[Federal Register Volume 88, Number 85 (Wednesday, May 3, 2023)]
[Proposed Rules]
[Pages 27960-28089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08959]



[[Page 27959]]

Vol. 88

Wednesday,

No. 85

May 3, 2023

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 431, 438, et al.





Medicaid Program; Ensuring Access to Medicaid Services; Proposed Rule

  Federal Register / Vol. 88, No. 85 / Wednesday, May 3, 2023 / 
Proposed Rules  

[[Page 27960]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 431, 438, 441, and 447

[CMS-2442-P]
RIN 0938-AU68


Medicaid Program; Ensuring Access to Medicaid Services

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule takes a comprehensive approach to improving 
access to care, quality and health outcomes, and better addressing 
health equity issues in the Medicaid program across fee-for-service 
(FFS), managed care delivery systems, and in home and community-based 
services (HCBS) programs. These proposed improvements seek to increase 
transparency and accountability, standardize data and monitoring, and 
create opportunities for States to promote active beneficiary 
engagement in their Medicaid programs, with the goal of improving 
access to care.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by July 3, 2023.

ADDRESSES: In commenting, please refer to file code CMS-2442-P.
    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-2442-P, P.O. Box 8016, 
Baltimore, MD 21244-1850.
    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-2442-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: 
    Karen LLanos, (410) 786-9071, for Medical Care Advisory Committee.
    Jennifer Bowdoin, (410) 786-8551, for Home and Community-Based 
Services.
    Jeremy Silanskis, (410) 786-1592, for Fee-for-Service Payment.

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. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.

I. Background

A. Overview

    Title XIX of the Social Security Act (the Act) established the 
Medicaid program as a joint Federal and State program to provide 
medical assistance to eligible individuals, including many with low 
incomes. Under the Medicaid program, each State that chooses to 
participate in the program and receive Federal financial participation 
(FFP) for program expenditures, establishes eligibility standards, 
benefits packages, and payment rates, and undertakes program 
administration in accordance with Federal statutory and regulatory 
requirements. The provisions of each State's Medicaid program are 
described in the Medicaid ``State plan'' and, as applicable, related 
authorities, such as demonstration projects and waivers of State plan 
requirements. Among other responsibilities, CMS approves State plans, 
State plan amendments (SPAs), demonstration projects authorized under 
section 1115 of the Act, and waivers authorized under section 1915 of 
the Act; and reviews expenditures for compliance with Federal Medicaid 
law, including the requirements of section 1902(a)(30)(A) of the Act 
relating to efficiency, economy, quality of care, and access to ensure 
that all applicable Federal requirements are met.
    As of December 2022, the Medicaid program provides essential health 
care coverage to more than 85 million \1\ individuals, and, in 2021, 
accounted for 17 percent of national health expenditures.\2\ The 
program covers a broad array of health benefits and services critical 
to underserved populations,\3\ including low-income adults, children, 
parents, pregnant individuals, older adults, and people with 
disabilities. For example, Medicaid pays for approximately 41 percent 
of all births in the U.S.\4\ and is the largest payer of long-term 
services and supports (LTSS),\5\ the largest, single payer of services 
to treat substance use disorders,\6\ and services to prevent and treat 
the Human Immunodeficiency Virus.\7\
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    \1\ December 2022 Medicaid and CHIP Enrollment Snapshot. 
Accessed at https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/December-2022-medicaid-chip-enrollment-trend-snapshot.pdf.
    \2\ CMS National Health Expenditure Accounts. National Health 
Expenditures 2020 Highlight. Accessed at https://www.cms.gov/files/document/highlights.pdf.
    \3\ Executive Order 13985: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
    \4\ National Center for Health Statistics. Key Birth Statistics. 
Accessed at https://www.cdc.gov/nchs/nvss/births.htm.
    \5\ Colello, Kirsten J. Who Pays for Long-Term Services and 
Supports? Congressional Research Service. Updated June 15, 2022. 
Accessed at https://crsreports.congress.gov/product/pdf/IF/IF10343.
    \6\ Soni, Anita. Health Care Expenditures for Treatment of 
Mental Disorders: Estimates for Adults Ages 18 and Older, U.S. 
Civilian Noninstitutionalized Population, 2019. Statistical Brief 
#539, pg 12. February 2022. Agency for Healthcare Research and 
Quality, Rockville, MD. Accessed at https://meps.ahrq.gov/data_files/publications/st539/stat539.pdf.
    \7\ Dawson, L. and Kates, J. Insurance Coverage and Viral 
Suppression Among People with HIV, 2018. September 2020. Kaiser 
Family Foundation. Accessed at https://www.kff.org/hivaids/issue-brief/insurance-coverage-and-viral-suppression-among-people-with-hiv-2018/.
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    On January 28, 2021, the President signed Executive Order (E.O.) 
14009,\8\ ``Strengthening Medicaid and the Affordable Care Act'' which 
established the policy objective to protect and strengthen Medicaid and 
the Affordable Care Act and to make high-quality health care accessible 
and affordable for every American and directed executive departments 
and agencies to review existing regulations, orders, guidance 
documents, and policies to determine whether such agency actions are 
inconsistent with this policy. On April

[[Page 27961]]

5, 2022, E.O. 14070,\9\ ``Continuing To Strengthen Americans' Access to 
Affordable, Quality Health Coverage,'' directed Federal agencies with 
responsibilities related to Americans' access to health coverage to 
review agency actions to identify ways to continue to expand the 
availability of affordable health coverage, to improve the quality of 
coverage, to strengthen benefits, and to help more Americans enroll in 
quality health coverage. This proposed rule aims to fulfill E.O.s 14009 
and 14070 by helping States to strengthen Medicaid and improve access 
to and quality of care provided.
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    \8\ Executive Order 14009: https://www.federalregister.gov/documents/2021/02/02/2021-02252/strengthening-medicaid-and-the-affordable-care-act.
    \9\ Executive Order 14070: https://www.federalregister.gov/documents/2022/04/08/2022-07716/continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage.
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    Ensuring that beneficiaries can access covered services is 
necessary to the basic operation of the Medicaid program. Depending on 
the State and its Medicaid program structure, beneficiaries access 
their health care services using a variety of care delivery systems 
(for example, FFS, fully-capitated managed care, partially capitated 
managed care, etc.), including through demonstrations and waiver 
programs. In 2020, 70 percent of Medicaid beneficiaries were enrolled 
in comprehensive managed care plans; \10\ the remaining individuals 
received all of their care or some services that have been carved out 
of managed care through FFS.
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    \10\ MACPAC 2022 Analysis of T-MSIS data February 2022. Exhibit 
30. Percentage of Medicaid Enrollees in Managed Care by State and 
Eligibility Group https://www.macpac.gov/wp-content/uploads/2022/12/EXHIBIT-30.-Percentage-of-Medicaid-Enrollees-in-Managed-Care-by-State-and-Eligibility-Group-FY-2020.pdf.
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    Current access regulations are neither comprehensive nor consistent 
across delivery systems or coverage authority (for example, State plan 
and demonstration authority). For example, regulations at 42 CFR 
447.203 and 447.204 relating to access to care, service payment rates, 
and Medicaid provider participation in rate setting apply only to 
Medicaid FFS delivery systems and focus on ensuring that payment rates 
are consistent with the statutory requirements in section 
1902(a)(30)(A) of the Act. The regulations do not apply to services 
delivered under managed care. These regulations are also largely 
procedural in nature and rely heavily on States to form an analysis and 
reach conclusions on the sufficiency of their own payment rates.
    With a program as large and complex as Medicaid, access regulations 
need to be multi-factorial to promote consistent access to health care 
for all beneficiaries across all types of care delivery systems in 
accordance with statutory requirements. Strategies to enhance access to 
health care services should reflect how people move through and 
interact with the health care system. We view the continuum of health 
care access across three dimensions of a person-centered framework: (1) 
enrollment in coverage; (2) maintenance of coverage; and (3) access to 
services and supports. Within each of these dimensions, accompanying 
regulatory, monitoring, and/or compliance actions may be needed to 
ensure access to health care is achieved and maintained.
    In the spring of 2022, we released a request for information (RFI) 
\11\ to collect feedback on a broad range of questions that examined 
topics such as: challenges with eligibility and enrollment; ways we can 
use data available to measure, monitor, and support improvement efforts 
related to access to services; strategies we can implement to support 
equitable and timely access to providers and services; and 
opportunities to use existing and new access standards to help ensure 
that Medicaid and CHIP payments are sufficient to enlist enough 
providers.
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    \11\ CMS Request for Information: Access to Coverage and Care in 
Medicaid & CHIP. February 2022. For a full list of question from the 
RFI, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.
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    Some of the most common feedback we received through the RFI 
related to ways that we can promote health equity through cultural 
competency. Commenters shared the importance that cultural competency 
plays in how beneficiaries access health care and in the quality of 
health services received by beneficiaries. The RFI respondents shared 
examples of actions that we could take, including collecting and 
analyzing health outcomes data by sociodemographic categories; 
establishing minimum standards for how States serve communities in ways 
that address cultural competency and language preferences; and reducing 
barriers to enrollment and retention for racial and ethnic minority 
groups.
    In addition to the topic of cultural competency, commenters also 
commonly shared that they viewed reimbursement rates as a key driver of 
provider participation in Medicaid and CHIP programs. Further, 
commenters noted that aligning payment approaches and setting minimum 
standards for payment regulations and compliance across Medicaid and 
CHIP delivery systems, services, and benefits could help ensure that 
beneficiaries' access to services is as similar as possible across 
beneficiary groups, delivery systems, and programs.
    As mentioned previously in this proposed rule, the first dimension 
of access focuses on ensuring that eligible people are able to enroll 
in the Medicaid program. Access to Medicaid enrollment requires that a 
potential beneficiary know if they are or may be eligible for Medicaid, 
be aware of Medicaid coverage options, and be able to easily apply for 
and enroll in coverage. The second dimension of access in this 
continuum relates to maintaining coverage once the beneficiary is 
enrolled in the Medicaid program initially. Maintaining coverage 
requires that eligible beneficiaries are able to stay enrolled in the 
program without interruption, or that they know how to and can smoothly 
transition to other health coverage, such as CHIP, Exchange coverage, 
or Medicare, when they are no longer eligible for Medicaid coverage but 
have become eligible for other health coverage programs. In September 
2022, we published a proposed rule, Streamlining the Medicaid, 
Children's Health Insurance Program, and Basic Health Program 
Application, Eligibility, Determination, Enrollment, and Renewal 
Processes (87 FR 54760; hereinafter the ``Streamlining Eligibility & 
Enrollment proposed rule'') to simplify the processes for eligible 
individuals to enroll and retain eligibility in Medicaid, CHIP, and the 
Basic Health Program (BHP).
    The third dimension, which is the focus of this proposed rule, is 
access to services and supports. This rule is focused on addressing 
additional critical elements of access: (1) potential access, which 
refers to a beneficiary's access to providers and services, whether or 
not the providers or services are used; (2) beneficiary utilization, 
which refers to beneficiaries' actual use of the providers and services 
available to them; and (3) beneficiaries' perceptions and experiences 
with the care they did or were not able to receive. These terms and 
definitions build upon previous efforts to examine how best to monitor 
access.\12\
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    \12\ Kenney, Genevieve M., Kathy Gifford, Jane Wishner, Vanessa 
Forsberg, Amanda I. Napoles, and Danielle Pavliv. ``Proposed 
Medicaid Access Measurement and Monitoring Plan.'' Washington, DC: 
The Urban Institute. August 2016. Accessed at https://www.urban.org/sites/default/files/publication/88081/2001143-medicaid-access-measurement-and-monitoring-plan_0.pdf.
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    We are engaging in an array of regulatory activities, including 
three rulemakings that are currently underway (more specifically, the 
Streamlining Eligibility & Enrollment proposed rule, a proposed rule, 
entitled

[[Page 27962]]

Medicaid and Children's Health Insurance Program (CHIP) Managed Care 
Access, Finance, and Quality, on managed care including matters of 
access, and this proposed rule on access). Additionally, we are taking 
non-regulatory activities to improve beneficiary access to care (for 
example, best practices toolkits and technical assistance to States) to 
improve access to health care services across Medicaid delivery 
systems.
    As noted earlier, we issued the Streamlining Eligibility & 
Enrollment proposed rule to address the first two dimensions of access 
to health care: (1) enrollment in coverage and (2) maintenance of 
coverage. Through that proposed rule, we sought to streamline Medicaid, 
CHIP and BHP eligibility and enrollment processes, reduce 
administrative burden on States and applicants/enrollees toward a more 
seamless eligibility and enrollment process, and increase the 
enrollment and retention of eligible individuals.
    The managed care proposed rule seeks to improve access to care and 
quality outcomes for Medicaid and CHIP beneficiaries enrolled in 
managed care by: creating standards for timely access to care and 
States' monitoring and enforcement efforts; reducing burden for some 
State directed payments and certain quality reporting requirements; 
adding new standards that would apply when States use in lieu of 
services and settings (ILOSs) to promote effective utilization, and 
specifying the scope and nature of ILOS; specifying medical loss ratio 
(MLR) requirements, and establishing a quality rating system for 
Medicaid and CHIP managed care plans.
    Through the managed care proposed rule and this proposed rule 
(Ensuring Access to Medicaid Services), we propose additional 
requirements to address the third dimension of the health care access 
continuum: access to services. The proposed requirements outlined later 
in this section focus on improving access to services in Medicaid by 
utilizing tools such as FFS rate transparency, standardized reporting 
for HCBS, and improving the process for interested parties, especially 
Medicaid beneficiaries, to provide feedback to State Medicaid agencies 
and for Medicaid agencies to respond to the feedback (also known as a 
feedback loop).
    Through a combination of these three proposed rules, we seek to 
address a range of access-related challenges that impact how 
beneficiaries are served by Medicaid across all of its delivery 
systems. FFP would be available for expenditures that might be 
necessary to implement the activities States would need to undertake to 
comply with the provisions of the proposed rules, if finalized.
    Finally, we also believe it is important to acknowledge the role of 
health equity within this proposed rule. Medicaid plays a 
disproportionately large role in covering health care for people of 
color in this country.\13\ Consistent with E.O. 13985 on Advancing 
Racial Equity and Support for Underserved Communities Through the 
Federal Government (January 20, 2021),\14\ which calls for advancing 
equity for underserved populations, we are working to ensure our 
programs consistently provide high-quality care to all beneficiaries, 
and thus advance health equity, consistent with the goals and 
objectives we have outlined in the CMS Framework for Health Equity 
2022-2032 \15\ and the HHS Equity Action Plan.\16\ That effort includes 
increasing our understanding of the needs of those we serve to ensure 
that all individuals have access to equitable care and coverage.
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    \13\ Guth, M. and Artiga, S. Medicaid and Racial Health Equity 
March 2022. Accessed at https://www.kff.org/medicaid/issue-brief/medicaid-and-racial-health-equity/.
    \14\ Executive Order 13985: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
    \15\ CMS Framework for Health Equity 2022-2032: https://www.cms.gov/files/document/cms-framework-health-equity.pdf.
    \16\ HHS Equity Action Plan. April 2022. Accessed at https://www.hhs.gov/sites/default/files/hhs-equity-action-plan.pdf.
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    We recognize that each State faces a unique set of challenges 
related to the resumption of its normal program acvitities after the 
end of the COVID-19 public health emergency (PHE). More specifically, 
the expiration of the continuous enrollment condition authorized by the 
Families First Coronavirus Response Act (FFCRA) presents the single 
largest health coverage transition event since the first open 
enrollment period of the Affordable Care Act. As a condition of 
receiving a temporary 6.2 percentage point Federal Medical Assistance 
Percentage (FMAP) increase under the FFCRA, States have been required 
to maintain enrollment of nearly all Medicaid enrollees. This 
continuous enrollment condition expired on March 31, 2023, and States 
now have 12 months to initiate and 14 months to complete renewals for 
all individuals enrolled in Medicaid, CHIP and the Basic Health 
Program. Additionally, many other temporary authorities adopted by 
States during the COVID-19 PHE will expire at the end of the PHE, and 
States will be returning to regular operations across their programs. 
The resumption of normal Medicaid operations is generally referred to 
as ``unwinding'' and the 12-month period for States to initiate all 
outstanding eligibility actions that were delayed because of the FFCRA 
continuous enrollment condition is called the ``unwinding period.'' CMS 
considered States' unwinding responsibilities when proposing the 
effective dates for the proposals in this rule, but, as noted below, we 
seek State feedback on whether our proposals strike the correct 
balance.
    As we contemplate the timing of a final rule, we are considering 
adopting an effective date of 60 days following publication of the 
final rule and separate compliance dates for various provisions, which 
we note where relevant in our discussion of specific proposals in this 
proposed rule. We seek comment on whether an effective date of 60 days 
following publication would be appropriate when combined with later 
dates for compliance for some provisions. We also seek comment on the 
timeframe that would be most achievable and appropriate for compliance 
with each proposed provision and whether the compliance date should 
vary by provision.

B. Medical Care Advisory Committees (MCAC)

    We obtained feedback during various public engagement activities 
conducted with States and other interested parties, which supports 
research findings that the beneficiary perspective and lived Medicaid 
experience \17\ should be considered when making policy decisions 
related to Medicaid programs.18 19 A 2022 report from the

[[Page 27963]]

HHS Assistant Secretary of Planning and Evaluation (ASPE) noted that 
including people with lived experience in the policy-making process can 
lead to a deeper understanding of the conditions affecting certain 
populations, facilitate identification of possible solutions, and avoid 
unintended consequences of potential policy or program changes that 
could negatively impact the people the program aims to serve.\20\ We 
have concluded that beneficiary perspectives need to be central to 
operating a high-quality health coverage program that consistently 
meets the needs of all its beneficiaries.
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    \17\ Lived experience refers to ``representation and 
understanding of an individual's human experiences, choices, and 
options and how those factors influence one's perception of 
knowledge'' based on one's own life. In this context, we refer to 
people who have been enrolled in Medicaid currently or in the past. 
Accessed at https://aspe.hhs.gov/lived-
experience#:~:text=In%20the%20context%20of%20ASPE%E2%80%99s%20researc
h%2C%20people%20with,programs%20that%20aim%20to%20address%20the%20iss
ue%20%28s%29.
    \18\ Zhu JM, Rowland R, Gunn R, Gollust S, Grande DT. Engaging 
Consumers in Medicaid Program Design: Strategies from the States. 
Milbank Q. 2021 Mar;99(1):99-125. doi: 10.1111/1468-0009.12492. Epub 
2020 Dec 15. PMID: 33320389; PMCID: PMC7984666. Accessed at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7984666/.
    \19\ Key Findings from the Medicaid MCO Learning Hub Discussion 
Group Series and Roundtable--Focus on Member Engagement and the 
Consumer Voice. NORC at the University of Chicago. Jan 2021. 
Accessed at https://www.norc.org/PDFs/Medicaid%20Managed%20Care%20Organization%20Learning%20Hub/MMCOLearningHub_MemberEngagement.pdf.
    \20\ Syreeta Skelton-Wilson et al., ``Methods and Emerging 
Strategies to Engage People with Lived Experience,'' Office of the 
Assistant Secretary for Planning and Evaluation (ASPE), U.S. 
Department of Health and Human Services, January 4, 2022, https://aspe.hhs.gov/reports/lived-experience-brief.
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    However, effective community engagement is not as simple as 
planning a meeting and requesting feedback. To create opportunities 
that facilitate true engagement, it is important to understand and 
honor strengths and assets that exist within communities; recognize and 
solicit the inclusion of diverse voices; dedicate resources to ensuring 
that engagement is done in culturally meaningful ways; ensure 
timelines, planning processes, and resources that support equitable 
participation; and follow up with communities to let them know how 
their input was utilized. Ensuring optimal health outcomes for all 
beneficiaries served by a program through the design, implementation, 
and operationalization of policies and programs requires intentional 
and continuous effort to engage people who have historically been 
excluded from the process.
    Section 1902(a)(4) of the Act is a longstanding statutory provision 
that, as implemented in part in regulations currently codified at 42 
CFR 431.12,\21\ requires States to have a Medical Care Advisory 
Committee (MCAC) in place to advise the State Medicaid agency about 
health and medical care services. Under section 1903(a)(7) of the Act, 
expenditures made by the State agency to operate the MCAC are eligible 
for Federal administrative match.
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    \21\ The regulatory provision was originally established in 36 
FR 3793 at 3870.
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    The current MCAC regulations at Sec.  431.12 require States to 
establish such a committee, and describe high-level requirements 
related to the composition of the committee, the scope of topics to be 
discussed, and the support the Committee can receive from the State in 
its administration. Due to the lack of specificity in the current 
regulations, these regulations have not been consistently implemented 
across States. For example, there is no mention of how States should 
approach meeting periodicity or meeting structure in ways that are 
conducive to including a variety of Medicaid interested parties. There 
is also no mention in the regulations about how States can build 
accountability through transparency with their interested parties by 
publicly sharing meeting dates, membership lists, and the outcomes of 
these meetings. The regulations also limit the MCAC discussions to 
topics about health and medical care services--which in turn limits the 
benefits of using the MCAC as a vehicle that can provide States with 
varied ideas, suggestions, and experiences on a range of issues 
(medical and non-medical) related to the effective administration of 
the Medicaid program.
    As such, we have determined the requirements governing MCACs need 
to be more robust to ensure all States are using these committees 
optimally to realize a more effective and efficient Medicaid program 
that is informed by the experiences of beneficiaries, their caretakers, 
and other interested parties. The current regulations have been in 
place without change for over 40 years.\22\ Over the last four decades, 
we have learned that the current MCAC requirements are insufficient in 
ensuring that the beneficiary perspective is meaningfully represented 
on the MCAC. Recent research regarding soliciting input from 
individuals with lived experience, including our recent discussions 
with States about their MCAC, provide a unique opportunity to re-
examine the purpose of this committee and update the policies to 
reflect four decades of program experience.
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    \22\ 43 FR 45091 at 45189.
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    In 2022, we gathered feedback from various public engagement 
activities conducted with States, other interested parties, and 
directly from a subset of State Medicaid agencies that described a wide 
variation in how States are operating MCACs today. The feedback 
suggested that some MCACs operate simply to meet the broad Federal 
requirements. As discussed previously in this section, we have 
discovered that our current regulations do not further the statutory 
goal of meaningfully engaging Medicaid beneficiaries and other low-
income people in matters related to the operation of the Medicaid 
program. Meaningful engagement can help develop relationships and 
establish trust between the communities served and the Medicaid agency 
to ensure States receive important information concerning how to best 
provide health coverage to their beneficiary populations. The current 
MCAC regulations establish the importance of broad feedback from 
interested parties, but they lack the specificity that can ensure 
States use MCACs in ways that facilitate that feedback.
    The current regulation requires that MCACs must include Medicaid 
beneficiaries as committee members. However, the regulations do not 
mention or account for the reality that other interested parties can 
stifle beneficiary contribution in a group setting. For example, when 
there are a small number of beneficiary representatives in large 
committees with providers, health plans, and professional advocates, it 
can be uncomfortable and intimidating for beneficiaries to share their 
perspective and experience. Based on these reasons, several States 
already use beneficiary-only groups that feed into larger MCACs.
    Improvements to the MCACs are critical to ensuring a robust and 
accurate understanding of beneficiaries' challenges to health care 
access. The current regulations value State Medicaid agencies having a 
way to get feedback from interested parties on issues related to the 
Medicaid program. However, the current regulations lack specificity 
related to how MCACs can be used to benefit the Medicaid program more 
expressly by more fully promoting the beneficiary voice. MCACs need to 
provide a forum for beneficiaries and people with lived experience with 
the Medicaid program to share their experiences and challenges with 
accessing health care, and to assist States in understanding and better 
addressing those challenges. These committees also represent unique 
opportunities for States to include representation by members that 
reflect the demographics of their Medicaid program to ensure that the 
program is best serving the needs of all beneficiaries, but not all 
States are utilizing that opportunity.
    The proposed rule seeks to strike a balance that reflects how 
States currently use advisory committees (such as MCACs or standalone 
beneficiary groups). We know that some States approach these committees 
as a way to meet a Federal requirement while other States are using 
them in much more innovative ways. As a middle ground, the proposed 
rule seeks to: (1) address the gaps in the current regulations 
described previously in this section; and (2) establish requirements to 
implement

[[Page 27964]]

more effective advisory committees. States would select members in a 
way that reflects a wide range of Medicaid interested parties (covering 
a diverse set of populations and interests relevant to the Medicaid 
program), place a special emphasis on the inclusion of the beneficiary 
perspective, and create a meeting environment where each voice is 
empowered to participate equally.
    The changes we propose in this rule are rooted in best practices 
learned from experience and from current State examples of community 
engagement that support getting the type of feedback and experiences 
from beneficiaries, their caretakers, providers, and other interested 
parties that can then be used to positively impact care delivered 
through the Medicaid program.
    Accordingly, the proposed rule includes changes that, if finalized, 
would support the implementation of the principles of bi-directional 
feedback, transparency, and accountability. We propose changes to the 
features of the new committee that could most effectively ensure member 
engagement, including the staff and logistical support that is required 
for beneficiaries and individuals representing beneficiaries to 
meaningfully participate in these committees. We also propose changes 
to expand the scope of topics to be addressed by the committee, address 
committee membership composition, prescribe the features of 
administration of the committee, establish requirements of an annual 
report, and underscore the importance of beneficiary engagement through 
the addition of a related beneficiary-only group.

C. Home and Community-Based Services (HCBS)

    While Medicaid programs are required to provide medically necessary 
nursing facility services for most eligible individuals age 21 or 
older, coverage for home and community-based services (HCBS) is a State 
option.\23\ As a result of this ``institutional bias,'' Medicaid 
reimbursement for LTSS was primarily spent on institutional care, 
historically, with very little spending for HCBS.\24\ However, over the 
past several decades, States have used several Medicaid 
authorities,\25\ as well as CMS-funded grant programs,\26\ to develop a 
broad range of HCBS to provide alternatives to institutionalization for 
eligible Medicaid beneficiaries and to advance person-centered care. 
Consistent with many beneficiaries' preferences for where they would 
like to receive their care, HCBS have become a critical component of 
the Medicaid program and are part of a larger framework of progress 
toward community integration of older adults and people with 
disabilities that spans efforts across the Federal government. In fact, 
total Medicaid HCBS expenditures surpassed the long-standing benchmark 
of 50 percent of LTSS expenditures in FY 2013 and has remained higher 
than 50 percent since then, reaching 55.4 percent in FY 2017 and 58.6 
percent in FY 2019.\27\ A total of 30 States spent at least 50 percent 
of Medicaid LTSS expenditures on HCBS in FY 2019.
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    \23\ Murray, Caitlin, Alena Tourtellotte, Debra Lipson, and 
Andrea Wysocki. ``Medicaid Long Term Services and Supports Annual 
Expenditures Report: Federal Fiscal Year 2019.''Chicago, IL: 
Mathematica, December, 2021. Accessed at https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltssexpenditures2019.pdf.
    \24\ Centers for Medicare and Medicaid Services. November 2020. 
Long-Term Services and Supports Rebalancing Toolkit. Accessed at 
https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-rebalancing-toolkit.pdf.
    \25\ These authorities include Medicaid State plan personal care 
services and Social Security Act (the Act) section 1915(c) waivers, 
section 1915(i) State plan HCBS, section 1915(j) self-directed 
personal assistant services, and section 1915(k) Community First 
Choice. See https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/index.html for 
more information on these authorities. Some States also use 
demonstration authority under section 1115(a) of the Act to cover 
and test home and community-based service strategies. See https://www.medicaid.gov/medicaid/section-1115-demonstrations/index.html for 
more information.
    \26\ Federally funded grant programs include the Money Follows 
the Person (MFP) demonstration program, which was initially 
authorized by the Deficit Reduction Act of 2005 (Pub. L. 109-171). 
The MFP program was recently extended under the Consolidated 
Appropriations Act, 2021 (Pub. L. 116-260), which allowed new States 
to join the demonstration and made statutory changes affecting MFP 
participant eligibility criteria, allowing grantees to provide 
community transition services under MFP earlier in an eligible 
individual's inpatient stay.
    \27\ Murray, Caitlin, Alena Tourtellotte, Debra Lipson, and 
Andrea Wysocki. ``Medicaid Long Term Services and Supports Annual 
Expenditures Report: Federal Fiscal Year 2019.'' Chicago, IL: 
Mathematica, December 9, 2021. Accessed at https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltssexpenditures2019.pdf.
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    Furthermore, HCBS play an important role in States' efforts to 
achieve compliance with the Americans with Disabilities Act (ADA) of 
1990, section 504 of the Rehabilitation Act of 1973 (section 504),\28\ 
section 1557 of the Affordable Care Act, and the Supreme Court's 
decision in Olmstead v. L.C.,\29\ in which the Court held that 
unjustified segregation of persons with disabilities is a form of 
unlawful discrimination under the ADA \30\ and States must ensure that 
persons with disabilities are served in the most integrated setting 
appropriate to their needs.\31\ Section 9817 of the American Rescue 
Plan Act of 2021 (ARP) (Pub. L. 117-2) recently provided a historic 
investment in Medicaid HCBS by providing qualifying States with a 
temporary 10 percentage point increase to the FMAP for certain Medicaid 
expenditures for HCBS that States must use to implement or supplement 
the implementation of one or more activities to enhance, expand, or 
strengthen HCBS under the Medicaid program.\32\
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    \28\ HHS interprets section 504 and Title II of the ADA 
similarly regarding the integration mandate and the Department of 
Justice generally interprets the requirements under section 504 
consistently with those under Title II of the ADA.
    \29\ 527 U.S. 581 (1999).
    \30\ Medicaid and the Olmstead Decision. Accessed at https://www.medicaid.gov/about-us/program-history/medicaid-50th-anniversary/entry/47688.
    \31\ Medicaid and the Olmstead Decision. Accessed at https://www.medicaid.gov/about-us/program-history/medicaid-50th-anniversary/entry/47688.
    \32\ Information on State activities to expand, enhance, or 
strengthen HCBS under ARP section 9817 can be found on Medicaid.gov 
at https://www.medicaid.gov/medicaid/home-community-based-services/guidance/strengthening-and-investing-home-and-community-based-services-for-medicaid-beneficiaries-american-rescue-plan-act-of-2021-section-9817/index.html.
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    Medicaid coverage of HCBS varies by State and can include a 
combination of medical and non-medical services, such as case 
management, homemaker, personal care, adult day health, habilitation 
(both day and residential), and respite care services. HCBS programs 
serve a variety of targeted population groups, such as older adults, 
and children and adults with intellectual or developmental 
disabilities, physical disabilities, mental health/substance use 
disorders, and complex medical needs. HCBS programs provide 
opportunities for Medicaid beneficiaries to receive services in their 
own homes and communities rather than in institutions.
    CMS and States have worked for decades to support the increased 
availability and provision of high-quality HCBS for Medicaid 
beneficiaries. While there are quality and reporting requirements for 
Medicaid HCBS, the requirements vary across authorities and are often 
inadequate to provide the necessary information for ensuring that HCBS 
are provided in a high-quality manner that best protects the health and 
welfare of beneficiaries. Consequently, quality measurement and 
reporting expectations are not consistent across and within services, 
but instead vary depending on the authorities under which States are 
delivering services. Additionally, States have flexibility to determine 
the quality measures they use in their HCBS programs. While we support 
State flexibility, a lack of

[[Page 27965]]

standardization has resulted in thousands of metrics and measures 
currently in use across States, with different metrics and measures 
often used for different HCBS programs within the same State. As a 
result, CMS and States are limited in the ability to compare HCBS 
quality and outcomes within and across States or to compare the 
performance of HCBS programs for different populations.
    In addition, although there are differences in rates of disability 
among demographic groups, there are very limited data currently 
available to assess disparities in HCBS access, utilization, quality, 
and outcomes. Few States have the data infrastructure to systematically 
or routinely report data that could be used to assess whether 
disparities exist in HCBS programs. This lack of available data also 
prevents CMS and States from implementing interventions to make 
improvements in HCBS programs designed to consistently meet the needs 
of all beneficiaries.
    Compounding these concerns have been notable and high-profile 
instances of abuse and neglect in recent years, which have been shown 
to result from poor quality care and inadequate oversight of HCBS in 
Medicaid. For example, a 2018 report, ``Ensuring Beneficiary Health and 
Safety in Group Homes Through State Implementation of Comprehensive 
Compliance Oversight,'' \33\ (``Joint Report''), which was jointly 
developed by the US Department of Health and Human Services' 
Administration for Community Living (ACL), Office for Civil Rights 
(OCR), and the Office of Inspector General (OIG), found systemic 
problems with health and safety policies and procedures being followed 
in group homes and that failure to comply with these policies and 
procedures left beneficiaries in group homes at risk of serious harm. 
In addition, while existing regulations provide safeguards for all 
Medicaid beneficiaries in the event of a denial of Medicaid eligibility 
or an adverse benefit determination by the State Medicaid agency and, 
where applicable, by the beneficiary's managed care plan, there are no 
safeguards related to other issues that HCBS beneficiaries may 
experience, such as the failure of a provider to comply with the HCBS 
settings requirements or difficulty accessing the services in the 
person-centered service plan unless the individual is receiving those 
services through a Medicaid managed care arrangement.
---------------------------------------------------------------------------

    \33\ Ensuring Beneficiary Health and Safety in Group Homes 
Through State Implementation of Comprehensive Compliance Oversight. 
US Department of Human Services, Office of the Inspector General, 
Administration for Community Living, and Office for Civil Rights. 
January 2018. Accessed at https://oig.hhs.gov/reports-and-publications/featured-topics/group-homes/group-homes-joint-report.pdf.
---------------------------------------------------------------------------

    Finally, through our regular interactions with State Medicaid 
agencies, provider groups, and beneficiary advocates, we observed that 
all these interested parties routinely cite a shortage of direct care 
workers and high rates of turnover in direct care workers among the 
greatest challenges in ensuring access to high-quality, cost-effective 
HCBS for people with disabilities and older adults. Some States have 
also indicated that a lack of direct care workers is preventing them 
from transitioning individuals from institutions to home and community-
based settings. While workforce shortages have existed for years, they 
have been exacerbated by the COVID-19 pandemic, which has resulted in 
higher rates of direct care worker turnover (for instance, due to 
higher rates of worker-reported stress), an inability of some direct 
care workers to return to their positions prior to the pandemic (for 
instance, due to difficulty accessing child care or concerns about 
contracting COVID-19 for people with higher risk of severe illness), 
workforce shortages across the health care sector, and wage increases 
in types of retail and other jobs that tend to draw from the same pool 
of workers.34 35 36
---------------------------------------------------------------------------

    \34\ MACPAC Issue Brief. State Efforts to Address Medicaid Home- 
and Community-Based Services Workforce Shortages. March 2022. 
Accessed at https://www.macpac.gov/wp-content/uploads/2022/03/MACPAC-brief-on-HCBS-workforce.pdf.
    \35\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \36\ American Network of Community Options and Resources 
(ANCOR). 2021. The state of America's direct support workforce 2021. 
Alexandria, VA: ANCOR. Accessed at https://www.ancor.org/sites/default/files/the_state_of_americas_direct_support_workforce_crisis_2021.pdf.
---------------------------------------------------------------------------

    To address the list of challenges outlined in this section, we are 
proposing new Federal requirements in this proposed rule to improve 
access to care, quality of care, and health and quality of life 
outcomes; promote health equity for people receiving Medicaid-covered 
HCBS; and ensure that there are safeguards in place for beneficiaries 
who receive HCBS through FFS delivery systems. We seek comment on other 
areas for rulemaking consideration. The proposed requirements are also 
intended to promote public transparency related to the administration 
of Medicaid HCBS programs.

