
Submissions'' final rule in which we extended the deadline for initial 
AMRP submissions to October 1, 2016. Although we received numerous 
comments on the issue of whether states with high managed care 
enrollment should be exempt from the requirements of the final rule, we 
did not include such an exemption in the April 12, 2016 final rule 
because we believed that further experience with the access monitoring 
review process was necessary to determine the appropriate circumstances 
for exemptions. We have considered the comments received in response to 
the November 2, 2015 final rule with comment period at (https://www.regulations.gov/document?D=CMS-2011-0062-0188) in the development 
of this proposed rule.
    The initial AMRP submissions were due to us on October 1, 2016. We 
received AMRP submissions from all states, and the submissions are 
available on Medicaid.gov (https://www.medicaid.gov/medicaid/access-to-care/review-plans/index.html). During the initial year of 
implementation, a number of states expressed concern regarding the 
administrative burden associated with the requirements of Sec.  
447.203, particularly those states with a very high beneficiary 
enrollment in comprehensive, risk-based managed care and a limited 
number of beneficiaries receiving care through a fee-for-service 
delivery system. Based on our experience in reviewing the AMRPs and 
working with states with high beneficiary enrollment in comprehensive, 
risk-based managed care, we now believe we have sufficient experience 
to establish a threshold for such states to be exempt from meeting 
certain access monitoring review requirements, and are proposing 
additional modifications to the regulations to ease the administrative 
burden on states that are proposing certain payment rate reductions.
    Although this proposed rule would establish such thresholds, states 
are still obligated by the statute to ensure Medicaid payment rates are 
sufficient to enlist enough providers to assure that beneficiary access 
to covered care and services is at least consistent with that of the 
general population in the same geographic area, particularly when 
reducing or restructuring Medicaid payment rates through SPAs. In lieu 
of the requirements set forth in Sec.  447.203(b)(6), we are proposing 
that states that meet the high managed care enrollment exemption 
threshold under this proposed rule would be permitted to submit 
alternate information and analysis, as determined by the state, when 
proposing payment rate reductions, to support compliance with section 
1902(a)(30)(A) of the Act.
    Our implementation experience has also created questions about the 
benefit of requiring states to conduct a public process and access 
analysis for every change in Medicaid payment rates or structure that 
results in a reduction to provider payments, including those nominal 
rate reductions that are unlikely to result in diminished access.

[[Page 12698]]

We have worked with a number of states that, over the past 2 years, 
have proposed relatively small payment rate reductions and have 
expended staff resources to add the services to the AMRP and complete 
the public process as required only to have received little or no 
feedback. Oftentimes, the impact on beneficiary access in FFS is 
limited due to the high managed care enrollment rates in states, and 
what little feedback might have been received through the public 
process has been related to how the proposed changes would impact 
managed care. These experiences have created additional confusion for 
states on how to address the rate reductions within the requirements of 
Sec. Sec.  447.203 and 447.204. States have questioned the value of 
undertaking the rigorous process set out in those regulations when 
payment changes are nominal and unlikely to diminish access or when the 
actual impact of the changes is low relative to the overall program 
administration because most of the state's beneficiaries are enrolled 
with a comprehensive managed care entity. In those instances, this rule 
proposes to relieve states of the more rigorous regulatory processes, 
while reaffirming the need for states to offer alternative information 
supporting compliance with section 1902(a)(30)(A) of the Act when 
proposing payment reductions.
    On November 16, 2017, we issued clarifying guidance to states 
through a State Medicaid Director Letter (SMDL #17-004) interpreting 
the requirements at Sec.  447.203(b)(6) to apply only to payment 
changes that are more than nominal and that may result in circumstances 
that could diminish access to care. Within that guidance letter, we 
noted several payment changes that would likely not result in 
diminished access to care and, in the absence of information to the 
contrary (for example, high volume of access complaints), would be 
exempt from the special provisions for proposed rate reductions or 
restructuring procedures in Sec.  447.203(b)(6). These include: Changes 
made to comply with other federal requirements, changes where Medicaid 
rates continue to be at or above Medicare or commercial payer rates, 
and changes consistent with those made by the Medicare program. We also 
described some nominal payment adjustments where it may be difficult 
for states to determine whether proposed SPA changes may result in 
diminished access. For those changes, the SMDL advised states to rely 
on the public process described in Sec.  447.204(a) and the associated 
information received from stakeholders as an indicator of whether a 
change is likely to diminish access.
    With this proposed rule, we are proposing to codify an exemption to 
the special provisions for proposed rate reductions or restructuring 
procedures in Sec.  447.203(b)(6) for all payment rate changes where 
the reduction within a state plan service category is less than 4 
percent of overall spending on the category within a single SFY and 
less than 6 percent over 2 consecutive SFYs. For example, if a state 
implements a rate reduction of 3.5 percent in one SFY and proposes an 
additional reduction of 3 percent the following SFY, the proposed 3 
percent reduction would not be considered to be nominal. As discussed 
in the SMDL, we generally believed changes below the 4 percent 
threshold to be nominal and unlikely to diminish access to care but 
suggested states rely on the public process to make the determination. 
Based on the feedback we have obtained through the SPA review process, 
we continue to believe that changes below 4 percent are generally 
nominal and have found that such changes do not typically result in 
significant access concerns being raised by providers and other 
stakeholders. As such, this proposed rule would go further by providing 
an exemption from all of the procedures described in Sec.  
447.203(b)(6) for proposed payment rate reductions within the above 
thresholds, even if the state has not completed the public process 
described in Sec.  447.204(a).
    In addition to the proposed thresholds described above, we are 
proposing to make an additional modification to the regulations based 
on our implementation experience. Currently, when a state submits a SPA 
to us proposing to reduce or restructure Medicaid provider payment 
rates in circumstances when the changes could result in diminished 
access, the state must submit an analysis of the changes' effect on 
access. States have found considerable difficulty in anticipating the 
effects of rate changes on Medicaid beneficiaries' access to care. Our 
experience has shown that uncertainties inherent in these analyses have 
limited their accuracy and hence their usefulness. Moreover, the 
regulations at Sec. Sec.  447.203(b)(6)(ii) and 447.203(b)(8) include 
considerable protections through requirements for monitoring and 
corrective actions by states to ensure that access remains undiminished 
after a payment rate change goes into effect (see 80 FR 67595 through 
67596), and the utility of an anticipatory analysis has not been 
demonstrated. Recognizing that it is challenging for states to 
accurately predict the effects of many Medicaid payment rate changes on 
beneficiary access to care, we are proposing to modify this requirement 
and, instead, require states to submit an assurance that current access 
is consistent with requirements of the Act at the time of the SPA 
submission, and the baseline data that supports this assurance. We will 
also rely in part on the information received through the public input 
process to help understand the potential effects of proposed rate 
changes that exceed the thresholds proposed in this proposed rule, and 
the states' ongoing monitoring activities to ensure beneficiary access 
to care is maintained.
    Importantly, while the SMDL provided relief to states for the rate 
reduction procedures in the regulations, neither the SMDL nor the 
policies discussed in this proposed rule, if finalized, would exempt 
states from their overall obligation to ensure that Medicaid rates are 
consistent with section 1902(a)(30)(A) of the Act, the public notice 
requirements in Sec.  447.205, or the public process for determining 
institutional provider payment rates in section 1903(a)(13)(A) of the 
Act. As part of the SPA review process, we retain the discretion to 
request that states provide information that would allow us to compare 
the Medicaid population's access to care with that of the general 
population in the same geographic area and we will continue to document 
whether states have met applicable public notice and process 
requirements in our administrative records. Additionally, for states 
that do not meet the managed care exemption threshold, we will use the 
ongoing AMRP process to help identify and address potential access 
issues.
    We are still interested in developing and adopting meaningful 
access measures that could apply consistently regardless of the service 
delivery approach used by the state. Our ultimate goal is to better 
measure, monitor and ensure Medicaid access across state programs and 
delivery systems. While there is a longstanding requirement in 42 CFR 
431.16 that states are obligated to provide all reports required by the 
Secretary and must follow the Secretary's instructions regarding the 
form and content of such reports, we are using this opportunity to 
state that, in the future and informed by stakeholder feedback, we may 
look to adopt a more standardized form and content for the states' AMRP 
submissions.

