[Federal Register Volume 86, Number 228 (Wednesday, December 1, 2021)]
[Notices]
[Pages 68260-68261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26136]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval South Carolina 
Medicaid State Plan Amendment (SPA) 19-0004-A

AGENCY:  Centers for Medicare & Medicaid Services, HHS.

ACTION: Notice of hearing: reconsideration of disapproval.

-----------------------------------------------------------------------

SUMMARY: This notice announces an administrative hearing to be held on 
January 12, 2022, at the Department of Health and Human Services, 
Division of Medicaid Field Operations, South, Centers for Medicare & 
Medicaid Services, Division of Medicaid and Children's Health 
Operations, 61 Forsyth St., Suite 4T20, Atlanta, Georgia 30303-8909 to 
reconsider CMS' decision to disapprove South Carolina's Medicaid SPA 
19-0004-A.

DATES: 
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by December 16, 2021.

FOR FURTHER INFORMATION CONTACT: Benjamin R. Cohen, Presiding Officer, 
CMS, 7500 Security Blvd., MS B1-01-31, Baltimore MD 21244-1850, 
Telephone: (410) 786-3169.

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider CMS's decision to disapprove South Carolina's 
Medicaid state plan amendment (SPA) 19-0004-A, which was submitted to 
the Centers for Medicare & Medicaid Services (CMS) on June 28, 2019 and 
disapproved on May 21, 2021. This SPA requested CMS approval to update 
annual supplemental teaching physician (STP) payment program using the 
Average Commercial Rate (ACR) methodology effective April 1, 2019. This 
SPA included Greenville Memorial Hospital, and Palmetto Health, 
Richland/USC.
    The issues to be considered at the hearing are whether South 
Carolina SPA 19-0004-A is inconsistent with the requirements of:
     Section 1902(a)(2) of the Social Security Act (the Act), 
providing that the state plan must assure adequate funding for the non-
federal share of expenditures from state or local sources, such that 
the lack of adequate funds from local sources will not result in 
lowering the amount, duration, scope, or quality of care and services 
available under the plan.
     Sections 1903(a) and 1905(b) of the Act, providing that 
states receive a statutorily determined Federal Medicaid Assistance 
Percentage (FMAP) for allowable state expenditures on medical 
assistance.
     Section 1903(w)(1)(A)(i)(I) of the Act, providing that, 
notwithstanding the previous provisions of section 1903, for purposes 
of determining the amount to be paid to a State (as defined in 
paragraph (7)(D)) under subsection (a)(1) for quarters in any fiscal 
year, the total amount expended during such fiscal year as medical 
assistance under the State plan (as determined without regard to 
section 1903(w)) shall be reduced, inter alia, by the sum of any 
revenues received by the State (or by a unit of local government in the 
State) during the fiscal year from provider-related donations other 
than bona fide provider-related donations, as defined in section 
1903(w)(2)(B).
     Section 1903(w)(2)(A) of the Act, providing that, in 
section 1903(w), except as provided in section 1903(w)(6), the term 
``provider-related donation'' means any donation or other voluntary 
payment (whether in cash or in kind) made (directly or indirectly) to a 
State or unit of local government by--(i) a health care provider (as 
defined in section 1903(w)(7)(B)), (ii) an entity related to a health 
care provider (as defined in section 1903(w)(7)(C)), or (iii) an entity 
providing goods or services under the State plan for which payment is 
made to the State under paragraph (2), (3), (4), (6), or (7) of section 
1903(a).
     Section 1903(w)(2)(B) of the Act, providing that, for 
purposes of section 1903(w)(1)(A)(i)(I), the term ``bona fide provider-
related donation'' means a provider-related donation that has no direct 
or indirect relationship (as determined by the Secretary) to payments 
made under title XIX to that provider, to providers furnishing the same 
class of items and services as that provider, or to any related entity, 
as established by the State to the satisfaction of the Secretary. The 
Secretary may by regulation specify types of provider-related donations 
described in the previous sentence that will be considered to be bona 
fide provider-related donations.
     Section 1903(w)(6)(A) of the Act, providing that, 
notwithstanding the provisions of section 1903(w), the Secretary may 
not restrict States'' use of funds where such funds are derived from 
State or local taxes (or funds appropriated to State university 
teaching hospitals) transferred from or certified by units of 
government within a State as the non-Federal share of expenditures 
under title XIX, regardless of whether the unit of government is also a 
health care provider, except as provided in section 1902(a)(2), unless 
the transferred funds are derived by the unit of government from 
donations or taxes that would not otherwise be recognized as the non-
Federal share under section 1903.
     42 CFR 433.54(b), (c)(2), and (c)(3), providing that 
provider-related donations will be determined to have no direct or 
indirect relationship to Medicaid payments if those donations are not 
returned to the individual provider, the provider class, or related 
entity under a hold harmless provision or practice, as described in 42 
CFR 433.54(c). A hold harmless practice exists if, inter alia, all or 
any portion of the Medicaid payment to the donor, provider class, or 
related entity, varies based only on the amount of the donation, 
including where Medicaid payment is conditional on receipt of the 
donation; or if the State (or other unit of government) receiving the 
donation provides for any direct or indirect payment, offset, or waiver 
such that the provision of that payment, offset, or waiver directly or 
indirectly guarantees to return any portion of the donation to the 
provider (or other parties responsible for the donation).
    Section 1116 of the Act and federal regulations at 42 CFR part 430 
establish Department procedures that provide an administrative hearing 
for reconsideration of a disapproval of a state plan or plan amendment. 
CMS is required to publish in the Federal Register a copy of the notice 
to a state Medicaid agency that informs the