D. Fee-for-Service (FFS) Payment

    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.'' Regulations at Sec.  447.203 require States to develop and 
submit to CMS an access monitoring review plan (AMRP) for a core set of 
services. Currently, the regulations rely on available State data to 
support a determination that the State's payment rates are sufficient 
to ensure access to care in Medicaid FFS that is at least as great for 
beneficiaries as is generally available to the general population in 
the geographic area, as required under section 1902(a)(30)(A) of the 
Act.
    In the May 6, 2011, Federal Register, we published the ``Medicaid 
Program; Methods for Assuring Access to Covered Medicaid Services'' 
proposed rule (76 FR 26341; hereinafter ``2011 proposed rule''), which 
outlined a data-driven process for States with Medicaid services paid 
through a State plan under FFS to follow in order to document their 
compliance with section 1902(a)(30)(A) of the Act. We finalized the 
2011 proposed rule in the November 2, 2015, Federal Register when we 
published the ``Medicaid Program; Methods for Assuring Access to 
Covered Medicaid Services'' final rule with comment period (80 FR 
67576; hereinafter ``2015 final rule with comment period''). Among 
other requirements, the 2015 final rule with comment period required 
States to develop and submit to CMS an AMRP for certain Medicaid 
services that is updated at least every 3 years. Additionally, the rule 
required that when States submit a SPA to reduce or restructure 
provider payment rates, they must consider the data collected through 
the AMRP and undertake a public process that solicits input on the 
potential impact of the proposed reduction or restructuring of Medicaid 
FFS payment rates on beneficiary access to care. We published the 
``Medicaid Program; Deadline for Access Monitoring Review Plan 
Submissions'' final rule in the April 12, 2016 Federal Register (81 FR 
21479; hereinafter ``2016 final rule'') with a revised deadline for 
States' AMRPs to be submitted to us.
    Following enactment, numerous States have expressed concern 
regarding the administrative burden associated with the 2015 final rule 
with comment period requirements, especially those

[[Page 27966]]

States with high rates of beneficiary enrollment in managed care. In an 
attempt to address some of the States' concerns regarding unnecessary 
administrative burden, we issued a State Medicaid Director letter 
(SMDL) on November 16, 2017 (SMDL #17-004), which clarified the 
circumstances in which provider payment reductions or restructurings 
would likely not result in diminished access to care, and therefore, 
would not require additional analysis and monitoring procedures 
described in the 2015 final rule with comment period.\37\ Subsequently, 
in the March 23, 2018 Federal Register, we published the ``Medicaid 
Program; Methods for Assuring Access to Covered Medicaid Services-
Exemptions for States With High Managed Care Penetration Rates and Rate 
Reduction Threshold'' proposed rule (83 FR 12696; hereinafter ``2018 
proposed rule''), which would have exempted States from requirements to 
analyze certain data or monitor access when the vast majority of their 
covered beneficiaries receive services through managed care plans. That 
proposed rule, if it had been finalized, would have provided similar 
flexibility to all States when they make nominal rate reductions or 
restructurings to FFS payment rates. Based on the responses received 
during the public comment period, we decided not to finalize the 
proposed exemptions.
---------------------------------------------------------------------------

    \37\ State Medicaid Director Letter #17-0004 Re: Medicaid Access 
to Care Implementation Guidance. Accessed at https://www.medicaid.gov/federal-policy-guidance/downloads/smd17004.pdf 
(November 2017).
---------------------------------------------------------------------------

    In the July 15, 2019 Federal Register, we published the ``Medicaid 
Program; Methods for Assuring Access to Covered Medicaid Services-
Rescission'' proposed rule (84 FR 33722; hereinafter ``2019 proposed 
rule'') to rescind the regulatory access requirements at Sec. Sec.  
447.203(b) and 447.204, and concurrently issued a CMCS Informational 
Bulletin \38\ stating the agency's intention to establish a new access 
strategy. Based on the responses we received during the public comment 
period, we decided not to finalize the 2019 proposed rule, and instead 
continue our efforts and commitment to develop a data-driven strategy 
to understand access to care in the Medicaid program.
---------------------------------------------------------------------------

    \38\ CMCS Informational Bulletin: Comprehensive Strategy for 
Monitoring Access in Medicaid, Accessed at https://www.medicaid.gov/federal-policy-guidance/downloads/CIB071119.pdf (July 2019).
---------------------------------------------------------------------------

    States have continued to question whether the AMRP process is the 
most effective or accurate reflection of access to care in a State's 
Medicaid program, and requested we provide additional clarity on the 
data necessary to support compliance with section 1902(a)(30)(A) of the 
Act. In reviewing the information that States presented through the 
AMRPs, we also have questioned whether the data and analysis 
consistently address the primary access-related question posed by 
section 1902(a)(30)(A) of the Act--namely, whether rates are sufficient 
to ensure access to care at least as great as that enjoyed by the 
general population in geographic areas. The unstandardized nature of 
the AMRPs, which largely defer to States to determine appropriate data 
measures to review and monitor when documenting access to care, have 
made it difficult to assess whether any single State's analysis 
demonstrates compliance with section 1902(a)(30)(A) of the Act.
    While the AMRPs were intended to be a useful guide to States in the 
overall process to monitor beneficiary access, they are generally 
limited to access in FFS delivery systems and focus on targeted payment 
rate changes rather than the availability of care more generally or 
population health outcomes (which may be indicative of the population's 
ability to access care). Moreover, the AMRP processes are largely 
procedural in nature and not targeted to specific services for which 
access may be of particular concern, requiring States to engage in 
triennial reviews of access to care for certain broad categories of 
Medicaid services--primary care services, physician specialist 
services, behavioral health services, pre and post-natal obstetric 
services, and home health services. Although the 2016 final rule 
reasonably discussed that the selected service categories intended to 
be indicators for available access in the overall Medicaid FFS system, 
the categories do not easily translate to the services authorized under 
section 1905(a) of the Act, granting States deference as to how broadly 
or narrowly to apply the AMRP analysis to services within their 
programs. For example, the category ``primary care services'' could 
encompass several of the Medicaid service categories described within 
section 1905(a) of the Act and, without clear guidance on which section 
1905(a) services categories, qualified providers, or procedures we 
intended States to include within the AMRP analyses. States were left 
to make their own interpretations in analyzing access to care under the 
2016 final rule.
    Similarly, a number of the AMRP data elements, both required and 
suggested within the 2016 final rule, may be overly broad, subject to 
interpretation, or difficult to obtain. Specifically, under the 2016 
final rule provisions, States are required to review: the extent to 
which beneficiary needs are fully met; the availability of care through 
enrolled providers to beneficiaries in each geographic area, by 
provider type and site of service; changes in beneficiary utilization 
of covered services in each geographic area; 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, by provider type and site of service. Though 
service utilization and provider participation are relatively easy 
measures to source and track using existing Medicaid program data, an 
analysis of whether beneficiary needs are fully met is at least 
somewhat subjective and could require States to engage in a survey 
process to complete. Additionally, while most Medicaid services have 
some level of equivalent payment data that can be compared to other 
available public payer data, such as Medicare, private pay information 
may be proprietary and difficult to obtain. Therefore, many States 
struggled to meet the regulatory requirement comparing Medicaid program 
rates to private payer rates because of their inability to obtain 
private payer data.
    Due to these issues, States produced varied AMRPs through the 
triennial process that were, as a whole, difficult to interpret or to 
use in assessing compliance with section 1902(a)(30)(A) of the Act. In 
isolation, a State's specific AMRP most often presented data that could 
be meaningful as a benchmark against changes within a State's Medicaid 
program, but did not present a case for Medicaid access consistent with 
the general population in geographic areas. Frequently, the data and 
information within the AMRPs were presented without a formal 
determination or attestation from the State that the information 
presented established compliance with section 1902(a)(30)(A) of the 
Act. Because the States' AMRPs generally varied to such a great degree, 
there was also little to glean in making State-to-State comparisons of 
performance on access measures, even for States with geographic and 
demographic similarities.
    Based on results of the triennial AMRPs, we were uncertain of how 
to make use of the information presented within them other than to make 
them publicly available. We published the

[[Page 27967]]

AMRPs on Medicaid.gov but had little engagement with States on the 
content or results of the AMRPs since much of the information within 
the plans could not meaningfully answer whether access in Medicaid 
programs satisfied the requirements of section 1902(a)(30)(A) of the 
Act. Additionally, we received little feedback from providers, 
beneficiaries, or advocates on whether or how interested parties made 
use of the triennial AMRPs. However, portions of the 2016 final rule 
related to public awareness and feedback on changes to Medicaid payment 
rates and the analysis that we received from individual States 
proposing to make rate changes was of great benefit in determining 
approvals of State payment change proposals. Specifically, the portion 
of the AMRP process where States update their plans to describe data 
and measures to serve as a baseline against which they monitor after 
reducing or restructuring Medicaid payments allows States to document 
consistency with section 1902(a)(30)(A) of the Act at the time of SPA 
submission, usually as an assessment of how closely rates align with 
Medicare rates, and to understand the impact of reductions through data 
monitoring after SPA approval.
    Under this proposed rule, we are proposing to balance elimination 
of unnecessary Federal and State administrative burden with robust 
implementation of the Federal and State shared obligation to ensure 
that Medicaid payment rates are set at levels sufficient to ensure 
access to care for beneficiaries consistent with section 1902(a)(30)(A) 
of the Act. The provisions of this proposed rule, as discussed in more 
detail later, would better achieve this balance through improved 
transparency of Medicaid FFS payment rates, through publication of a 
comparative payment rate analysis to Medicare and payment rate 
disclosures, and through a more targeted and defined approach to 
evaluating data and information when States propose to reduce or 
restructure their Medicaid payment rates. Payment rate transparency is 
a critical component of assessing compliance with section 
1902(a)(30)(A) of the Act. In addition, payment rate transparency helps 
to ensure that interested parties have basic information available to 
them to understand Medicaid payment levels and the associated effects 
of payment rates on access to care so that they may raise concerns to 
State Medicaid agencies via the various forms of public processes 
discussed within this proposed rule. Along with improved payment rate 
transparency and disclosures as well as comparative payment rate 
analyses, we are proposing a more efficient process for States to 
undertake when submitting rate reduction or restructuring SPAs to CMS 
for review. As we move toward aligning our Medicaid access to care 
strategy across FFS and managed care delivery systems, we will consider 
additional rulemaking to help ensure that Medicaid payment rate 
information is appropriately transparent and rates are fully consistent 
with broad access to care across delivery systems, so that interested 
parties have a more complete understanding of Medicaid payment rate 
levels and resulting access to care for beneficiaries.

II. Provisions of the Proposed Regulations

A. Medicaid Advisory Committee and Beneficiary Advisory Group (Sec.  
431.12)

    Current Sec.  431.12 requires States to have a MCAC to advise the 
State Medicaid agency about health and medical care services. The 
current regulations are intended to ensure that State Medicaid agencies 
have a way to receive feedback from interested parties on issues 
related to the Medicaid program. However, the current regulations lack 
specificity related to how these committees can be used to ensure the 
proper and efficient administration of the Medicaid program more 
expressly by more fully promoting beneficiary perspectives.
    Under the authority of section 1902(a)(4) of the Act, section 
1902(a)(19) of the Act, and our general rulemaking authority in section 
1102 of the Act, we propose to update Sec.  431.12 to replace the 
current MCAC requirements with a committee framework designed to ensure 
the proper and efficient administration of the Medicaid program and to 
better ensure that care and services under the Medicaid program will be 
provided in a manner consistent with the best interests of the 
beneficiaries. If finalized, States would be required to establish and 
operate the newly named Medicaid Advisory Committee (MAC) and a 
Beneficiary Advisory Group (BAG). The MAC and its corresponding BAG 
would serve as vehicles for bi-directional feedback between interested 
parties and the State on matters related to the effective 
administration of the Medicaid program. With this proposal, FFP, or 
Federal match, for Medicaid administrative activities would remain 
available to States for expenditures related to MAC and BAG activities 
in the same manner as the former MCAC.
    We propose to amend the title and paragraph (a) of Sec.  431.12 to 
update the name of the existing MCAC to the MAC, and to add the 
requirement for States to establish and operate a dedicated advisory 
group comprised of Medicaid beneficiaries, the BAG. Our goal is that 
the committee and its corresponding advisory group would advise the 
State not only on issues related to health and medical services, as the 
MCAC did, but also on matters related to policy development and to the 
effective administration of the Medicaid program consistent with the 
language of section1902(a)(4)(B) of the Act, which requires a State 
plan to meaningfully engage Medicaid beneficiaries and other low-income 
people in the administration of the plan. While the Medicaid program 
covers medical services, the program is increasingly also covering 
services designed to address beneficiaries' social determinants of 
health and their health-related social needs more generally. Therefore, 
having a discussion with the MAC about topics that are not directly 
related to covered services may be necessary to ensure that 
beneficiaries are able to meaningfully access these services. Expanding 
the scope of the current committee is necessary to align the actions of 
the committee with the expanding scope of the Medicaid program, 
consistent with section 1902(a)(4)(B) of the Act, because the MAC 
creates a formalized way for interested parties and beneficiary 
representatives to provide feedback to the State about issues related 
to the Medicaid program and the services it covers and to help ensure 
that the program operates efficiently and as it was designed to 
operate.
    Every State will vary in the types of topics that would benefit 
from the interested parties' feedback, so discretion on which topics 
will be discussed with the MAC will be left to the State. Depending on 
the priorities of the State in a given year, States may find it helpful 
to bring to the MAC issues related to, for example, grievances, 
consumer experience survey ratings, design of a new program, or other 
like topics. Proposed mandates for these entities are described later 
in this section under proposed paragraph (g). We further propose 
conforming updates to paragraph (b) regarding the State plan 
requirements, to reflect the proposed MAC and BAG and the expanded 
mandate proposed in this proposed rule. The interested parties advisory 
group, proposed and described in the FFS sections of this proposed 
rule, to advise States on rate setting for certain HCBS

[[Page 27968]]

is not related to the MAC or BAG outlined here. We note in that section 
that a State would be able utilize its MAC and BAG to provide 
recommendations for payment rates, thereby satisfying the requirements 
of that proposal. However, the MAC and BAG requirements proposed here, 
if finalized, are wholly separate from the interested parties advisory 
group, regardless of whether that proposal is finalized as well.
    We propose to update paragraph (c) of Sec.  431.12 regarding 
appointment of committee members to specify that the members of the MAC 
and BAG must be appointed by the agency director or higher State 
authority on a rotating, continuous basis. Under our proposals, 
committee and advisory group members would serve a specific amount of 
time, the length of which will be determined by each State and noted in 
its bylaws. After a committee or advisory group member term has been 
completed, the State will appoint a new member, thus ensuring that MAC 
and BAG memberships rotate continuously. We propose the State be 
required to make public its process and bylaws for recruitment and 
appointment of members of the MAC and BAG and post the list of both 
sets of members on the State's website. Under our proposal, the website 
page where this information is located must be easily accessible by the 
public. These updates align with how advisory committees similar to the 
MAC and BAG are run, and the changes are designed to provide additional 
details to support States' operation of the MAC and BAG. Further, these 
updates facilitate transparency, improving the current regulations, 
which do not mention nor promote transparency of information related 
the MCAC with the public. We believe that transparency of information 
can lead to enhanced accountability on the part of the State to making 
its MAC and BAG as effective as possible.
    Advisory committees and groups can be most effective when they 
represent a wide range of perspectives and experiences. The current MAC 
regulations only provide high level descriptions of types of members 
that should be selected. Since we know that each State environment is 
different, in the proposed rule, we continue to provide the State with 
discretion on how large the MAC and BAG should be, but we outline in 
more detail the types of categories of members that can best reflect 
the needs of a Medicaid program. We believe that diversely populated 
MACs and BAGs can provide States with access to a broad range of 
perspectives, and importantly, beneficiaries' perspective, which can 
positively impact the administration of the Medicaid program.
    We encourage States to take into consideration, as part of their 
member selection process, the demographics of the Medicaid population 
in their State. Keeping diverse representation in mind as a goal for 
the MAC membership can be a way for States to acknowledge that specific 
populations and those receiving critically important services be 
appropriately represented on the MAC. For example, in making the MAC 
appointments, the State may want to balance the representation of the 
MAC according to geographic areas of the State and the demographics of 
the Medicaid program of the State. The State may want to consider 
geographical diversity (for example, urban, rural, tribal) when making 
its membership selections. The State could also consider demographic 
representation of its membership by including members representing or 
serving Medicaid beneficiaries the following categories: (1) children's 
health care; (2) behavioral health services; (3) preventive care and 
reproductive health services; (4) health or service issues pertaining 
specifically to people over age 65; and (5) health or service issues 
pertaining specifically to people with disabilities. By offering these 
considerations, we seek to support States in their efforts to eliminate 
differences in health care access and outcomes experienced by diverse 
populations enrolled in Medicaid. Our aim is to support several of the 
priorities for operationalizing health equity across CMS programs as 
outlined in the CMS Framework for Health Equity (2022-2032) and the HHS 
Equity Action Plan which is consistent with E.O. 13985 which calls for 
advancing equity for underserved populations.
    As we considered effective ways to better integrate the beneficiary 
perspective into decisions related the Medicaid program, we also 
recognized that a diverse and representative set of interested parties 
should be reflected in the composition of each State's MAC. We propose 
to amend paragraph (d) of Sec.  431.12 regarding committee membership 
to account for both membership and composition, and to require the MAC 
membership include members from the BAG, described later in this 
section, who are currently or have been Medicaid beneficiaries, and 
individuals with direct experience supporting Medicaid beneficiaries 
(for example, family members or caregivers \39\ of those enrolled in 
Medicaid); as well as advocacy groups; providers or administrators of 
Medicaid services; representatives of managed care plans or State 
health plan associations representing such managed care plans; and 
representatives from other State agencies that serve Medicaid 
beneficiaries. This proposal is consistent with the language of section 
1902(a)(4)(B) of the Act, which requires a State plan to meaningfully 
engage Medicaid beneficiaries and other low-income people in the 
administration of the plan. The change we propose would support States 
to set up MACs that align with section 1902(a)(4)(B) of the Act since 
they would now have to select the membership composition to reflect the 
community members who represent the interests of Medicaid 
beneficiaries. The State also benefits from having a way to hear how 
the Medicaid program can be responsive to its beneficiaries' and the 
Medicaid community's needs.
---------------------------------------------------------------------------

    \39\ Caregivers can be paid or unpaid.
---------------------------------------------------------------------------

    Specifically, in paragraph (d)(1) of Sec.  431.12, we propose that 
at least 25 percent of the MAC must be individuals with lived Medicaid 
beneficiary experience from the BAG. This means that the BAG would be 
comprised of people who: (1) are currently or have been Medicaid 
beneficiaries and (2) individuals with direct experience supporting 
Medicaid beneficiaries (family members or caregivers of those enrolled 
in Medicaid). We selected 25 percent as a threshold to reflect the 
importance of including the beneficiary perspective in the 
administration of the Medicaid program and to ensure that the 
beneficiary perspective has equitable representation in the feedback 
provided by the MAC. We did not select a higher percentage because we 
acknowledge that States will benefit from a MAC that includes 
representation from a diverse set of interested parties who work in 
areas related to Medicaid but are not beneficiaries, their family 
members or their caregivers. We seek comment on the 25 percent 
requirement.
    As noted earlier, representation from the remaining committee 
members would be left to the States' discretion. Rather than 
prescribing specific percentages for each category, we only propose to 
require representation from each category as part of the MAC. The 
specific percentage of each of category (other than the BAG members) 
relative to the whole committee can be determined by each State. This 
approach would provide States with flexibility to determine how to best 
represent the unique landscape of each State's Medicaid program. We 
seek comment on what should be the minimum percentage requirement that 
MAC members be current/past Medicaid

[[Page 27969]]

beneficiaries or individuals with direct experience supporting Medicaid 
beneficiaries (such as family members or caregivers of those enrolled 
in Medicaid).
    States need to know how to deliver care to its beneficiaries. In 
addition to hearing directly from beneficiaries, the State can gain 
insights into how to effectively administer its program, from other 
groups of the Medicaid community. Categorically, we propose in 
paragraph (d)(2) that the rest of the MAC must include representation 
from each category: (1) members of State or local consumer advocacy 
groups or other community-based organizations that represent the 
interests of, or provide direct service, to Medicaid beneficiaries; (2) 
clinical providers or administrators who are familiar with the health 
and social needs of Medicaid beneficiaries and with the resources 
available and required for their care; (3) representatives from 
participating Medicaid managed care plans or the State health plan 
association representing such plans, as applicable; and (4) 
representatives from other State agencies serving Medicaid 
beneficiaries, as ex-officio members.
    States are determining which types of providers to include under 
the clinical providers or administrators category, we recommend they 
consider a wide range of providers or administrators that are 
experienced with the Medicaid program including, but not limited to: 
(1) primary care providers (internal or family medicine physicians or 
nurse practitioners or physician assistants that practice primary 
care); (2) behavioral health providers (that is, mental health and 
substance use disorder providers); (3) reproductive health service 
providers, including maternal health providers; (4) pediatric 
providers; (5) dental and oral health providers; (6) community health, 
rural health clinic or Federally Qualified Health Center (FQHC) 
administrators; (7) individuals providing long-term care services and 
supports; and (8) direct care workers \40\ who can be individuals with 
direct experience supporting Medicaid beneficiaries (such as family 
members or caregivers). Direct care workers also include community 
health workers who assist Medicaid beneficiaries in navigating access 
to needed services and care managers, care coordinators, or service 
coordinators who assist Medicaid beneficiaries with complex care needs.
---------------------------------------------------------------------------

    \40\ CMS defines direct care workers as: a registered nurse, 
licensed practical nurse, nurse practitioner, or clinical nurse 
specialist who provides nursing services to Medicaid-eligible 
individuals receiving home and community-based services; (2) A 
licensed or certified nursing assistant who provides such services 
under the supervision of a registered nurse, licensed practical 
nurse, nurse practitioner, or clinical nurse specialist; (3) A 
direct support professional; (4) A personal care attendant; (5) A 
home health aide; or (6) Other individuals who are paid to provide 
services to address activities of daily living or instrumental 
activities of daily living, behavioral supports, employment 
supports, or other services to promote community integration 
directly to Medicaid-eligible individuals receiving home and 
community-based services.
---------------------------------------------------------------------------

    We have also identified health plans as an important contributor to 
the MAC, but we acknowledge that not all States that have managed care 
delivery systems. We know many Medicaid health plans administer similar 
committees and thus allow for States to tailor health plan 
representation based on its managed care market. For example, States 
can fulfil this category with only one or with multiple plans operating 
in the State. In addition, we also give States the flexibility to meet 
the health plan representation requirements with either participating 
Medicaid managed care plans or the State health plan association 
representing such plans, as applicable.
    The proposed language in paragraph (d)(2)(D) broadens the type of 
representatives from other State agencies that are required to be on 
the committee from the similar MCAC requirement. The current MCAC 
regulation requires membership by ``the director of the public welfare 
department or the public health department, whichever does not head the 
Medicaid agency.'' By expanding the definition of external agency 
representation to be broader than the welfare or public health 
department, we would give States more flexibility in representing the 
Medicaid program's interests based on States' unique circumstances and 
organizational structure. States can work with sister State agencies to 
determine who should participate in the MAC (for example, foster care 
agency, mental health agency, department of public health). We also 
propose that these representatives be part of the committee as ex-
officio members, not as full members of the MAC. While we believe it 
will be essential to have these State-interested parties present for 
program coordination and information-sharing, we believe the formal 
representation of the MAC should be comprised of beneficiaries, 
advocates, community organizations, and providers that serve Medicaid 
beneficiaries.
    We propose to replace paragraph (e) of Sec.  431.12; in paragraph 
(e) to require that States create a BAG, a dedicated beneficiary 
advisory group that will meet separately from the MAC. Currently, the 
requirements governing MCACs require the presence of beneficiaries in 
committee membership but do little to ensure their contributions are 
considered or their voices heard. For example, current paragraph (e) 
describes committee participation and requires the committee 
``[further] the participation of beneficiary members in the agency 
program.'' This requirement provides little guidance toward this goal 
and creates an environment where a beneficiary may not feel comfortable 
participating despite the opportunity being afforded in its technical 
sense. We believe adding the creation of the BAG will result in 
providing the State with increased access to the beneficiary 
perspective. This proposal directly addresses and provides the 
mechanism (the BAG) through which States can meet the language of 
section 1902(a)(4)(B) of the Act, which requires a State plan to 
meaningfully engage Medicaid beneficiaries and other low-income people 
in the administration of the plan.
    As such, the creation of a separate beneficiary-only advisory group 
aligns with what we learned from multiple interviews with State 
Medicaid agencies and other Medicaid interested parties (for example, 
Medicaid researchers, former Medicaid officials) conducted over the 
course of 2022 on the effective operation of the existing MCACs. 
Interested parties described the importance of having a comfortable, 
supportive, and trusting environment that facilitates beneficiaries' 
ability to speak freely on matters most important to them. It is 
equally important that the BAG have a subset of its members that also 
sit on the State's MAC to ensure that the beneficiary perspective and 
experience are heard directly. We noted earlier that some States may 
already have highly effective BAG-type groups operating as part of 
their Medicaid program. These groups may represent specific 
constituencies such as children with complex medical needs or older 
adults or may be participants in a specific waiver. In these instances, 
States may utilize these groups to satisfy the proposed requirements of 
this rule, provided the BAG-type group membership includes the MAC 
members described in paragraph (d)(1). Those States must appoint 
members from the BAG-type group to serve on the MAC to facilitate this 
crossover.
    Specifically, at paragraph (e)(1), we propose that the MAC members 
described in proposed paragraph (d)(1) must also be members of the BAG. 
This proposed requirement would facilitate the bi-directional 
communication essential to effective beneficiary

[[Page 27970]]

engagement and allow for meaningful representation of diverse voices 
across the MAC and BAG. In paragraph (e)(2), we propose that the BAG 
meetings occur in advance of each MAC meeting to ensure BAG member 
preparation for each MAC discussion. BAG meetings would also be subject 
to requirements we propose in paragraph (f)(5), described later in this 
section, that the BAG meetings must occur virtually, in-person, or 
through a hybrid option to maximize member attendance. We plan to 
expound on best practices for engaging beneficiary participation in 
committees like the MAC in future guidance.
    We propose at subsection (f) an administrative framework for the 
MAC and BAG to ensure transparency and a meaningful feedback loop to 
the public and among the members of the committee and group. Interested 
parties' feedback and recent reports 41 42 published on 
meaningful beneficiary engagement illuminate the need for more 
transparent and standardized processes across States to drive 
participation from key interested parties and to facilitate the 
opportunity for participation from a diverse set of members and the 
community. Further, we believe that in order for the State to comply 
with the language of section 1902(a)(4)(B) of the Act, which requires a 
State plan to meaningfully engage Medicaid beneficiaries and other low-
income people in the administration of the plan, it needs to be 
responsive to the needs of its beneficiaries. To be responsive to the 
needs of its beneficiaries, the State needs to be able to gather 
feedback from a variety of people that touch the Medicaid program, and 
the MAC and BAG will serve as the vehicle through which States can 
obtain this feedback.
---------------------------------------------------------------------------

    \41\ Resources for Integrated Care and Community Catalyst, 
``Listening to the Voices of Dually Eligible Beneficiaries: 
Successful Member Advisory Councils'', 2019. Retrieved from https://www.resourcesforintegratedcare.com/listening_to_voices_of_dually_eligible_beneficiaries/.
    \42\ Centers for Medicare & Medicaid Services.(n.d.). Person & 
Family Engagement Strategy: Sharing with Our Partners. Retrieved 
from: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/QualityInitiativesGenInfo/Downloads/Person-
and-Family-Engagement-Strategic-Plan-12-12-
16.pdf#:~:text=person%E2%80%99s%20priorities%2C%20goals%2C%20needs%20
and%20values.%E2%80%9D%20Using%20these,to%20guide%20all%20clinical%20
decisions%20and%20drives%20genuine.
---------------------------------------------------------------------------

    Specifically, in paragraph (f)(1), we propose to require State 
agencies to develop and post publicly on their website bylaws for 
governance of the MAC and BAG, current lists of MAC and BAG 
memberships, and past meeting minutes for both the committee and group. 
In paragraph (f)(2), we propose to require State agencies to develop 
and post publicly a process for MAC and BAG member recruitment and 
appointment, and for selection of MAC and BAG leadership. In paragraph 
(f)(3), we propose to require State agencies to develop, publicly post, 
and implement a regular meeting schedule for the MAC and BAG. The 
requirement specifies the MAC and BAG must each meet at least once per 
quarter and hold off-cycle meetings as needed. In paragraph (f)(4), we 
propose that, at least two MAC meetings per year must be opened to the 
public. For the MAC meetings that are open to the public, the meeting 
agenda must include a dedicated time for public comment to be heard by 
the MAC. Further, the State must also adequately notify the public of 
the date, location, and time of these type (public) of MAC meetings at 
least 30 calendar days in advance. None of the BAG meetings are not 
required to be open to the public, unless the State's BAG members 
decide otherwise. The same requirements would apply to States whose BAG 
meetings were determined, by its membership, to be open to the public. 
We seek comment on this approach.
    In paragraph (f)(5), we propose to require that States offer in-
person and virtual attendance options to maximize member participation 
at MAC and BAG meetings. We acknowledge that interested parties may 
face a range of technological and internet accessibility limitations, 
and that at a minimum, States will need to provide a telephone dial-in 
option for MAC and BAG meetings. While we understand that in-person 
interaction can sometimes assist in building trusted relationships, we 
also recognize that accommodations for members and the public to 
participate virtually is important, particularly since the beginning of 
the COVID-19 pandemic. We invite comment on ways to best strike this 
balance. We address technical and logistical challenges in paragraph 
(f)(5) and address effective communication and language access and 
meeting accessibility in subsequent paragraphs.
    With respect to in-person meetings, we propose in paragraph (f)(6) 
to require that States ensure meeting times and locations for MAC and 
BAG meetings are selected to maximize participant attendance, which may 
vary by meeting. For example, States may determine, by consulting with 
its MAC and BAG members that holding meetings in various locations 
throughout the State may result in better attendance. In addition, they 
may ask the committee and group members about which times and weekdays 
may be more favorable than others and hold meetings at those times 
accordingly. States must also use the publicly posted meeting minutes, 
which lists attendance by members, as a way to gauge which meeting 
times and locations garner maximum participate attendance. Finally, in 
paragraph (f)(7), we propose to require State agencies to facilitate 
participation of beneficiaries by ensuring that meetings are accessible 
to people with disabilities, that reasonable modifications are provided 
when necessary to ensure access and enable meaningful participation, 
that communication with individuals with disabilities is as effective 
as with others, that reasonable steps are taken to provide meaningful 
access to individuals with Limited English Proficiency, and that 
meetings comply with the requirements at Sec.  435.905(b) and 
applicable regulations implementing the ADA, section 504 of the 
Rehabilitation Act, and section 1557 of the Affordable Care Act at 28 
CFR part 35 and 45 CFR parts 84 and 92.
    We propose to revise paragraph (g) to detail an expansion of the 
topics on which the MAC and BAG should provide feedback to the Medicaid 
agency from the prior MCAC requirements. In researching other States' 
MACs, we know that some already use the MACs to get feedback from 
interested parties, including beneficiaries, on a variety of topics 
relating to the effective and efficient administration of the Medicaid 
program. The changes we propose aim to strike a balance that reflects 
some States' current practices without putting strict limitations on 
specific topics for discussion to all States. Broadening the scope of 
the topics that the MAC and BAG discuss will benefit the State by 
giving greater insight into how it is currently delivering care for its 
beneficiaries and thereby assist in identifying ways to improve the way 
the Medicaid program is administered.
    The State will use this engagement with the MAC and BAG to ensure 
that the beneficiary and interested parties' voices are considered and 
to allow the opportunity to adjust course based on the feedback 
provided by the committee and group members. Topics of discussion are 
to be based on State need and determined in collaboration with the MAC 
to address matters related to policy development and matters related to 
the effective administration of the Medicaid program. These topics 
could include new policy or program developments; changes to services; 
coordination of care and quality of

[[Page 27971]]

services; eligibility, enrollment, and renewal processes; the review of 
communications to beneficiaries by the State Medicaid agency and 
Medicaid managed care plans; the provision of culturally and 
linguistically appropriate services, health equity, disparities, and 
biases in the Medicaid program; and other issues that impact the 
provision or outcomes of health and medical care services in the 
Medicaid program as identified by the MAC, the BAG, or the State.
    We propose new paragraph (h) to expand on existing State 
responsibilities for managing the MAC and BAG regarding staff 
assistance, participation, and financial support. We understand from 
States and other interested parties, that many States already provide 
staffing and financial support to their MACs in ways that meet or going 
beyond what we propose through our updated requirements. We believe 
that expanding upon the current standards regarding State 
responsibility for planning and executing the functions of the MAC and 
BAG will ensure consistent and ongoing standards to further 
beneficiaries' and interested parties' engagement. For example, we know 
that when any kind of interested parties group meets, all members of 
that group need to fully understand the topics being discussed in order 
to meaningfully engage in that discussion. This is particularly 
relevant when the topics of discussion are complex or based in specific 
terminology as Medicaid related issues often can be.
    We believe that when States provide their MACs and BAGs with 
additional staffing support that can explain, provide background 
materials, and meet with the members in preparation for the larger 
discussions, the members have a greater chance to provide more 
meaningful feedback and ensure that members are adequately prepared to 
engage in these discussions. The proposed changes to the requirements 
seek to create environments that support meaningful engagement by the 
members of these groups whose feedback can then be used by States to 
support the efficient administration of their Medicaid program. We 
anticipate providing additional guidance on model practices, 
recruitment strategies, and ways to facilitate beneficiary 
participation, and we invite comments on effective strategies to ensure 
meaningful interested parties' engagement that in turn can facilitate 
full beneficiary participation.
    Under the current MCAC regulations in Sec.  431.12(f), each State 
is required to provide the committee with staff assistance from the 
agency, independent technical assistance as needed to enable it to make 
effective recommendations, and financial arrangements, if necessary, to 
make possible the participation of beneficiary members. The changes we 
propose include adding requirements regarding recruitment, meeting 
scheduling, recordkeeping, and support for beneficiary members. The 
overlap with the current regulation would mean much of the work to 
implement our proposals, if finalized, would already be occurring.
    The proposed requirement for beneficiary support, including 
financial support, is similar to current requirements, such as using 
dedicated staff to support beneficiary attendance at both the MAC and 
BAG meetings and providing financial assistance to facilitate meeting 
attendance by beneficiary members, as needed. Staff may support 
beneficiary attendance through outreach to the Medicaid beneficiary MAC 
and BAG members throughout the membership period to provide information 
and answer questions; identify barriers and supports needed to 
facilitate attendance at MAC and BAG meetings; and facilitate access to 
those supports. We are not proposing changes to existing financial 
support requirements. However, we are proposing an additional 
requirement that at least one member of the State agency's executive 
staff attend all MAC and BAG meetings to provide an opportunity for 
beneficiaries and representatives of the State's leadership to interact 
directly.
    In the spirit of transparency and to ensure compliance with the 
updated regulations, we propose new paragraph (i) to require that the 
MAC, with support from the State and in accordance with the 
requirements proposed at this section, submit an annual report to the 
State. The BAG perspective and feedback will be embedded in the report, 
since the Group is represented on the MAC. The State, in turn, would be 
required to review the report and include responses to recommendations 
in the report. Prior to finalizing the report, the State must allow the 
MAC to perform a final review. Once the MAC completes its final review, 
the State must publish it by posting it on its website. The proposed 
requirements of this section seek to both ensure transparency while 
also facilitating a feedback loop and view into the impact of the 
committee and group's recommendations. We invite comment on additional 
ways to ensure that the State can create a feedback loop with the MAC 
and BAG.
    Finally, we propose no changes to, and thus maintain, the current 
regulatory language on FFP from current paragraph (g) to support 
committee and group administration, to appear in new paragraph (j) with 
conforming edits for new committee and group names.
    This requirement, if finalized, would be effective 60 days after 
the effective date of the final rule, which would provide States with 1 
year to implement these requirements. We seek comment on whether 1 year 
is too much or not enough time for States to implement the updates in 
this regulation in an effective manner. We understand that States may 
need to modify their current MCACs to reflect the updated requirements 
and may also need to create the BAG and recruit members to participate, 
if they do not already have a similar entity already in place.

B. Home and Community-Based Services (HCBS)

    We are proposing both to amend and add new Federal HCBS 
requirements to improve access to care, quality of care, and 
beneficiary health and quality of life outcomes, while consistently 
meeting the needs of all beneficiaries receiving Medicaid-covered HCBS. 
This preamble discusses our proposed changes in the context of current 
law.
    We have previously received questions from States with 
demonstration projects under section 1115 of the Act that include HCBS 
about the applicability of other HCBS regulatory requirements. As a 
result, we are identifying that, consistent with the applicability of 
other HCBS regulatory requirements to such demonstration projects, the 
proposed requirements for section 1915(c) waiver programs and section 
1915(i), (j), and (k) State plan services included in this proposed 
rule, if finalized, would apply to such services included in approved 
section 1115 demonstration projects, unless we explicitly waive one or 
more of the requirements as part of the approval of the demonstration 
project. We are not proposing to apply the requirements for section 
1915(c) waiver programs and section 1915(i), (j), and (k) State plan 
services in this proposed rule to the Program of All-Inclusive Care of 
the Elderly (PACE) authorized under sections 1894 and 1934 of the Act, 
as the existing requirements for PACE either already address or exceed 
the requirements outlined in this proposed rule, or are substantially 
different from those for section 1915(c) waiver programs and section 
1915(i), (j), and (k) State plan services.