[[Page 12699]]

II. Provisions of the Proposed Regulations

A. Exemption for States With High Managed Care Enrollment

    We are proposing to amend Sec.  447.203(b) to establish a 
comprehensive, risk-based managed care enrollment rate threshold for 
which states above the threshold would be exempt from meeting the 
requirements of Sec.  447.203(b)(1) through (6). The threshold for 
exemption would be calculated to include services provided under 
comprehensive risk contracts between a state and a managed care 
organization as defined under Sec.  438.2 and any entities required 
under the special terms and conditions of an 1115 demonstration to 
comply with part 438 in the same manner as a managed care organization. 
We are proposing an 85 percent threshold, meaning that states with an 
overall comprehensive, risk-based managed care enrollment rate of 85 
percent or greater would be exempt from the specified requirements and 
would not be required to develop an AMRP or conduct an access analysis 
or add services to the AMRP when reducing or restructuring provider 
payment rates. We chose the 85 percent threshold based on comments 
received in response to the November 2, 2015 final rule with comment 
period in which states suggested thresholds ranging from 75 percent to 
95 percent. We are seeking comment on whether an 85 percent overall 
threshold is appropriate, or if the threshold should be higher, or 
lower but stratified across eligibility categories (for example, a 70 
percent overall threshold with at least a 50 percent managed care 
enrollment rate across all eligibility categories).
    We are proposing to require states with a comprehensive, risk-based 
managed care enrollment rate at or above the threshold to submit to us 
an attestation by January 1 of each year. Because managed care 
enrollment rates fluctuate, we are proposing to require states to 
attest to meeting the threshold every year. The attestation would 
include the state's Medicaid managed care enrollment rate as of July 
1st of the previous year. States that meet the managed care exemption 
threshold would not be required to comply with the requirements for 
development and updating the AMRP for the services otherwise subject to 
the requirements for ongoing review or the special provisions for 
proposed provider rate reductions in Sec.  447.203(b)(1) through (b)(6) 
during that calendar year.
    Consistent with the proposed changes to Sec.  447.203(b)(1) through 
(6), we are also proposing changes to Sec.  447.204, redesignating 
paragraph (d) to new paragraph (e), and adding a new paragraph (d), for 
states that meet the 85 percent managed care enrollment threshold. When 
proposing to reduce or restructure Medicaid payment rates, these states 
would be exempt from the requirements to consider the data collected 
through the AMRP and undertake a public process that solicits input on 
the potential impact of the proposed rate reduction or restructuring 
SPA, and accordingly, would not be required to include documentation 
supporting compliance with the AMRP review and public process otherwise 
required under Sec.  447.204(a) through (c) with the SPA submission. 
However, states are not exempt from the statutory requirements and, 
when proposing to reduce or restructure Medicaid payment rates in 
circumstances that may diminish access, would be required to present 
alternative data and analysis, determined at the discretion of the 
state, to support compliance with section 1902(a)(30)(A) of the Act. As 
such, we are proposing to include the requirement for states to submit 
such alternative data in Sec.  447.204(d). We are requesting comments 
on the types of alternative data and analysis that states may present 
to support compliance with section 1902(a)(30)(A) of the Act, which we 
may use to inform future sub-regulatory guidance to states.