[[Page 68261]]

agency of the time and place of the hearing, and the issues to be 
considered. If we subsequently notify the state Medicaid agency of 
additional issues that will be considered at the hearing, we will also 
publish that notice in the Federal Register.
    Any individual or group that wants to participate in the hearing as 
a party must petition the presiding officer within 15 days after 
publication of this notice, in accordance with the requirements 
contained at 42 CFR 430.76(b)(2). Any interested person or organization 
that wants to participate as amicus curiae must petition the presiding 
officer before the hearing begins in accordance with the requirements 
contained at 42 CFR 430.76(c). If the hearing is later rescheduled, the 
presiding officer will notify all participants.
    The notice to South Carolina announcing an administrative hearing 
to reconsider the disapproval of its SPAs reads as follows:

Robert M. Kerr
Director, South Carolina Department of Health and Human Services, 
Post Office Box 8206, Columbia, SC 29202-8206

Dear Mr. Kerr:

    I am responding to the July 19, 2021 request for reconsideration 
of the decision to disapprove South Carolina's State Plan amendment 
(SPA) 19-0004-A. South Carolina SPA 19-0004-A was submitted to the 
Centers for Medicare & Medicaid Services (CMS) on June 28, 2019 and 
disapproved on May 21, 2021. I am scheduling a hearing on the 
request for reconsideration to be held on January 12, 2022, at the 
Department of Health and Human Services, Division of Medicaid Field 
Operations, South, Centers for Medicare & Medicaid Services, 
Division of Medicaid and Children's Health Operations, 61 Forsyth 
St., Suite 4T20, Atlanta, Georgia 30303-8909.
    I am designating Mr. Benjamin R. Cohen as the presiding officer. 
If these arrangements present any problems, please contact Mr. Cohen 
at (410) 786-3169. In order to facilitate any communication that may 
be necessary between the parties prior to the hearing, please notify 
the presiding officer to indicate acceptability of the hearing date 
that has been scheduled and provide names of the individuals who 
will represent the State at the hearing. If the hearing date is not 
acceptable, Mr. Cohen can set another date mutually agreeable to the 
parties. The hearing will be governed by the procedures prescribed 
by federal regulations at 42 CFR part 430.
    This SPA requested CMS approval to update annual supplemental 
teaching physician (STP) payment program using the Average 
Commercial Rate (ACR) methodology effective April 1, 2019. This SPA 
included Greenville Memorial Hospital, and Palmetto Health Richland/
USC.
    The issues to be considered at the hearing are whether South 
Carolina SPA 19-0004-A is inconsistent with the requirements of:
     Section 1902(a)(2) of the Social Security Act (the 
Act), providing that the state plan must assure adequate funding for 
the non-federal share of expenditures from state or local sources, 
such that the lack of adequate funds from local sources will not 
result in lowering the amount, duration, scope, or quality of care 
and services available under the plan.
     Sections 1903(a) and 1905(b) of the Act, providing that 
states receive a statutorily determined Federal Medicaid Assistance 
Percentage (FMAP) for allowable state expenditures on medical 
assistance.
     Section 1903(w)(1)(A)(i)(I) of the Act, providing that, 
notwithstanding the previous provisions of section 1903, for 
purposes of determining the amount to be paid to a State (as defined 
in paragraph (7)(D)) under subsection (a)(1) for quarters in any 
fiscal year, the total amount expended during such fiscal year as 
medical assistance under the State plan (as determined without 
regard to section 1903(w)) shall be reduced, inter alia, by the sum 
of any revenues received by the State (or by a unit of local 
government in the State) during the fiscal year from provider-