[[Page 27972]]

1. Person-Centered Service Plans (42 CFR 441.301(c), 441.450(c), 
441.540(c), and 441.725(c))
    Section 1915(c)(1) of the Act requires that services provided 
through section 1915(c) waiver programs be provided under a written 
plan of care (hereinafter referred to as ``person-centered service 
plans'' or ``service plans''). Existing Federal regulations at Sec.  
441.301(c) address the person-centered planning process and include a 
requirement at Sec.  441.301(c)(3) that the person-centered service 
plan be reviewed and revised, upon reassessment of functional need, at 
least every 12 months, when the individual's circumstances or needs 
change significantly, or at the request of the individual.
    In 2014, we released guidance for section 1915(c) waiver programs 
\43\ (hereinafter the ``2014 guidance'') that included expectations for 
State reporting of State-developed performance measures to demonstrate 
compliance with section 1915(c) of the Act and the implementing 
regulations in part 441, subpart G, through six assurances, including 
assurances related to person-centered service plans. The 2014 guidance 
indicated that States should conduct systemic remediation and implement 
a Quality Improvement Project when they score below an 86 percent 
threshold on any of their performance measures. The six assurances 
identified in the 2014 guidance were the following:
---------------------------------------------------------------------------

    \43\ Modifications to Quality Measures and Reporting in Sec.  
1915(c) Home and Community-Based Waivers. March 2014. Accessed at 
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/3-cmcs-quality-memo-narrative_0_2.pdf.
---------------------------------------------------------------------------

    1. Level of Care: The State demonstrates that it implements the 
processes and instrument(s) specified in its approved waiver for 
evaluating/reevaluating an applicant's/waiver participant's level of 
care consistent with care provided in a hospital, nursing facility, or 
Intermediate Care Facility for Individuals with Intellectual 
Disabilities;
    2. Service Plan: The State demonstrates it has designed and 
implemented an effective system for reviewing the adequacy of service 
plans for waiver participants;
    3. Qualified Providers: The State demonstrates that it has designed 
and implemented an adequate system for assuring that all waiver 
services are provided by qualified providers;
    4. Health and Welfare: The State demonstrates it has designed and 
implemented an effective system for assuring waiver participant health 
and welfare;
    5. Financial Accountability: The State demonstrates that it has 
designed and implemented an adequate system for insuring financial 
accountability of the waiver program; and
    6. Administrative Authority: The Medicaid Agency retains ultimate 
administrative authority and responsibility for the operation of the 
waiver program by exercising oversight of the performance of waiver 
functions by other State and local/regional non-State agencies (if 
appropriate) and contracted entities.\44\
---------------------------------------------------------------------------

    \44\ Performance measures were required for delegated functions 
unless the delegated functions were covered by performance measures 
associated with other assurances.
---------------------------------------------------------------------------

    We are proposing a different approach for States to demonstrate 
that they meet the statutory requirements in section 1915(c) of the Act 
and the regulatory requirements in part 441, subpart G, including the 
requirements regarding assurances around service plans. The proposed 
approach is based on feedback CMS obtained during various public 
engagement activities conducted with States and other interested 
parties over the past several years about the reporting discussed in 
the 2014 guidance, as well as feedback received through the RFI \45\ 
discussed earlier about the need to standardize reporting and set 
minimum standards for HCBS. Accordingly, the proposed HCBS requirements 
in this rulemaking are intended to establish a new strategy for 
oversight, monitoring, quality assurance, and quality improvement for 
section 1915(c) waiver programs. The proposed approach focuses on 
priority areas that have been identified by States, oversight entities, 
consumer advocacy organizations, and other interested parties. The 
priority areas are person-centered planning, health and welfare, 
access, beneficiary protections, and quality improvement. As part of 
this approach, we propose to establish new minimum performance 
requirements and new reporting requirements for section 1915(c) waiver 
programs that are intended to supersede and fully replace the reporting 
requirements and the 86 percent performance level threshold for 
performance measures described in the 2014 guidance. Further, to ensure 
consistency and alignment across HCBS authorities, we propose to apply 
the proposed requirements for section 1915(c) waiver programs to 
section 1915(i), (j), and (k) State plan services as appropriate.
---------------------------------------------------------------------------

    \45\ CMS Request for Information: Access to Coverage and Care in 
Medicaid & CHIP. February 2022. For a full list of question from the 
RFI, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.
---------------------------------------------------------------------------

    Under section 1902(a)(19) of the Act, States must provide 
safeguards to assure that eligibility for Medicaid-covered care and 
services will be determined and provided in a manner that is consistent 
with simplicity of administration and that is in the best interest of 
Medicaid beneficiaries. While the needs of some individuals who receive 
HCBS may be relatively stable over some time periods, individuals who 
receive HCBS experience changes in their functional needs and 
individual circumstances, such as the availability of natural supports 
or a desire to choose a different provider, that necessitate revisions 
to the person-centered service plan to remain as independent as 
possible or to prevent adverse outcomes. The requirements to reassess 
functional need and to update the person-centered service plan based on 
the results of the reassessment, when circumstances or needs change 
significantly, or at the request of the individual are important 
safeguards that are in the best interest of beneficiaries because they 
ensure that an individual's section 1915(c) waiver program services 
change to meet the beneficiary's needs most appropriately as those 
needs change. Section 2402(a) of the Affordable Care Act (Pub. L. 111-
148 and Pub. L. 111-152) requires the Secretary of HHS to ensure that 
all States receiving Federal funds for HCBS, including Medicaid, 
develop HCBS systems that are responsive to the needs and choices of 
beneficiaries receiving HCBS, maximize independence and self-direction, 
provide support and coordination to facilitate the participant's full 
engagement in community-life, and achieve a more consistent and 
coordinated approach to the administration of policies and procedures 
across public programs providing HCBS.\46\ In particular, section 
2402(a)(1) of the Affordable Care Act requires States to allocate 
resources for services in a manner that is responsive to the changing 
needs and choices of beneficiaries receiving HCBS and to provide 
strategies for beneficiaries receiving such services to maximize their 
independence, while section 2402(a)(2) of the Affordable Care Act 
requires States to provide beneficiaries who need HCBS with the support 
and coordination needed to design a plan based on individual 
preferences and

[[Page 27973]]

personal goals that support their full engagement in community life.
---------------------------------------------------------------------------

    \46\ Section 2402(a) of the Affordable Care Act--Guidance for 
Implementing Standards for Person-Centered Planning and Self-
Direction in Home and Community-Based Services Programs. Accessed at 
https://acl.gov/sites/default/files/news%202016-10/2402-a-Guidance.pdf.
---------------------------------------------------------------------------

    Effective State implementation of the person-centered planning 
process is integral to ensuring compliance with section 2402 of the 
Affordable Care Act. This is because this process is how States 
identify and document the service needs and choices of people receiving 
HCBS, plan for delivering individualized services that promote 
independence and self-direction, effectively coordinate services and 
supports necessary for community living, and ensure that the services 
and supports that people receive are responsive to their changing needs 
and choices. Each component of the person-centered planning process, 
including the functional assessment, developing and implementing the 
person-centered service plan, and periodically reassessing and updating 
of the service plan, are essential to ensuring States' compliance with 
sections 2402(a)(1) and (2) of the Affordable Care Act.
    Since the release of the 2014 guidance, we have received feedback 
from States, the OIG, ACL, and OCR, and other interested parties on how 
crucial person-centered planning is in the delivery of care and the 
significance of the person-centered service plan for the assurance of 
health and welfare for section 1915(c) waiver program participants. The 
importance of the person-centered planning process to the assurance of 
health and welfare is supported by the existing regulatory requirements 
for section 1915(c) waivers, which indicate, at Sec.  
441.301(c)(2)(vi), that person-centered service plans must ``reflect 
risk factors and measures in place to minimize them, including 
individualized back-up plans and strategies when needed'' and, at Sec.  
441.301(c)(2)(xiii)(H), that person-centered service plans must 
``include an assurance that interventions and supports will cause no 
harm to the individual.'' As such, if States fail to conduct the 
required reassessment and updating of the person-centered service plan, 
they could increase the risk of harm for beneficiaries by not 
identifying risk factors and measures to minimize them and by not 
taking the steps necessary to assure that interventions and supports 
will not cause harm.
    To ensure a more consistent application of person-centered service 
plan requirements across States and to protect the health and welfare 
of section 1915(c) waiver participants, we propose under our authority 
at sections 1915(c)(1) and 1902(a)(19) of the Act and section 
2402(a)(1) and (2) of the Affordable Care Act, to codify a minimum 
performance level to demonstrate that States meet the requirements at 
Sec.  441.301(c)(3). Specifically, at new Sec.  441.301(c)(3)(ii)(A), 
we propose to require that States demonstrate that a reassessment of 
functional need was conducted at least annually for at least 90 percent 
of individuals continuously enrolled in the waiver for at least 365 
days. We also propose, at new Sec.  441.301(c)(3)(ii)(B), to require 
that States demonstrate that they reviewed the person-centered service 
plan and revised the plan as appropriate based on the results of the 
required reassessment of functional need at least every 12 months for 
at least 90 percent of individuals continuously enrolled in the waiver 
for at least 365 days.
    We considered whether to propose to codify the minimum 86 percent 
performance level that was outlined in the 2014 guidance, instead of 
the minimum 90 percent performance level we are now proposing. The 
minimum 86 percent performance level was intended to provide States 
with a reasonable threshold for demonstrating compliance with the 
requirements at Sec.  441.301(c)(3). However, since we released the 
2014 guidance, we have heard from many interested parties that a 
minimum 86 percent performance level may not be sufficient to 
demonstrate that a State is meeting these requirements. The key concern 
expressed is that this performance level provides States with more 
latitude than is necessary to account for unexpected delays in the 
timeframe for conducting reassessments and updating service plans, as 
States should assume that some delays are likely and account for them 
as part of their reassessment and service planning processes. Further, 
media and anecdotal reports indicate that re-assessment and care 
planning processes are often delayed without valid reasons, which 
suggests that beneficiaries may be at risk for preventable harm due to 
unnecessary delays in person-centered planning processes and that we 
should establish a more stringent threshold for States to demonstrate 
compliance with the requirements at Sec.  441.301(c)(3). In response to 
the feedback we have received since 2014, we are proposing a slight 
increase to the minimum performance level outlined in the 2014 
guidance. This proposed minimum performance level is intended to 
strengthen person-centered planning requirements based on feedback we 
have received, while also recognizing that there may be legitimate 
reasons why assessment and care planning processes occasionally are not 
completed timely in all instances.
    We also considered whether to propose allowing good cause 
exceptions to the minimum performance level in the event of a natural 
disaster, public health emergency, or other event that would negatively 
impact a State's ability to achieve a minimum 90 percent performance 
level. In the end, we decided not to propose good cause exceptions 
because the minimum 90 percent performance level is intended to account 
for various scenarios that might impact a State's ability to achieve 
these minimum performance levels. Further, there are existing disaster 
authorities that States could utilize to request a waiver of these 
requirements in the event of a public health emergency or a disaster. 
We invite comment on these proposals.
    At Sec.  441.301(c)(3), we are also proposing to move the sentence 
beginning with ``The person-centered service plan must be reviewed . . 
.'' to a new paragraph at Sec.  441.301(c)(3)(i) and to reposition the 
regulatory text under the proposed title, Requirement. In addition, we 
are proposing to revise the regulatory text at the renumbered 
paragraph, which currently says, ``The person-centered service plan 
must be reviewed, and revised upon reassessment of functional need as 
required by Sec.  441.365(e), at least every 12 months, when the 
individual's circumstances or needs change significantly, or at the 
request of the individual'' to read, ``The State must ensure that the 
person-centered service plan is reviewed, and revised, as appropriate, 
based upon the reassessment of functional need as required by Sec.  
441.365(e), at least every 12 months, when the individual's 
circumstances or needs change significantly, or at the request of the 
individual.'' We are proposing this revision to the regulatory text so 
that it is clearer that the State is the required actor under Sec.  
441.301(c)(3). We are also proposing this revision to the regulatory 
text so that it is clear that changes to the person-centered service 
plan are not required if the reassessment does not indicate a need for 
changes. With this proposed revision to the regulatory text, a State 
could, for instance, meet the requirement that the person-centered 
service plan was reviewed and revised as appropriate based on the 
results of the required reassessment of functional need by documenting 
that there were no changes in functional needs or the individual's 
circumstances upon reassessment that necessitated changes to the 
service plan.

[[Page 27974]]

    Section 2402(a)(3)(A) of the Affordable Care Act requires States to 
improve coordination among, and the regulation of, all providers of 
Federally and State-funded HCBS programs to achieve a more consistent 
administration of policies and procedures across HCBS programs. In the 
context of Medicaid coverage of HCBS, it should not matter whether the 
services are covered directly on an FFS basis or by a managed care 
entity to its enrollees. The requirement for ``consistent 
administration'' should require consistency between these two modes of 
service delivery. Accordingly, we are proposing to specify that a State 
must ensure compliance with the requirements in Sec.  441.301(c)(3), 
with respect to HCBS delivered under both FFS and managed care delivery 
systems. To ensure consistency in person-centered service plan 
requirements between FFS and managed care delivery systems, we propose 
to add the requirements at Sec.  441.301(c)(3) to 42 CFR 438.208(c).
    We also propose updates to existing language describing the person-
centered planning process specific to section 1915(c) waivers. Current 
language describes the role of an individual's authorized 
representative as if every waiver participant will require an 
authorized representative, which is not the case and has been a source 
of confusion for States and providers. We propose to remove extraneous 
language from the regulation text at Sec.  441.301(c)(1) to now read: 
``The individual, or if applicable, the individual and the individual's 
authorized representative, will lead the person-centered planning 
process. When the term `individual' is used throughout this section, it 
includes the individual's authorized representative if applicable. In 
addition, the person-centered planning process: . . .'' This proposed 
language brings the section 1915(c) waiver regulatory text in line with 
person-centered planning process language in both the section 1915(j) 
and (k) State plan options.
    We recognize that many States may need time to implement these 
proposed requirements, including time to amend provider agreements or 
managed care contracts, make State regulatory or policy changes, 
implement process or procedural changes, update information systems for 
data collection and reporting, or conduct other activities to implement 
these requirements. As a result, we are proposing at Sec.  
441.301(c)(3)(iii) to make the performance levels under Sec.  
441.301(c)(3)(ii) effective 3 years after the effective date of Sec.  
441.301(c)(3) (in other words, 3 years after the effective date of the 
final rule) in FFS delivery systems. For States with managed care 
delivery systems under the authority of sections 1915(a), 1915(b), 
1932(a), or 1115(a) of the Act that include HCBS in the managed care 
organization's (MCO), prepaid inpatient health plan's (PIHP), or 
prepaid ambulatory health plan's (PAHP) contract, we are proposing to 
provide States until the first managed care plan contract rating period 
that begins on or after 3 years after the effective date of the final 
rule to implement these requirements. This time period is based on 
feedback from States and other interested parties that it could take 2 
to 3 years to amend State regulations and work with their State 
legislatures, if needed, as well as to revise policies, operational 
processes, information systems, and contracts to support implementation 
of the proposals outlined in this section. We also considered this 
proposed timeframe based on all of the HCBS proposals outlined in this 
proposed rule as whole. We invite comments on whether this timeframe is 
sufficient, whether we should require a shorter timeframe (2 years) or 
longer timeframe (4 years) to implement these provisions, and if an 
alternate timeframe is recommended, the rationale for that alternate 
timeframe. As noted previously, the proposed requirements at Sec.  
441.301(c)(3), in combination with new proposed reporting requirements 
at Sec.  441.311(b)(3) and other proposed requirements identified 
throughout this proposed rule, are intended to supersede and fully 
replace the reporting requirements and the required minimum 86 percent 
performance level for performance measures described in the 2014 
guidance. We expect that States may implement some of the requirements 
proposed in this proposed rule in advance of the effective date. We 
will work with States to phase-out the requirements in the 2014 
guidance as they implement the future requirements that become part of 
the final rule to reduce unnecessary burden and to avoid duplicative or 
conflicting reporting requirements.
    As discussed earlier in this section of the preamble, section 
2402(a)(3)(A) of the Affordable Care Act requires States to improve 
coordination among, and the regulation of, all providers of Federally 
and State-funded HCBS programs to achieve a more consistent 
administration of policies and procedures across HCBS programs. In 
accordance with the requirement of section 2402(a)(3)(A) of the 
Affordable Care Act for States to achieve a more consistent 
administration of policies and procedures across HCBS programs and 
because HCBS State plan options have similar person-centered planning 
and service plan requirements, we are proposing to incorporate these 
new requirements within the applicable HCBS regulatory sections. 
Specifically, we propose to apply the proposed requirements at Sec.  
441.301(c)(3) to section 1915(j), (k), and (i) State plan services by 
cross-referencing at Sec. Sec.  441.450(c), 441.540(c), and 441.725(c), 
respectively. Consistent with our proposal for section 1915(c) waivers, 
we propose these requirements under section 1902(a)(19) of the Act, 
which authorizes safeguards necessary to assure that eligibility for 
care and services under the Medicaid program will be determined, and 
such care and services will be provided, in a manner consistent with 
the best interest of beneficiaries. We believe the same reasons for 
proposing these requirements for section 1915(c) waivers are equally 
applicable for these other HCBS authorities and are also responsive to 
feedback we have received from States and interested parties over the 
years requesting consistency of requirements across HCBS authorities. 
We request comment on the application of these provisions to section 
1915(i), (j), and (k) authorities.
    Finally, we considered whether to also apply these proposed 
requirements to section 1905(a) ``medical assistance'' State plan 
personal care, home health, and case management services. However, we 
are not proposing that these requirements apply to any section 1905(a) 
State plan services at this time, based on State feedback that States 
do not have the same data collection and reporting capabilities for 
these services as they do for other HCBS at section 1915(c), (i), (j), 
and (k), and because the person-centered planning and service plan 
requirements for section 1905(a) services are substantially different 
from those for section 1915(c), (i), (j), and (k) services. 
Specifically, there are requirements for a ``comprehensive assessment 
and periodic reassessment of individual needs'' and ``development (and 
periodic revision) of a specific care plan based on the information 
collected through the assessment'' under Sec.  440.169(d) for the 
provision of case management services. There are also requirements for 
a ``plan of treatment'' (or, at the option of the State, a ``service 
plan'') under Sec.  440.167 for the provision of personal care 
services. However, Sec. Sec.  440.169(d) and 440.167 do not include 
specific timeframes that could be used to establish minimum

[[Page 27975]]

performance thresholds that would be similar to those proposed for 
section 1915(c) waivers. A face-to-face encounter within the 90 days 
before or within the 30 days after the start of the services is 
required at Sec.  440.70(f)(1) for the initiation of home health 
services, and a written plan of care that the ordering practitioner 
reviews every 60 days for services is required under Sec.  440.70(a)(2) 
for the provision of home health services. However, the proposed 
minimum thresholds for section 1915(c) waiver services would be 
incompatible with the required timeframes under Sec.  440.70(a)(2) and 
(f)(1). Person-centered planning and service plan requirements are not 
required by Medicaid for other section 1905(a) services, although we 
recommend that States implement person-centered planning process for 
all HCBS. We note that the vast majority of HCBS is delivered under 
section 1915(c), (i), (j), and (k) authorities, while only a small 
percentage of HCBS nationally is delivered under section 1905(a) State 
plan authorities. However, the small overall percentage includes large 
numbers of people with mental health needs who receive case management. 
We request comment on whether we should establish similar person-
centered planning and service plan requirements for section 1905(a) 
State plan personal care, home health, and case management services.
2. Grievance System (Sec. Sec.  441.301(c)(7), 441.464(d)(2)(v), 
441.555(b)(2)(iv), and 441.745(a)(1)(iii))
    As discussed earlier in section II.B.1., of this preamble, section 
2402(a) of the Affordable Care Act requires the Secretary of HHS to 
ensure that all States receiving Federal funds for HCBS, including 
Medicaid HCBS, develop HCBS systems that are responsive to the needs 
and choices of beneficiaries receiving HCBS, maximize independence and 
self-direction, provide support and coordination to assist with a 
community-supported life, and achieve a more consistent and coordinated 
approach to the administration of policies and procedures across public 
programs providing HCBS.\47\ Among other things, section 
2402(a)(3)(B)(ii) of the Affordable Care Act requires development and 
monitoring of an HCBS complaint system. Further, section 1902(a)(19) of 
the Act requires States to provide safeguards to assure that 
eligibility for Medicaid-covered care and services will be determined 
and provided in a manner that is consistent with simplicity of 
administration and the best interest of Medicaid beneficiaries.
---------------------------------------------------------------------------

    \47\ Section 2402(a) of the Affordable Care Act--Guidance for 
Implementing Standards for Person-Centered Planning and Self-
Direction in Home and Community-Based Services Programs. Accessed at 
https://acl.gov/sites/default/files/news%202016-10/2402-a-Guidance.pdf.
---------------------------------------------------------------------------

    Federal regulations at 42 CFR part 431, subpart E require States to 
provide Medicaid applicants and beneficiaries with an opportunity for a 
fair hearing before the State Medicaid agency in certain circumstances, 
including for a termination, suspension, or reduction of Medicaid 
eligibility, or for a termination, suspension, or reduction in benefits 
or services. These fair hearing rights apply to all Medicaid applicants 
and beneficiaries, including those receiving HCBS regardless of the 
delivery system. Under 42 CFR part 438, subpart F, Medicaid managed 
care plans must have in place: an appeal system that allows a Medicaid 
managed care enrollee to request an appeal, which is a review by the 
Medicaid managed care plan of an adverse benefit determination issued 
by the plan; and a grievance system, which allows a Medicaid managed 
care enrollee to file an expression of dissatisfaction with the plan 
about any matter other than an adverse benefit determination. Note that 
if a Medicaid managed care enrollee exhausts the Medicaid managed care 
plan's appeals process, the enrollee may request a fair hearing before 
the State Medicaid agency. Medicaid managed care enrollees cannot 
request a fair hearing for grievances because grievances are not 
generally related to the direct provision of services. Section 
1902(a)(3) of the Act provides for the opportunity for a State fair 
hearing when a ``claim for medical assistance under the plan is denied 
or is not acted upon with reasonable promptness.'' This structure 
creates a disparity for FFS HCBS beneficiaries, as it does not provide 
for a venue to raise concerns about issues that HCBS beneficiaries may 
experience which are not subject to the fair hearing process, such as 
the failure of a provider to comply with the HCBS settings requirements 
at Sec.  441.301(c)(4) (note that these are issues for which a managed 
care enrollee could file a grievance with their plan).
    Under our authority at section 1902(a)(19) of the Act and section 
2402(a)(3)(B)(ii) of the Affordable Care Act, we propose to require at 
new Sec.  441.301(c)(7) that States establish grievance procedures for 
Medicaid beneficiaries receiving section 1915(c) waiver program 
services through an FFS delivery system. Specifically, we propose at 
Sec.  441.301(c)(7) that States must establish a procedure under which 
a beneficiary can file a grievance related to the State's or a 
provider's compliance with the person-centered planning and service 
plan requirements at Sec. Sec.  441.301(c)(1) through (3) and the HCBS 
settings requirements at Sec. Sec.  441.301(c)(4) through (6). This 
proposal is based on feedback obtained during various public engagement 
activities conducted with interested parties over the past several 
years about the need for beneficiary grievance processes in section 
1915(c) waiver programs related to these requirements. However, to 
avoid duplication with the grievance requirements at part 438, subpart 
F, we are not proposing to apply this requirement to establish a 
grievance procedure to managed care delivery systems. We note, though, 
that the proposals in this section are similar to requirements for 
managed care grievance requirements found at part 438, subpart F, with 
any differences reflecting changes appropriate for FFS systems. The 
proposed requirements included at Sec.  441.301(c)(7) in this proposed 
rule are focused specifically on grievance systems and do not establish 
new fair hearing system requirements, as appeals of adverse eligibility 
and/or benefit or service determinations are addressed by existing fair 
hearing requirements at 42 CFR part 431, subpart E. We welcome comments 
on any additional changes we should consider in this section.
    As discussed earlier in this section of the preamble, section 
2402(a)(3)(B)(ii) of the Affordable Care Act requires development and 
monitoring of an HCBS complaint system. In addition, section 
2402(a)(3)(A) of the Affordable Care Act requires the Secretary of HHS 
to ensure that all States receiving Federal funds for HCBS, including 
Medicaid HCBS, develop HCBS systems that achieve a more consistent and 
coordinated approach to the administration of policies and procedures 
across public programs providing HCBS. As such, we believe the 
requirement for States to establish grievance procedures for Medicaid 
beneficiaries receiving section 1915(c) waiver program services through 
a FFS delivery system are necessary to comply with the HCBS complaint 
system requirements at section 2402(a)(3)(B)(ii) and to ensure 
consistency in the administration of HCBS between managed care and FFS 
delivery systems. Further, in the absence of a grievance system 
requirement for FFS HCBS programs, States may not have established 
processes and systems for people receiving section 1915(c) waiver 
program services through FFS delivery

[[Page 27976]]

systems to express dissatisfaction with or voice concerns related to 
States' compliance with the person-centered planning and service plan 
requirements at Sec.  441.301(c)(1) through (3) and the HCBS settings 
requirements at Sec.  441.301(c)(4) through (6), as such concerns are 
not subject to the existing fair hearing process at 42 CFR part 431 
subpart E. As a result, we believe the proposal for a grievance system 
for FFS HCBS programs is necessary to assure that care and services 
will be provided in a manner that is in the best interests of the 
beneficiaries, as required by section 1902(a)(19) of the Act.
    We have specifically focused this requirement on States' and 
providers' compliance with the person-centered planning and service 
plan requirements at Sec.  441.301(c)(1) through (3) and the HCBS 
settings requirements at Sec.  441.301(c)(4) through (6) because of the 
critical role that person-centered planning and the service plan play 
in appropriate care delivery for people receiving HCBS. Additionally, 
we have focused the grievance system requirements on the HCBS settings 
requirements because of the importance of the HCBS settings 
requirements to ensuring that HCBS beneficiaries have full access to 
the benefits of community living and are able to receive services in 
the most integrated setting appropriate to their needs. Beneficiary 
advocates and other interested parties have also indicated to us that 
these are especially important areas for which to ensure that grievance 
processes are in place for all Medicaid beneficiaries receiving HCBS. 
Further, focusing the grievance systems requirements on the person-
centered planning and service plan requirements at Sec.  441.301(c)(1) 
through (3) and the HCBS settings requirements at Sec.  441.301(c)(4) 
through (6) helps to ensure that the proposed grievance requirements do 
not duplicate or conflict with existing fair hearing requirements at 
part 431, subpart E, as HCBS settings requirements and person-centered 
planning requirements are outside the scope of the fair hearing 
requirements.
    At Sec.  441.301(c)(7)(ii)(A), we propose to define ``grievance'' 
as an expression of dissatisfaction or complaint related to the State's 
or a provider's compliance with the person-centered planning and 
service plan requirements at Sec.  441.301(c)(1) through (3) and the 
HCBS settings requirements at Sec.  441.301(c)(4) through (6), 
regardless of whether the beneficiary requests that remedial action be 
taken to address the area of dissatisfaction or complaint. At Sec.  
441.301(a)(7)(ii)(B), we also propose to define ``grievance system'' as 
the processes the State implements to handle grievances, as well as the 
processes to collect and track information about them. To ensure 
consistency in the administration of HCBS between managed care and FFS 
delivery systems, we based these definitions on the definitions at part 
438, subpart F.
    At Sec.  441.301(c)(7)(iii)(A) through (C), we propose new general 
requirements for States' grievance procedures. Specifically, at Sec.  
441.301(c)(7)(iii)(A), we propose to require that a beneficiary or 
authorized representative be permitted to file a grievance. Under the 
proposal, another individual or entity may file a grievance on a 
beneficiary's behalf, so long as the beneficiary or authorized 
representative provides written consent. Our proposal would not permit 
a provider to file a grievance that would violate conflict of interest 
guidelines, which States are required to have in place under Sec.  
441.540(a)(5). At Sec.  441.301(c)(7)(iii)(A), we also propose to 
specify that all references to beneficiary in the regulatory text of 
this section includes the beneficiary's representative, if applicable.
    At Sec.  441.301(c)(7)(iii)(B)(1) through (7), we propose to 
require States to:
     Have written policies and procedures for their grievance 
processes that at a minimum meet the requirements of this proposed 
section and serve as the basis for the State's grievance process;
     Provide beneficiaries with reasonable assistance in 
completing the forms and procedural steps related to grievances and to 
ensure that the grievance system is consistent with the availability 
and accessibility requirements at Sec.  435.905(b);
     Ensure that punitive action is not threatened or taken 
against an individual filing a grievance;
     Accept grievances, requests for expedited resolution of 
grievances, and requests for extensions of timeframes from 
beneficiaries;
     Provide beneficiaries with notices and other information 
related to the grievance system, including information on their rights 
under the grievance system and on how to file grievance, and ensure 
that such information is accessible for individuals with disabilities 
and individuals who are limited English proficient in accordance with 
Sec.  435.905(b);
     Review grievance resolutions with which beneficiaries are 
dissatisfied; and
     Provide information on the grievance system to providers 
and subcontractors approved to deliver services under section 1915(c) 
of the Act.
    At Sec.  441.301(c)(7)(iii)(C)(1) through (5), we propose to 
require that the processes for handling grievances must:
     Allow beneficiaries to file a grievance either orally or 
in writing;
     Acknowledge receipt of each grievance;
     Ensure that decisions on grievances are not made by anyone 
previously involved in review or decision-making related to the problem 
or issue for which the beneficiary has filed a grievance or a 
subordinate of such an individual, are made by individuals with 
appropriate expertise, and are made by individuals who consider all of 
the information submitted by the beneficiary related to the grievance;
     Provide beneficiaries with a reasonable opportunity, face-
to-face (including through the use of audio or video technology) and in 
writing, to present evidence and testimony and make legal and factual 
arguments related to their grievance;
     Provide beneficiaries, free of charge and in advance of 
resolution timeframes, with their own case files and any new or 
additional evidence used or generated by the State related to the 
grievance; and
     Provide beneficiaries, free of charge, with language 
services, including written translation and interpreter services in 
accordance with 435.905(b), to support their participation in grievance 
processes and their use of the grievance system.
    At Sec.  441.301(c)(7)(iv)(A), we propose to require that the 
beneficiary be able to file a grievance at any time. At Sec.  
441.301(c)(7)(iv)(B), we propose to require that beneficiaries be 
permitted to request expedited resolution of a grievance, whenever 
there is a substantial risk that resolution within standard timeframes 
will adversely affect the beneficiary's health, safety, or welfare, 
such as if, for example, a beneficiary cannot access personal care 
services authorized in the person-centered service plan.
    At Sec.  441.301(c)(7)(v), we propose resolution and notification 
requirements for grievances. Specifically, at Sec.  
441.301(c)(7)(v)(A), we propose to require that States resolve and 
provide notice of resolution related to each grievance as quickly as 
the beneficiary's health, safety, and welfare requires and within 
State-established timeframes that do not exceed the standard and 
expedited timeframes proposed in Sec.  441.301(c)(7)(v)(B). At Sec.  
441.301(c)(7)(v)(B)(1), we propose to require that standard resolution 
of a grievance and notice to affected parties must occur within 90 
calendar days of receipt of the grievance. At

[[Page 27977]]

Sec.  441.301(c)(7)(v)(B)(2), we propose to require that expedited 
resolution of a grievance and notice must occur within 14 calendar days 
of receipt of the grievance.
    At Sec.  441.301(c)(7)(v)(C), we propose that States be permitted 
to extend the timeframes for the standard resolution and expedited 
resolution of grievances by up to 14 calendar days if the beneficiary 
requests the extension, or the State documents that there is need for 
additional information and how the delay is in the beneficiary's 
interest. At Sec.  441.301(c)(7)(v)(D), we propose to require that 
States make reasonable efforts to give the beneficiary prompt oral 
notice of the delay, give the beneficiary written notice, within 2 
calendar days of determining a need for a delay but no later than the 
timeframes in paragraph (c)(7)(v)(B), of the reason for the decision to 
extend the timeframe, and resolve the grievance as expeditiously as the 
beneficiary's health condition requires and no later than the date the 
extension expires, if the State extends the timeframe for a standard 
resolution or an expedited resolution.
    We note that the proposed requirements at Sec.  
441.301(c)(7)(iv)(B) that beneficiaries be permitted to request 
expedited resolution of a grievance and at Sec.  441.301(c)(7)(v)(B)(2) 
related to the timeframe for expedited resolution of a grievance and 
notice differ from the current grievance system requirements for 
Medicaid managed care plans at part 438, subpart F, which do not 
include specific requirements for an expedited resolution of a 
grievance. We invite comment on whether part 438, subpart F should be 
amended to include the proposed requirements at Sec.  
441.301(c)(7)(iv)(B) and at Sec.  441.301(c)(7)(v)(B)(2).
    Proposed Sec.  441.301(c)(7)(vi) describes proposed requirements 
related to the notice of resolution for beneficiaries. Specifically, at 
Sec.  441.301(c)(7)(vi)(A), we propose to require that States establish 
a method for written notice to beneficiaries and that the method meet 
the availability and accessibility requirements at Sec.  435.905(b). At 
Sec.  441.301(c)(7)(vi)(B), we propose to require that States make 
reasonable efforts to provide oral notice of resolution for expedited 
resolutions.
    Proposed Sec.  441.301(c)(7)(vii) lists proposed recordkeeping 
requirements related to grievances. Specifically, at Sec.  
441.301(c)(7)(vii)(A), we propose to require that States maintain 
records of grievances and review the information as part of their 
ongoing monitoring procedures. At Sec.  441.301(c)(7)(vii)(B)(1) 
through (6), we propose to require that the record of each grievance 
must contain the following information at a minimum: a general 
description of the reason for the grievance, the date received, the 
date of each review or review meeting (if applicable), resolution and 
date of the resolution of the grievance (if applicable), and the name 
of the beneficiary for whom the grievance was filed. Further, at Sec.  
441.301(c)(7)(vii)(C), we propose to require that grievance records be 
accurately maintained and in a manner that would be available upon our 
request.
    We recognize that many States may need time to implement these 
requirements, including to amend provider agreements, make State 
regulatory or policy changes, implement process or procedural changes, 
update information systems for data collection and reporting, or 
conduct other activities to implement these requirements. However, we 
also recognize that the absence of a grievance system in FFS HCBS 
systems poses a substantial risk of harm to beneficiaries. As a result, 
we are proposing at Sec.  441.301(c)(7)(viii) that the requirement at 
Sec.  441.301(c)(7) be effective 2 years after the effective date of 
the final rule. A 2-year time period after the effective date of the 
final rule for States to implement these requirements reflects our 
attempt to balance two competing challenges: (1) the fact that there is 
a gap in existing regulations for FFS HCBS grievance processes related 
to important HCBS beneficiary protection issues involving person-
centered planning and HCBS settings requirements; and (2) feedback from 
States and other interested parties that it could take 1 to 2 years to 
amend State regulations and work with their State legislatures, if 
needed, as well as to revise policies, operational processes, 
information systems, and contracts to support implementation of the 
proposals outlined in this section. We also considered all of the HCBS 
proposals outlined in this proposed rule as whole. We invite comments 
on overall burden for States to meet the requirements of this section, 
whether this timeframe is sufficient, whether we should require a 
shorter timeframe (1 year to 18 months) or longer timeframe (3 to 4 
years) to implement these provisions, and if an alternate timeframe is 
recommended, the rationale for that alternate timeframe.
    As discussed earlier in section II.B.1. of this preamble, section 
2402(a)(3)(A) of the Affordable Care Act requires States to improve 
coordination among, and the regulation of, all providers of Federally 
and State-funded HCBS programs to achieve a more consistent 
administration of policies and procedures across HCBS programs. In 
accordance with the requirement of section 2402(a)(3)(A) of the 
Affordable Care Act for States to achieve a more consistent 
administration of policies and procedures across HCBS programs and 
because HCBS State plan options also must comply with the HCBS Settings 
Rule and with similar person-centered planning and service plan 
requirements, we are proposing to incorporate these grievance 
requirements within the applicable regulatory sections. Specifically, 
we propose to apply these proposed requirements in Sec.  441.301(c)(7) 
to sections 1915(j), (k), and (i) State plan services by cross-
referencing at Sec. Sec.  441.464(d)(2)(v), 441.555(b)(2)(iv), and 
441.745(a)(1)(iii), respectively.
    Consistent with our proposal for section 1915(c) waivers, we 
propose to apply the proposed grievance requirements in Sec.  
441.301(c)(7) to sections 1915(j), (k), and (i) State plan services 
based on our authority under section 1902(a)(19) of the Act to assure 
that there are safeguards for beneficiaries and our authority at 
section 2402(a)(3)(B)(ii) of the Affordable Care Act to require a 
complaint system for beneficiaries. We believe the same arguments for 
proposing these requirements for section 1915(c) waivers are equally 
applicable to these other HCBS authorities. We request comment on the 
application of the grievance system provisions to section 1915(i), (j), 
and (k) authorities. We note that in the language added to Sec.  
441.464(d)(2)(v), we identify that the proposed grievance requirements 
apply when self-directed personal assistance services authorized under 
section 1915(j) include services under a section 1915(c) waiver 
program. As described later in this section of this proposed rule, we 
have not proposed to apply these requirements to section 1905(a) 
services; section 1905(a) personal care services are the other service 
authorized under section 1915(j) authorities to be self-directed.