B. Exemption for Payment Rate Changes

    We are proposing to amend Sec. Sec.  447.203(b)(6) and 447.204 to 
set a threshold for nominal payment rate changes that are below 4 
percent for a Medicaid service category in total within a single SFY 
and 6 percent over two consecutive SFYs. For purposes of this proposed 
rule, service categories are those generally defined under sections 
1905(a)(1) through (29) of the Act (that is, inpatient hospital 
services, outpatient hospital services, other laboratory and X-ray 
service, etc.) and other applicable sections that specify categories of 
services eligible for medical assistance under the State plan. Such 
nominal payment rate changes will not be subject to the special 
provisions for rate reductions or restructuring procedures in Sec.  
447.203(b)(6), and similarly, states would not be subject to the 
requirements of Sec.  447.204(a) through (c) when submitting a SPA for 
such changes. Additionally, since states may make rate changes in 
consecutive years, we are proposing to limit the exemption threshold to 
a 6 percent reduction in spending for a Medicaid service category over 
2 consecutive SFYs.
    We are requesting comments to determine whether the nominal 
threshold should be higher or lower than 4 percent for a single SFY and 
6 percent for 2 consecutive SFYs, recognizing that state legislatures 
need sufficient flexibility to manage budgets and make adjustments to 
Medicaid spending that are unlikely to result in diminished access to 
care for program beneficiaries. We are proposing to limit the 4 percent 
threshold exemption over a state fiscal year, rather than apply the 4 
percent to a single SPA submission, and to apply the 6 percent 
threshold as a cumulative threshold over 2 consecutive SFYs. This means 
that state payment rate changes would be exempted from the special 
provisions for proposed rate reductions or restructuring in Sec.  
447.203(b)(6) and the SPA submission requirements in Sec.  447.204(a) 
through (c) as long as they do not exceed 4 percent in total spending 
for a service category within a single SFY and 6 percent over 2 
consecutive SFYs. We believe this policy would provide state 
legislatures sufficient leeway to make nominal Medicaid payment changes 
that, considering the cumulative effects of the proposed year-over-year 
changes, would be unlikely to have adverse impacts on Medicaid 
beneficiaries' access to care. We seek comment on these proposals, 
including on the potential impacts of cumulative rate reductions over 
more than 2 consecutive SFYs, as well as on potential alternatives to 
the 6 percent threshold and on the 2 consecutive SFYs timeframe from 
consideration of cumulative impacts of year-over-year changes.
    In conjunction with the proposed changes to Sec.  447.203(b)(6), we 
are also proposing changes to Sec.  447.204, to include in the new 
paragraph (d) an exemption for states that are proposing payment rate 
reductions below the threshold of 4 percent within a single SFY (6 
percent over 2 consecutive SFYs). When submitting such nominal payment 
rate reductions, such states would not be required to consider the data 
collected through the AMRP and undertake a public process that solicits 
input on the potential impact of the proposed rate reduction or 
restructuring SPA, and accordingly, would not be required to include 
documentation supporting compliance with the AMRP review and public 
process otherwise required under Sec.  447.204(a) through (c) with the 
SPA submission. Although we are proposing this exemption from the 
regulatory requirements at Sec. Sec.  447.203(b)(6) and 447.204(a) 
through (c) for the proposed SPAs that would

[[Page 12700]]

implement nominal payment rate reductions, states are not exempt from 
the statutory requirements and, when proposing to reduce or restructure 
Medicaid payment rates in circumstances that may diminish access, would 
be required to present alternative analysis and supporting data, 
determined at the discretion of the state, to demonstrate compliance 
with section 1902(a)(30)(A) of the Act. Accordingly, we are proposing 
to include the requirement for states to submit such alternative data 
in Sec.  447.204(d). We are requesting comments on the types of 
alternative analysis and supporting data that states may present to 
demonstrate compliance with section 1902(a)(30)(A) of the Act, which we 
may use to inform future sub-regulatory guidance to states.

C. Modification of Payment Rate Change SPA Submission Information

    We are proposing to amend Sec.  447.204(b)(2) to remove the 
requirement that states submit an analysis of the effect the change in 
payment rates will have on access and instead require that states 
submit an assurance and baseline data that supports the state's 
conclusion that current access is sufficient for the services impacted 
by the rate change. The data will be used as part of the state's plan 
to monitor the effects of the rate reduction for 3 years following 
implementation, when required under Sec.  447.203(b)(6). We are 
proposing this change because we have determined that the current 
requirement of having states provide an analysis of the effect that a 
proposed payment rate reduction might have on access is of limited 
usefulness due to many uncertainties inherent to such analyses. 
Therefore, we believe that having the state submit baseline data on 
access to services will be more helpful to CMS in ensuring that a 
state's proposed payment rate reductions are consistent with section 
1902(a)(30)(A) of the Act.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.) 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 Office of Management and Budget (OMB) for 
review and approval. To fairly evaluate whether an information 
collection should be approved by OMB, section 3506(c)(2)(A) of the PRA 
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 proposed information 
collection requirements:

 Exemption for States with High Managed Care Penetration 
(Sec. Sec.  447.203(b) and 447.204(a) through (c))
 Exemption for Payment Rate Changes (Sec. Sec.  447.203(b) and 
447.204(a) through (c))
 Modification of Payment Rate Change SPA Submission Information 
(Sec.  447.204(b)(2))

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' May 2016 National Occupational Employment and Wage 
Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 1 presents the mean hourly wage, 
the cost of fringe benefits and overhead (calculated at 100 percent of 
salary), and the adjusted hourly wage.