related donations other than bona fide provider-related donations, 
as defined in section 1903(w)(2)(B).
     Section 1903(w)(2)(A) of the Act, providing that, in 
section 1903(w), except as provided in section 1903(w)(6), the term 
``provider-related donation'' means any donation or other voluntary 
payment (whether in cash or in kind) made (directly or indirectly) 
to a State or unit of local government by--(i) a health care 
provider (as defined in section 1903(w)(7)(B)), (ii) an entity 
related to a health care provider (as defined in section 
1903(w)(7)(C)), or (iii) an entity providing goods or services under 
the State plan for which payment is made to the State under 
paragraph (2), (3), (4), (6), or (7) of section 1903(a).
     Section 1903(w)(2)(B) of the Act, providing that, for 
purposes of section 1903(w)(1)(A)(i)(I), the term ``bona fide 
provider-related donation'' means a provider-related donation that 
has no direct or indirect relationship (as determined by the 
Secretary) to payments made under title XIX to that provider, to 
providers furnishing the same class of items and services as that 
provider, or to any related entity, as established by the State to 
the satisfaction of the Secretary. The Secretary may by regulation 
specify types of provider-related donations described in the 
previous sentence that will be considered to be bona fide provider-
related donations.
     Section 1903(w)(6)(A) of the Act, providing that, 
notwithstanding the provisions of section 1903(w), the Secretary may 
not restrict States'' use of funds where such funds are derived from 
State or local taxes (or funds appropriated to State university 
teaching hospitals) transferred from or certified by units of 
government within a State as the non-Federal share of expenditures 
under title XIX, regardless of whether the unit of government is 
also a health care provider, except as provided in section 
1902(a)(2), unless the transferred funds are derived by the unit of 
government from donations or taxes that would not otherwise be 
recognized as the non-Federal share under section 1903.
     42 CFR 433.54(b), (c)(2), and (c)(3), providing that 
provider-related donations will be determined to have no direct or 
indirect relationship to Medicaid payments if those donations are 
not returned to the individual provider, the provider class, or 
related entity under a hold harmless provision or practice, as 
described in 42 CFR 433.54(c). A hold harmless practice exists if, 
inter alia, all or any portion of the Medicaid payment to the donor, 
provider class, or related entity, varies based only on the amount 
of the donation, including where Medicaid payment is conditional on 
receipt of the donation; or if the State (or other unit of 
government) receiving the donation provides for any direct or 
indirect payment, offset, or waiver such that the provision of that 
payment, offset, or waiver directly or indirectly guarantees to 
return any portion of the donation to the provider (or other parties 
responsible for the donation).
    In the event that CMS and the State come to agreement on 
resolution of the issues which formed the basis for disapproval, 
these SPAs may be moved to approval prior to the scheduled hearing.

Sincerely,

Chiquita Brooks-LaSure,
Administrator

cc: Benjamin R. Cohen

    The Administrator of the Centers for Medicare & Medicaid Services 
(CMS), Chiquita Brooks-LaSure, having reviewed and approved this 
document, authorizes Evell J. Barco Holland, who is the Federal 
Register Liaison, to electronically sign this document for purposes of 
publication in the Federal Register.
    Section 1116 of the Social Security Act (42 U.S.C. section 1316; 42 
CFR section 430.18) (Catalog of Federal Domestic Assistance Program No. 
13.714. Medicaid Assistance Program.)

    Dated: November 26, 2021.
Evell J. Barco Holland,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
 [FR Doc. 2021-26136 Filed 11-30-21; 8:45 am]
 BILLING CODE 4120-01-P