[[Page 27978]]

    We considered whether to also apply the proposed requirements to 
section 1905(a) ``medical assistance'' State plan personal care, home 
health, and case management services. However, we are not proposing 
that these requirements apply to any section 1905(a) State plan 
services because section 1905(a) services are not required to comply 
with HCBS settings requirements and because the person-centered 
planning and service plan requirements for most section 1905(a) 
services are substantially different from those for section 1915(c), 
(i), (j), and (k) services. Further, the vast majority of HCBS is 
delivered under section 1915(c), (i), (j), and (k) authorities, while 
only a small percentage of HCBS nationally is delivered under section 
1905(a) State plan authorities. We request comment on whether we should 
establish grievance requirements for section 1905(a) State plan 
personal care, home health, and case management services.
3. Incident Management System (Sec. Sec.  441.302(a)(6), 441.464(e), 
441.570(e), and 441.745(a)(1)(v))
    Section 1902(a)(19) of the Act requires States to provide 
safeguards as may be necessary to assure that eligibility for care and 
services will be determined, and that ``such care and services will be 
provided,'' in a manner consistent with simplicity of administration 
and ``the best interests of the recipients.'' Section 1915(c)(2)(A) of 
the Act and current Federal regulations at Sec.  441.302(a) require 
that States have in place necessary safeguards to protect the health 
and welfare of individuals receiving section 1915(c) waiver program 
services. Further, as discussed previously in section II.B.1. of this 
preamble, section 2402(a) of the Affordable Care Act requires the 
Secretary of HHS to ensure that all States receiving Federal funds for 
HCBS, including Medicaid, develop HCBS systems that are responsive to 
the needs and choices of beneficiaries receiving HCBS, maximize 
independence and self-direction, provide support and coordination to 
assist with a community-supported life, and achieve a more consistent 
and coordinated approach to the administration of policies and 
procedures across public programs providing HCBS.\48\ Among other 
things, section 2402(a)(3)(B)(ii) of the Affordable Care Act requires 
development and oversight of a system to qualify and monitor providers.
---------------------------------------------------------------------------

    \48\ Section 2402(a) of the Affordable Care Act--Guidance for 
Implementing Standards for Person-Centered Planning and Self-
Direction in Home and Community-Based Services Programs. Accessed at 
https://acl.gov/sites/default/files/news%202016-10/2402-a-Guidance.pdf.
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    As noted earlier in section II.B.1. of this preamble we released 
guidance for section 1915(c) waiver programs in 2014 which noted that 
States should report on State-developed performance measures to 
demonstrate that they meet six assurances, including a Health and 
Welfare assurance for States to demonstrate that they have designed and 
implemented an effective system for assuring waiver participant health 
and welfare. Specifically, the 2014 guidance highlighted, related to 
the Health and Welfare assurance, the following:
     The State demonstrates on an ongoing basis that it 
identifies, addresses, and seeks to prevent instances of abuse, 
neglect, exploitation, and unexplained death;
     The State demonstrates that an incident management system 
is in place that effectively resolves incidents and prevents further 
similar incidents to the extent possible;
     The State policies and procedures for the use or 
prohibition of restrictive interventions (including restraints and 
seclusion) are followed;
     The State establishes overall health care standards and 
monitors those standards based on the responsibility of the service 
provider as stated in the approved waiver.
    Consistent with the expectations for other performance measures, 
the 2014 guidance noted that States should conduct systemic remediation 
and implement a Quality Improvement Project when they score below 86 
percent on any of their Health and Welfare performance measures.
    Despite States implementing these statutory and regulatory 
requirements to protect the health and welfare of individuals receiving 
section 1915(c) waiver program services, and States' adherence to 
related subregulatory guidance, there have been notable and high-
profile instances of abuse and neglect in recent years that highlight 
the risks associated with poor quality care and with inadequate 
oversight of HCBS in Medicaid. For example, a 2018 report, ``Ensuring 
Beneficiary Health and Safety in Group Homes Through State 
Implementation of Comprehensive Compliance Oversight,'' \49\ (referred 
to as the Joint Report, developed by ACL, OCR, and the OIG), found 
systemic problems with health and safety policies and procedures being 
followed in group homes and that failure to comply with these policies 
and procedures left beneficiaries in group homes at risk of serious 
harm.
---------------------------------------------------------------------------

    \49\ Ensuring Beneficiary Health and Safety in Group Homes 
Through State Implementation of Comprehensive Compliance Oversight. 
US Department of Human Services, Office of the Inspector General, 
Administration for Community Living, and Office for Civil Rights. 
January 2018. Accessed at https://oig.hhs.gov/reports-and-publications/featured-topics/group-homes/group-homes-joint-report.pdf.
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    In addition, in 2016 and 2017, OIG released several reports on 
their review of States' compliance with Federal and State requirements 
regarding critical incident reporting and monitoring. 
50 51 52 OIG found that several States did not comply with 
Federal waiver and State requirements for reporting and monitoring 
critical incidents involving individuals receiving HCBS through 
waivers. In particular, they reported that:
---------------------------------------------------------------------------

    \50\ HHS OIG. ``Connecticut did not comply with Federal and 
State requirements for critical incidents involving developmentally 
disabled Medicaid beneficiaries.'' May 2016. Accessed at https://oig.hhs.gov/oas/reports/region1/11400002.pdf.
    \51\ HHS OIG. ``Massachusetts did not comply with Federal and 
State requirements for critical incidents involving developmentally 
disabled Medicaid beneficiaries.'' July 2016. Accessed at https://oig.hhs.gov/oas/reports/region1/11400008.pdf.
    \52\ HHS OIG. ``Maine did not comply with Federal and State 
requirements for critical incidents involving Medicaid beneficiaries 
with developmental disabilities.'' August 2017. Accessed at https://oig.hhs.gov/oas/reports/region1/11600001.pdf.
---------------------------------------------------------------------------

     Critical incidents were not reported correctly;
     Adequate training to identify appropriate action steps for 
reported critical incidents or reports of abuse or neglect was not 
provided to State staff;
     Appropriate data sets to trend and track critical 
incidents were not accessible to State staff; and
     Critical incidents were not clearly defined, making it 
difficult to identify potential abuse or neglect.
    In 2016, we conducted three State audits based at least in part on 
concerns regarding health and welfare and media coverage on abuse, 
neglect, or exploitation issues.\53\ We found that these three States 
had not been meeting their section 1915(c) waiver assurances, similar 
to findings reported by the OIG. In two cases, for the incidents of 
concern, tracking and trending of critical incidents were not present. 
Further, in at least two of the States, staffing at appropriate levels 
was identified as an issue.
---------------------------------------------------------------------------

    \53\ Presentation by CMS for Advancing States: Quality in the 
HCBS Waiver--Health and Welfare. See: http://www.nasuad.org/sites/nasuad/files/Final%20Quality%20201.pdf.
---------------------------------------------------------------------------

    In January 2018, the United States Government Accountability Office 
(GAO) released a report on a study of 48 States that covered assisted 
living services.\54\ The GAO found large

[[Page 27979]]

inconsistencies between States in their definition of a critical 
incident and their system's ability to report, track, and collect 
information on critical incidents that have occurred. States also 
varied in their oversight methods as well as the type of information 
they were reviewing as part of this oversight. The GAO recommended that 
requiring States to report information on incidents (such as the type 
and severity of incidents and the number of incidents) would strengthen 
the effectiveness of State and Federal oversight.
---------------------------------------------------------------------------

    \54\ Government Accountability Office. ``Medicaid assisted 
living services--improved Federal oversight of beneficiary health 
and welfare is needed.'' January 2018. Accessed at https://www.gao.gov/assets/690/689302.pdf.
---------------------------------------------------------------------------

    In July 2019, we issued a survey to States that operate section 
1915(c) waivers, requesting information on their approach to 
administering incident management systems. The goal of the survey was 
to obtain a comprehensive understanding of how States organize their 
incident management system to best respond to, resolve, monitor, and 
prevent critical incidents in their waiver programs. The survey found 
that:
     Definitions of critical incidents vary across States and, 
in some cases, within States for different HCBS programs or 
populations;
     Some States do not use standardized forms for reporting 
incidents, thereby impeding the consistent collection of information on 
critical incidents;
     Some States do not have electronic incident management 
systems, and, among those that do, many use systems with outdated 
electronic platforms that are not linked with other State systems, 
leading to the systems operating in silos and the need to consolidate 
information across disparate systems; and
     Many States cited the lack of communication within and 
across State agencies, including with investigative agencies, as a 
barrier to incident resolution.
    Additionally, during various public engagement activities conducted 
with interested parties over the past several years, we have heard that 
ensuring access to HCBS requires that we must first ensure health and 
safety systems are in place across all States, a theme underscored by 
the Joint Report.
    Based on these findings and reports, under the authorities at 
sections 1902(a)(19) and 1915(c)(2)(A) of the Act and section 
2402(a)(3)(B)(ii) of the Affordable Care Act, we propose a new 
requirement at Sec.  441.302(a)(6) to require that States provide an 
assurance that they operate and maintain an incident management system 
that identifies, reports, triages, investigates, resolves, tracks, and 
trends critical incidents. This proposal is intended to ensure 
standardized requirements for States regarding incidents that harm or 
place a beneficiary at risk of harm and is based on our experience 
working with States as part of the section 1915(c) waiver program and 
informed by the incident management survey described previously in this 
section of the proposed rule. In the absence of an incident management 
system, people receiving section 1915(c) waiver program services are at 
risk of preventable or intentional harm. As such, we believe that such 
a system to identify and address incidents of abuse, neglect, 
exploitation, or other harm during the course of service delivery is in 
the best interest of and necessary for protecting the health and 
welfare of individuals receiving section 1915(c) waiver program 
services.
    At Sec.  441.302(a)(6)(i)(A) through (G), we propose new 
requirements for States' incident management systems. Specifically, at 
Sec.  441.302(a)(6)(i)(A), we propose to establish a minimum standard 
definition of a critical incident to include, at a minimum, verbal, 
physical, sexual, psychological, or emotional abuse; neglect; 
exploitation including financial exploitation; misuse or unauthorized 
use of restrictive interventions or seclusion; a medication error 
resulting in a telephone call to or a consultation with a poison 
control center, an emergency department visit, an urgent care visit, a 
hospitalization, or death; or an unexplained or unanticipated death, 
including but not limited to a death caused by abuse or neglect. 
Currently, there is no standardized Federal definition for the type of 
events or instances that States should consider a critical incident 
that must be reported by a provider to the State and considered for an 
investigation by the State to assess whether the incident was the 
result of abuse, neglect, or exploitation, and whether it could have 
been prevented. The proposed definition at Sec.  441.302(a)(6)(i)(A) is 
based on internal analyses of data and information obtained through a 
CMS survey of States' incident management systems, commonalities across 
definitions, and common gaps in States' definitions of critical 
incidents (for instance, that many States do not consider sexual 
assault to be a critical incident). We request comment on whether there 
are specific types of events or instances of serious harm to section 
1915(c) waiver participants, such as identity theft or fraud, that 
would not be captured by the proposed definition and that should be 
included, and whether the inclusion of any specific types of events or 
instances of harm in the proposed definition would lead to the 
overidentification of critical incidents.
    At Sec.  441.302(a)(6)(i)(B), we propose to require that States 
have electronic critical incident systems that, at a minimum, enable 
electronic collection, tracking (including of the status and resolution 
of investigations), and trending of data on critical incidents. We 
request comment on the burden associated with requiring States to have 
electronic critical incident systems and whether there is specific 
functionality, such as unique identifiers, that should be required or 
encouraged for such systems. Although we are not proposing to require 
States to do so, States are also encouraged to advance the 
interoperable exchange of HCBS data and support quality improvement 
activities by adopting standards in 45 CFR, part 170 and other relevant 
standards identified in the Interoperability Standards Advisory 
(ISA).\55\ We also remind States that enhanced FFP is available at a 90 
percent FMAP for the design, development, or installation of 
improvements of mechanized claims processing and information retrieval 
systems, in accordance with applicable Federal requirements.\56\ 
Enhanced FFP at a 75 percent FMAP is also available for operations of 
such systems, in accordance with applicable Federal requirements.\57\ 
However, we note that receipt of these enhanced funds is conditioned 
upon States meeting a series of standards and conditions to ensure 
investments are efficient and effective.\58\
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    \55\ Relevant standards adopted by HHS and identified in the ISA 
include the USCDI (https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi), eLTSS (https://www.healthit.gov/isa/documenting-care-plans-person-centered-services), and Functional 
Assessment Standardized Items (https://www.healthit.gov/isa/representing-patient-functional-status-andor-disability).
    \56\ See section 1903(a)(3)(A)(i) and Sec.  433.15(b)(3), 80 FR 
75817-75843; https://www.medicaid.gov/state-resourcecenter/faq-medicaid-and-chip-affordable-care-act-implementation/downloads/affordable-care-act-faq-enhancedfunding-for-medicaid.pdf; https://www.medicaid.gov/federal-policy-guidance/downloads/SMD16004.pdf.
    \57\ See section 1903(a)(3)(B) and Sec.  433.15(b)(4).
    \58\ See Sec.  433.112 (b, 80 FR 75841; https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-433/subpart-C.
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    At Sec.  441.302(a)(6)(i)(C), we propose to require States to 
require providers to report to States any critical incidents that occur 
during the delivery of section 1915(c) waiver program services as 
specified in a waiver participant's person-centered service plan, or 
any critical incidents that are a result of the

[[Page 27980]]

failure to deliver authorized services. Based on the findings of the 
Joint Report, as well as the OIG and GAO reports cited earlier, 
settings in which residential habilitation and day habilitation 
services are provided, and services provided in a beneficiary's private 
home by a provider should be of particular focus. We believe that such 
a requirement will help to specify provider expectations for reporting 
critical incidents and to ensure that harm that occurs because of the 
failure to deliver services will be appropriately identified as a 
critical incident.
    At Sec.  441.302(a)(6)(i)(D), we propose to require that States use 
claims data, Medicaid Fraud Control Unit data, and data from other 
State agencies such as Adult Protective Services or Child Protective 
Services to the extent permissible under applicable State law to 
identify critical incidents that are unreported by providers and occur 
during the delivery of section 1915(c) waiver program services, or as a 
result of the failure to deliver authorized services. We believe that 
such data can play an important role in identifying serious instances 
of harm to waiver program participants, which may be unreported by a 
provider, such as a death that occurs as a result of choking of an 
individual with a developmental disability residing in a group home, or 
a burn that occurs because a provider failed to appropriately supervise 
someone with dementia and that results in an emergency department 
visit. We request comment on whether States should be required to use 
these data sources to identify unreported critical instances, and 
whether there are other specific data sources that States should be 
required to use to identify unreported critical incidents.
    At Sec.  441.302(a)(6)(i)(E), we propose to require that States 
share information, consistent with the regulations in 42 CFR part 431, 
subpart F, on the status and resolution of investigations. We expect 
this data sharing could be accomplished through the use of information 
sharing agreements, with other entities in the State responsible for 
investigating critical incidents, if the State refers critical 
incidents to other entities for investigation. We also propose, at 
Sec.  441.302(a)(6)(i)(F), to require States to separately investigate 
critical incidents if the investigative agency fails to report the 
resolution of an investigation within State-specified timeframes. These 
proposed requirements are intended to ensure that the failure to 
effectively share information between State agencies or other entities 
in the State responsible for investigating incidents does not impede a 
State's ability to effectively identify, report, triage, investigate, 
resolve, track, and trend critical incidents, particularly where there 
could be evidence of serious harm or a pattern of harm to a section 
1915(c) waiver program participant for which a provider is responsible.
    As noted in section II.B.1. of this proposed rule, in 2014, we 
released guidance for section 1915(c) waiver programs in which we 
indicated that States should report on State-developed performance 
measures across several domains, including to demonstrate that the 
State designed and implemented an effective system for assuring waiver 
participant health and welfare. Specifically, the 2014 guidance noted 
that States should demonstrate: on an ongoing basis that they identify, 
address, and seek to prevent instances of abuse, neglect, exploitation, 
and unexplained death; that an incident management system is in place 
that effectively resolves those incidents and prevents further similar 
incidents to the extent possible; State policies and procedures for the 
use or prohibition of restrictive interventions (including restraints 
and seclusion) are followed; and overall health care standards are 
established and monitored. The 2014 guidance also indicated that States 
should conduct systemic remediation and implement a Quality Improvement 
Project when they score below 86 percent on any of their performance 
measures.
    Section 1902(a)(6) of the Act requires State Medicaid agencies to 
make such reports, in such form and containing such information, as the 
Secretary may from time to time require, and to comply with such 
provisions as the Secretary may from time to time find necessary to 
assure the correctness and verification of such reports. Under our 
authority at section 1902(a)(6) of the Act, we propose to modernize the 
health and welfare reporting by requiring all States to report on the 
same Federally prescribed quality measures as opposed to the State-
developed measures, which naturally vary State by State. Specifically, 
at new Sec.  441.302(a)(6)(i)(G), we propose to require that States 
meet the reporting requirements at Sec.  441.311(b)(1) related to the 
performance of their incident management systems. We discuss these 
reporting requirements in our discussion of proposed Sec.  
441.311(b)(1). Further, under our authority at sections 1915(c)(2)(A) 
and 1902(a)(19) of the Act, we propose to codify a minimum performance 
level to demonstrate that States meet the requirements at Sec.  
441.302(a)(6). Specifically, at new Sec.  441.302(a)(6)(ii)(A) through 
(C), we propose to require that States demonstrate that an 
investigation was initiated, within State-specified timeframes, for no 
less than 90 percent of critical incidents; an investigation was 
completed and the resolution of the investigation was determined, 
within State-specified timeframes, for no less than 90 percent of 
critical incidents; and corrective action was completed, within State-
specified timeframes, for no less than 90 percent of critical incidents 
that require corrective action.
    While we expect States to meet State-specified timeframes for 
initiating investigations, completing investigations and determining 
resolution, and completing corrective action plans for all critical 
incidents, we are proposing to establish a minimum 90 percent 
performance level in each of these areas in recognition of the various 
scenarios that may impact a State's ability to meet these timeframes 
for each critical incident (for example, some critical incidents may 
require more complex investigations than others, an illness may delay 
the interview of an important witness to the incident).
    We considered whether to codify the minimum 86 percent performance 
level that was established in the 2014 guidance, instead of the minimum 
90 percent performance level we have proposed. The minimum 86 percent 
performance level was intended to provide States with a reasonable 
threshold for demonstrating compliance with the requirements at Sec.  
441.302(a)(6). However, we have conducted extensive oversight and 
received significant feedback from external parties since we released 
the 2014 guidance. Our findings from the oversight and feedback have 
led us to conclude that the minimum 86 percent performance level may 
not be sufficient to demonstrate a State is meeting these requirements 
because it provides States with more latitude than is necessary to 
account for unexpected delays in the timeframes for investigating and 
addressing critical incidents. Further, findings from our 2016 audits 
and 2019 survey, feedback from States, OIG, ACL, OCR, and other 
interested parties, and media and anecdotal reports document the harm 
that beneficiaries can experience when States fail to investigate and 
address critical incidents and indicate that we should establish a more 
stringent threshold for States to demonstrate compliance with the 
requirements at Sec.  441.302(a)(6). As a result, we are proposing an 
increase to the minimum performance level in the 2014 guidance. This 
proposed minimum performance level is intended to

[[Page 27981]]

strengthen health and welfare reporting requirements based on feedback 
and evidence we have received, while also recognizing that there may be 
legitimate reasons for delays in investigating and addressing critical 
incidents.
    We also considered whether to propose allowing good cause 
exceptions to the minimum performance level in the event of a natural 
disaster, public health emergency, or other event that would negatively 
impact a State's ability to achieve a minimum 90 percent performance 
level. In the end, we are not proposing good cause exceptions because 
the minimum 90 percent performance level is intended to account for 
various scenarios that might impact a State's ability to achieve these 
performance levels. Further, as noted earlier with the person-centered 
service plan requirements in section II.B.1. of this preamble, there 
are existing disaster authorities that States could utilize to request 
a waiver of these requirements in the event of a public health 
emergency or a disaster.
    At Sec.  441.302(a)(6)(iii), we propose to apply these requirements 
to services delivered under FFS or managed care delivery systems. As 
discussed earlier in section II.B.1. of this preamble, section 
2402(a)(3)(A) of the Affordable Care Act requires States to improve 
coordination among, and the regulation of, all providers of Federally 
and State-funded HCBS programs to achieve a more consistent 
administration of policies and procedures across HCBS programs. In the 
context of Medicaid coverage of HCBS, it should not matter whether the 
services are covered directly on a FFS basis or by a managed care 
entity to its enrollees. The requirement for ``consistent 
administration'' should require consistency between these two modes of 
service delivery. We accordingly are proposing to identify that a State 
must ensure compliance with the requirements in Sec.  441.302(a)(6) 
with respect to HCBS delivered both under FFS and managed care delivery 
systems.
    As noted throughout the HCBS proposals in this rule, we recognize 
that many States may need time to implement these requirements, 
including to amend provider agreements or managed care contracts, make 
State regulatory or policy changes, implement process or procedural 
changes, update information systems for data collection and reporting, 
or conduct other activities to implement these requirements. As a 
result, we are proposing at Sec.  441.302(a)(6)(iii) to provide States 
with 3 years to implement these requirements in FFS delivery systems 
following effective date of the final rule. For States with managed 
care delivery systems under the authority of sections 1915(a), 1915(b), 
1932(a), or 1115(a) of the Act and that include HCBS in the MCO's, 
PIHP's, or PAHP's contract, we are proposing to provide States until 
the first managed care plan contract rating period that begins on or 
after 3 years after the effective date of the final rule to implement 
these requirements. This time period is based on feedback from States 
and other interested parties that it could take 2 to 3 years to amend 
State regulations and work with their State legislatures, if needed, as 
well as to revise policies, operational processes, information systems, 
and contracts to support implementation of the proposals outlined in 
this section. We also considered all of the HCBS proposals outlined in 
proposed rule as whole. We invite comments on whether this timeframe is 
sufficient, whether we should require a shorter timeframe (2 years) or 
longer timeframe (4 years) to implement these provisions, and if an 
alternate timeframe is recommended, the rationale for that alternate 
timeframe.
    Again, the proposed requirements at Sec. Sec.  441.302(a)(6)(iii) 
and 441.311(b)(1), in combination with other proposed requirements 
identified throughout this proposed rule, are intended to supersede and 
fully replace the reporting expectations and the minimum 86 percent 
performance level for State's performance measures described in the 
2014 guidance. We expect that States may implement some of the 
requirements proposed in this proposed rule in advance of the effective 
date. To reduce unnecessary burden and to avoid duplicative or 
conflicting reporting requirements, we will work with States to phase-
out the 2014 guidance as they implement these proposed requirements 
should a final rule be adopted.
    Additionally, as discussed earlier in section II.B.1. of this 
preamble, section 2402(a)(3)(A) of the Affordable Care Act requires 
States to improve coordination among, and the regulation of, all 
providers of Federally and State-funded HCBS programs to achieve a more 
consistent administration of policies and procedures across HCBS 
programs. In accordance with the requirement of section 2402(a)(3)(A) 
of the Affordable Care Act for States to achieve a more consistent 
administration of policies and procedures across HCBS programs and 
because of the importance of assuring health and welfare for other HCBS 
State plan options, we are proposing to incorporate these incident 
management requirements within the applicable regulatory sections. 
Specifically, we propose to apply the proposed requirements Sec.  
441.302(a)(6) to section 1915(j), (k), and (i) State plan services by 
cross-referencing at Sec. Sec.  441.570(e), 441.464(e), and 
441.745(a)(1)(v), respectively. Consistent with our proposal for 
section 1915(c) waivers, we propose these requirements based on our 
authority under section 1902(a)(19) of the Act to assure that there are 
safeguards for beneficiaries. We believe the same arguments for 
proposing these requirements for section 1915(c) waivers are equally 
applicable for these other HCBS authorities. We request comment on the 
application of these provisions across section 1915(i), (j), and (k) 
authorities. To accommodate the addition of new language at Sec.  
441.464(e) and (f) (discussed later in section II.B.5. of this proposed 
rule), we are proposing to renumber existing Sec.  441.464(e) as Sec.  
441.464(g) and existing Sec.  441.464(f) as Sec.  441.464(h).
    Finally, we considered whether to also apply the proposed incident 
management system and critical incident reporting and performance 
threshold requirements to section 1905(a) ``medical assistance'' State 
plan personal care, home health, and case management services. However, 
we are not proposing that these requirements apply to any section 
1905(a) State plan services based on State feedback that they do not 
have the same data collection and reporting capabilities in place for 
section 1905(a) services as they do for section 1915(c), (i), (j), and 
(k) services. Further, the vast majority of HCBS is delivered under 
section 1915(c), (i), (j), and (k) authorities, while only a small 
percentage of HCBS nationally is delivered under section 1905(a) State 
plan authorities. We request comment on whether we should establish 
similar health and welfare requirements for section 1905(a) State plan 
personal care, home health, and case management services.
4. Reporting (Sec.  441.302(h))
    Proposed Sec.  441.311, described in section II.B.7. of this 
proposed rule, establishes a new Reporting Requirements section. As 
discussed earlier in section II.B.1. of this preamble, section 
2402(a)(3)(A) of the Affordable Care Act requires HHS to promulgate 
regulations to ensure that States develop HCBS systems that are 
designed to improve coordination among, and the regulation of, all 
providers of Federally and State-funded HCBS programs to achieve a more 
consistent administration of policies and procedures across HCBS 
programs.

[[Page 27982]]

In addition to supporting States with achieving a more consistent 
administration of policies and procedures across HCBS programs in 
accordance with the requirement of section 2402(a)(3)(A) of the 
Affordable Care Act, we believe that standardizing reporting across 
HCBS authorities will streamline and simplify reporting for providers, 
improve States' and CMS's ability to assess HCBS quality and 
performance, and better enable States to improve the quality of HCBS 
programs through the availability of comparative data. Further, section 
1902(a)(6) of the Act requires State Medicaid agencies to make such 
reports, in such form and containing such information, as the Secretary 
may from time to time require, and to comply with such provisions as 
the Secretary may from time to time find necessary to assure the 
correctness and verification of such reports.
    To avoid duplicative or conflicting reporting requirements at Sec.  
441.302(h), we propose to amend Sec.  441.302(h) by removing the 
following language: ``annually''; ``The information must be consistent 
with a data collection plan designed by CMS and must address the 
waiver's impact on -''; and by removing paragraphs (1) and (2) under 
Sec.  441.302(h). Further, we propose to add ``, including the data and 
information as required in Sec.  441.311'' at the end of the new 
amended text, ``Assurance that the agency will provide CMS with 
information on the waiver's impact.'' By making these changes, we are 
consolidating reporting expectations in one new section at proposed 
Sec.  441.311, described in section II.B.7. of this proposed rule, 
under our authority at section 1902(a)(6) of the Act and section 
2402(a)(3)(A) of the Affordable Care Act. As noted earlier in section 
II.B.1. of this proposed rule, this reporting will supersede existing 
reporting for section 1915(c) waivers and standardize reporting across 
section 1915 HCBS authorities.
5. HCBS Payment Adequacy (Sec. Sec.  441.302(k), 441.464(f), 
441.570(f), 441.745(a)(1)(vi))
    Section 1902(a)(30)(A) of the Act requires State Medicaid programs 
to ensure that payments to providers are consistent with efficiency, 
economy, and quality of care and are sufficient to enlist enough 
providers so that care and services are available to beneficiaries at 
least to the extent as to the general population in the same geographic 
area. Access to most HCBS generally requires hands-on and in-person 
services to be delivered by direct care workers. Direct care workers 
are referred to by various names, such as direct support professionals, 
personal care attendants, and home health aides, within and across 
States. They perform a variety of roles, including nursing services, 
assistance with activities of daily living (such as mobility, personal 
hygiene, eating) and instrumental activities of daily living (such as 
cooking, grocery shopping, managing finances), behavioral supports, 
employment supports, and other services to promote community 
integration for older adults and people with disabilities. We discuss 
the definition of direct care workers in more detail below in the 
context of our proposed definition of direct care workers.
    Direct care workers typically earn low wages and receive limited 
benefits,59 60 61 contributing to a shortage of direct care 
workers and high rates of turnover in this workforce, which can limit 
access to and impact the quality of HCBS. Workforce shortages can also 
reduce the cost-effectiveness of services for State Medicaid agencies 
that take into account the actual cost of delivering services when 
determining Medicaid payment rates, such as by increasing the reliance 
on overtime and temporary staff, which have higher hourly costs than 
non-overtime wages paid to permanent staff. Further, an insufficient 
supply of HCBS providers can prevent individuals from transitioning 
from institutions to home and community-based settings and from 
receiving HCBS that can prevent institutionalization. HCBS is, on 
average, less costly than institutional services,62 63 and 
most older adults and people with disabilities strongly prefer to live 
in the community. Accordingly, limits on the availability of HCBS 
lessen the ability for State Medicaid programs to deliver LTSS in a 
cost-effective, beneficiary friendly manner.
---------------------------------------------------------------------------

    \59\ MACPAC Issue Brief. State Efforts to Address Medicaid Home- 
and Community-Based Services Workforce Shortages. March 2022. 
Accessed at https://www.macpac.gov/wp-content/uploads/2022/03/MACPAC-brief-on-HCBS-workforce.pdf.
    \60\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \61\ We recognize that there are workforce shortages that may 
impact access to other Medicaid-covered services aside from HCBS. We 
are focusing in this proposed rule on addressing workforce shortages 
in HCBS and continue to assess the feasibility and potential impact 
of other actions to address workforce shortages in other parts of 
the health care sector.
    \62\ Reaves, E.L., & Musumeci, M.B. December 15, 2015. Medicaid 
and Long-Term Services and Supports: A Primer. Kaiser Family 
Foundation. Accessed at https://www.kff.org/medicaid/report/medicaid-and-long-term-services-and-supports-a-primer/.
    \63\ Kim, M-Y, Weizenegger, E., & Wysocki, A. July 22, 2022. 
Medicaid Beneficiaries Who Use Long-Term Services and Supports: 
2019. Chicago, IL: Mathematica. Accessed at https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-user-brief-2019.pdf.
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    Shortages of direct care workers and high rates of turnover also 
reduce the quality of HCBS. For instance, workforce shortages can 
prevent individuals from receiving needed services and, in turn, lead 
to poorer outcomes for people who need HCBS. Insufficient staffing can 
also make it difficult for providers to achieve quality standards.\64\ 
High rates of turnover can reduce quality of care,\65\ including 
through the loss of experienced and qualified workers and by reducing 
continuity of care people receiving HCBS,\66\ which is associated with 
the reduced likelihood of improvement in function among people 
receiving home health aide services.\67\
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    \64\ American Network of Community Options and Resources 
(ANCOR). 2021. The state of America's direct support workforce 2021. 
Alexandria, VA: ANCOR. Accessed at https://www.ancor.org/sites/default/files/the_state_of_americas_direct_support_workforce_crisis_2021.pdf.
    \65\ Newcomer R, Kang T, Faucett J. Consumer-directed personal 
care: comparing aged and non-aged adult recipient health-related 
outcomes among those with paid family versus non-relative providers. 
Home Health Care Serv Q. 2011;30(4):178-97.
    \66\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \67\ Russell D, Rosati RJ, Peng TR, Barr[oacute]n Y, 
Andreopoulos E . Continuity in the provider of home health aide 
services and the likelihood of patient improvement in activities of 
daily living. Home Health Care Manage Pract. 2013;25(1):6-12.
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    While workforce shortages have existed for years, the COVID-19 
pandemic has exacerbated the problem, leading to higher rates of direct 
care worker turnover (for instance, due to higher rates of worker-
reported stress), an inability of some direct care workers to return to 
their positions prior to the pandemic (for instance, due to difficulty 
accessing child care or concerns about contracting COVID-19 for people 
with higher risk of severe illness), workforce shortages across the 
health care sector, and wage increases in retail and other jobs that 
tend to draw from the same pool of workers as some 
HCBS.68 69 70

[[Page 27983]]

Further, demand for direct care workers is expected to continue rising 
due to the growing needs of the aging population, the changing ability 
of aging caregivers to provide supports, a broader societal shift away 
from institutional services and towards services that are integrated in 
the community, and a decline in the number of younger workers available 
to provide services.71 72 73 As discussed previously in 
section II.B.1. of this proposed rule, section 2402(a) of the 
Affordable Care Act requires the Secretary of HHS to ensure that all 
States receiving Federal funds for HCBS, including Medicaid, develop 
HCBS systems that are responsive to the needs and choices of 
beneficiaries receiving HCBS, maximize independence and self-direction, 
provide coordination for and support each person's full engagement in 
community life, and achieve a more consistent and coordinated approach 
to the administration of policies and procedures across public programs 
providing HCBS.\74\ In particular, section 2402(a)(1) of the Affordable 
Care Act requires States to allocate resources for services in a manner 
that is responsive to the changing needs and choices of beneficiaries 
receiving HCBS, while section 2402(a)(3)(B)(iii) of the Affordable Care 
Act requires States to oversee and monitor HCBS system functions to 
assure a sufficient number of qualified direct care workers to provide 
self-directed personal assistance services. To comply with sections 
2402(a)(1) and 2402(a)(3)(B)(iii) of the Affordable Care Act, States 
must have a sufficient direct care workforce to be able to deliver 
services that are responsive to the changing needs and choices of 
beneficiaries, and, specifically, a sufficient number of qualified 
direct care workers to provide self-directed personal assistance 
services.
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    \68\ MACPAC Issue Brief. State Efforts to Address Medicaid Home- 
and Community-Based Services Workforce Shortages. March 2022. 
Accessed at https://www.macpac.gov/wp-content/uploads/2022/03/MACPAC-brief-on-HCBS-workforce.pdf.
    \69\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \70\ American Network of Community Options and Resources 
(ANCOR). 2021. The state of America's direct support workforce 2021. 
Alexandria, VA: ANCOR. Accessed at https://www.ancor.org/sites/default/files/the_state_of_americas_direct_support_workforce_crisis_2021.pdf.
    \71\ MACPAC Issue Brief. State Efforts to Address Medicaid Home- 
and Community-Based Services Workforce Shortages. March 2022. 
Accessed at https://www.macpac.gov/wp-content/uploads/2022/03/MACPAC-brief-on-HCBS-workforce.pdf.
    \72\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \73\ Centers for Medicare and Medicaid Services. November 2020. 
Long-Term Services and Supports Rebalancing Toolkit. Accessed at 
https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-rebalancing-toolkit.pdf.
    \74\ Section 2402(a) of the Affordable Care Act--Guidance for 
Implementing Standards for Person-Centered Planning and Self-
Direction in Home and Community-Based Services Programs. Accessed at 
https://acl.gov/sites/default/files/news%202016-10/2402-a-Guidance.pdf.
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    Consistent with section 1902(a)(30)(A) of the Act and sections 
2402(a)(1) and 2402(a)(3)(B)(iii) of the Affordable Care Act, we 
propose to require that State Medicaid agencies demonstrate that 
payment rates for certain HCBS authorized under section 1915(c) of the 
Act are sufficient to ensure a sufficient direct care workforce 
(defined and explained later in this section of the proposed rule) to 
meet the needs of beneficiaries and provide access to services in 
accordance with the amount, duration, and scope specified in the 
person-centered service plan, as required under Sec.  441.301(c)(2). We 
believe that this proposal supports the economy, efficiency, and 
quality of HCBS authorized under section 1915(c) of the Act, by 
ensuring that a sufficient portion of State FFS and managed care 
payments for HCBS go directly to compensation of the direct care 
workforce. While many States have already voluntarily established such 
minimums for payments authorized under section 1915(c) of the Act,\75\ 
we believe a Federal standard would support ongoing access to, and 
quality and efficiency of, HCBS.
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    \75\ For instance, as part of their required activities to 
enhance, expand, or strengthen HCBS under ARP section 9817, some 
States have required that a minimum percentage of rate increases and 
supplemental payments go to the direct care workforce. See https://www.medicaid.gov/medicaid/home-community-based-services/guidance/strengthening-and-investing-home-and-community-based-services-for-medicaid-beneficiaries-american-rescue-plan-act-of-2021-section-9817/index.html for more information on ARP section 9817.
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    This proposal is designed to affect the inextricable link between 
sufficient payments being received by the direct care workforce and 
access to and, ultimately, the quality of HCBS received by Medicaid 
beneficiaries. We believe that this proposal would not only benefit 
direct care workers but also individuals receiving Medicaid HCBS 
because supporting and stabilizing the direct care workforce will 
result in better qualified employees, lower turnover, and a higher 
quality of care. The direct care workforce must be able to attract and 
retain qualified workers in order for beneficiaries to access providers 
of the services they have been assessed to need and for the direct care 
workforce to be comprised of workers with the training, expertise, and 
experience to meet the diverse and often complex HCBS needs of 
individuals with disabilities and older adults. Without access to a 
sufficient pool of direct care providers, individuals are forced to 
forgo having their needs met or addressed by workers without sufficient 
training, expertise, or experience to meet their unique needs, both of 
which could lead to worsening health and quality of life outcomes, loss 
of independence, and institutionalization.76 77 78 79 
Further, we believe that ensuring adherence to a Federal standard of 
the percentage of Medicaid payments going to direct care workers is a 
concrete step in recruitment and retention efforts to stabilize this 
workforce by enhancing salary competitiveness in the labor market. In 
the absence of such requirements, we are unable to support and 
stabilize the direct care workforce because we are unable to ensure 
that the payments are used primarily and substantially to pay for care 
and services provided by direct care workers. Therefore, at Sec.  
441.302(k)(3)(i), we propose to require that at least 80 percent of all 
Medicaid payments, including but not limited to base payments and 
supplemental payments, with respect to the following services be spent 
on compensation to direct care workers: homemaker services, home health 
aide services, and personal care services.\80\
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    \76\ MACPAC Issue Brief. State Efforts to Address Medicaid Home- 
and Community-Based Services Workforce Shortages. March 2022. 
Accessed at https://www.macpac.gov/wp-content/uploads/2022/03/MACPAC-brief-on-HCBS-workforce.pdf.
    \77\ Campbell, S., A. Del Rio Drake, R. Espinoza, K. Scales. 
2021. Caring for the future: The power and potential of America's 
direct care workforce. Bronx, NY: PHI http://phinational.org/wp-content/uploads/2021/01/Caring-for-the-Future-2021-PHI.pdf.
    \78\ American Network of Community Options and Resources 
(ANCOR). 2021. The state of America's direct support workforce 2021. 
Alexandria, VA: ANCOR. Accessed at https://www.ancor.org/sites/default/files/the_state_of_americas_direct_support_workforce_crisis_2021.pdf.
    \79\ Chong, N., I. Akorbirshoev, J. Caldwell, H.S. Kaye, and M. 
Mitra. 2021. The relationship between unmet need for home and 
community-based services and health and community living outcomes. 
Disability Health Journal. Accessed at https://www.sciencedirect.com/science/article/abs/pii/S1936657421001953.
    \80\ We note that section 2402(a) of the Affordable Care Act 
applies broadly to all HCBS programs and services funded by HHS. 
Further, section 2402(a) does not include limits on the scope of 
services, HCBS authorities, or other factors related to its use of 
the term HCBS. Therefore, we believe that there is no indication 
that personal care, homemaker, and home health aide services would 
fall outside the scope of section 2402(a).
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    This proposal is based on feedback from States that have 
implemented similar requirements for payments for certain HCBS under 
section 9817 of the ARP \81\ or other State-led initiatives.