                          Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                    Occupation      Mean hourly    benefits and      Adjusted
                Occupation title                       code         wage ($/hr)    overhead ($/   hourly wage ($/
                                                                                        hr)             hr)
----------------------------------------------------------------------------------------------------------------
Business Operations Specialist..................         13-1000           34.54           34.54           69.08
Computer and Information Analyst................         15-1120           44.36           44.36           88.72
General and Operations Manager..................         11-1021           58.70           58.70          117.40
Management Analyst..............................         13-1111           44.19           44.19           88.38
Social Science Research Assistant...............         19-4061           22.51           22.51           45.02
----------------------------------------------------------------------------------------------------------------

    We adjusted our employee hourly wage estimates by a factor of 100 
percent. This was necessarily a rough adjustment, both because fringe 
benefits and overhead costs vary significantly from employer to 
employer, and because methods of estimating these costs vary widely 
from study to study. Nonetheless, there was no practical alternative 
and we believed that doubling the hourly wage to estimate total cost 
was a reasonably accurate estimation method.

B. Proposed Information Collection Requirements (ICRs)

1. ICRs Regarding Exemption for States With High Managed Care 
Enrollment (Sec. Sec.  447.203(b) and 447.204(a) Through (c))
    Current provisions at Sec.  447.203(b)(1) through (3) require that 
states develop and make publicly available an access monitoring review 
plan using data trends and factors that considers: Beneficiary needs, 
availability of care and providers, and changes in beneficiary 
utilization of covered services.
    Section 447.203(b)(1) and (2) describes the minimum factors that 
states must consider when developing an access monitoring review plan. 
Specifically, we require the review to include: Input from both 
Medicaid beneficiaries and Medicaid providers, an analysis of Medicaid 
payment data, and a description of the specific measures the state will 
use to analyze access to care. We require that states use existing 
provider feedback mechanisms, such as medical advisory committees 
described in Sec.  431.12, rather than create new requirements, to 
avoid placing unnecessary burden on states.
    Section 447.203(b)(3) requires that states include aggregate 
percentage comparisons of Medicaid payment rates to other public 
(including, as practical, Medicaid managed care rates) or private

[[Page 12701]]

health coverage rates within geographic areas of the state.
    Section 447.203(b)(4) describes the minimum content that must be in 
included in the monitoring plan. States are required to describe: The 
measures the state uses to analyze access to care issues, how the 
measures relate to the overarching framework, access issues that are 
discovered as a result of the review, and the state Medicaid agency's 
recommendations on the sufficiency of access to care based on the 
review.
    Section 447.203(b)(5) describes the timeframe for states to develop 
the access monitoring review plan and complete the data review for the 
following categories of services: Primary care, physician specialist 
services, behavioral health, pre- and post-natal obstetric services 
including labor and delivery, home health, any services for which the 
state has submitted a state plan amendment to reduce or restructure 
provider payments which changes could result in diminished access, and 
additional services as determined necessary by the state or CMS. While 
the initial access monitoring review plans have been completed, the 
plan must be updated at least every 3 years, but no later than October 
1 of the update year.
    In our currently approved information collection request (CMS-
10391; OMB 0938-1134), we estimated that the requirements to develop 
and make the access monitoring review plans publically available under 
Sec.  447.203(b)(1) through (4) for the specific categories of Medicaid 
services will affect each of the 50 state Medicaid programs and the 
District of Columbia (51 total respondents). We estimated it will take 
a one-time effort of 5,100 hr to develop the access monitoring review 
plan, 8,160 hr to collect and analyze the data, and 2,040 to publish 
the plan and 510 hr for a manager to review and approve the plan 
(15,810 total hours at a cost of $1,197,194.40, or $23,474.40 per 
state). Since the initial one-time requirement has been met, and since 
the policies in this proposed rule would create exemptions from certain 
current requirements, we are now estimating this proposed rule as a 
burden reduction.
    In deriving these figures we used the following labor rates and 
time to complete each task: 80 hr at $45.02/hr for a research assistant 
staff to gather data, 80 hr at $88.72/hr for an information analyst 
staff to analyze the data, 100 hr at $88.38/hr for management analyst 
staff to update the content of the access review monitoring plan, 40 hr 
at $69.08/hr for business operations specialist staff to publish the 
access monitoring review plan, and 10 hr at $117.40/hr for managerial 
staff to review and approve the access monitoring review plan.