[[Page 27984]]

These States have reported to us through various public engagement 
activities that similar requirements have had their intended effect of 
ensuring that a sufficient portion of the payment for Medicaid HCBS 
goes to compensation for the direct care workforce. These States have 
also indicated an 80 percent threshold is an appropriate threshold that 
takes into account the expected portion of payments that are necessary 
for provider administrative and other costs, aside from direct care 
worker compensation, although our research indicates that some States 
have successfully implemented other thresholds, ranging from a low of 
around 75 percent \82\ to a high of 90 percent. We have also focused 
this requirement on homemaker services, home health aide services, and 
personal care services because they are services for which we expect 
that the vast majority of payment should be comprised of compensation 
for direct care workers. These are services that would most commonly be 
conducted in individuals' homes and general community settings. As 
such, there should be low facility or other indirect costs associated 
with the services. We request comment on the following options for the 
minimum percentage of payments that must be spent on compensation to 
direct care workers for homemaker services, home health aide services, 
and personal care services: (1) 75 percent; (2) 85 percent; and (3) 90 
percent. If an alternate minimum percentage is recommended, we request 
that commenters provide the rationale for that minimum percentage.
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    \81\ Information on State activities to expand, enhance, or 
strengthen HCBS under ARP section 9817 can be found on Medicaid.gov 
at https://www.medicaid.gov/medicaid/home-community-based-services/guidance/strengthening-and-investing-home-and-community-based-services-for-medicaid-beneficiaries-american-rescue-plan-act-of-2021-section-9817/index.html.
    \82\ Minnesota has established a minimum threshold of 72.5 
percent, while Illinois has implemented a minimum threshold of 77 
percent, for similar requirements for HCBS as we are proposing. See 
https://www.revisor.mn.gov/statutes/cite/256B.85/pdf and https://casetext.com/regulation/illinois-administrative-code/title-89-social-services/part-240-community-care-program/subpart-t-financial-reporting/section-2402040-minimum-direct-service-worker-costs-for-in-home-service, respectively, for more information.
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    We considered whether the proposed requirements at Sec.  
441.302(k)(3)(i) related to the percent of payments going to the direct 
care workforce should apply to other services, such as adult day 
health, habilitation, day treatment or other partial hospitalization 
services, psychosocial rehabilitation services, and clinic services for 
individuals with chronic mental illness. However, these services may 
have facility or other indirect costs for which we do not have adequate 
information to determine a minimum percent of the payment that should 
be spent on compensation for the direct care workforce. We request 
comment on whether the proposed requirements at Sec.  441.302(k)(3)(i) 
related to the percent of payments going to the direct care workforce 
should apply to other services listed at Sec.  440.180(b). In 
particular, in recognition of the importance of services provided to 
individuals with intellectual or developmental disabilities, we request 
comment on whether the proposed requirements at Sec.  441.302(k)(3)(i) 
related to the percent of payments going to the direct care workforce 
should apply to residential habilitation services, day habilitation 
services, and home-based habilitation services.
    We also request comment on the following options for the minimum 
percentage of payments that must be spent on compensation to direct 
care workers for each specific service that this provision should apply 
if this provision should apply to other services at Sec.  440.180(b): 
(1) 65 percent; (2) 70 percent; (3) 75 percent; and (4) 80 percent. 
Specifically, we request that commenters respond separately on the 
minimum percentage of payments for services delivered in a non-
residential community-based facility, day center, senior center, or 
other dedicated physical space, which would be expected to have higher 
other indirect costs and facility costs built into the Medicaid payment 
rate than other HCBS. If an alternate minimum percentage is 
recommended, we request that commenters provide the rationale for that 
minimum percentage.
    We further clarify that we are requesting comment on a different 
range of options for the other services at Sec.  440.180(b) than for 
the services at Sec.  440.180(b)(2) through (4) because we expect that 
some of the other services at Sec.  440.180(b), such as adult day 
health and day habilitation services, may have higher other indirect 
costs and facility costs than the services at Sec.  440.180(b)(2) 
through (4). We also request that commenters respond separately on the 
minimum percentage of payments for facility-based residential services 
and other facility-based round-the-clock services that have other 
indirect costs and facility costs that would be paid for at least in 
part by room and board payments that Medicaid does not cover. If a 
minimum percentage is recommended for any services, we request that 
commenters provide the rationale for that minimum percentage.
    At Sec.  441.302(k)(1)(i), we propose to define compensation to 
include salary, wages, and other remuneration as defined by the Fair 
Labor Standards Act and implementing regulations (29 U.S.C. 201 et 
seq., 29 CFR parts 531 and 778), and benefits (such as health and 
dental benefits, sick leave, and tuition reimbursement). In addition, 
we propose to define compensation to include the employer share of 
payroll taxes for direct care workers delivering services under section 
1915(c) waivers. We considered whether to include training or other 
costs in our proposed definition of compensation. However, we 
determined that a definition that more directly assesses the financial 
benefits to workers would better ensure that a sufficient portion of 
the payment for services went to direct care workers, as it is unclear 
that the cost of training and other workforce activities is an 
appropriate way to quantify the benefit of those activities for 
workers. We request comment on whether the definition of compensation 
should include other specific financial and non-financial forms of 
compensation for direct care workers.
    At Sec.  441.302(k)(1)(ii), we propose to define direct care 
workers to include workers who provide nursing services, assist with 
activities of daily living (such as mobility, personal hygiene, eating) 
or instrumental activities of daily living (such as cooking, grocery 
shopping, managing finances), and provide behavioral supports, 
employment supports, or other services to promote community 
integration. Specifically, we propose to define direct care workers to 
include nurses (registered nurses, licensed practical nurses, nurse 
practitioners, or clinical nurse specialists) who provide nursing 
services to Medicaid-eligible individuals receiving HCBS, licensed or 
certified nursing assistants, direct support professionals, personal 
care attendants, home health aides, and other individuals who are paid 
to directly provide services to Medicaid beneficiaries receiving HCBS 
to address activities of daily living or instrumental activities of 
daily living, behavioral supports, employment supports, or other 
services to promote community integration. We further identify that our 
definition of direct care worker is intended to exclude nurses in 
supervisory or administrative roles who are not directly providing 
nursing services to people receiving HCBS.
    Our definition of direct care worker is intended to broadly define 
such workers to ensure that the definition appropriately captures the 
diversity of roles and titles that direct care workers may have. We 
included workers with professional degrees, such as nurses, in our 
proposed definition because of the

[[Page 27985]]

important roles that direct care workers with professional degrees play 
in the care and services of people receiving HCBS, and because 
excluding workers with professional degrees may increase the complexity 
of reporting, and may unfairly punish States, managed care plans, and 
providers that disproportionately rely on workers with professional 
degrees in the delivery of HCBS. We also propose to define direct care 
workers to include: individuals employed by a Medicaid provider, State 
agency, or third party; contracted with a Medicaid provider, State 
agency, or third party; or delivering services under a self-directed 
service model. This proposed definition is in recognition of the varied 
service delivery models and employment relationships that can exist in 
HCBS waivers. We request comment on whether there are other specific 
types of direct care workers that should be included in the definition, 
and whether any of the types of workers listed should be excluded from 
the definition of direct care worker.
    Section 1902(a)(6) of the Act requires State Medicaid agencies to 
make such reports, in such form and containing such information, as the 
Secretary may from time to time require, and to comply with such 
provisions as the Secretary may from time to time find necessary to 
assure the correctness and verification of such reports. At Sec.  
441.302(k)(2), under our authority at section 1902(a)(6) of the Act, we 
propose to require that States demonstrate that they meet the minimum 
performance level at Sec.  441.302(k)(3)(i) through new Federal 
reporting requirements at Sec.  441.311(e). We discuss these reporting 
requirements in our discussion of proposed Sec.  441.311(e).
    At Sec.  441.302(k)(4), we propose to apply these requirements to 
services delivered under FFS or managed care delivery systems. As 
discussed earlier in section II.B.1. of this preamble, section 
2402(a)(3)(A) of the Affordable Care Act requires States to improve 
coordination among, and the regulation of, all providers of Federally 
and State-funded HCBS programs to achieve a more consistent 
administration of policies and procedures across HCBS programs. In the 
context of Medicaid coverage of HCBS, it should not matter whether the 
services are covered directly on a FFS basis or by a managed care 
entity to its enrollees. The requirement for ``consistent 
administration'' should require consistency between these two modes of 
service delivery. We accordingly are proposing to specify that a State 
must ensure compliance with the requirements in Sec.  441.302(k) with 
respect to HCBS delivered both under FFS and managed care delivery 
systems.
    Similarly, because workforce shortages exist under other HCBS 
authorities, which include many of the same types of services to 
address activities of daily living or instrumental activities of daily 
living as under section 1915(c) waiver authority, we are proposing to 
incorporate these requirements within the applicable regulatory 
sections. Specifically, we propose to apply the proposed requirements 
at Sec.  441.302(k) to section 1915(j), (k), and (i) State plan 
services by cross-referencing at Sec. Sec.  441.464(f), 441.570(f), and 
441.745(a)(1)(vi), respectively. Consistent with our proposal for 
section 1915(c) waivers, we propose these requirements based on our 
authority under section 1902(a)(30)(A) of the Act to ensure payments to 
HCBS providers are consistent with efficiency, economy, and quality of 
care and are sufficient to enlist enough providers so that care and 
services are available to beneficiaries at least to the extent as to 
the general population in the same geographic area. We believe the same 
arguments for proposing these requirements for section 1915(c) waivers 
are equally applicable for these other HCBS authorities. We request 
comment on the application of payment adequacy provisions across 
section 1915(i), (j), and (k) authorities. As noted earlier in section 
II.B.4. of this proposed rule, to accommodate the addition of new 
language at Sec. Sec.  441.464(e) and 441.464(f), we are proposing to 
renumber existing Sec.  441.464(e) as Sec.  441.464(g) and existing 
Sec.  441.464(f) as Sec.  441.464(h). We request comment on whether we 
should exempt, from these requirements, services delivered using any 
self-directed service delivery model under any Medicaid authority.
    We considered whether to also apply these proposed payment adequacy 
requirements to section 1905(a) ``medical assistance'' State plan 
personal care and home health services. However, we are not proposing 
that these requirements apply to any 1905(a) State plan services based 
on State feedback that they do not have the same data collection and 
reporting capabilities in place for section 1905(a) services as they do 
for section 1915(c), (i), (j), waiver programs and section 1915(i), 
(j), and (k) services. Further, the vast majority of HCBS is delivered 
under section 1915(c), (i), (j), and (k) authorities, while only a 
small percentage of HCBS nationally is delivered under section 1905(a) 
State plan authorities. We request comment on whether we should apply 
these requirements to section 1905(a) State plan personal care and home 
health services.
    As noted throughout the HCBS provisions in this preamble, we 
recognize that many States may need time to implement these 
requirements, including to amend provider agreements or managed care 
contracts, make State regulatory or policy changes, implement process 
or procedural changes, update information systems for data collection 
and reporting, or conduct other activities to implement these proposed 
payment adequacy requirements. We expect that these activities will 
take longer than similar activities for other HCBS provisions in this 
proposed rule. Further, we expect that it will take a substantial 
amount of time for managed care plans and providers to establish the 
necessary systems, data collection tools, and processes necessary to 
collect the required information to report to States. As a result, we 
are proposing at Sec.  441.302(k)(4), to provide States with 4 years to 
implement these requirements in FFS delivery systems following 
effective date of the final rule. For States with managed care delivery 
systems under the authority of sections 1915(a), 1915(b), 1932(a), or 
1115(a) of the Act and that include HCBS in the MCO's, PIHP's, or 
PAHP's contract, we are proposing to provide States until the first 
managed care plan contract rating period that begins on or after 4 
years after the effective date of the final rule to implement these 
requirements. Similar to our rationale in other sections, this proposed 
timeline reflects feedback from States and other interested parties 
that it could take 3 to 4 years for States to complete any necessary 
work to amend State regulations and work with their State legislatures, 
if needed, as well as to revise policies, operational processes, 
information systems, and contracts to support implementation of the 
proposals outlined in this section. We also considered the overall 
burden of the proposed rule as whole in proposing the effective date 
for the payment adequacy provision. We invite comments on the overall 
burden associated with implementing this section, whether this 
timeframe is sufficient, whether we should require a shorter timeframe 
(such as 3 years) or longer timeframe (such as 5 years) to implement 
the payment adequacy provisions and if an alternate timeframe is 
recommended, the rationale for that alternate timeframe.

[[Page 27986]]

6. Supporting Documentation Required (Sec.  441.303(f)(6))
    As described in section II.B.7 of this proposed rule, discussing 
newly proposed reporting requirements, States vary in whether they 
maintain waiting lists for section 1915(c) waivers, and if a waiting 
list is maintained, how individuals may join the waiting list. Section 
1915(c) of the Act authorizes States to set enrollment limits or caps 
on the number of individuals served in a waiver, and many States 
maintain waiting lists of individuals interested in receiving waiver 
services once a spot becomes available. While some States require 
individuals to first be determined eligible for waiver services to join 
the waiting list, other States permit individuals to join a waiting 
list after an expression of interest in receiving waiver services. This 
can overestimate the number of people who need Medicaid-covered HCBS 
because the waiting lists may include individuals who are not eligible 
for services. According to the Kaiser Family Foundation, over half of 
people on HCBS waiting lists live in States that do not screen people 
on waiting lists for eligibility.\83\
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    \83\ Burns, A., M. O'Malley Watts, M. Ammula. A Look at Waiting 
lists for Home and Community-Based Services from 2016 to 2021. 
Kaiser Family Foundation. https://www.kff.org/47f8e6f/.
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    We have not previously required States to submit any information on 
the existence or composition of waiting lists, which has led to gaps in 
information on the accessibility of HCBS within and across States. 
Further, feedback obtained during various public engagement activities 
conducted with States and other interested parties over the past 
several years about reporting requirements for HCBS, as well as 
feedback received through the RFI \84\ discussed earlier, indicate that 
there is a need to improve public transparency and processes related to 
States' HCBS waiting lists. In addition, we have found, over the past 
several years in particular, that some States are operating waiting 
lists for their section 1915(c) waiver programs even though they are 
serving fewer people than their CMS-approved enrollment limit or cap, 
and States are expected to enroll individuals up to their CMS-approved 
enrollment limit or cap before imposing a waiting list. However, 
because we do not routinely collect information on States' use of 
waiting lists and the number of people on waiting lists, we are unable 
to determine the extent to which States are operating such 
``unauthorized'' waiting lists or to work with States to address these 
``unauthorized'' waiting lists.
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    \84\ CMS Request for Information: Access to Coverage and Care in 
Medicaid & CHIP. February 2022. For a full list of question from the 
RFI, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.
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    Section 1902(a)(6) of the Act requires State Medicaid agencies to 
make such reports, in such form and containing such information as the 
Secretary may from time to time require, and to comply with such 
provisions as the Secretary may from time to time find necessary to 
assure the correctness and verification of such reports. Based on the 
authority found at section 1902(a)(6) of the Act, we now propose to 
require information from States on waiting lists to improve public 
transparency and processes related to States' HCBS waiting lists and 
ensure that we are able to adequately oversee and monitor States' use 
of waiting lists in their section 1915(c) waiver programs. To address 
new proposed requirements at Sec.  441.311(d)(1), described in the next 
section of the preamble, on State reporting on waiting lists, we 
propose to amend Sec.  441.303(f)(6) by adding the following sentence 
to the end of the existing regulatory text: If the State has a limit on 
the size of the waiver program and maintains a list of individuals who 
are waiting to enroll in the waiver program, the State must meet the 
reporting requirements at Sec.  441.311(d)(1).''
7. Reporting Requirements (Sec. Sec.  441.311, 441.474(c), 441.580(i), 
and 441.745(a)(1)(vii))
    Section 1902(a)(6) of the Act requires State Medicaid agencies to 
make such reports, in such form and containing such information, as the 
Secretary may from time to time require, and to comply with such 
provisions as the Secretary may from time to time find necessary to 
assure the correctness and verification of such reports. As discussed 
in section II.B.1. of this proposed rule, in 2014, we released guidance 
for section 1915(c) waiver programs in which we requested States to 
report on State-developed performance measures across several domains, 
as part of an overarching HCBS waiver quality strategy. The 2014 
guidance established an expectation that States conduct systemic 
remediation and implement a Quality Improvement Project when they score 
below 86 percent on any of their performance measures. Under our 
authority at section 1902(a)(6) of the Act, we are proposing 
requirements at Sec.  441.311, in combination with other proposed 
requirements identified throughout this proposed rule, to supersede and 
fully replace the reporting metrics and the minimum 86 percent 
performance level expectations for States' performance measures 
described in the 2014 guidance. We describe the basis and scope of this 
section in paragraph (a).
    The reporting requirements proposed in this proposed rule represent 
consolidated feedback from States, consumer advocates, managed care 
plans, providers, and other HCBS interested parties on improving and 
enhancing section 1915(c) waiver performance to integrate nationally 
standardized quality measures into the reporting requirements, address 
gaps in existing reporting requirements related to access and the 
direct service workforce, strengthen health and welfare and person-
centered planning reporting requirements, and eliminate annual 
performance measure reporting requirements that provide limited useful 
data for assessing State compliance with statutory and regulatory 
requirements. We believe that the proposed reporting requirements will 
allow us to better assess State compliance with the statutory and 
regulatory requirements for section 1915(c) waiver programs. As 
indicated at the end of this preamble section, we propose that the 
following reporting requirements also apply to State plan options 
authorized under section 1915(i), (j) and (k) of the Act, as well as to 
both FFS and managed care delivery systems.
a. Compliance Reporting
(1) Incident Management System Assessment
    As noted earlier in section II.B.3. of this preamble, there have 
been notable and high-profile instances of abuse and neglect in recent 
years that highlight the risks associated with poor quality care and 
with inadequate oversight of HCBS in Medicaid, despite State efforts to 
implement statutory and regulatory requirements to protect the health 
and welfare of individuals receiving section 1915(c) waiver program 
services, and State adoption of related subregulatory guidance, 
requirements, and adopting subregulatory guidance. In addition, a July 
2019 survey of States that operate section 1915(c) waivers found that:
     Definitions of critical incidents vary across States and, 
in some cases, within States for different HCBS programs or 
populations;
     Some States do not use standardized forms for reporting 
incidents, thereby impeding the consistent collection of information on 
critical incidents;
     Some States do not have electronic incident management 
systems, and, among those that do, many use systems

[[Page 27987]]

with outdated electronic platforms that are not linked with other State 
systems, leading to the systems operating in silos and the need to 
consolidate information across disparate systems; and
     Many States cited the lack of communication within and 
across State agencies, including with investigative agencies, as a 
barrier to incident resolution.
    Based on these findings and reports, as well as feedback obtained 
during various public engagement activities conducted with interested 
parties over the past several years to standardize and strengthen 
health and welfare reporting requirements, we are proposing new 
requirements for States' incident management systems at Sec.  
441.302(a)(6), as discussed in section II.B.3. of this preamble. We 
believe that these proposed reporting requirements will allow us to 
better assess State compliance with the requirements at Sec.  
441.302(a)(6).
    Relying on our authority at section 1902(a)(6) of the Act, at Sec.  
441.311(b), we propose to establish new compliance reporting 
requirements. Specifically, at Sec.  441.311(b)(1)(i), we propose to 
require that States report every 24 months on the results of an 
incident management system assessment to demonstrate that they meet the 
requirements at Sec.  441.302(a)(6) that the State operate and maintain 
an incident management system that identifies, reports, triages, 
investigates, resolves, tracks, and trends critical incidents, 
including that:
     The State define critical incidents to meet the proposed 
minimum standard definition at Sec.  441.302(a)(6)(i)(A);
     The State have an electronic critical incident system 
that, at a minimum, enables electronic collection, tracking (including 
of the status and resolution of investigations), and trending of data 
on critical incidents as proposed at Sec.  441.302(a)(6)(i)(B);
     The State require that providers report any critical 
incidents that occur during the delivery of section 1915(c) waiver 
program services as specified in a waiver participant's person-centered 
service plan, or are a result of the failure to deliver authorized 
services, as proposed at Sec.  441.302(a)(6)(i)(C);
     The State use claims data, Medicaid Fraud Control Unit 
data, and data from other State agencies such as Adult Protective 
Services or Child Protective Services to the extent permissible under 
applicable State law to identify critical incidents that are unreported 
by providers and occur during the delivery of section 1915(c) waiver 
program services, or as a result of the failure to deliver authorized 
services, as proposed at Sec.  441.302(a)(6)(i)(D);
     The State share information on reported incidents, the 
status and resolution of investigations, such as through the use of 
information sharing agreements, with other entities in the State 
responsible for investigating critical incidents, if the State refers 
critical incidents to other entities for investigation, as proposed at 
Sec.  441.302(a)(6)(i)(E); and
     The State separately investigate critical incidents if the 
investigative agency fails to report the resolution of an investigation 
within State-specified timeframes as proposed at Sec.  
441.302(a)(6)(i)(F).
    Given the risk of preventable and intentional harm to beneficiaries 
when effective incident management systems are not in place, documented 
instances of abuse and neglect among people receiving HCBS, and 
identified shortcomings and weaknesses of States' incident management 
systems discussed earlier, we believe the requirement for States to 
report every other year on the results of an incident management system 
assessment is in the best interest of and necessary for protecting the 
health and welfare of individuals receiving section 1915(c) waiver 
program services. In the absence of such a reporting requirement, we 
are unable to determine whether States have effective systems in place 
to identify and address incidents of abuse, neglect, exploitation, or 
other harm during the course of service delivery; ensure that States 
are protecting the health and welfare of individuals receiving section 
1915(c) waiver program services; and safeguard people receiving section 
1915(c) waiver program services from preventable or intentional harm.
    In proposing an every other year timeframe for reporting, we were 
attempting to take into account the likely frequency of State changes 
to policies, procedures, and information systems, while also balancing 
State reporting burden and the potential risk to beneficiaries if 
States have incident management systems that are not compliant with the 
proposed requirements at Sec.  441.302(a)(6). We believe every other 
year timeframe for reporting is sufficient to detect substantial 
changes to policies, procedures, and information systems and ensure 
that we have accurate information on States' incident management 
systems. We also propose, at Sec.  441.311(b)(1)(ii), to allow States 
to reduce the frequency of reporting to up to once every 60 months for 
States with incident management systems that are determined to meet the 
requirements at proposed Sec.  441.302(a)(6). We expect to provide 
States with technical assistance on how to meet the requirements at 
proposed Sec.  441.302(a)(6). We invite comments on whether the 
timeframe for States to report on the results of the incident 
management system assessment is sufficient or if we should require 
reporting more frequently (every year) or less frequently (every 3 
years). We also invite comment on whether we should require reporting 
more frequently (every 3 years or every 4 years) for States that are 
determined to have an incident management system that meets the 
requirements at Sec.  441.302(a)(6). If an alternate timeframe is 
recommended, we request that commenters provide the rationale for that 
alternate timeframe.
(2) Critical Incidents
    As discussed earlier in section II.B.4. of this proposed rule, at 
Sec.  441.302(a)(6)(i)(A), we propose to require States to define 
critical incidents at a minimum as verbal, physical, sexual, 
psychological, or emotional abuse; neglect; exploitation including 
financial exploitation; misuse or unauthorized use of restrictive 
interventions or seclusion; a medication error resulting in a telephone 
call to or a consultation with a poison control center, an emergency 
department visit, an urgent care visit, a hospitalization, or death; or 
an unexplained or unanticipated death, including but not limited to a 
death caused by abuse or neglect.
    Based on the same rationale as discussed previously in section 
II.B.7.a.(1) of this preamble related to the proposed incident 
management system assessment proposed reporting requirement, at Sec.  
441.311(b)(2), relying on our authority under section 1902(a)(6) of the 
Act, we propose to require that States report annually on the number 
and percent of critical incidents for which an investigation was 
initiated within State-specified timeframes; number and percent of 
critical incidents that are investigated and for which the State 
determines the resolution within State-specified timeframes; and number 
and percent of critical incidents requiring corrective action, as 
determined by the State, for which the required corrective action has 
been completed within State-specified timeframes. We intend to use the 
information generated from the proposed reporting requirements at Sec.  
441.311(b)(2)(ii) through (iv) to determine if States meet the 
requirements at Sec.  441.302(a)(6)(ii). Given the risk of harm to 
beneficiaries when effective incident management

[[Page 27988]]

systems are not in place, documented instances of abuse and neglect 
among people receiving HCBS, and identified shortcomings and weaknesses 
of States' incident management systems discussed earlier, we believe 
the proposed requirement at Sec.  441.311(b)(2) for States to report 
annually on critical incidents is in the best interest of and necessary 
for protecting the health and welfare of individuals receiving section 
1915(c) waiver program services. We invite comments on the timeframe 
for States to report on the critical incidents, whether we should 
require reporting less frequently (every 2 years), and if an alternate 
timeframe is recommended, the rationale for the alternate timeframe.
(3) Person-Centered Planning
    Under the authority of section 1902(a)(6) of the Act, we propose at 
Sec.  441.311(b)(3) to require that States report annually to 
demonstrate that they meet the requirements at Sec.  441.301(c)(3)(ii). 
Specifically, at Sec.  441.311(b)(3)(i), we propose to require that 
States report on the percent of beneficiaries continuously enrolled for 
at least 365 days for whom a reassessment of functional need was 
completed within the past 12 months. At Sec.  441.311(b)(3)(ii), we 
propose to require that States report on the percent of beneficiaries 
continuously enrolled for at least 365 days who had a service plan 
updated as a result of a re-assessment of functional need within the 
past 12 months. These proposed requirements are based on feedback 
obtained during various interested parties' engagement activities 
conducted with States and other interested parties over the past 
several years about the reporting discussed in the 2014 guidance. As 
discussed in section II.B.7. of this preamble, this feedback has 
indicated that we should strengthen person-centered planning reporting 
requirements, and eliminate annual performance measure reporting 
requirements that provide limited useful data for assessing State 
compliance with statutory and regulatory requirements. These proposed 
requirements are also based on feedback received through the RFI \85\ 
discussed earlier about the need to standardize reporting and set 
minimum standards for HCBS.
---------------------------------------------------------------------------

    \85\ CMS Request for Information: Access to Coverage and Care in 
Medicaid & CHIP. February 2022. For a full list of question from the 
RFI, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.
---------------------------------------------------------------------------

    As discussed in section II.B.1. of this preamble, we are proposing 
a revision to the regulatory text so that it is clear that changes to 
the person-centered service plan are not required if the re-assessment 
does not indicate a need for changes. As such, for the purpose of the 
reporting requirement at Sec.  441.311(b)(3)(ii), beneficiaries will be 
considered to have had a service plan updated as a result of the re-
assessment if it is documented that the required re-assessment did not 
indicate a need for changes.
    For both of the metrics at Sec.  441.301(c)(3), we propose to allow 
States to report on a statistically valid random sample of 
beneficiaries, rather than for all individuals continuously enrolled in 
the waiver program for at least 365 days. We invite comments on whether 
there are other specific compliance metrics related to person-centered 
planning that we should require States to report, either in place of or 
in addition to the metrics we proposed. We also invite comments on the 
timeframe for States to report on the person-centered planning, whether 
we should require reporting less frequently (every 2 years), and if an 
alternate timeframe is recommended, the rationale for the alternate 
timeframe.
(4) Type, Amount, and Cost of Services
    As discussed previously in section II.B.4. of this preamble, we 
propose to amend Sec.  441.302(h) to avoid duplicative or conflicting 
reporting requirements with the new Reporting Requirements section at 
proposed Sec.  441.311. In particular, at Sec.  441.302(h), we propose 
to remove paragraphs (1) and (2). At Sec.  441.311(b)(4), we propose to 
add the language previously at Sec.  441.302(h)(1). In doing so, we are 
proposing to retain the current requirement that States report on the 
type, amount, and cost of services and to include the reporting 
requirement in the new consolidated reporting section at Sec.  441.311.
b. Reporting on the Home and Community-Based Services (HCBS) Quality 
Measure Set
    At Sec.  441.311(c), relying on our authority under section 
1902(a)(6) of the Act, we propose to require that States report every 
other year on the HCBS Quality Measure Set, which is described later in 
section II.B.8. of the preamble. Specifically, we propose, at Sec.  
441.311(c)(1)(i), to require that States report every other year, 
according to the format and schedule prescribed by the Secretary 
through the process for developing and updating the HCBS Quality 
Measure Set described later in section II.B.8. of the preamble, on 
measures identified in the HCBS Quality Measure Set as mandatory 
measures for States to report or are identified as measures for which 
the Secretary will report on behalf of States, and, at Sec.  
441.311(c)(1)(ii), to allow States to report on measures in the HCBS 
Quality Measure Set that are not identified as mandatory, as described 
later in this section of this proposed rule. We are proposing every 
other year for State reporting in recognition of the fact that the 
current, voluntary HCBS Quality Measure Set is heavily comprised of 
survey-based measures, which are more burdensome, including for 
beneficiaries who would be the respondents for the surveys, and 
costlier to implement than other types of quality measures. Further, we 
believe that requiring reporting every other year, rather than 
annually, would better allow States to use the data that they report 
for quality improvement purposes, as it would provide States with 
sufficient time to implement interventions that would result in 
meaningful improvement in performance scores from one reporting period 
to another. We are also proposing this frequency in recognition of the 
overall burden of the proposed requirements.
    As discussed earlier in section II.B.1. of this preamble, section 
1902(a)(19) of the Act requires States to provide safeguards to assure 
that eligibility for Medicaid-covered care and services will be 
determined and provided in a manner that is consistent with 
simplification, simplicity of administration, and in the best interest 
of Medicaid beneficiaries. Because the delivery of high quality 
services is in the best interest of Medicaid beneficiaries, we propose 
at Sec.  441.311(c)(1)(iii), under our authority at section 1902(a)(19) 
of the Act, to require States to establish performance targets, subject 
to our review and approval, for each of the measures in the HCBS 
Quality Measure Set that are identified as mandatory for States to 
report or are identified as measures for which we will report on behalf 
of States, as well as to describe the quality improvement strategies 
that they will pursue to achieve the performance targets for those 
measures.\86\ We welcome comments on whether there should be a 
threshold of compliance that would exempt the State from developing 
improvement strategies, and if so, what that threshold should be.
---------------------------------------------------------------------------

    \86\ We note that compliance with CMS regulations and reporting 
requirements does not imply that a State has complied with the 
integration mandate of Title II of the ADA, as interpreted by the 
Supreme Court in the Olmstead Decision.
---------------------------------------------------------------------------

    At Sec.  441.311(c)(1)(iv), we propose to allow States to establish 
State performance targets for other measures in the HCBS Quality 
Measure Set that are not identified as mandatory for States to report 
or as measures for which

[[Page 27989]]

the Secretary will report on behalf of States as well as to describe 
the quality improvement strategies that they will pursue to achieve the 
performance targets for those targets.
    At Sec.  441.311(c)(2), we propose to report, on behalf of the 
States, on a subset of measures in the HCBS Quality Measure Set that 
are identified as measures for which we will report on behalf of 
States. Further, at Sec.  441.311(c)(3), we propose to allow, but not 
require, States to report on measures that are not yet required but 
will be, and on populations for whom reporting is not yet required but 
will be phased-in in the future.
    We invite comments on whether the timeframe for States to report on 
the measures in HCBS Quality Measure Set is sufficient, whether we 
should require reporting more frequently (every year) or less 
frequently (every 3 years), and if an alternate timeframe is 
recommended, the rationale for that alternate timeframe. We welcome 
comments on any additional changes we should consider in this section.
c. Access Reporting
    As noted earlier in section II.B.6. of this preamble, feedback 
obtained during various public engagement activities conducted with 
States and other interested parties over the past several years about 
reporting requirements for HCBS, as well as feedback received through 
the RFI \87\ discussed earlier, indicate that there is a need to 
improve public transparency and processes related to States' HCBS 
waiting lists and for standardized reporting on HCBS access, including 
timeliness of HCBS and the comparability to services received to 
eligibility for services.
---------------------------------------------------------------------------

    \87\ CMS Request for Information: Access to Coverage and Care in 
Medicaid & CHIP. February 2022. For a full list of question from the 
RFI, see: https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.
---------------------------------------------------------------------------

    At Sec.  441.311(d)(1)(i), relying on our authority under section 
1902(a)(6) of the Act, we propose to require that States provide a 
description annually on how they maintain the list of individuals who 
are waiting to enroll in a section 1915(c) waiver program, if they have 
a limit on the size of the waiver program and maintain a list of 
individuals who are waiting to enroll in the waiver program, as 
described in Sec.  441.303(f)(6). We further propose to require that 
this description must include, but be not limited to, information on 
whether the State screens individuals on the waiting list for 
eligibility for the waiver program, whether the State periodically re-
screens individuals on the waiver list for eligibility, and the 
frequency of re-screening if applicable. We also propose to require 
States to report, at Sec.  441.311(d)(1)(ii), the number of people on 
the waiting list, if applicable, and, at Sec.  441.311(d)(1)(iii), the 
average amount of time that individuals newly enrolled in the waiver 
program in the past 12 months were on the waiting list, if applicable. 
We invite comments on whether there are other specific metrics or 
reporting requirements related to waiting lists that we should require 
States to report, either in place of or in addition to the requirements 
we proposed. We also invite comments on the timeframe for States to 
report on their waiting lists, whether we should require reporting less 
frequently (every 2 or 3 years), and if an alternate timeframe is 
recommended, the rationale for that alternate timeframe.
    At Sec.  441.311(d)(2)(i), based on our authority under section 
1902(a)(6) of the Act, we propose to require States report annually on 
the average amount of time from when homemaker services, home health 
aide services, or personal care services, as listed in Sec.  
440.180(b)(2) through (4), are initially approved to when services 
began, for individuals newly approved to begin receiving services 
within the past 12 months. We propose to focus on these specific 
services for this reporting requirement because of feedback from 
States, consumer advocates, managed care plans, providers, and other 
HCBS interested parties that timely access to these services is 
especially challenging and because the failure of States to ensure 
timely access to these services poses substantial risk to the health, 
safety, and quality of care of individuals residing independently and 
in other community-based residences. Having States report this 
information will assist us in our oversight of State HCBS programs by 
helping us target our technical assistance and monitoring efforts. We 
request comment on whether this requirement should apply to additional 
services authorized under section 1915(c) of the Act.
    For this metric, we propose to allow States to report on a 
statistically valid random sample of individuals newly approved to 
begin receiving these services within the past 12 months, rather than 
for all individuals newly approved to begin receiving these services 
within the past 12 months. We invite comments on the timeframe for 
States to report on this metric, whether we should require reporting 
less frequently (every 2 or 3 years), and if an alternate timeframe is 
recommended, the rationale for that alternate timeframe. We also invite 
comments on whether there are other specific metrics related to the 
amount of time that it takes for eligible individuals to begin 
receiving homemaker services, home health aide services, or personal 
care services that we should require States to report, either in place 
of or in addition to the metric we proposed.
    At Sec.  441.311(d)(2)(ii), also based on our authority under 
section 1902(a)(6) of the Act, we propose to require States to report 
annually on the percent of authorized hours for homemaker services, 
home health aide services, or personal care services, as listed in 
Sec.  440.180(b)(2) through (4), that are provided within the past 12 
months. For this metric, we further propose to allow States to report 
on a statistically valid random sample of individuals authorized to 
receive these services within the past 12 months, rather than all 
individuals authorized to receive these services within the past 12 
months. We invite comments on the timeframe for States to report on 
this metric, whether we should require reporting less frequently (every 
2 or 3 years), and if an alternate timeframe is recommended, the 
rationale for that alternate timeframe. We also invite comments on 
whether there are other specific metrics related to individuals' use of 
authorized homemaker services, home health aide services, or personal 
care services that we should require States to report, either in place 
of or in addition to the metric we proposed. We further request comment 
on whether this requirement should apply to additional services 
authorized under section 1915(c) of the Act.
d. Payment Adequacy
    At Sec.  441.311(e), we propose new reporting requirements for 
section 1915(c) waivers, under our authority at section 1902(a)(6) of 
the Act, for States to demonstrate that they meet the proposed HCBS 
Payment Adequacy requirements at Sec.  441.302(k). Specifically, we 
propose that States report annually on the percent of payments for 
homemaker, home health aide, and personal care services, as listed at 
Sec.  440.180(b)(2) through (4), that are spent on compensation for 
direct care workers. As discussed in section II.B.5. of this preamble, 
we have focused this requirement on homemaker services, home health 
aide services, and personal care services because they are services for 
which we expect that the vast majority of payment should be comprised 
of compensation for direct care workers and for which there would be 
low facility or other indirect costs. These are services that would 
most commonly be conducted in individuals' homes and general community 
settings.

[[Page 27990]]

As such, there should be low facility or other indirect costs 
associated with the services.
    We considered whether the proposed reporting requirements at Sec.  
441.311(e) related to the percent of payments going to the direct care 
workforce should apply to other services, such as adult day health, 
habilitation, day treatment or other partial hospitalization services, 
psychosocial rehabilitation services and clinic services for 
individuals with chronic mental illness. As discussed in section 
II.B.5. of this preamble, these services may have facility or other 
indirect costs for which we do not have adequate information to 
determine a minimum percent of the payment that should be spent on 
compensation for the direct care workforce and, as a result, we are not 
proposing to apply HCBS Payment Adequacy requirements at Sec.  
441.302(k) to services other than homemaker, home health aide, and 
personal care services, as listed at Sec.  440.180(b)(2) through (4). 
However, we are requesting comment on whether the proposed requirements 
at Sec.  441.302(k)(3)(i) related to the percent of payments going to 
the direct care workforce should apply to other services listed at 
Sec.  440.180(b). In particular, we are requesting comment on whether 
the proposed requirements at Sec.  441.302(k)(3)(i) related to the 
percent of payments going to the direct care workforce should apply to 
residential habilitation services, day habilitation services, and home-
based habilitation services. As a result, we are also requesting 
comment whether States should be required to report annually on the 
percent of payments for other services listed at Sec.  440.180(b) that 
are spent on compensation for direct care workers and, in particular, 
on the percent of payments for residential habilitation services, day 
habilitation services, and home-based habilitation services that are 
spent on compensation for direct care workers.
    We further propose that States separately report for each service 
subject to the reporting requirement and, within each service, 
separately report on payments for services that are self-directed. We 
considered whether other reporting requirements such as a State 
assurance or attestation or an alternative frequency of reporting could 
be used to determine State compliance with the requirement at Sec.  
441.302(k) and decided that the proposed requirement would be most 
effective to demonstrate State compliance. We request comment on 
whether we should allow States to provide an assurance or attestation, 
subject to audit, that they meet the requirement in place of reporting 
on the percent of payments, and whether we should reduce the frequency 
of reporting to every other year.
    The intent of this proposed requirement is for States to report in 
the aggregate for each service across all of their services across all 
programs as opposed to separately report for each waiver or HCBS 
program. As an alternative, we considered whether to require reporting 
at the delivery system, HCBS waiver program, or population level. 
However, we are not proposing to require additional levels of reporting 
because we expect that it would increase reporting burden for States 
without providing us with additional information necessary for 
determining whether States meet the requirements at Sec.  441.302(k). 
We request comment on whether we should require States to report on the 
percent of payments for certain HCBS that are spent on compensation for 
direct care workers at the delivery system, HCBS waiver program, or 
population level. In addition, we considered whether to require States 
to report on median hourly wage and on compensation by category, 
including salary, wages, and other remuneration; benefits; and payroll 
taxes. We believe that such information would be valuable for better 
monitoring workforce compensation and its impact on workforce shortages 
and turnover and access to services for Medicaid beneficiaries. While 
such information should be readily accessible for providers, we have 
not proposed requiring these types of reporting, as collecting and 
aggregating such information would increase State burden. We request 
comment on whether we should require States to report on median hourly 
wage and on compensation by category. We considered whether to allow 
States, at their option, to exclude, from their reporting to CMS but 
not from the proposed requirement at Sec.  441.302(k) related to the 
percent of payments that are spent on compensation for direct care 
workers, payments to providers of agency-directed services that have 
low Medicaid revenues or serve a small number of Medicaid 
beneficiaries, based on Medicaid revenues for the service, number of 
direct care workers serving Medicaid beneficiaries, or the number of 
Medicaid beneficiaries receiving the service. We considered this option 
as a way to reduce State, managed care plan, and provider data 
collection and reporting burden based on the experience of States that 
have implemented similar reporting requirements. However, we are 
concerned that such an option could discourage providers from serving 
Medicaid beneficiaries or increasing the number of Medicaid 
beneficiaries or amount of Medicaid revenues. We request comment on 
whether we should allow States the option to exclude, from their 
reporting to CMS, payments to providers of agency directed services 
that have low Medicaid revenues or serve a small number of Medicaid 
beneficiaries, based on Medicaid revenues for the service, number of 
direct care workers serving Medicaid beneficiaries, or the number of 
Medicaid beneficiaries receiving the service.
    We also request comment on whether we should establish a specific 
limit on this exclusion and, if so, the specific limit we should 
establish, such as to limit the exclusion to providers in the lowest 
5th, 10th, 15th, or 20th percentile of providers in terms Medicaid 
revenues for the service, number of Medicaid beneficiaries served, or 
number of direct care workers serving Medicaid beneficiaries.
    We also considered whether to allow States to exclude payments for 
self-directed services from this reporting requirement, based on 
feedback obtained during various interested parties' engagement 
activities conducted with States and other interested parties over the 
past several years related to HCBS workforce shortages that indicate 
that compensation for direct care workers in self-directed models tends 
to be higher and may comprise a higher percentage of the payments for 
services than other HCBS, and that administrative costs account for a 
small percentage of the cost of self-directed services. However, we 
have decided that payments for self-directed services by States should 
be included in these reporting requirements. This decision not to 
exclude them was based on the importance of ensuring a sufficient 
direct care workforce for self-directed services, the experience of 
States that have applied similar requirements to report on the percent 
of payments for to self-directed services that are spent on 
compensation for direct care workers, and the lack of conclusive data 
indicating that compensation for direct care workers meets or exceeds 
the proposed 80 percent threshold. We request comment on whether we 
should allow States to exclude payments for self-directed services from 
these reporting requirements.
e. Effective Date
    We recognize that many States may need time to implement these 
reporting requirements, including to amend provider agreements or 
managed care contracts, make State regulatory or

[[Page 27991]]

policy changes, implement process or procedural changes, update 
information systems for data collection and reporting, or conduct other 
activities to implement these requirements. As a result, we are 
proposing at Sec.  441.311(f)(1) to provide States with 3 years to 
implement the compliance reporting requirements at Sec.  441.311(b), 
the HCBS Quality Measure Set reporting requirements at Sec.  
441.311(c), and the access reporting requirements at Sec.  441.311(d) 
in FFS delivery systems following the effective date of the final rule. 
For States with managed care delivery systems under the authority of 
sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and that 
include HCBS in the MCO's, PIHP's, or PAHP's contract, we are proposing 
to provide States until the first managed care plan contract rating 
period that begins on or after 3 years after the effective date of the 
final rule to implement these requirements. This time period is based 
on feedback from States and other interested parties that it could take 
2 to 3 years to amend State regulations and work with their State 
legislatures, if needed, as well as to revise policies, operational 
processes, information systems, and contracts to support implementation 
of these proposed reporting requirements. We also have considered all 
of the HCBS proposals outlined in this proposed rule as whole. We 
invite comments on whether this timeframe is sufficient, whether we 
should require a shorter timeframe (2 years) or longer timeframe (4 
years) to implement these provisions, and if an alternate timeframe is 
recommended, the rationale for that alternate timeframe.
    In addition, we are proposing at Sec.  441.311(f)(2) to provide 
States with 4 years to implement the payment adequacy reporting 
requirements at Sec.  441.311(e) in FFS delivery systems following the 
effective date of the final rule. For States with managed care delivery 
systems under the authority of sections 1915(a), 1915(b), 1932(a), or 
1115(a) of the Act and that include HCBS in the MCO's, PIHP's, or 
PAHP's contract, we are proposing to provide States until the first 
managed care plan contract rating period that begins on or after 4 
years after the effective date of the final rule to implement these 
requirements. This time period is intended to align with the effective 
date for the HCBS payment adequacy requirements at Sec.  441.302(k), 
which are discussed in section II.B.5. of this preamble. It is also 
based on feedback from States and other interested parties that it 
could take 3 to 4 years to amend State regulations and work with their 
State legislatures, if needed, as well as to revise policies, 
operational processes, information systems, and contracts to support 
implementation of these reporting requirements. We also have considered 
all of the HCBS proposals outlined in this proposed rule as whole. We 
invite comments on whether this timeframe is sufficient, whether we 
should require a shorter timeframe (3 years) or longer timeframe (5 
years) to implement these provisions, and if an alternate timeframe is 
recommended, the rationale for that alternate timeframe.
    At Sec.  441.311(f), we propose to apply all of the reporting 
requirements described in Sec.  441.311 to services delivered under FFS 
and managed care delivery systems. As discussed earlier in section 
II.B.1. of this preamble, section 2402(a)(3)(A) of the Affordable Care 
Act requires States to improve coordination among, and the regulation 
of, all providers of Federally and State-funded HCBS programs to 
achieve a more consistent administration of policies and procedures 
across HCBS programs, and as noted in the Medicaid context this would 
include consistent administration between FFS and managed care 
programs. We accordingly are proposing to specify that a State must 
ensure compliance with the requirements in Sec.  441.302(a)(6) with 
respect to HCBS delivered both under FFS and managed care delivery 
systems.
    As discussed earlier in section II.B.1. of this preamble, the 
proposed requirements at Sec.  441.311, in combination with other 
proposed requirements identified throughout this proposed rule, are 
intended to supersede and fully replace the reporting expectations and 
the minimum 86 percent performance level for State's performance 
measures described in the 2014 guidance, also discussed earlier in 
section II.B.1. of this preamble. We expect that States may implement 
some of the requirements proposed in this proposed rule in advance of 
any effective date. If the rule is finalized, we will work with States 
to phase out the 2014 guidance as they implement the requirements in 
the future final rule to reduce unnecessary burden and to avoid 
duplicative or conflicting reporting requirements.
    In accordance with the requirement of section 2402(a)(3)(A) of the 
Affordable Care Act for States to achieve a more consistent 
administration of policies and procedures across HCBS programs, and 
because these reporting requirements are relevant to other HCBS 
authorities, we are proposing to incorporate these requirements within 
the applicable regulatory sections for other HCBS authorities. 
Specifically, we propose to apply the requirements at Sec.  441.311 to 
section 1915(j), (k), and (i) State plan services by cross-referencing 
at Sec. Sec.  441.474(c), 441.580(i), and 441.745(a)(1)(vii), 
respectively. Consistent with our proposal for section 1915(c) waivers, 
we propose these requirements based on our authority under section 
1902(a)(6) of the Act, which requires State Medicaid agencies to make 
such reports, in such form and containing such information, as the 
Secretary may from time to time require, and to comply with such 
provisions as the Secretary may from time to time find necessary to 
assure the correctness and verification of such reports. We believe the 
same arguments for proposing these requirements for section 1915(c) 
waivers are equally applicable for these other HCBS authorities. We 
request comment on the application of these provisions across section 
1915(i), (j), and (k) authorities. To accommodate the addition of new 
language at Sec.  441.580(i), we are proposing to renumber existing 
Sec.  441.580(i) as Sec.  441.580(j).
    We considered whether to also apply these reporting requirements to 
section 1905(a) ``medical assistance'' State plan personal care, home 
health, and case management services. However, we are not proposing 
that these requirements apply to any section 1905(a) State plan 
services based on State feedback that they do not have the same data 
collection and reporting capabilities in place for section 1905(a) 
services as they do for sections 1915(c), (i), (j), and (k) services 
and because the person-centered planning, service plan, and waiting 
list requirements that comprise a significant portion of these 
reporting requirements have little to no relevance for section 1905(a) 
services, in comparison to section 1915(c), (i), (j), and (k) services. 
Further, the vast majority of HCBS is delivered under section 1915(c), 
(i), (j), and (k) authorities, while only a small percentage of HCBS 
nationally is delivered under section 1905(a) State plan authority. We 
request comment on whether we should establish similar reporting 
requirements for section 1905(a) ``medical assistance'' State plan 
personal care, home health, and case management services.
    We expect that, should we finalize these reporting requirements, we 
will establish new processes and forms for States to meet the reporting 
requirements, provide additional technical information on how States 
can meet the reporting requirements including related to sampling 
requirements (where States are

[[Page 27992]]

permitted to report on a sample of beneficiaries rather than on all 
individuals who meet the inclusion criteria for the reporting 
requirement), and amend existing templates and establish new templates 
under the Paperwork Reduction Act.
8. Home and Community-Based Services (HCBS) Quality Measure Set 
(Sec. Sec.  441.312, 441.474(c), 441.585(d), and 441.745(b)(1)(v)
    On July 21, 2022, we issued State Medicaid Director Letter # 22-003 
\88\ to release the first official version of the HCBS Quality Measure 
Set. The HCBS Quality Measure Set is a set of nationally standardized 
quality measures for Medicaid-covered HCBS. It is intended to promote 
more common and consistent use within and across States of nationally 
standardized quality measures in HCBS programs, create opportunities 
for CMS and States to have comparative quality data on HCBS programs, 
drive improvement in quality of care and outcomes for people receiving 
HCBS, and support States' efforts to promote equity in their HCBS 
programs. It is also intended to reduce some of the burden that States 
and other interested parties may experience in identifying and using 
HCBS quality measures. By providing States and other interested parties 
with a set of nationally standardized measures to assess HCBS quality 
and outcomes and by facilitating access to information on those 
measures, we believe that we can reduce the time and resources that 
States and other interested parties expend on identifying, assessing, 
and implementing measures for use in HCBS programs.
---------------------------------------------------------------------------

    \88\ CMS State Medicaid Director Letter. SMD# 22-003 Home and 
Community-Based Services Quality Measure Set. July 2022. Accessed at 
https://www.medicaid.gov/federal-policy-guidance/downloads/smd22003.pdf.
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    Section 1102(a) of the Act provides the Secretary of HHS with 
authority to make and publish rules and regulations that are necessary 
for the efficient administration of the Medicaid program. Section 
1902(a)(6) of the Act requires State Medicaid agencies to make such 
reports, in such form and containing such information, as the Secretary 
may from time to time require, and to comply with such provisions as 
the Secretary may from time to time find necessary to assure the 
correctness and verification of such reports. Under our authority at 
sections 1102(a) and 1902(a)(6) of the Act, we are proposing to add a 
new section, at Sec.  441.312, Home and Community-Based Services 
Quality Measure Set, to require use of the measure set in 1915(c) 
waiver programs and promote public transparency related to the 
administration of Medicaid-covered HCBS. We describe the basis and 
scope of this section in proposed paragraph (a).
    We believe that quality is a critical component of efficiency, and 
as such, having a standardized set of measures that is used to assess 
the quality of Medicaid HCBS programs supports the efficient operation 
of the Medicaid program. Further, we believe that this proposal is 
necessary for the efficient administration of Medicaid-covered HCBS 
authorized under section 1915(c) of the Act, consistent with section 
1902(a)(4) of the Act, as it would establish a process through which we 
would regularly update and maintain the required set of measures at 
Sec.  441.311(c) in consultation with States and other interested 
parties (as described later in this section of the preamble). This 
process would ensure that the priorities of interested parties are 
reflected in the selection of the measures included in the HCBS Quality 
Measure Set. This process would also ensure that the required set of 
HCBS quality measures is updated to address gaps in the HCBS Quality 
Measure Set as new measures are developed and to remove measures that 
are less relevant or add less value than other available measures, and 
that it meets scientific and other standards for quality measures. Due 
to the constantly evolving field of HCBS quality measurement, we 
believe that the failure to establish such a process would result in 
ongoing reporting by States of measures that do not reflect the 
priorities of interested parties, measures that offer limited value 
compared to other measures, and measures that do not meet strong 
scientific and other standards. It would also result in a lack of 
reporting on key measurement priority areas, which could be addressed 
by updating the HCBS Quality Measure Set as new measures are developed. 
The failure to establish such a process would lead to inefficiency in 
States' HCBS quality measurement activities through the continued 
reporting on an outdated set of measures. In other words, we believe 
that such a process is necessary for the efficient administration of 
Medicaid-covered HCBS by ensuring that quality measure reporting 
requirements are focused on the most valuable, useful, and 
scientifically supported areas of quality measurement, and that quality 
measures with limited value are removed timely from quality measure 
reporting requirements.
    We propose a definition at Sec.  441.312(b)(1) for ``Attribution 
rules,'' to mean the process States use to assign beneficiaries to a 
specific health care program or delivery system for the purpose of 
calculating the measures on the ``HCBS Quality Measure Set'' as 
described in proposed Sec.  441.312(d)(6), and at Sec.  441.312(b)(2) 
for ``Home and Community-Based Services Quality Measure Set'' to mean 
the Home and Community-Based Measures for Medicaid established and 
updated at least every other year by the Secretary through a process 
that allows for public input and comments, including through the 
Federal Register.
    At Sec.  441.312(c), we describe the general process that the 
Secretary will follow to update and maintain the HCBS Quality Measure 
Set. Specifically, at Sec.  441.312(c)(1), we propose that the 
Secretary will identify and update at least every other year, through a 
process that allows for public input and comment, the quality measures 
to be included in the HCBS Quality Measure Set. At Sec.  441.312(c)(2), 
we propose that the Secretary will solicit comment at least every other 
year with States and other interested parties, which are identified 
later in this section of the preamble, to:
     Establish priorities for the development and advancement 
of the HCBS Quality Measure Set.
     Identify newly developed or other measures which should be 
added including to address gaps in the measures included in the HCBS 
Quality Measure Set.
     Identify measures which should be removed as they no 
longer strengthen the HCBS Quality Measure Set.
     Ensure that all measures included in the HCBS Quality 
Measure Set are evidence-based, are meaningful for States, and are 
feasible for State-level and program-level reporting as appropriate.
    The proposed frequency for updating the quality measures included 
in the HCBS Quality Measure Set is aligned with the proposed frequency 
at Sec.  441.311(c)(1)(i) for States' reporting of the measures in the 
HCBS Quality Measure Set. We have based other aspects of the process 
that the Secretary will follow to update and maintain the HCBS Quality 
Measure Set in part on the proposed processes for the Secretary to 
update and maintain the Child, Adult, and Health Home Core Sets as 
described in the Medicaid Program and CHIP; Mandatory Medicaid and

[[Page 27993]]

Children's Health Insurance Program (CHIP) Core Set Reporting proposed 
rule (87 FR 51303); (hereinafter the ``Mandatory Medicaid and CHIP Core 
Set Reporting proposed rule''). We believe that such alignment in 
processes will ensure consistency and promote efficiency for both CMS 
and States across Medicaid quality measurement and reporting 
activities.
    At Sec.  441.312(c)(3), we propose that the Secretary will, in 
consultation with States and other interested parties (as described 
later in this section of preamble), develop and update the measures in 
the HCBS Quality Measure Set, at least every other year, through a 
process that allows for public input and comment. We invite comments on 
whether the timeframes for updating the measures in the HCBS Quality 
Measure Set and conducting the process for developing and updating the 
HCBS Quality Measure Set is sufficient, whether we should conduct these 
activities more frequently (every year) or less frequently (every 3 
years), and if an alternate timeframe is recommended, the rationale for 
that alternate timeframe.
    At Sec.  441.312(d), we describe the proposed process for 
developing and updating the HCBS Quality Measure Set. Specifically, we 
propose that the Secretary will address the following through the 
proposed process:
     Identify all measures in the HCBS Quality Measure Set, 
including newly added measures, measures that have been removed, 
mandatory measures, measures that the Secretary will report on States' 
behalf, measures that States can elect to have the Secretary report on 
their behalf, as well as the measures that the Secretary will provide 
States with additional time to report and the amount of additional 
time.
     Inform States how to collect and calculate data on the 
measures.
     Provide a standardized format and reporting schedule for 
reporting the measures.
     Provide procedures that States must follow in reporting 
the measure data.
     Identify specific populations for which States must report 
the measures, including people enrolled in a specific delivery system 
type, people who are dually eligible for Medicare and Medicaid, older 
adults, people with physical disabilities, people with intellectual or 
developmental disabilities, people who have serious mental illness, and 
people who have other health conditions; and provide attribution rules 
for determining how States must report on measures for beneficiaries 
who are included in more than one population.
     Identify the subset of measures that must be stratified by 
race, ethnicity, Tribal status, sex, age, rural/urban status, 
disability, language, or such other factors as may be specified by the 
Secretary.
     Describe how to establish State performance targets for 
each of the measures.
    We anticipate that, for State reporting on the measures in the HCBS 
Quality Measure Set, as outlined in Sec.  441.311, the technical 
information on attribution rules described at proposed Sec.  
441.312(d)(6), would call for inclusion in quality reporting based on a 
beneficiary's continuous enrollment in the Medicaid waiver. This would 
ensure the State has enough time to furnish services during the 
measurement period. In the technical information, we anticipate we 
would set attribution rules to address transitions in Medicaid 
eligibility, enrollment in Medicare, or transitions between different 
delivery systems or managed care plans, within a reporting year, for 
example, based on the length of time beneficiaries was enrolled in 
each. We invite comment on other considerations we should address in 
the attribution rules or other topics we should address in the 
technical information.
    At Sec.  441.312(e), we propose, in the process for developing and 
updating the Home and Community-Based Services Quality Measure Set 
described at proposed Sec.  441.312(d), that the Secretary consider the 
complexity of State reporting and allow for the phase-in over a 
specified period of time of mandatory State reporting for some measures 
and of reporting for certain populations, such as older adults or 
people with intellectual and disabilities. At Sec.  441.312(f), we 
propose that, in specifying the measures and the factors by which 
States must report stratified measures, the Secretary will consider 
whether such stratified sampling can be accomplished based on valid 
statistical methods, without risking a violation of beneficiary 
privacy, and, for measures obtained from surveys, whether the original 
survey instrument collects the variables or factors necessary to 
stratify the measures. This proposed stratification of data for the 
measures contained in the HCBS Quality Measure Set is consistent with 
our statutory authority under section 1902(a)(6) of the Act, which 
requires States to report information ``in such form and containing 
such information'' as the Secretary requires.
    Stratified sampling is a method of sampling from a population, in 
which the sampling can be partitioned into sub-populations, such as by 
race, ethnicity, sex, age, rural/urban status, disability, language, or 
such other factors. Stratified data would enable us and States to 
identify the health and quality of life outcomes of underserved 
populations and potential differences in outcomes based on race, 
ethnicity, sex, age, rural/urban status, disability, language, or such 
factors on measures contained in the HCBS Quality Measure Set. 
Measuring health disparities, reporting these results, and driving 
improvements in quality are cornerstones of the CMS approach to 
advancing health equity. Advancing equity for underserved populations 
through data reporting and stratification aligns with E.O. 13985.\89\ 
In line with the policy objective of E.O. 13985, CMS defines health 
equity as ``the attainment of the highest level of health for all 
people, where everyone has a fair and just opportunity to attain their 
optimal health regardless of race, ethnicity, disability, sexual 
orientation, gender identity, socioeconomic status, geography, 
preferred language, or other factors that affect access to care and 
health outcomes.'' \90\ We are working to advance health equity by 
designing, implementing, and operationalizing policies and programs 
that support health for all the people served by our programs, 
eliminating avoidable differences in health and quality of life 
outcomes experienced by people who are disadvantaged or underserved, 
and providing the care and support that all individuals need to thrive.
---------------------------------------------------------------------------

    \87\ Exec. Order No. 13985 (2021), Accessed at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
    \90\ CMS definition of health equity. Accessed at https://www.cms.gov/pillar/health-equity.
---------------------------------------------------------------------------

    We considered giving States the flexibility to choose which 
measures they would stratify and by what factors. However, as discussed 
in the Mandatory Medicaid and CHIP Core Set Reporting rule (87 FR 
51313), consistent measurement of differences in health and quality of 
life outcomes between different groups of beneficiaries is essential to 
identifying areas for intervention and evaluation of those 
interventions.\91\ This consistency could
---------------------------------------------------------------------------

    \91\ Schlotthauer AE, Badler A, Cook SC, Perez DJ, Chin MH. 
Evaluating Interventions to Reduce Health Care Disparities: An RWJF 
Program. Health Aff (Millwood). 2008;27(2):568-573.

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[[Page 27994]]

not be achieved if each State made its own decisions about which data 
it would stratify and by what factors.92 93
---------------------------------------------------------------------------

    \92\ Centers for Medicare & Medicaid Services (CMS) Office of 
Minority Health (OMH). Stratified Reporting. 2022; https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \93\ National Quality Forum. A Roadmap for Promoting Health 
Equity and Eliminating Disparities. Sep 2017. Accessed at https://www.qualityforum.org/Publications/2017/09/A_Roadmap_for_Promoting_Health_Equity_and_Eliminating_Disparities__The_Four_I_s_for_Health_Equity.aspx.
---------------------------------------------------------------------------

    We recognize that States may be constrained in their ability to 
stratify measures in the HCBS Quality Measure Set and that data 
stratification would require additional State resources. There are 
several challenges to stratification of measure reporting. First, the 
validity of stratification is threatened when the demographic data are 
incomplete. Complete demographic information is often unavailable to us 
and to States due to several factors, including the fact that Medicaid 
applicants and beneficiaries are not required to provide race and 
ethnicity data. Second, when States with smaller populations and less 
diversity stratify data, it may be possible to identify individual 
data, raising privacy concerns. Therefore, if the sample sizes are too 
small, the data would be suppressed, in accordance with the CMS Cell 
Size Suppression Policy and the data suppression policies for 
associated measure stewards and therefore not publicly reported to 
avoid a potential violation of privacy.\94\
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    \94\ CMS Cell Size Suppression Policy, Issued 2020: https://www.hhs.gov/guidance/document/cms-cell-suppression-policy or the 
cell suppression standards of the associated measure stewards.
---------------------------------------------------------------------------

    We also may face constraints in stratifying measures for which we 
are able to report on behalf of States, as our ability to stratify will 
be dependent on whether the original dataset or survey instrument: (1) 
collects the demographic information or other variables needed and (2) 
has a large enough sample size. The Transformed Medicaid Statistical 
Information System (T-MSIS), for example, currently has the capability 
to stratify some HCBS Quality Measure Set measures by sex and urban/
rural status, but not by race, ethnicity, or disability status. This is 
because applicants provide information on sex and urban/rural address, 
which is reported to T-MSIS by States, whereas applicants are not 
required to provide information on their race and ethnicity or 
disability status, and often do not do so. However, we have developed 
the capacity to impute race and ethnicity using a version of the 
Bayesian Improved Surname Geocoding (BISG) method \95\ that includes 
Medicaid-specific enhancements to optimize accuracy, and are able to 
stratify by race and ethnicity, urban/rural status, and sex.
---------------------------------------------------------------------------

    \95\ Elliott, Marc N., et al. ``Using the Census Bureau's 
surname list to improve estimates of race/ethnicity and associated 
disparities.'' Health Services and Outcomes Research Methodology 9.2 
(2009): 69-83.
---------------------------------------------------------------------------

    The method proposed for this project utilizes State-submitted race/
ethnicity data when it is complete and accurate as based on the 
Medicaid DQ Atlas assessment for a given year.\96\ When State-submitted 
data is missing or inaccurate, imputed results are used to ensure 
statistical accuracy. Because imputations are only used when self-
reported data is missing or States have systematic errors in reporting 
race and/or ethnicity, millions of self-reported datapoints are 
preserved and model accuracy is improved. This also reflects that, as 
the quality of State-submitted data improves, the imputations will be 
used less frequently. We will release detailed documentation about the 
methodology used to develop the imputations prior to the release of 
these results. While complete demographic information for beneficiaries 
would always be preferable to using imputed model values, reliable 
techniques to impute values is a substitute to enable identification 
and analysis of health disparities.
---------------------------------------------------------------------------

    \96\ Medicaid DQ Atlas. ``Race and Ethnicity.'' https://www.medicaid.gov/dq-atlas/landing/topics/single/map?topic=g3m16&tafVersionId=32.
---------------------------------------------------------------------------

    With these challenges in mind, we propose that stratification by 
States in reporting of HCBS Quality Measure Set data would be 
implemented through a phased-in approach in which the Secretary would 
specify which measures and by which factors States must stratify 
reported measures. In proposed Sec.  441.312(f), States would be 
required to provide stratified data for 25 percent of the measures in 
the HCBS Quality Measure Set for which the Secretary has specified that 
reporting should be stratified by 3 years after the effective date of 
these regulations, 50 percent of such measures by 5 years after the 
effective date of these regulations, and 100 percent of measures by 7 
years after the effective date of these regulations. We note that the 
percentages listed here align with the proposed phase-in of equity 
reporting in the Mandatory Medicaid and CHIP Core Set Reporting 
proposed rule, although the proposed deadlines for each compliance 
level would be longer here (87 FR 51314). However, the timeframe 
associated with each percentage is different from what was proposed in 
that rule. Specifically, that proposed rule would require States to 
provide stratified data for 25 percent of measures within 2 years after 
the effective date of the final rule, 50 percent of measures within 3 
years after the effective date of the final rule, and 100 percent of 
measures within 5 years after the effective date of the final rule.
    We propose a slower phase-in for stratification for the measures in 
the HCBS Quality Measure Set because the HCBS Quality Measure Set was 
only first released for voluntary use by States in July 2022, while 
Child, Adult, and Health Home Core Sets voluntary reporting has been in 
place for a number of years. Further, a substantial portion of the 
measures included in the HCBS Quality Measure Set, particularly 
compared to the Child, Adult, and Health Home Core Sets, are derived 
from beneficiary experience of care surveys, which are costlier to 
implement than other types of measures. In addition, the slower phase-
in is also intended to take into consideration the overall burden of 
the reporting requirements in this proposed rule.
    We have determined that this proposed phased-in approach to data 
stratification would be reasonable and minimally burdensome, and thus 
consistent with E.O. 13985 on Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government (January 20, 
2021),\97\ because we are balancing the importance of being able to 
identify differences in outcomes between populations under these 
measures with the potential operational challenges that States may face 
in implementing these proposed requirements.
---------------------------------------------------------------------------

    \97\ Exec. Order No. 13985 (2021), Accessed at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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    We recognize that States may need to make enhancements to their 
data and information systems or incur other costs in implementing the 
HCBS Quality Measure Set. We remind States that enhanced FFP is 
available at a 90 percent match rate for the design, development, or 
installation of improvements of mechanized claims