                         Table 2--Access Monitoring Review Plan: Reduced One-Time Burden
                                                   [per state]
----------------------------------------------------------------------------------------------------------------
                                                                                     Adjusted        Cost per
              Requirement                   Occupation title       Burden hours   hourly wage ($/   monitoring
                                                                                        hr)       plan ($/state)
----------------------------------------------------------------------------------------------------------------
Gathering Data........................  Social Science Research             (80)           45.02      (3,601.60)
                                         Assistant.
Analyzing Data........................  Computer and Information            (80)           88.72      (7,097.60)
                                         Analyst.
Developing Content of Access Review     Management Analyst......           (100)           88.38      (8,838.00)
 Monitoring Plan.
Publishing Access Review Monitoring     Business Operations                 (40)           69.08      (2,763.20)
 Plan.                                   Specialist.
Reviewing and Approving Access Review   General and Operations              (10)          117.40      (1,174.00)
 Monitoring Plan.                        Manager.
                                                                 =================
    Total.............................  ........................           (310)          varies     (23,474.40)
----------------------------------------------------------------------------------------------------------------


                         Table 3--Access Monitoring Review Plan: Reduced One-Time Burden
                                                     [Total]
----------------------------------------------------------------------------------------------------------------
                                                                                  Cost of review    Total cost
       Anticipated number of state reviews                  Total hours            per state ($)   estimate ($)
----------------------------------------------------------------------------------------------------------------
(51)............................................  (15,810) [-310 hr x 51             (23,474.40)  (1,197,194.40)
                                                   reviews].
----------------------------------------------------------------------------------------------------------------

    Based on this rule's proposed exemption for states with managed 
care enrollment rates at or above 85 percent, we are adjusting our on-
going access monitoring review plan burden by reducing the number of 
states (and DC) by 17, from 51 to 34 states, because as of July 2016, 
we estimate that 17 states had a managed care enrollment rate of at 
least 85 percent and would therefore meet the threshold for an 
exemption based on high managed care enrollment. We relied on data from 
the Kaiser Family Foundation website (https://www.kff.org/data-collection/medicaid-managed-care-market-tracker/) to arrive at the 
estimates, although we note that we will rely upon state attestations 
of meeting or exceeding the enrollment rate threshold to administer the 
exemption. Consistent with our currently approved estimates, we 
continue to anticipate that the average ongoing burden is likely to be 
the same as the average initial burden estimates since states will need 
to re-run the data, determine whether to add or drop measures, consider 
public feedback, and write-up new conclusions based on the information 
they review. In this regard, we estimate that the exemption would 
reduce our estimates by 5,270 hr (from 15,810 hr to 10,540 hr) and 
$399,064.80.

[[Page 12702]]



                         Table 4--Access Monitoring Review Plan: Reduced On-Going Burden
----------------------------------------------------------------------------------------------------------------
                                                                                  Cost of review    Total cost
       Anticipated number of state reviews                  Total hours            per state ($)   estimate ($)
----------------------------------------------------------------------------------------------------------------
(17)............................................  (5,270) (-310 hr x 17 reviews)     (23,474.40)    (399,064.80)
----------------------------------------------------------------------------------------------------------------

    In lieu of developing and updating the access monitoring review 
plan for the services subject to the ongoing review or for proposed 
provider rate reductions or payment restructurings that could result in 
diminished access, this rule proposes that states seeking an exemption 
from those requirements based on having a comprehensive risk-based 
managed care enrollment rate at or above 85 percent must submit an 
annual attestation of its Medicaid managed care enrollment rate as of 
July 1 of the previous year to CMS. We anticipate states will use the 
same enrollment data required to be monitored under Sec.  438.66 and 
included in the currently approved information collection request (CMS-
10108; OMB 0938-0920) as a basis for the annual attestation. As such, 
we estimate the burden associated with the annual attestation to be 0.5 
hr at $117.40/hr for a General and Operations Manager to develop the 
attestation document and submit it to CMS. In aggregate, we estimate an 
annual burden of 8.5 hr (0.5 hr x 17 respondents) at a cost of $997.90 
(8.5 hr x $117.40/hr) or $58.70 per respondent.

                                   Table 5--Annual Attestation On-Going Burden
----------------------------------------------------------------------------------------------------------------
                                                                                  Cost of review    Total cost
      Anticipated number of state reviews                  Total hours             per state ($)   estimate ($)
----------------------------------------------------------------------------------------------------------------
17............................................  8.5 (0.5 hr x 17 reviews).......           58.70          997.90
----------------------------------------------------------------------------------------------------------------

    The revised requirements and burden will be submitted to OMB for 
approval under control number 0938-1134 (CMS-10391).
2. ICRs Regarding Exemption for Payment Rate Changes (Sec. Sec.  
447.203(b)(6) and 447.204(a) Through (c))
    Section 447.203(b)(6)(ii) requires states to have procedures within 
the access monitoring review plan to monitor continued access after 
implementation of a SPA that reduces or restructures payment rates. The 
monitoring procedures must be in place for at least 3 years following 
the effective date of the SPA. The ongoing burden associated with the 
requirements under Sec.  447.203(b)(6)(ii) is the time and effort it 
would take each of the state Medicaid programs to monitor continued 
access following the implementation of a SPA that reduces or 
restructures payment rates.
    For provider rate reductions to a service category that are below 4 
percent per state fiscal year, and below 6 percent across two 
consecutive state fiscal years, the proposed changes to Sec.  
447.203(b)(6)(i) would exempt states from the analysis and monitoring 
procedures described in Sec.  447.203(b)(6)(ii).
    In our currently approved information collection request (CMS-
10391; OMB 0938-1134), we estimated that in each SPA submission cycle, 
states would submit 22 SPAs to implement rate changes or restructure 
provider payments based on the number of submissions received in FY 
2010.
    We estimated that it would take, on average, 880 hr to develop the 
monitoring procedures, 528 hr to periodically review the monitoring 
results, and 66 hr for review and approval of the monitoring procedures 
(1,474 total hours). We also estimated an average cost of $6,008.52 per 
state and $132,187.44 (total).
    In deriving these figures we used the following labor rates and 
time to complete each task: 40 hr at $88.38/hr for management analyst 
staff to develop the monitoring procedures, 24 hr at $88.38/hr for 
management analyst staff to periodically review the monitoring results, 
and 3 hr at $117.40/hr for management staff to review and approve the 
monitoring procedures.

              Table 6--Access Monitoring Procedures Following Rate Reduction SPA--Burden Per State
                                                    [Annual]
----------------------------------------------------------------------------------------------------------------
                                                                                     Adjusted      Cost per data
              Requirement                   Occupation title       Burden hours   hourly wage ($/   review ($/
                                                                                        hr)           state)
----------------------------------------------------------------------------------------------------------------
Develop Monitoring Procedures.........  Management Analyst......              40           88.38        3,535.20
Periodically Review Monitoring Results  Management Analyst......              24           88.38        2,121.12
Approve Monitoring Procedures.........  General and Operations                 3          117.40          352.20
                                         Manager.
                                                                 -----------------------------------------------
    Total.............................  ........................              67          varies        6,008.52
----------------------------------------------------------------------------------------------------------------

    We are revising our estimates based on more current data that we 
collected during the 2016 submission cycle and reducing the burden 
hours to account for the proposed managed care enrollment rate 
exemption and threshold for payment rate reductions. During the 2016 
submission cycle, we received approximately 23 payment rate change 
submissions from nine states that would have fallen under the 
monitoring procedure's information

[[Page 12703]]

collection burden, which is generally consistent with our currently 
approved burden estimates.
    Of the 23 submissions, 9 would meet the exemption criteria for 
states with managed care enrollment rates at or above 85 percent. For 
the remaining 14 submissions, we believe 4 may have fallen below the 4 
percent threshold for overall spending within the service category 
exemption for a single state fiscal year, and 6 percent for two 
consecutive state fiscal years based on information provided by the 
state during the SPA review process. Based on the proposed exemptions 
process, we are reducing our original estimated number of SPA 
submissions from 22 to 10. We note that there is some variability in 
state SPA submissions from year-to-year and the number of rate 
reduction SPAs that states submit to CMS for approval.

            Table 7--Revised Access Monitoring Procedures Following Rate Reduction SPA--Total Burden
                                                    [Annual]
----------------------------------------------------------------------------------------------------------------
                                                                                  Cost of review    Total cost
      Anticipated number of state reviews                  Total hours             per state ($)   estimate ($)
----------------------------------------------------------------------------------------------------------------
(12)..........................................  (804) [-67 hr x 12 responses]...      (6,008.52)     (72,102.24)
----------------------------------------------------------------------------------------------------------------

    The revised requirements and burden will be submitted to OMB for 
approval under control number 0938-1134 (CMS-10391).
3. ICRs Regarding Modification of Payment Rate Change SPA Submission 
Information (Sec.  447.204(b)(2))
    Section 447.204(b)(2) requires states to include specific 
documentation to demonstrate access when submitting a SPA that proposes 
to reduce or restructure payment rates. Included in the documentation, 
states are required to submit a copy of its most recent access 
monitoring review plan that includes the services for which payment is 
being reduced or restructured and an analysis of the effect of the 
changes in payment rates on access. The burden associated with such 
submission is included under Sec.  447.203(b)(1) (see above) for 
ongoing access monitoring review plan (reduction of 10,540 hr).
    We are proposing to modify the requirement in Sec.  447.204(b)(2) 
so that states will no longer be required to predict the effect the 
payment rate change will have on access, and will instead be required 
to submit to CMS an assurance that data indicates current access is 
consistent with requirements of the Act. We do not anticipate there 
will be any changes in burden based on the proposal since it would 
merely change the expectation for the type of conclusion that the state 
will draw using its analysis from one that anticipates future access to 
one that infers access is currently sufficient.
    The revised requirement will be submitted to OMB for approval under 
control number 0938-1134 (CMS-10391).

C. Summary of Proposed Information Collection Requirements and Burden

                                         Table 8--Proposed Annual Recordkeeping and Reporting Requirements Under
                                                              OMB Control Number 0938-1134
                                                                       [CMS-10391]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Burden per     Total annual   Labor cost ($/
      Regulatory section(s) in Title 42 of the CFR          Respondents      Responses     response (hr)    burden (hr)         hr)       Total cost ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   447.203(b)(1)-(4) (one time requirement).........            (51)            (51)           (310)        (15,810)          varies     (1,197,194)
Sec.   447.203(b)(1)-(4) (on-going requirement).........            (17)            (17)           (310)         (5,270)          varies       (399,065)
Sec.   447.203(b) (attestation).........................              17              17             0.5             8.5          117.40             998
Sec.   447.203(b)(6) (monitoring following rate                     (12)            (12)            (67)           (804)          varies        (72,102)
 reduction/restructuring)...............................
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................            (34)            (34)         (561.5)      (21,808.5)          varies     (1,667,363)
--------------------------------------------------------------------------------------------------------------------------------------------------------

D. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. The requirements are not effective, if finalized, until 
they have been approved by OMB.
    We invite public comments on these information collection 
requirements, and particularly on submission frequency and burden hours 
per response. If you wish to comment, please identify the rule (CMS-
2406-P) and, where applicable, the ICR's CFR citation, CMS ID number, 
and OMB control number.
    To obtain copies of a supporting statement and any related forms 
for the proposed collection(s) summarized in this notice, you may make 
your request using one of following:
    1. Access CMS' website address at https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html.
    2. Email your request, including your address, phone number, OMB 
number, and CMS document identifier, to [email protected].
    3. Call the Reports Clearance Office at (410) 786-1326.
    See this rule's DATES and ADDRESSES sections for the comment due 
date and for additional instructions.