[[Page 27995]]

processing and information retrieval systems, in accordance with 
applicable Federal requirements.\98\ Enhanced FFP at a 75 percent match 
rate is also available for operations of such systems, in accordance 
with applicable Federal requirements.\99\ Receipt of these enhanced 
funds is conditioned upon States meeting a series of standards and 
conditions to ensure investments are efficient and effective.\100\ 
States are also encouraged to advance the interoperable exchange of 
HCBS data and support quality improvement activities by adopting 
standards in 45 CFR part 170 and other relevant standards identified in 
the ISA.\101\
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    \98\ See section 1903(a)(3)(A)(i) of the Act and Sec.  
433.15(b)(3), 80 FR 75817 through 75843; https://www.medicaid.gov/state-resourcecenter/faq-medicaid-and-chip-affordable-care-act-implementation/downloads/affordable-care-act-faq-enhancedfunding-for-medicaid.pdf; https://www.medicaid.gov/federal-policy-guidance/downloads/SMD16004.pdf.
    \99\ See section 1903(a)(3)(B) and Sec.  433.15(b)(4).
    \100\ See Sec.  433.112 (b, 80 FR 75841; https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-433/subpart-C.
    \101\ Relevant standards adopted by HHS and identified in the 
ISA include the USCDI (https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi), eLTSS (https://www.healthit.gov/isa/documenting-care-plans-person-centered-services), and Functional 
Assessment Standardized Items (https://www.healthit.gov/isa/representing-patient-functional-status-andor-disability).
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    We solicit comments on the proposed schedule for phasing in 
reporting of HCBS Quality Measure Set data. We also seek comment on 
whether we should phase-in reporting on all of the measures in the HCBS 
Quality Measure Set.
    At Sec.  441.312(g), we propose the list of interested parties with 
whom the Secretary must consult to specify and update the quality 
measures established in the HCBS Quality Measure Set. The proposed list 
of interested parties includes: State Medicaid Agencies and agencies 
that administer Medicaid-covered HCBS; health care and HCBS 
professionals who specialize in the care and treatment of older adults, 
children and adults with disabilities, and individuals with complex 
medical needs; health care and HCBS professionals, providers, and 
direct care workers who provide services to older adults, children and 
adults with disabilities and complex medical and behavioral health care 
needs who live in urban and rural areas or who are members of groups at 
increased risk for poor outcomes; HCBS providers; direct care workers 
and organizations representing direct care workers; consumers and 
national organizations representing consumers; organizations and 
individuals with expertise in HCBS quality measurement; voluntary 
consensus standards setting organizations and other organizations 
involved in the advancement of evidence-based measures of health care; 
measure development experts; and other interested parties the Secretary 
may determine appropriate.
    Because these quality measurement requirements are relevant to 
other HCBS authorities, we are proposing to incorporate these 
requirements within the applicable regulatory sections for other HCBS 
authorities. Specifically, we propose to apply the proposed 
requirements at Sec.  441.312 to section 1915(j), (k), and (i) State 
plan services by cross-referencing at Sec. Sec.  441.474(c), 
441.585(d), and 441.745(b)(1)(v), respectively. Consistent with our 
proposal for section 1915(c) waivers, we propose these requirements 
based on our authority under section 1902(a)(6) of the Act, which 
requires State Medicaid agencies to make such reports, in such form and 
containing such information, as the Secretary may from time to time 
require, and to comply with such provisions as the Secretary may from 
time to time find necessary to assure the correctness and verification 
of such reports. We believe the same arguments for proposing these 
requirements for section 1915(c) waivers are equally applicable for 
these other HCBS authorities. We request comment on the application of 
these provisions across sections 1915(i), (j), and (k) authorities.
9. Website Transparency (Sec. Sec.  441.313, 441.486, 441.595, and 
441.750)
    Section 1102(a) of the Act provides the Secretary of HHS with 
authority to make and publish rules and regulations that are necessary 
for the efficient administration of the Medicaid program. Under our 
authority at section 1102(a) of the Act, we are proposing to add a new 
section, at Sec.  441.313, titled Website transparency, to promote 
public transparency related to the administration of Medicaid-covered 
HCBS. As noted earlier in section II.B.8. of this preamble, we believe 
that quality is a critical component of efficiency, as payments for 
services that are low quality do not produce their desired effects and, 
as such, are more wasteful than payments for services that are high 
quality. However, feedback from interested parties during various 
public engagement activities over the past several years have indicated 
that it is difficult to find information on HCBS access, quality, and 
outcomes in many States. As a result, it is not possible for 
beneficiaries, consumer advocates, oversight entities, or other 
interested parties to hold States accountable for ensuring that 
services are accessible and high quality for people who need Medicaid 
HCBS. As a result, we believe that the proposal described immediately 
below supports the efficient administration of Medicaid-covered HCBS 
authorized under section 1915(c) of the Act by promoting public 
transparency and accountability of the quality and performance of 
Medicaid HCBS systems, as the availability of such information will 
improve the ability of interested parties to hold States accountable 
for the quality and performance of their HCBS systems.
    Specifically, at Sec.  441.313(a), we propose to require States to 
operate a website that meets the availability and accessibility 
requirements at Sec.  435.905(b) of this chapter and that provides the 
results of the reporting requirements under newly proposed Sec.  
441.311 (specifically, incident management, critical incident, person 
centered planning, and service provision compliance data; data on the 
HCBS Quality Measure Set; access data; and payment adequacy data). We 
request comment on whether the requirements at Sec.  435.905(b) are 
sufficient to ensure the availability and the accessibility of the 
information for people receiving HCBS and other HCBS interested parties 
and for specific requirements to ensure the availability and 
accessibility of the information.
    At Sec.  441.313(a)(1), we propose to require that the data and 
information that States are required to report under Sec.  441.311 be 
provided on one web page, either directly or by linking to the web 
pages of the managed care organization, prepaid ambulatory health plan, 
prepaid inpatient health plan, or primary care case management entity 
that is authorized to provide services. We request comment on whether 
States should be permitted to link to web pages of these managed care 
entities and whether we should limit the number of separate web pages 
that a State could link to, in place of directly reporting the 
information on its own web page.
    At Sec.  441.313(a)(2), we propose to require that the web page 
include clear and easy to understand labels on documents and links. We 
request comment on whether these requirements are sufficient to ensure 
the accessibility of the information for people receiving HCBS and 
other HCBS interested parties and for specific requirements to ensure 
the accessibility of the information.
    At Sec.  441.313(a)(3), we propose to require that States verify 
the accurate function of the website and the timeliness of the 
information and links

[[Page 27996]]

at least quarterly. We request comment on whether this timeframe is 
sufficient or if we should require a shorter timeframe (monthly) or a 
longer timeframe (semi-annually or annually).
    At Sec.  441.313(a)(4), we propose to require that States include 
prominent language on the website explaining that assistance in 
accessing the required information on the website is available at no 
cost and include information on the availability of oral interpretation 
in all languages and written translation available in each non-English 
language, how to request auxiliary aids and services, and a toll-free 
and TTY/TDY telephone number.
    We are also proposing at Sec.  441.313(b) that CMS must report on 
its CMS website the information reported by States to us under Sec.  
441.311. For example, we envision that we will update CMS's website to 
provide HCBS comparative information reported by States that can be 
compared to HCBS information shared by other States. We also envision 
using data from State reporting in future iterations of the CMS 
Medicaid and CHIP Scorecard.\102\
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    \102\ CMS's Medicaid and CHIP Scorecard. Accessed at https://www.medicaid.gov/state-overviews/scorecard/index.html.
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    We are proposing at Sec.  441.313(c), to provide States with 3 
years to implement these requirements in FFS delivery systems following 
effective date of the final rule. For States with managed care delivery 
systems under the authority of sections 1915(a), 1915(b), 1932(a), or 
section 1115(a) of the Act and that include HCBS in the MCO's, PIHP's, 
or PAHP's contract, we are proposing to provide States until the first 
managed care plan contract rating period that begins on or after 3 
years after the effective date of the final rule to implement these 
requirements. This time period is based primarily on the effective date 
for State reporting at Sec.  441.311. We also have considered all of 
the HCBS proposals outlined in the proposed rule as whole. We invite 
comments on whether this timeframe is sufficient, whether we should 
require a longer timeframe (4 years) to implement these provisions, and 
if a longer timeframe is recommended, the rationale for that longer 
timeframe.
    As discussed earlier in section II.B.1. of this preamble, section 
2402(a)(3)(A) of the Affordable Care Act requires States to improve 
coordination among, and the regulation of, all providers of Federally 
and State-funded HCBS programs to achieve a more consistent 
administration of policies and procedures across HCBS programs. In the 
context of Medicaid coverage of HCBS, it should not matter whether the 
services are covered directly on a FFS basis or by a managed care 
entity to its enrollees. The requirement for ``consistent 
administration'' should require consistency between these two modes of 
service delivery. We accordingly are proposing to specify that a State 
must ensure compliance with the requirements in Sec.  441.313, with 
respect to HCBS delivered both under FFS and managed care delivery 
systems.
    Similarly, because we are proposing to apply the reporting 
requirements at Sec.  441.311 to other HCBS State plan options, we are 
proposing to incorporate these website transparency requirements within 
the applicable regulatory sections. Specifically, we propose to apply 
the proposed requirements of Sec.  441.313 to section 1915(j), (k), and 
(i) State plan services by cross-referencing at Sec. Sec.  441.486, 
441.595, and 441.750, respectively. Consistent with our proposal for 
section 1915(c) waivers, we propose these requirements based on our 
authority under section 1102(a) of the Act to make and publish rules 
and regulations that are necessary for the efficient administration of 
the Medicaid program. We believe the same arguments for proposing these 
requirements for section 1915(c) waivers are equally applicable for 
these other HCBS authorities. We request comment on the application of 
these provisions across section 1915(i), (j), and (k) authorities.
10. Applicability of Proposed Requirements to Managed Care Delivery 
Systems
    As discussed earlier in sections II.B.1., II.B.4., II.B.5., 
II.B.7., and II.J. of this rule, we are proposing to apply the 
requirements at Sec. Sec.  441.301(c)(3), 441.302(a)(6), 441.302(k), 
441.311, and 441.313 to both FFS and managed care delivery systems. 
Although the proposed provisions at Sec. Sec.  441.301(c)(3), 
441.302(a)(6) and (k), 441.311, and 441.313 would apply to LTSS 
programs that use a managed care delivery system to deliver services 
authorized under section 1915(c) waivers and section 1915(i), (j), and 
(k) State plan authorities, we believe incorporating a reference in 42 
CFR part 438 would be helpful to States and managed care plans. 
Therefore, we propose to add a cross reference to the requirements in 
proposed Sec.  438.72 to be explicit that States that include HCBS in 
their MCO, PIHP, or PAHP contracts would have to comply with the 
requirements at Sec. Sec.  441.301(c)(1) through (3), 441.302(a)(6) and 
(k), 441.311, and 441.313. We believe this would make the obligations 
of States that implement LTSS programs through a managed care delivery 
system clear, consistent, and easy to locate. While we believe the list 
proposed in Sec.  438.72 would help States easily identify the 
provisions related to LTSS, we identify that a provision specified in 
any other section of 42 CFR part 438 or any other Federal regulation 
but omitted from Sec.  438.72, is still in full force and effect. We 
also note that Sec.  438.208(c)(3)(ii) currently includes a cross-
reference to Sec.  441.301(c)(1) and (2). We are not proposing any 
changes to the regulatory language at Sec.  441.301(c)(1) or (2) or to 
Sec.  438.208(c)(3)(ii) through this rule. We have included Sec.  
441.301(c)(1) and (2) in the proposed regulatory language at Sec.  
438.72 so that it is clear that the requirements at Sec.  441.301(c)(1) 
and (2) continue to apply when States include HCBS in their MCO, PIHP, 
or PAHP contracts.

C. Documentation of Access to Care and Service Payment Rates (Sec.  
447.203)

    Section 1902(a)(30)(A) of the Act requires that State plans 
``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.'' Through the proposed provisions in Sec.  
447.203, we seek to establish an updated process through which States 
would be required to document, and we would ensure, compliance with the 
requirements of section 1902(a)(30)(A) of the Act.
    In the 2015 final rule with comment period, we codified a process 
that requires States to complete and make public AMRPs that analyze and 
inform determinations of the sufficiency of access to care (which may 
vary by geographic location in the State) and are used to inform State 
policies affecting access to Medicaid services, including provider 
payment rates. The AMRP must specify data elements that support the 
State's analysis of whether beneficiaries have sufficient access to 
care, based on data, trends, and factors that measure beneficiary 
needs, availability of care through enrolled providers, and utilization 
of services. States are required to update their AMRPs at regular 
intervals and whenever the State proposes to reduce FFS provider 
payment rates or restructure them in circumstances when the changes 
could result in diminished access. Specifically, the current AMRP 
process at Sec.  447.203 requires States to consider the extent to 
which beneficiary needs are fully met; the availability of

[[Page 27997]]

care through enrolled providers to beneficiaries in each geographic 
area, by provider type and site of service; changes in beneficiary 
utilization of covered services in each geographic area; 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, by provider type and site of 
service. The analysis further requires consideration of beneficiary and 
provider input, and an analysis of the percentage comparison of 
Medicaid payment rates to other public and private health insurer 
payment rates within geographic areas of the State, for each of the 
services reviewed, by the provider types and sites of service. While 
the current regulations do include broad requirements for what an 
acceptable analysis methodology must include, States retain discretion 
in establishing their processes, including but not limited to the 
specification of data sources and analytical methodologies to be used. 
The result is a large analytical burden on States without a 
standardization that would allow us and other interested parties to 
compare data between States to understand whether the Federal access 
standards are successfully achieving robust access consistent with 
section 1902(a)(30)(A) of the Act for beneficiaries nationwide.
    Through AMRPs, we aimed to create a transparent and data-driven 
process through which to ensure State compliance with section 
1902(a)(30)(A) of the Act. Following publication of the 2011 proposed 
rule and as discussed in both the 2015 final rule with comment period 
and the 2016 final rule, as we worked with States to implement the AMRP 
requirements, many States expressed numerous concerns about the 
rule.103 104 105 States were concerned about the 
administrative burden of completing the AMRPs and questioned whether 
the AMRP process is the most effective way to establish that access to 
care in a State's Medicaid program meets statutory requirements. States 
with high managed care enrollment penetration were also concerned about 
the AMRP process because the remaining FFS populations in their State 
often reside in long-term care facilities or require only specialized 
care that is carved out from managed care, but long-term care and 
specialized care services were not required to be analyzed under the 
AMRP process. We have also heard concerns from other interested 
parties, including medical associations and non-profit organizations, 
that the 2015 final rule with comment period afforded States too much 
discretion in developing access measures which could lead to 
ineffective monitoring and enforcement as well as challenges comparing 
access across States. One commenter was concerned that States had too 
much discretion in ``. . . setting standards and access measures . . 
.'' and ``. . .whether they have met their chosen standards'' as this 
process relies on self-regulation rather than ``an independent, 
objective third party as the primary arbiter of a State's compliance . 
. .'' \106\ Another commenter stated that ``CMS should designate a 
limited and standardized set of data measures that would be collected 
rather than leaving the decision of which data measures to use to State 
discretion'' as this would ``enable the development of key, valid, and 
uniform measures; more effective monitoring and enforcement; and will 
ensure comparability of objective measures across the States.'' \107\ 
At the time of publication of the 2011 proposed rule and 2015 final 
rule with comment period, we believed that a uniform approach to 
meeting the statutory requirement under section 1902(a)(30)(A) of the 
Act, including setting standardized access to care data measures, could 
prove difficult given then-current limitations on data, local 
variations in service delivery, beneficiary needs, and provider 
practice roles.108 109
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    \103\ 76 FR 26341.
    \104\ 80 FR 67576 at 67583-67584.
    \105\ 81 FR 21479 at 21479.
    \106\ American Medical Association, Comment Letter on 2015 Final 
Rule with Comment Period (January 4, 2016), https://www.regulations.gov/comment/CMS-2011-0062-0328.
    \107\ American Association of Retired Persons, Comment Letter on 
2011 Propose Rule (July 5, 2011), https://www.regulations.gov/comment/CMS-2011-0062-0121.
    \108\ 76 FR 26341 at 26349.
    \109\ 80 FR 67576 at 67577, 67579, 67590.
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    Separately, the Supreme Court, in Armstrong v. Exceptional Child 
Center, Inc., 135 S. Ct. 1378 (2015), ruled that Medicaid providers and 
beneficiaries do not have a private right of action to challenge 
Medicaid payment rates in Federal courts. This decision means provider 
and beneficiary legal challenges are unavailable in Federal court to 
supplement our oversight as a means of ensuring compliance with section 
1902(a)(30)(A) of the Act. The Armstrong decision also underscored HHS' 
and CMS' unique responsibility for resolving issues concerning the 
interpretation and implementation of section 1902(a)(30)(A) of the Act. 
By concluding that the responsible Federal administrative agency is 
better suited than Federal courts to make determinations regarding the 
sufficiency of Medicaid payment rates, the Supreme Court's Armstrong 
decision placed added importance on CMS' administrative review of SPAs 
proposing to reduce or restructure FFS payment rates. Accordingly, the 
2015 final rule with comment period was an effort to establish a more 
robust oversight and enforcement strategy with respect to section 
1902(a)(30)(A) of the Act.
    In consideration of State agencies' and other interested parties' 
feedback on the AMRP process, as well as CMS' obligation to ensure 
continued compliance with section 1902(a)(30)(A) of the Act, we propose 
to update the requirements in Sec.  447.203. We propose to rescind and 
replace the AMRP requirements currently in Sec.  447.203(b)(1) through 
(8) with a streamlined and standardized process, described in proposed 
Sec.  447.203(b) and (c). This proposed change is informed by a center-
wide review of our policy and processes regarding access to care for 
all facets of the Medicaid program. The 2015 final rule with comment 
period acknowledged our need to better understand FFS rate actions and 
their potential impact on State programs, and the requirements we 
finalized require a considerable amount of data from States. To ensure 
States were meeting the statutory requirement under section 
1902(a)(30)(A) of the Act, the AMRP process was originally intended to 
establish a transparent data-driven process for States to measure the 
current status of access to services within the State and utilize this 
process for monitoring access when proposing rate reductions and 
restructurings.\110\ As the rule took effect and as we reviewed State's 
AMRPs, we found that some rate reductions and restructurings had much 
smaller impacts than others. The 2017 SMDL reflected the experience 
that certain payment rate changes would not likely result in diminished 
access to care and do not require the substantial review of access data 
that generally is required under the 2015 final rule with comment 
period. Since publication of the 2019 CMCS Informational Bulletin 
stating the agency's intention to establish a new access strategy, we 
have developed this proposal for a new process that considers the 
lessons learned under the AMRP process, and emphasizes transparency and 
data

[[Page 27998]]

analysis, with specific proposed requirements varying depending on the 
State's current payment levels relative to Medicare, the magnitude of 
the proposed rate reduction or restructuring, and any access to care 
concerns raised to State Medicaid agency by interested parties. With 
these proposed provisions, we aim to balance Federal and State 
administrative burden with our shared obligation to ensure compliance 
with section 1902(a)(30)(A) of the Act (and our obligation to oversee 
State compliance with the same).
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    \110\ 80 FR 67576 at 67577.
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1. Fully Fee-For-Service States
    We are seeking comment on whether additional access standards for 
States with a fully FFS delivery system may be appropriate. Because the 
timeliness standards of the proposed Medicaid and Children's Health 
Insurance Program Managed Care Access, Finance, and Quality proposed 
rule (Managed Care proposed rule) at Sec.  438.68 would not apply to 
any care delivery in such States, we are considering whether a narrow 
application of timeliness standards to fully FFS States that closely 
mirrors the proposed appointment wait time standards, secret shopper 
survey requirements, and publication requirements (as applied to 
outpatient mental health and substance use disorder, adult and 
pediatric; primary care, adult and pediatric; obstetrics and 
gynecology; and an additional type of service determined by the State) 
in that rule might be appropriate. Given that timeliness standards 
would apply directly to States, we also seek comment on a potentially 
appropriate method for CMS to collect data demonstrating that States 
meet the established standards at least 90 percent of the time.
2. Payment Rate Transparency (Sec.  447.203(b))
    We propose to rescind Sec.  447.203(b) in its entirety and replace 
it with new requirements to ensure FFS Medicaid payment rate adequacy, 
including a new process to promote payment rate transparency. This new 
proposed process would require States to publish their FFS Medicaid 
payment rates in a clearly accessible, public location on the State's 
website, as described later in this section. Then, for certain 
services, States would be required to conduct a comparative payment 
rate analysis between the States' Medicaid payment rates and Medicare 
rates, or provide a payment rate disclosure for certain HCBS that would 
permit CMS to develop and publish HCBS payment benchmark data.
    In paragraph (b)(1), we propose to require the State agency to 
publish all Medicaid FFS payment rates on a website developed and 
maintained by the single State agency that is accessible to the general 
public. We propose that published Medicaid FFS payment rates would 
include fee schedule payment rates made to providers delivering 
Medicaid services to Medicaid beneficiaries through a FFS delivery 
system. We also propose to require that the website be easily reached 
from a hyperlink easily reached from a hyperlink on the State Medicaid 
agency's website.
    Within this payment rate publication, we propose that FFS Medicaid 
payment rates must be organized in such a way that a member of the 
public can readily determine the amount that Medicaid would pay for the 
service and, in the case of a bundled or similar payment methodology, 
identify each constituent service included within the rate and how much 
of the bundled payment is allocated to each constituent service under 
the State's methodology. We also propose that, if the rates vary, the 
State must separately identify the Medicaid FFS payment rates by 
population (pediatric and adult), provider type, and geographical 
location, as applicable.
    Longstanding legal requirements to provide effective communication 
with individuals with disabilities and the obligation to take 
reasonable steps to provide meaningful access to individuals with 
limited English proficiency also apply to the State's website 
containing Medicaid FFS payment rate information. Under Title II of the 
Americans with Disabilities Act of 1990, section 504 of the 
Rehabilitation Act, section 1557 of the Affordable Care Act, and 
implementing regulations, qualified individuals with disabilities may 
not be excluded from participation in, or denied the benefits of any 
programs or activities of the covered entity, or otherwise be subjected 
to discrimination by any covered entity, on the basis of disability, 
and programs must be accessible to people with disabilities.\111\ 
Individuals with disabilities are entitled to communication that is as 
effective as communication for people without disabilities, including 
through the provision of auxiliary aids and services.\112\ Section 1557 
of the Affordable Care Act requires recipients of Federal financial 
assistance, including State Medicaid programs, to take reasonable steps 
to provide meaningful access to their programs or activities for 
individuals with limited English proficiency, and requires the 
provision of interpreting services and translations when it is a 
reasonable step to provide meaningful access.\113\
---------------------------------------------------------------------------

    \111\ 29 U.S.C. 794; 42 U.S.C. 18116(a); 42 U.S.C. 12132; 28 
CFR. 35.130(a); 45 CFR 84.4(a); 45 CFR 92.2(b).
    \112\ 28 CFR 35.160; 45 CFR 92.102; see also 45 CFR 84.52(d).
    \113\ 45 CFR 92.101; see also https://www.hhs.gov/civil-rights/for-providers/laws-regulations-guidance/guidance-federal-financial-assistance-title-vi/index.html.
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    We propose that for States that pay varying Medicaid FFS payment 
rates by population (pediatric and adult), provider type, and 
geographical location, as applicable, those States would need to 
separately identify their Medicaid FFS payment rates in the payment 
rate transparency publication by each grouping or multiple groupings, 
when applicable to a State's program. In the event rates vary according 
to these factors, as later discussed in this proposed rule, our intent 
is that a member of the public be readily able to determine the payment 
amount that would be made, accounting for all relevant circumstances. 
For example, a State that varies their Medicaid FFS payment rates by 
population may pay for a service identified by code 99202 when provided 
to a child at a rate of $110.00 and when provided to an adult at a rate 
of $80.00. Because the Medicaid FFS payment rates vary based on 
population, both of these Medicaid FFS payment rates would need to be 
included separately as Medicaid FFS payment rates for 99202 in the 
State's payment rate transparency publication. As another example, a 
State that varies their Medicaid FFS payment rates by provider type may 
pay for 99202 when delivered by a physician at a rate of $50.00, and 
when delivered by a nurse practitioner or physician assistant at a rate 
of $45.00.
    We are aware that some State plans include language that non-
physician practitioners (NPPs), such as a nurse practitioner or 
physician assistant, are paid a percentage of the State's fee schedule 
rate. Because the Medicaid FFS payment rates vary by provider type, 
both of the Medicaid FFS payment rates in both situations (fee schedule 
rates of $50.00 and $45.00) would need to be separately identified as 
Medicaid FFS payment rates for 99202 in the State's payment rate 
transparency publication, regardless of whether the State has 
individually specified each amount certain in its approved payment 
schedule or has State plan language specifying the nurse practitioner 
or physician assistant rate as a percentage of the physician rate. 
Additionally, for

[[Page 27999]]

example, a State that varies their Medicaid FFS payment rates by 
geographical location may pay for 99202 delivered in a rural area at a 
rate of $70, in an urban or non-rural area as a rate of $60, and in a 
major metropolitan area as a rate of $50. We are also aware that States 
may vary their Medicaid FFS payment rates by geographical location by 
zip code, by metropolitan or micropolitan areas, or other geographical 
location breakdowns determined by the State. Because the Medicaid FFS 
payment rates vary based on geographical location, all Medicaid FFS 
payment rates based on geographical location would need to be included 
separately as Medicaid FFS payment rates for 99202 in the State's 
payment rate transparency publication.
    For a State that varies its Medicaid FFS payment rates by any 
combination of these groupings, then the payment rate transparency 
publication would be required to reflect these multiple groupings. For 
example, the State would be required to separately identify the rate 
for a physician billing 99202 provided to a child in a rural area, the 
rate for a nurse practitioner billing 99202 provided to a child in a 
rural area, the rate for a physician billing 99202 provided to an adult 
in a rural area, the rate for a nurse practitioner billing 99202 
provided to an adult in a rural area, the rate for a physician billing 
99202 provided to a child in an urban area, the rate for a nurse 
practitioner billing 99202 provided to a child in an urban area, and so 
on. This information would be required to be presented clearly so that 
a member of the public can readily determine the payment rate for a 
service that would be paid for each grouping or combination of 
groupings (population (pediatric and adult), provider type, and 
geographical location), as applicable. We acknowledge that States may 
also pay a single Statewide rate regardless of population (pediatric 
and adult), provider type, and geographical location, and as such would 
only need to list the single Statewide rate in their payment rate 
transparency publication.
    We acknowledge that there may be additional burden associated with 
our proposal that the payment rate transparency publication include a 
payment rate breakdown by population (pediatric and adult), provider 
type, and geographical location, as applicable, when States' Medicaid 
FFS payment rates vary based on these groupings. Despite the additional 
burden, we believe that the additional level of granularity in the 
payment rate transparency publication is important for ensuring 
compliance with section 1902(a)(30)(A) of the Act, given State Medicaid 
programs rely on multiple provider types to deliver similar services to 
Medicaid beneficiaries of all ages, across multiple Medicaid benefit 
categories, throughout each area of each State.
    We further propose that Medicaid FFS payment rates published under 
the proposed payment rate transparency requirement would only include 
fee schedule payment rates made to providers delivering Medicaid 
services to Medicaid beneficiaries through a FFS delivery system. To 
ensure maximum transparency in the case of a bundled fee schedule 
payment rate or rate determined by a similar payment methodology where 
a single payment rate is used to pay for multiple services, we propose 
that the State must identify each constituent service included in the 
bundled fee schedule payment rate or rate determined by a similar 
payment methodology. We also propose that the State must identify how 
much of the bundled fee schedule payment rate or rate determined by a 
similar payment methodology is allocated to each constituent service 
under the State's payment methodology. For example, if a State's fee 
schedule lists a bundled fee schedule rate that pays for day treatment 
under the rehabilitation benefit and the following services are 
included in the day treatment bundle: community based psychiatric 
rehabilitation and support services, individual therapy, and group 
therapy, then the State would need to identify services community based 
psychiatric rehabilitation and support services, individual therapy, 
and group therapy separately and each portion of the bundled fee 
schedule payment rate for day treatment that is allocated to community 
based psychiatric rehabilitation and support services, individual 
therapy, and group therapy. Proposing to require States identify the 
portion of the bundled fee is allocable to each constituent service 
included in the bundled fee schedule payment rate would add an 
additional level of granularity to the payment rate transparency 
publication that continues to enable a member of the public to readily 
be able to determine the payment amount that would be made for a 
service, accounting for all relevant circumstances, including the 
payment rates for each constituent service within a bundle and as a 
standalone service. We also propose to require that the website be 
easily reached from a hyperlink to ensure transparency of payment rate 
information is available to beneficiaries, providers, CMS, and other 
interested parties.
    We propose the initial publication of Medicaid FFS payment rates 
would occur no later than January 1, 2026, and include approved 
Medicaid FFS payment rates in effect as of that date, January 1, 2026. 
We propose this timeframe to provide States with at least 2 years from 
the possible effective date of the final rule, if this proposal is 
finalized, to comply with the payment rate transparency requirement. 
The proposed timeframe would initially set a consistent baseline for 
all States to first publish their payment rate transparency information 
and then set a clear schedule for States to update their payment rates 
based on the cadence of the individual States' payment rate changes.
    The same initial publication due date for all States to publish 
their payment rates as of January 1, 2026, would promote comparability 
between States' payment rate transparency publications. Once States 
would begin making updates to their payment rate transparency 
publication, there would be a clear distinction between State payment 
rates that have recently updated their payment rates and State payment 
rates that have long maintained the same payment rates. For example, 
two States initially publish their payment rates for 99202 at $50; 
however, one State annually increases their payment rate by 5 percent 
over the next 2 years and would update their payment rate transparency 
publication in 2027 with a payment rate of $52.50, then in 2028 with a 
payment rate of $55.13, while the other States' payment rate for the 
same service remains at $50 in 2027 and 2028. The transparency of a 
State's recent payment rates including the date the payment rates were 
last updated on the State Medicaid agency's website, as discussed 
later, as well as the ability to compare payment rates between States 
on accessible and easily reachable State-maintained websites, 
highlights how the proposed payment rate transparency would help to 
ensure that Medicaid payment rate information is available to 
beneficiaries, providers, CMS, and other interested parties for the 
purposes of assessing access to care issues to better ensure compliance 
with section 1902(a)(30)(A) of the Act.
    We also propose that the initial publication include approved 
Medicaid FFS payment rates in effect as of January 1, 2026. We propose 
this language to narrow the scope of the publication to CMS-approved 
payment rates and methodologies, thereby excluding any rate changes for 
which a SPA or similar amendment request is

[[Page 28000]]

pending CMS review or approval. SPAs are submitted throughout the year, 
can include retroactive effective dates, and are subject to a CMS 
review period that varies in duration.114 115
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    \114\ In accordance with 42 CFR 430.20, an approved SPA can be 
effective no earlier than the first day of the calendar quarter in 
which an approvable amendment is submitted. For example, a SPA 
submitted on September 30th can be retroactively effective to July 
1st.
    \115\ In accordance with 42 CFR 430.16, a SPA will be considered 
approved unless CMS, within 90 days after submission, requests 
additional information or disapproves the SPA. When additional 
information is requested by CMS and the State has respond to the 
request, CMS will then have another 90 days to either approve, 
disapprove, and request the State withdraw the SPA or the State's 
response to the request for additional information. This review 
period includes two 90-day review periods plus additional time when 
CMS has requested additional information which can result is a wide 
variety of approval timeframes.
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    As discussed later in this proposed rule regarding paragraph (b)(2) 
and(b)(3), States are encouraged to use the proposed payment rate 
transparency publication as a source of Medicaid payment rate data for 
compliance with the paragraph (b)(3)(i)(B) proposed comparative payment 
rate analysis and paragraph (b)(3)(ii)(B) proposed payment rate 
disclosure requirements. However, we note that the comparative payment 
rate analysis and payment rate disclosure requirements impose a one-
year lag on the date when rates are effective. We include a more in-
depth discussion of the timeframes for publication of the comparative 
payment rate analysis and payment rate disclosure in paragraph (b)(4) 
later in this proposed rule, where we note that the 1-year shift in 
timeframe is necessitated by the timing of when Medicare publishes 
their payment rates in November and the rates taking effect on January 
1, leaving insufficient time for CMS to publish the code list for 
States to use for the comparative payment rate analysis and for States 
develop and publish their comparative payment rate analysis and payment 
rate disclosure by January 1. We note that the ongoing payment 
transparency publication requirements will allow the public to view 
readily available, current Medicaid payment rates at all times, even if 
slightly older Medicaid payment rate information must be used for 
comparative payment rate analyses due to the cadence of Medicare 
payment rate changes as well as the payment rate disclosure. We are 
cognizant that the payment rate disclosure does not depend on the 
availability of Medicare payment rates, however, we are proposing to 
provide States with the same amount of time to comply with both of the 
proposed comparative payment rate analysis and payment rate disclosure 
requirements.
    If this proposal is finalized at a time that does not allow for 
States to have a period of at least 2 years between the effective date 
of the final rule and the proposed January 1, 2026, due date for the 
initial publication of Medicaid FFS payment rates, then we would 
propose an alternative date of July 1, 2026, for the initial 
publication of Medicaid FFS payment rates and for the initial 
publication to include approved Medicaid FFS payment rates as of that 
date, July 1, 2026. This shift would allow more time for States to 
comply with the payment rate transparency requirements. We acknowledge 
that the date of the initial payment rate transparency publication is 
subject to change based on the final rule publication schedule and 
effective date, if this rule is finalized. If further adjustment is 
necessary beyond the July 1, 2026, timeframe to allow adequate time for 
States to comply with the payment rate transparency requirements, then 
we would adjust date of the initial payment rate transparency 
publication in 6-month intervals, as appropriate, to allow for 
approximately 2 years between the effective date of the final rule and 
the initial required payment rate transparency publication.
    We propose to require the that the single State agency include the 
date the payment rates were last updated on the State Medicaid agency's 
website. We also propose to require that the single State agency ensure 
that Medicaid FFS payment rates are kept current where any necessary 
updates to the State fee schedules made no later than 1 month following 
the date of CMS approval of the SPA, section 1915(c) HCBS waiver, or 
similar amendment revising the provider payment rate or methodology. 
Finally, in paragraph (b)(1), we propose that, in the event of a 
payment rate change that occurs in accordance with a previously 
approved rate methodology, the State would be required to update its 
payment rate transparency publication no later than 1 month after the 
effective date of the most recent update to the payment rate. This 
provision is intended to capture Medicaid FFS payment rate changes that 
occur because of previously approved SPAs containing payment rate 
methodologies. For example, if a State sets their Medicaid payment 
rates for Durable Medical Equipment, Prosthetics, Orthotics and 
Supplies (DMEPOS) at a percentage of the most recent Medicare fee 
schedule rate, then the State's payment rate would change when Medicare 
adopts a new fee schedule rate through the quarterly publications of 
the Medicare DMEPOS fee schedule, unless otherwise specified in the 
approved State plan methodology that the State implements a specific 
quarterly publication, for example, the most recent April Medicare 
DMEPOS fee schedule. Therefore, the State's Medicaid FFS payment rate 
automatically updates when Medicare publishes a new fee schedule, 
without the submission of a SPA because the State's methodology pays a 
percentage of the most recent State plan specified Medicare fee 
schedule rate. In this example, the State would need to update its 
Medicaid FFS payment rates in the payment rate transparency publication 
no later than 1 month after the effective date of the most recent 
update to the Medicare fee schedule payment rate made applicable under 
the approved State plan payment methodology.
    While there is no current Federal requirement for States to 
consistently publish their rates in a publicly accessible manner, we 
are aware that most States already publish at least some of their 
payments through FFS rate schedules on State agency websites. 
Currently, rate information may not be easily obtained from each 
State's website in its current publication form, making it difficult to 
understand the amounts that States pay providers for items and services 
furnished to Medicaid beneficiaries and to compare Medicaid payment 
rates to other health care payer rates or across States. However, 
through this proposal we seek to ensure all States do so in a format 
that is publicly accessible and where all Medicaid FFS payment rates 
can be easily located and understood. The new transparency requirements 
under this proposed rule would help to ensure that interested parties 
have access to updated payment rate schedules and could conduct 
analyses that would provide insights into how State Medicaid payment 
rates compare to, for example, Medicare payment rates and other State 
Medicaid payment rates. The proposal intends to help ensure that 
payments are transparent and clearly understandable to beneficiaries, 
providers, CMS, and other interested parties. We are seeking public 
comment on the proposed requirement for States to publish their 
Medicaid FFS payment rates for all services, the proposed structure for 
Medicaid FFS payment rate transparency publication on the State's 
website, and the timing of the publication of and updates to the 
State's Medicaid FFS payment rates for the