IV. 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.

V. Regulatory Impact Analysis

A. Statement of Need

    This proposed rule impacts states' documentation of compliance with 
section 1902(a)(30)(A) of the Act. This

[[Page 12704]]

proposed rule would provide burden relief to states with comprehensive, 
risk-based managed care enrollment rates above 85 percent of the total 
covered Medicaid population within a state's Medicaid program and 
states making rate reductions to services below a threshold of 4 
percent of overall Medicaid spending within a service category (for 
example, physician services) within a single SFY and 6 percent over 2 
consecutive SFYs by exempting them from certain processes described in 
Sec. Sec.  447.203 and 447.204. This proposed rule also would modify 
the requirements at Sec.  447.204(b)(2) so that states must submit to 
CMS with SPAs that reduce or restructure Medicaid payment rates an 
assurance that the current baseline data indicates access is consistent 
with the Act, rather than an analysis anticipating the effects of a 
proposed change in payment rates.

B. Overall Impact

    We have examined the impacts of this proposed 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 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), the Congressional Review Act (5 U.S.C. 804(2)) and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    Executive Orders 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). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). This proposed rule is not economically significant with an 
overall estimated reduced economic reporting burden of $449,961.

C. Anticipated Effects

1. Effects on State Medicaid Programs
    We anticipate effects on state Medicaid programs that have high 
comprehensive, risk-based managed care enrollment rates and that make 
adjustments to their Medicaid payment rates that are unlikely to 
diminish access to care. States with comprehensive, risk-based managed 
care enrollment rates of 85 percent or above would no longer be 
required to maintain and update the access monitoring review plans 
required under the regulations. In addition, states that make nominal 
changes to their Medicaid payment rates, defined below 4 percent for a 
SFY and 6 percent for 2 consecutive SFYs, would no longer be required 
to conduct monitoring activities described in the regulations related 
to those SPA changes. Importantly, the provisions of this proposed rule 
provide exemptions to the regulatory procedure requirements for 
demonstrating access to care. However, states are not exempt from the 
statutory requirements described at section 1902(a)(30)(A) of the Act 
and must have alternative approaches to ensure access is consistent 
with the Act when reducing Medicaid payment rates.
2. Effects on Small Business and Providers
    We anticipate some effects on small businesses and providers that 
reside in states that meet the exemption criteria described in the 
proposed rule but only to the extent that we would have disapproved a 
SPA based on the information required for submission through the 
regulations. As the exemptions proposed in the proposed rule are either 
for states with relatively low fee-for-service delivery (and related 
expenditures) and for nominal payment rate changes, we do not 
anticipate the effects will be significant.
3. Effects on the Medicaid Program
    The estimated fiscal impact on the Medicaid program from the 
implementation of the proposed rule is estimated to be a net savings to 
Medicaid state agencies. These estimates are based on our estimation 
that 17 states will no longer be required to maintain and update the 
AMRPs and the approximate number annual SPAs requiring access 
monitoring will be reduced by 11. This will have a relatively minor 
effect on state administrative expenditures, with a total anticipated 
reduction in spending of $1,667,363. However, states have raised 
significant concerns over the administrative burden and associated 
benefits to complying with the regulatory requirements both when the 
majority of Medicaid beneficiaries are served through managed care and 
when making minor adjustments to Medicaid payments that they believe 
are unlikely to diminish access to care.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. The great majority of hospitals and most 
other health care providers and suppliers are small entities, either by 
being nonprofit organizations or by meeting the SBA definition of a 
small business (having revenues of less than $7.5 million to $38.5 
million in any one year). Individuals and states are not included in 
the definition of a small entity. As previously stated, we do not 
anticipate any effect on 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 and has fewer than 100 beds. This rule will 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 (UMRA) 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 2017, that 
threshold is approximately $148 million. This rule does not contain 
mandates that will impose spending costs on state, local, or tribal 
governments in the aggregate, or by the

[[Page 12705]]

private sector, in excess of the threshold.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule that imposes 
substantial direct requirement costs on state and local governments, 
preempts state law, or otherwise has Federalism implications. This rule 
does not have a substantial impact on state or local governments.

D. Alternatives Considered

    In developing this rule, the following alternatives were 
considered:
    1. We considered proposing a managed care enrollment exemption 
threshold at or above 70 percent but, in reviewing programmatic data, 
we discovered that the rate of managed care coverage can vary 
significantly based on category of Medicaid eligibility. For instance, 
while many states would meet the 70 percent threshold, the rate of 
managed care coverage for certain populations may fall well below 50 
percent. This is frequently the case for individuals who are eligible 
based on a combination of income and age or as a result of disability. 
The disproportion of coverage based on eligibility appears 
significantly less with an exemption threshold at or above 85 percent, 
therefore the proposed rule would set such a limit. However, we are 
requesting comments on the exemption threshold and whether additional 
considerations, discussed in more detail above, may be applied to allow 
a lower threshold.
    2. In codifying the 4 percent exemption for access monitoring, we 
considered whether the exemption percentage was too low or too high. As 
described in our SMDL on this matter, we believe that rate changes 
below a 4 percent threshold are unlikely to diminish access to care and 
generally the benefits of monitoring access for such reductions are not 
consistent with the administrative burden associated with monitoring. 
We are requesting comment on whether 4 percent is too high or low, but 
determine 4 percent to be appropriate for purposes of the proposed 
rule. We also considered applying the 4 percent exemption threshold 
annually but, in evaluating the potential cumulative effects of year-
over-year rate reductions, proposed a 6 percent threshold over 2 SFYs. 
We request comment on consideration of cumulative impacts, including 
the 6 percent threshold amount and 2 SFYs timeframe.

E. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs, was issued on January 30, 2017. This proposed rule is 
expected to be an E.O. 13771 deregulatory action. Details on the $1.66 
million estimated cost savings of this rule can be found in the 
preceding analyses.

G. Conclusion

    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

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 proposes to amend 42 CFR chapter IV as set forth 
below:

PART 447--PAYMENTS FOR SERVICES

0
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).

0
2. Section 447.203 is amended by revising paragraphs (b) introductory 
text, (b)(6)(i) and (ii) to read as follows:


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

* * * * *
    (b) In consultation with the medical care advisory committee under 
Sec.  431.12 of this chapter, the agency must develop a medical 
assistance access monitoring review plan and update it, in accordance 
with the timeline established in paragraph (b)(5) of this section and 
with procedures established by CMS. The plan must be published and made 
available to the public for review and comment for a period of no less 
than 30 days, prior to being finalized and submitted to CMS for review. 
States that have for all eligibility groups combined at least 85 
percent of beneficiaries enrolled in Medicaid managed care 
organizations, as defined in Sec.  438.2 of this chapter, and including 
section 1115 demonstration populations enrolled under such 
comprehensive risk contracts, are not required to meet the requirements 
under paragraphs (b)(1) through (6) of this section. Any state seeking 
an exemption based on an overall Medicaid managed care enrollment of 85 
percent or higher must submit an annual attestation of its Medicaid 
managed care enrollment rate as of July 1 of the previous year to CMS. 
In lieu of the requirements under paragraph (b)(6) of this section, 
States that have overall Medicaid managed care enrollment of at least 
85 percent for the calendar year, must submit an alternative analysis 
and certification, including the data and other information on which 
the analysis and certification are based, that demonstrate compliance 
with section 1902(a)(30)(A) of the Act.
* * * * *
    (6) * * *
    (i) Compliance with access requirements. The State shall submit 
with any State plan amendment that proposes to reduce provider payments 
by greater than 4 percent in overall service category spending in a 
State fiscal year or greater than 6 percent across two consecutive 
State fiscal years, or restructure provider payments in circumstances 
when the changes could result in diminished access, an access review, 
in accordance with the access monitoring review plan, for each service 
affected by the State plan amendments as 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 to demonstrate compliance with the access 
requirements at section 1902(a)(30)(A) of the Act.
    (ii) Monitoring procedures. In addition to the analysis conducted 
through paragraphs (b)(1) through (4) of this section that demonstrates 
access to care is sufficient as of the effective date of the State plan 
amendment, for any State plan amendment that reduces provider payment 
greater than 4 percent in overall service category spending in a State 
fiscal year or greater than 6 percent across two consecutive State 
fiscal years, or restructures provider payments in circumstances when 
the changes could result in diminished access, the state must establish 
procedures in its access monitoring review plan to monitor continued 
access to care after implementation of state plan service rate 
reduction or payment restructuring. The frequency of monitoring should 
be informed by the public review described in paragraph (b) of this 
section and should be conducted no less frequently than annually.
* * * * *
0
3. Section 447.204 is amended by--

[[Page 12706]]

0
a. Revising paragraphs (a) introductory text, (b) introductory text, 
(b)(2), and (c).
0
b. Redesignating paragraph (d) as paragraph (e).
0
c. Adding new paragraph (d).
    The revisions and addition 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 beneficiaries at least 
to the extent that those services are available to the general 
population. Except as provided in paragraph (d) of this section, in 
reviewing payment sufficiency, states are required to consider, prior 
to the submission of any state plan amendment that proposes to reduce 
or restructure Medicaid service payment rates:
* * * * *
    (b) Except as provided in paragraph (d) of this section, the State 
must submit to CMS with any such proposed State plan amendment 
affecting payment rates:
* * * * *
    (2) An assurance that access to care is sufficient in accordance 
with section 1902(a)(30)(A) of the Act, and baseline data to support 
this conclusion; and
* * * * *
    (c) Except as provided in paragraph (d) of this section, CMS may 
disapprove a proposed state plan amendment affecting payment rates if 
the state does not include in its submission the supporting 
documentation described in paragraph (b) of this section, for failure 
to document compliance with statutory access requirements. Any such 
disapproval would follow the procedures described at part 430 Subpart B 
of this title.
    (d) Paragraphs (a) through (c) of this section shall not apply in 
the case of a state that is not required to meet the requirements of 
Sec.  447.203(b)(1) through (b)(6) because the state has Medicaid 
managed care enrollment of at least 85 percent, as described in Sec.  
447.203(b), or in the case of a proposed State plan amendment that 
reduces provider payment rates by no more than 4 percent in any State 
fiscal year, and no more than 6 percent across two consecutive State 
fiscal years. In lieu of the requirements under paragraphs (a) though 
(c) of this section, States that are not required to meet these 
requirements pursuant to this paragraph must submit to CMS an 
alternative analysis, along with supporting data, to demonstrate 
compliance with section 1902(a)(30)(A) of the Act when submitting a 
state plan amendment that proposes to reduce or restructure Medicaid 
service payment rates in circumstances that may diminish access to 
care.
* * * * *

    Dated: March 1, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: March 16, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2018-05898 Filed 3-22-18; 8:45 am]
BILLING CODE 4120-01-P