[[Page 28001]]

proposed payment rate transparency requirements in Sec.  447.203(b)(1).
    In paragraph (b)(2), we propose to require States to develop and 
publish a comparative payment rate analysis of Medicaid payment rates 
for certain specified services, and a payment rate disclosure for 
certain HCBS. In paragraph (b)(2) we specify the categories of services 
that States would be required to include in a comparative payment rate 
analysis and payment rate disclosure of Medicaid payment rates. 
Specifically, we are proposing that for each of the categories of 
services in paragraphs (b)(2)(i) through (iii), each State agency would 
be required to develop and publish a comparative payment rate analysis 
of Medicaid payment rates as specified in proposed Sec.  447.203(b)(3). 
We also propose that for each of the categories of services in 
paragraph (b)(2)(iv), each State agency would be required to develop 
and publish a payment rate disclosure of Medicaid payment rates as 
specified in proposed Sec.  447.203(b)(3). We propose for both the 
comparative payment rate analysis and payment rate disclosure that, if 
the rates vary, the State must separately identify the payment rates by 
population (pediatric and adult), provider type, and geographical 
location, as applicable. The categories of services listed in paragraph 
(b)(2) include: primary care services; obstetrical and gynecological 
services; outpatient behavioral health services; and personal care, 
home health aide, and homemaker services, as specified in Sec.  
440.180(b)(2) through (4), provided by individual providers and 
providers employed by an agency.
    In paragraph (b)(2), we propose to require States separately 
identify the payment rates in the comparative payment rate analysis and 
payment rate disclosure, if the rates vary, by population (pediatric 
and adult), provider type, and geographical location, as applicable. 
These proposed breakdowns of the Medicaid payment rates, similar to how 
we propose payment rates would be broken down in the payment rate 
transparency disclosures under proposed Sec.  447.203(b)(1), would 
apply to all proposed categories of services listed in paragraph 
(b)(2): primary care services, obstetrical and gynecological services, 
outpatient behavioral health services, and personal care, home health 
aide, and homemaker services provided by individual providers and 
providers employed by an agency.
    We acknowledge that not all States pay varied payment rates by 
population (pediatric and adult), provider type, and geographical 
location, which is why we have included language ``if the rates vary'' 
and ``as applicable'' in the proposed regulatory text. This language is 
included in the proposed regulatory text to ensure the comparative 
payment rate analysis and payment rate disclosure captures all Medicaid 
payment rates, including when States pay varied payment rates by 
population (pediatric and adult), provider type, and geographical 
location. We also included proposed regulatory text for the payment 
rate disclosure that ensures the average hourly payment rates for 
personal care, home health aide, and homemaker services provided by 
individual providers and providers employed by an agency are separately 
identified for payments made to individual providers and to providers 
employed by an agency, if the rates vary, as later discussed in 
connection with proposed Sec.  447.203(b)(3)(ii). For States that do 
not pay varied payment rates by population (pediatric and adult), 
provider type, and geographical location and pay a single Statewide 
payment rate for a single service, then the comparative payment rate 
analysis and payment rate disclosure would only need to include the 
State's single Statewide payment rate.
    We propose to include a breakdown of Medicaid payment rates by 
population (pediatric and adult), provider type, and geographical 
location, as applicable, on the Medicaid side of the comparative 
payment rate analysis in paragraph (b)(2) to align with the proposed 
payment rate transparency provision, to account for State Medicaid 
programs that pay variable Medicaid payment rates by population 
(pediatric and adult), provider type, and geographical location, and to 
help ensure the State's comparative payment rate analyses accurately 
align with Medicare. Following the initial year that the provisions 
proposed in this rule would be in effect, these proposed provisions 
would align with and build on the payment rate transparency 
requirements described in Sec.  447.203(b)(1), because States could 
source the codes and their corresponding Medicaid payment rates that 
the State already would publish to meet the payment rate transparency 
requirements.
    These proposed provisions are also intended to help ensure that the 
State's comparative payment rate analysis contains the highest level of 
granularity in each proposed aspect by considering and accounting for 
any variation in Medicaid payment rates by population (pediatric and 
adult), provider type, and geographical location, as currently required 
in the AMRP process under current Sec.  447.203(b)(1)(iv) and (v), and 
(b)(3). Additionally, Medicare varies payment rates for certain NPPs 
(nurse practitioners, physician assistants, and clinical nurse 
specialists) by paying them 85 percent of the full Medicare physician 
fee schedule amount and varies their payment rates by geographical 
location through calculated adjustments to the pricing amounts to 
reflect the variation in practice costs from one geographical location 
to another; therefore, the comparative payment rate analysis accounting 
for these payment rate variations is crucial to ensuring the Medicaid 
FFS payment rates accurately align with FFS Medicare Physician Fee 
Schedule (PFS) rates.\116\ As discussed later in this proposed rule, 
Medicare payment variations for provider type and geographical location 
would be directly compared with State Medicaid payment rates that also 
apply the same payment variations, in addition to payment variation by 
population (pediatric and adult) which is unique to Medicaid, yet an 
important payment variation to take into consideration when striving 
for transparency of Medicaid payment rates. For States that do not pay 
varied payment rates by population (pediatric and adult), provider 
type, or geographical location and pay a single Statewide payment rate 
for a single service, Medicare payment variations for provider type and 
geographical location would be considered by calculating a Statewide 
average of Medicare PFS rates which is later discussed in this proposed 
rule.
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    \116\ https://www.medpac.gov/wp-content/uploads/2021/11/MedPAC_Payment_Basics_22_Physician_FINAL_SEC.pdf.
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    Similar to the payment rate transparency publication, we 
acknowledge that there may be additional burden associated with our 
proposal that the payment rate transparency publication and the 
comparative payment rate analysis include a payment rate breakdown by 
population (pediatric and adult), provider type, and geographical 
location, as applicable, when States' payment rates vary based on these 
groupings. However, we believe that any approach to requiring a 
comparative payment rate analysis would involve some level of burden 
that is greater for States that choose to employ these payment rate 
differentials, since any comparison methodology would need to take 
account--through a separate comparison, weighted average, or other 
mathematically reasonable approach--of all rates paid under the 
Medicaid program for a given service. In all

[[Page 28002]]

events, we believe this proposal would create an additional level 
granularity in the analysis that is important for ensuring compliance 
with section 1902(a)(30)(A) of the Act. Multiple types of providers, 
for example, physicians, physician assistants, and nurse practitioners, 
are delivering similar services to Medicaid beneficiaries of all ages, 
across multiple Medicaid benefit categories, throughout each State. 
Section 1902(a)(30)(A) states ``. . . 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,'' and we believe that having 
sufficient access to a variety of provider types is important to 
ensuring access for Medicaid beneficiaries meets this statutory 
standard. For example, a targeted payment rate reduction to nurse 
practitioners, who are often paid less than 100 percent of the State's 
physician fee schedule rate, could have a negative impact on access to 
care for services provided by nurse practitioners, but this reduction 
would not directly impact physicians or their willingness to 
participate in Medicaid and furnish services to beneficiaries. By 
proposing that the comparative payment rate analysis include a 
breakdown by provider type, where States distinguish payment rates for 
a service by provider type, the analysis would capture this payment 
rate variation among providers of the same services and provide us with 
a granular level of information to aid in determining if access to care 
is sufficient, particularly in cases where beneficiaries depend to a 
large extent on the particular provider type(s) that would be affected 
by the proposed rate change for the covered service(s).
    We identified payment rate variation by population (pediatric and 
adult), provider type, and geographical location as the most commonly 
applied adjustments to payment rates that overlap between FFS Medicaid 
and Medicare and could be readily broken down into separately 
identified payment rates for comparison in the comparative payment rate 
analysis. For transparency purposes and to help to ensure the 
comparative payment rate analysis is conducted at a granular level of 
analysis, we believe it is important for the State to separately 
identify their rates, if the rates vary, by population (pediatric and 
adult), provider type, and geographical location, as applicable. We are 
seeking public comments on the proposal to require the comparative 
payment rate analysis includes, if the rates vary, separate 
identification of payment rates by population (pediatric and adult), 
provider type, and geographical location, as applicable, in the 
comparative payment rate analysis in proposed Sec.  447.203(b)(2).
    We acknowledge that States may apply additional payment adjustments 
or factors, for example, the Consumer Price Index, Medicare Economic 
Index, or State-determined inflationary factors or budget neutrality 
factors, to their Medicaid payment rates other than population 
(pediatric and adult), provider type, and geographical location 
identified in this proposed rule. We would expect any other additional 
payment adjustments and factors to already be included in the State's 
published Medicaid fee schedule rate or calculable from the State plan 
because Sec.  430.10 requires the State plan to be a ``comprehensive 
written statement . . . contain[ing] all information necessary for CMS 
to determine whether the plan can be approved to serve as a basis for . 
. . FFP . . .'' Therefore, for States paying for services with a fee 
schedule payment rate, the Medicaid fee schedule is the sole source of 
information for providers to locate their final payment rate for 
Medicaid services provide to Medicaid beneficiaries under a FFS 
delivery system. For States with a rate-setting methodology where the 
approved State plan describes how rates are set based upon a fee 
schedule (for example, payment for NPPs are set a percentage of a 
certain published Medicaid fee schedule), the Medicaid fee schedule 
would again be the source of information for providers to identify the 
relevant starting payment rate and apply the rate-setting methodology 
described in the State plan to ascertain their Medicaid payment.\117\ 
We are also seeking public comment on any additional types of payment 
adjustments or factors States make to their Medicaid payment rates as 
listed on their State fee schedules that should be identified in the 
comparative payment rate analysis that we have not already discussed in 
Sec.  447.203(b)(i)(B) of this proposed rule, and how the inclusion of 
any such additional adjustments or factors should be considered in the 
development of the Medicare PFS rate to compare Medicaid payment rates 
to, as later described in Sec.  447.203(b)(3)(i)(C), of this proposed 
rule.
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    \117\ https://www.medicaid.gov/state-resource-center/downloads/spa-and-1915-waiver-processing/fed-req-pymt-methodologies.docx.
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    In paragraphs (b)(2)(i) through (iv), we propose that primary care 
services, obstetrical and gynecological services, and outpatient 
behavioral health services would be subject to a comparative payment 
rate analysis of Medicaid payment rates and personal care, home health 
aide, and homemaker services provided by individual providers and 
providers employed by an agency would be subject to a payment rate 
disclosure of Medicaid payment rates. We begin with a discussion about 
the importance of primary care services, obstetrical and gynecological 
services, and outpatient behavioral health services as proposed in 
Sec.  447.203(b)(2)(i) through (iii), and the reason for their 
inclusion in this proposed requirement. Then, we will discuss the 
importance and justification for including personal care, home health 
aide, and homemaker services provided by individual providers and 
providers employed by an agency as proposed in Sec.  447.203(b)(2)(iv).
    In Sec.  447.203(b)(2)(i) through (iii), we propose to require 
primary care services, obstetrical and gynecological services, and 
outpatient behavioral health services be included in the comparative 
payment rate analysis, because we believe that these categories of 
services are critical preventive, routine, and acute medical services 
in and of themselves, and that they often serve as gateways to access 
to other needed medical services, including specialist services, 
laboratory and x-ray services, prescription drugs, and other mandatory 
and optional Medicaid benefits that States cover. Including these 
categories of services in the comparative payment rate analysis would 
require States to closely examine their Medicaid FFS payment rates to 
comply with section 1902(a)(30)(A) of the Act. As described in the 
recent key findings from public comments on the February 2022 RFI that 
we published, payment rates are a key driver of provider participation 
in the Medicaid program.\118\ By proposing that States compare their 
Medicaid payment rates for primary care services, obstetrical and 
gynecological services, and outpatient behavioral health services to 
Medicare payment rates, States would be required to analyze if and how 
their 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

[[Page 28003]]

services are available to the general population in the geographic 
area.
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    \118\ Summary of Public Comments in response to the CMS 2022 
Request for Information: Access to Coverage and Care in Medicaid & 
CHIP. December 2022. For the report, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-report.pdf.
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    As discussed later in this section, we believe that Medicare 
payment rates for these services are likely to serve as a reliable 
benchmark for a level of payment sufficient to enlist providers to 
furnish the relevant services to a beneficiary because Medicare 
delivers services through a FFS delivery system across all geographical 
regions of the US and historically, the vast majority of physicians 
accept new Medicare patients, with extremely low rates of physicians 
opting out of the Medicare program, suggesting that Medicare's payment 
rates are generally consistent with a high level of physician 
willingness to accept new Medicare patients.\119\ Additionally, 
Medicare payment rates are publicly published in an accessible and 
consistent format by CMS making Medicare payment rates an available and 
reliable comparison point for States, rather than private payer data 
which typically is considered proprietary information and not generally 
available to the public. Therefore, the proposed requirement that 
States develop and publish a comparative payment rate analysis would 
enable States, CMS, and other interested parties to closely examine the 
relationship between State Medicaid FFS payment rates and those paid by 
Medicare. This analysis would continually help States to ensure that 
their Medicaid payment rates are set at a level that is likely 
sufficient to meet the statutory access standard under 1902(a)(30)(A) 
of the Act that payments by enlisting 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. We believe that the comparative payment rate analysis 
would provide States, CMS, and other interested parties with clear and 
concise information for identifying when there is a potential access to 
care issue, such as Medicaid payment rates not keeping pace with 
changes in corresponding Medicare rates and decreases in claims volume 
and beneficiary utilization of services. As discussed later in this 
section, numerous studies have found a relationship between Medicaid 
payment rates and provider participation in the Medicaid program and, 
given the statutory standard of ensuring access for Medicaid 
beneficiaries, a comparison of Medicaid payment rates to other payer 
rates, particularly Medicare payment rates as justified later in this 
rule, is an important barometer of whether State payment rates and 
policies are sufficient for meeting the statutory access standard under 
section 1902(a)(30)(A) of the Act.
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    \119\ Physicians and practitioners who do not wish to enroll in 
the Medicare program may ``opt-out'' of Medicare. This means that 
neither the physician, nor the beneficiary submits the bill to 
Medicare for services rendered. Instead, the beneficiary pays the 
physician out-of-pocket and neither party is reimbursed by Medicare. 
A private contract is signed between the physician and the 
beneficiary that states, that neither one can receive payment from 
Medicare for the services that were performed. See https://data.cms.gov/provider-characteristics/medicare-provider-supplier-enrollment/opt-out-affidavits.
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    We propose to focus on these particular services because they are 
critical medical services and of great importance to overall 
beneficiary health. Beginning with primary care, these services provide 
access to preventative services and facilitate the development of 
crucial doctor-patient relationships. Primary care providers often 
deliver preventative health care services, including immunizations, 
screenings for common chronic and infectious diseases and cancers, 
clinical and behavioral interventions to manage chronic disease and 
reduce associated risks, and counseling to support healthy living and 
self-management of chronic diseases; Medicaid coverage of preventative 
health care services promotes disease prevention which is critical to 
helping people live longer, healthier lives.\120\ Accessing primary 
care services can often result in beneficiaries receiving referrals or 
recommendations to schedule an appointment with physician specialists, 
such as gastroenterologists or neurologists, that they would not be 
able to obtain without the referral or recommendation by the primary 
care physician. Additionally, primary care physicians provide 
beneficiaries with orders for laboratory and x-ray services as well as 
prescriptions for necessary medications that a beneficiary would not be 
able to access without the primary care physician. Research over the 
last century has shown that the impact of the doctor-patient 
relationship on patient's health care experience, health outcomes, and 
health care costs exists \121\ and more recent studies have shown that 
the quality of the physician-patient relationship is positively 
associated with functional health among patients.\122\ Another study 
found that higher primary care payment rates reduced mental illness and 
substance use disorders among non-elderly adult Medicaid enrollees, 
suggesting that positive spillover from increasing primary care rates 
also positively impacted behavioral health outcomes.\123\ Lastly, 
research has shown that a reduction in barriers to accessing primary 
care services has been associated with helping reduce health 
disparities and the risk of poor health outcomes. 124 125 
These examples illustrate how crucial access to primary care services 
is for overall beneficiary health and to enable access to other medical 
services. We are seeking public comment on primary care services as one 
of the proposed categories of services subject to the comparative 
payment rate analysis requirements in proposed Sec.  447.203(b)(2)(i).
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    \120\ https://www.medicaid.gov/medicaid/benefits/prevention/index.html.
    \121\ Cockerham, W.C. (2021). The Wiley Blackwell Companion to 
Medical Sociology (1st ed.). John Wiley & Sons.
    \122\ Olaisen, R.H., Schluchter, M.D., Flocke, S.A., Smyth, 
K.A., Koroukian, S.M., & Stange, K.C. (2020). Assessing the 
longitudinal impact of physician-patient relationship on Functional 
Health. The Annals of Family Medicine, 18(5), 422-429. https://doi.org/10.1370/afm.2554.
    \123\ Maclean, Johanna Catherine, McCleallan, Chandler, Pesko, 
Michael F., and Polsky, Daniel. (2023). Medicaid reimbursement rates 
for primary care services and behavioral health outcomes. Health 
economics, 1-37. https://doi.org/10.1002/hec.4646.
    \124\ Starfield, B., Shi, L., & Macinko, J. (2005). Contribution 
of primary care to health systems and health. The Milbank quarterly, 
83(3), 457-502. https://doi.org/10.1111/j.1468-0009.2005.00409.x.
    \125\ https://health.gov/healthypeople/priority-areas/social-determinants-health/literature-summaries/access-primary-care.
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    Similar to primary care services, both obstetrical and 
gynecological services and outpatient behavioral health services 
provide access to preventative and screening services unique to each 
respective field. A well-woman visit to an obstetrician-gynecologist 
often provides access to screenings for cervical and breast cancer; 
screenings for Rh(D) incompatibility, syphilis infection, and hepatitis 
B virus infection in pregnant persons; monitoring for healthy weight 
and weight gain in pregnancy; immunization against the human 
papillomavirus infection; and perinatal depression screenings among 
other recommended preventive services.126 127 Behavioral 
health care

[[Page 28004]]

promotes mental health, resilience, and wellbeing; the treatment of 
mental and substance use disorders; and the support of those who 
experience and/or are in recovery from these conditions, along with 
their families and communities. Outpatient behavioral health services 
can overlap with preventative primary care and obstetrical and 
gynecological services, for example screening for depression in adults 
and perinatal depression screenings, but also provide unique 
preventative and screening services such as screenings for unhealthy 
alcohol use in adolescents and adults, anxiety in children and 
adolescents, and eating disorders in adolescents and adults, among 
other recommended preventive services.\128\
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    \126\ Rh(D) incompatibility is a preventable pregnancy 
compilation where a woman who is Rh negative is carrying a fetus 
that is Rh positive (Rh factor is a protein that can be found on the 
surface of red blood cells). When the blood of an Rh-positive fetus 
gets into the bloodstream of an Rh-negative woman, her body will 
recognize that the Rh-positive blood is not hers. Her body will try 
to destroy it by making anti-Rh antibodies. These antibodies can 
cross the placenta and attack the fetus's blood cells. This can lead 
to serious health problems, even death, for a fetus or a newborn. 
Prevention of Rh(D) incompatibility screening for Rh negative early 
in pregnancy (or before pregnancy) and, if needed, giving you a 
medication to prevent antibodies from forming.
    \127\ https://www.acog.org/clinical/clinical-guidance/committee-opinion/articles/2018/10/well-woman-visit.
    \128\ https://www.uspreventiveservicestaskforce.org/uspstf/topic_search_results?topic_status=P.
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    The U.S. is simultaneously experiencing a maternal health crisis 
and mental health crisis, putting providers of obstetrical and 
gynecological and outpatient behavioral health services, respectively, 
at the forefront.129 130 According to MACPAC, ``Medicaid 
plays a key role in providing maternity-related services for pregnant 
women, paying for slightly less than half of all births nationally in 
2018.'' \131\ Given Medicaid's significant role in maternal health 
during a time when maternal mortality rates in the United States 
continue to worsen and the racial disparities among mothers continues 
to widen,132 133 accessing obstetrical and gynecological 
care, including care before, during, and after pregnancy is crucial to 
positive maternal and infant outcomes.\134\ We are seeking public 
comment on obstetrical and gynecological services as one of the 
proposed categories of services subject to the comparative payment rate 
analysis requirements in proposed Sec.  447.203(b)(2)(ii).
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    \129\ https://www.whitehouse.gov/wp-content/uploads/2022/06/Maternal-Health-Blueprint.pdf.
    \130\ https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/31/fact-sheet-biden-harris-administration-highlights-strategy-to-address-the-national-mental-health-crisis/.
    \131\ https://www.macpac.gov/wp-content/uploads/2020/01/Medicaid%E2%80%99s-Role-in-Financing-Maternity-Care.pdf.
    \132\ https://www.cdc.gov/nchs/data/hestat/maternal-mortality/2020/maternal-mortality-rates-2020.htm.
    \133\ https://www.nytimes.com/2022/02/23/health/maternal-deaths-pandemic.html?smid=url-share.
    \134\ https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/rural-health/09032019-Maternal-Health-Care-in-Rural-Communities.pdf.
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    Improving access to behavioral health services is a critical, 
national issue facing all payors, particularly for Medicaid which plays 
a crucial role in mental health care access as the single largest payer 
of services and has a growing role in payment for substance use 
disorder services, in part due to Medicaid expansion and various 
efforts by Congress to improve access to mental health and substance 
use disorder services.135 136 Several studies have found an 
association between reducing the uninsured rate through increased 
Medicaid enrollment and improved and expanded access to critically 
needed behavioral health services.\137\ Numerous studies have found 
positive outcomes associated with Medicaid expansion: increases in the 
insured rate and access to care and medications for adults with 
depression, increases in coverage rates and a greater likelihood of 
being diagnosed with a mental health condition as well as the use of 
prescription medications for a mental health condition for college 
students from disadvantaged backgrounds,\138\ and a decrease in delayed 
or forgone necessary care in a nationally representative sample of non-
elderly adults with serious psychological distress.\139\ While 
individuals who are covered by Medicaid have better access to 
behavioral health services compared to people who are uninsured, some 
coverage gaps remain in access to behavioral health care for many 
people, including those with Medicaid.
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    \135\ https://www.medicaid.gov/medicaid/access-care/downloads/coverage-and-behavioral-health-data-spotlight.pdf.
    \136\ https://www.medicaid.gov/medicaid/benefits/behavioral-health-services/index.html.
    \137\ https://www.cbpp.org/research/health/to-improve-behavioral-health-start-by-closing-the-medicaid-coverage-gap.
    \138\ Cowan, Benjamin W. & Hao, Zhuang. (2021). Medicaid 
expansion and the mental health of college students. Health 
economics, 30(6), 1306-1327. https://www.nber.org/system/files/working_papers/w27306/w27306.pdf.
    \139\ Novak, P., Anderson, A. C., & Chen, J. (2018). Changes in 
Health Insurance Coverage and Barriers to Health Care Access Among 
Individuals with Serious Psychological Distress Following the 
Affordable Care Act. Administration and policy in mental health, 
45(6), 924-932. https://doi.org/10.1007/s10488-018-0875-9.
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    Some of the barriers to accessing behavioral health treatment in 
Medicaid reflect larger system-wide access problems: overall shortage 
of behavioral health providers in the United States and relatively 
small number of psychiatrists who accept any form of insurance or 
participate in health coverage programs.\140\ Particularly for 
outpatient behavioral health services for Medicaid beneficiaries, one 
reason physicians are unwilling to accept Medicaid patients is because 
of low Medicaid payment rates.\141\ One study found evidence of low 
Medicaid payment rates by examining outpatient Medicaid claims data 
from 2014 in 11 States with a primary behavioral health diagnosis and 
an evaluation and management (E/M) procedure code of 99213 (Established 
patient office visit, 20-29 minutes) or 99214 (Established patient 
office visit, 30-39 minutes) and found that psychiatrists in nine 
States were paid less, on average, than primary care physicians.\142\ 
These pieces of research and data about the importance of outpatient 
behavioral health services and the existing challenges beneficiaries 
face in trying to access outpatient behavioral health services 
underscore how crucial access to outpatient behavioral health services 
is, and that adequate Medicaid payment rates for these services is 
likely to be an important driver of access for beneficiaries. We are 
seeking public comment on outpatient behavioral health services as one 
of the proposed categories of services subject to the comparative 
payment rate analysis requirements in proposed Sec.  
447.203(b)(2)(iii).
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    \140\ https://www.kff.org/medicaid/issue-brief/medicaids-role-in-financing-behavioral-health-services-for-low-income-individuals/.
    \141\ https://www.healthaffairs.org/do/10.1377/forefront.20190401.678690/full/.
    \142\ Mark, Tami L., Parish, William, Zarkin, Gary A., and 
Weber, Ellen. (2020). Comparison of Medicaid Reimbursements for 
Psychiatrists and Primary Care Physicians. Psychiatry services 
71(9), 947-950. https://doi.org/10.1176/appi.ps.202000062.
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    In Sec.  447.203(b)(2)(iv), we propose to require personal care, 
home health aide, and homemaker services provided by individual 
providers and providers employed by an agency in the payment rate 
disclosure requirements proposed in Sec.  447.203(b)(3)(ii). We are 
cognizant that many HCBS providers nationwide are facing workforce 
shortages and high staff turnover that have been exacerbated by the 
COVID-19 pandemic, and these issues and related difficulty accessing 
HCBS can lead to higher rates of costly, institutional stays for 
beneficiaries.\143\ As with any covered service, the supply of HCBS 
providers has a direct and immediate impact on beneficiaries' ability 
to access high quality HCBS, therefore, we included special 
considerations for LTSS, specifically HCBS, through two proposed 
provisions in Sec.  447.203. The first provision in proposed paragraph

[[Page 28005]]

(b)(2)(iv) would require States to include personal care, home health 
aide, and homemaker services provided by individual providers and 
providers employed by an agency to be included in the payment rate 
disclosure in proposed paragraph (b)(3)(ii). The second provision in 
paragraph (b)(6), discussed in the next section, would require States 
to establish an interested parties' advisory committee to advise and 
consult on rates paid to certain HCBS providers. This provision is 
intended to help contextualize lived experience of direct care workers 
and beneficiaries who receive the services they deliver by providing 
direct care workers, beneficiaries and their authorized 
representatives, and other interested parties with the ability to make 
to recommendations to the Medicaid agency regarding the sufficiency of 
Medicaid payment rates for these specified services to help ensure 
sufficient provider participation so that these HCBS are accessible to 
beneficiaries consistent with section 1902(a)(30)(A) of the Act.
---------------------------------------------------------------------------

    \143\ https://www.kff.org/coronavirus-covid-19/event/march-30-web-event-unsung-heroes-the-crucial-role-and-tenuous-circumstances-of-home-health-aides-during-the-pandemic/; https://www.macpac.gov/wp-content/uploads/2022/03/MACPAC-brief-on-HCBS-workforce.pdf.
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    The proposed payment rate disclosure would require States to 
publish the average hourly payment rates made to individual providers 
and to providers employed by an agency, separately, if the rates vary, 
for each category of services specified in paragraph (b)(2)(iv) of this 
section. No comparison to Medicare payment rates would be required in 
recognition that Medicare generally does not cover and pay for these 
services, and when these services are covered and paid for by Medicare, 
the services are very limited and provided on a short-term basis, 
rather than long-term basis as with Medicaid HCBS. While Medicare 
covers part-time or intermittent home health aide services (only if a 
Medicare beneficiary is also getting other skilled services like 
nursing and/or therapy at the same time) under Medicare Part A 
(Hospital Insurance) or Medicare Part B (Medical Insurance), Medicare 
does not cover personal care or homemaker services.\144\
---------------------------------------------------------------------------

    \144\ https://www.medicare.gov/coverage/home-health-services.
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    We propose to require these services be subject to a payment rate 
disclosure because this proposed rule aims to standardize data and 
monitoring across service delivery systems with the goal of improving 
access to care. To remain consistent with the proposed HCBS provisions 
at Sec.  441.311(d)(2) and (e), where we propose to require annual 
State reporting on access and payment adequacy metrics for homemaker, 
home health aide, and personal care services, we are proposing to 
include these services, provided by individual providers and providers 
employed by an agency in the FFS payment rate disclosure proposed in 
Sec.  447.203(b)(2). As described earlier in the HCBS provisions of 
this rule, these specific services were chosen because we expect them 
to be most commonly conducted in individuals' homes and general 
community settings and, therefore, constitute the vast majority of FFS 
payments for direct care workers delivering services under FFS. We 
acknowledge that the proposed analyses required of States in the HCBS 
provisions at Sec.  441.311(d)(2) and (e) and in the FFS provisions at 
Sec.  447.203(b)(2) are different, although, unique to assessing access 
in each program and delivery system. We are proposing to include 
personal care, home health aide, and homemaker services for consistency 
with HCBS access and payment adequacy provisions in this proposed rule, 
and also to include these services in the proposed provisions of Sec.  
447.203(b)(2) to require States to conduct and publish a payment rate 
disclosure. We believe the latter proposal is important because the 
payment rate disclosure of personal care, home health aide, and 
homemaker services would provide CMS with sufficient information, 
including average hourly payment rates, claims volume, and number of 
Medicaid enrolled beneficiaries who received a service as specified in 
proposed Sec.  447.203(b)(3)(ii), from States for ensuring compliance 
with section 1902(a)(30)(A) of the Act, which requires that payments be 
consistent with efficiency, economy, and quality of care and 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. 
Additionally, this proposal to include personal care, home health aide, 
and homemaker services provided by individual providers and providers 
employed by an agency is supported by the statutory mandate at section 
2402(a) of the Affordable Care Act. Among other things, section 2402(a) 
of the Affordable Care Act directs the Secretary to promulgate 
regulations ensuring that all States develop service systems that 
ensure that there is an adequate number of qualified direct care 
workers to provide self-directed services. We are seeking public 
comment on personal care, home health aide, and homemaker services 
provided by individual providers and providers employed by an agency as 
the proposed categories of services subject to the payment rate 
disclosure requirements in proposed Sec.  447.203(b)(2)(iv).
    After discussing our proposed categories of services for the 
comparative payment rate analysis and payment rate disclosure 
requirements, we discuss the similarities and differences between the 
proposed rule and services currently included in the existing AMRP 
requirements. While this proposed rule would eliminate the triennial 
AMRP process, there are some similarities between the service 
categories for which we are proposing to require a comparative payment 
rate analysis or payment rate disclosure in Sec.  447.203(b)(2) and 
those subject to the current AMRP requirements under Sec.  
447.203(b)(5)(ii). Specifically, Sec.  447.203(b)(5)(ii)(A) currently 
requires the State agency to use data collected through the AMRP to 
provide a separate analysis for each provider type and site of service 
for primary care services (including those provided by a physician, 
FQHC, clinic, or dental care). We are proposing the comparative payment 
rate analysis include primary care services, without any parenthetical 
description. We believe this is appropriate because the proposed rule 
includes a comparative payment rate analysis that is at the Current 
Procedural Terminology (CPT) or Healthcare Common Procedure Coding 
System (HCPCS) code level, as applicable, the specifics for which are 
discussed later in this section. This approach requires States to 
perform less sub-categorization of the data analysis, and as discussed 
later the analysis, would exclude FQHCs and clinics.
    The current AMRP process also includes in Sec.  
447.203(b)(5)(ii)(C) behavioral health services (including mental 
health and substance use disorder); however, this proposed rule 
specifies that the comparative payment rate analysis only would include 
outpatient behavioral health services to narrow the scope of the 
analysis by excluding inpatient behavioral health services (including 
inpatient behavioral health services furnished in psychiatric 
residential treatment facilities, institutions for mental diseases, and 
psychiatric hospitals). While we acknowledge that behavioral health 
services encompass a broad range of services provided in a wide variety 
of settings, from outpatient screenings in a physician's office to 
inpatient hospital treatment, we are proposing to narrow the scope of 
behavioral health services to just outpatient services to focus the 
comparative payment rate analysis on ambulatory care provided by 
practitioners in an office-based setting without duplicating existing

[[Page 28006]]

requirements, or analysis that must be completed to satisfy existing 
requirements, for upper payment limits (UPL) and the supplemental 
payment reporting requirements under section 1903(bb) of the Act, as 
established by Division CC, Title II, Section 202 (section 202) of the 
Consolidated Appropriations Act, 2021 (CAA) (Public Law 116-260).
    The proposed categories of services in this rule are delivered as 
ambulatory care where the patient does not need to be hospitalized to 
receive the service being delivered. Particularly for behavioral health 
services, we propose to narrow the scope to outpatient behavioral 
health services to maintain consistency within the categories of 
service included in the proposed comparative payment rate analysis and 
payment rate disclosure all being classified as ambulatory care. 
Additionally, as discussed further in this section of the proposed 
rule, we proposed that the comparative payment rate analysis would be 
conducted on a CPT/HCPCS code level, focusing on E/M codes. By 
narrowing the comparative payment rate analysis to E/M CPT/HCPCS codes, 
we are proposing States' analyses includes a broad range of core 
services which would cover a variety of commonly provided services that 
fall into the categories of service proposed in paragraphs (b)(2)(i) 
through (iii). To balance State administrative burden with our 
oversight of State compliance with the access requirement in section 
1902(a)(30)(A) of the Act, we are also proposing to limit the services 
to those delivered primarily by physicians and NPPs in an office-based 
setting for primary care, obstetrical and gynecological, and outpatient 
behavioral health services. By excluding facility-based services, 
particularly inpatient behavioral health services, we intend to ensure 
the same E/M CPT/HCPCS code-level methodology could be used for all 
categories of services included in the proposed comparative payment 
rate analysis, including the use of E/M CPT/HCPCS codes used for 
outpatient behavioral health services. Rather than fee schedule rates, 
States often pay for inpatient behavioral health services using 
prospective payment rate methodologies, such as Diagnosis Related 
Groups (DRGs), or interim payment methodologies that are reconciled to 
actual cost.\145\ These methodologies pay for a variety of services 
delivered by multiple providers that a patient receives during an 
inpatient hospital stay, rather than a single ambulatory service billed 
by a single provider using a single CPT/HCPCS code. Variations in these 
payment methodologies and what is included in the rate could complicate 
the proposed comparison to FFS Medicare rates for the services 
identified in paragraphs (b)(2)(i) through (iii) and could frustrate 
comparisons between States and sometimes even within a single State. 
Therefore, we do not believe the E/M CPT/HCPCS code level methodology 
proposed for the comparative payment rate analysis would be feasible 
for inpatient behavioral health services or other inpatient and 
facility-based services in general.
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    \145\ https://www.cms.gov/icd10m/version37-fullcode-cms/fullcode_cms/Design_and_development_of_the_Diagnosis_Related_Group_(DRGs).pdf.
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    While we considered including inpatient behavioral health services 
as one of the proposed categories of services in the comparative 
payment rate analysis, we ultimately did not because we already collect 
and review Medicaid and Medicare payment rate data for inpatient 
behavioral health services through annual upper payment limits 
demonstrations (UPL) and supplemental payment reporting requirements 
under section 1903(bb) of the Act. SMDL 13-003 discusses the annual 
submission of State UPL demonstrations for inpatient hospital services, 
among other services, including a complete data set of payments to 
Medicaid providers and a reasonable estimate of what Medicare would 
have paid for the same services.146 147 UPL requirements go 
beyond the proposed requirements in this rule by requiring States to 
annually submit the following data for all inpatient hospital services, 
depending on the State's UPL methodology, on a provider level basis: 
Medicaid charges, Medicaid base payments, Medicaid supplemental 
payments, Medicaid discharges, Medicaid case mix index, Medicaid 
inflation factors, other adjustments to Medicaid payments, Medicaid 
days, Medicare costs, Medicare payments, Medicare discharges, Medicare 
case mix index, Medicare days, UPL inflation factors, Medicaid provider 
tax cost, and other adjustments to the UPL amount. If we proposed 
inpatient behavioral health services as one of the categories of 
services subject to the comparative payment rate analysis, then this 
proposed rule would require States to biennially submit the following 
data for only inpatient behavioral health services on a CPT/HCPCS code 
level basis: Medicaid base payment rates for select E/M CPT/HCPCS codes 
(accounting for rate variation based on population (pediatric and 
adult), provider type, and geographical location, as applicable), the 
corresponding Medicare payment rates, Medicaid base payment rate as a 
percentage of Medicare payment rate, and the number of Medicaid-paid 
claims. While the UPL requires aggregated total payment and cost data 
at the provider level and the comparative payment rate analysis would 
require more granular base payment data at the CPT/HCPCS code level, 
the UPL overall requires aggregate Medicaid provider payment data for 
both base and supplemental payments as well as more detailed data for 
calculating what Medicare would have paid as the upper payment amount. 
Therefore, proposing to require States include Medicaid and Medicare 
payment rate data for inpatient behavioral health services in the 
comparative payment rate analysis would be duplicative of existing UPL 
requirements that are inclusive of and more comprehensive than the 
payment information proposed in the comparative payment rate analysis.
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    \146\ https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/SMD-13-003-02.pdf.
    \147\ If a State's payment methodology describes payment at no 
more than 100 percent of the Medicare rate for the period covered by 
the UPL, then the State does not need to submit a demonstration. See 
FAQ ID: 92201. https://www.medicaid.gov/faq/index.html?search_api_fulltext=ID%3A92201&sort_by=field_faq_date&sort_order=DESC.
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    Additionally, section 1903(bb) of the Act requires us to establish 
a Medicaid supplemental payment reporting system that collects detailed 
information on State Medicaid supplemental payments, including total 
quarterly supplemental payment expenditures per provider; information 
on base payments made to providers that have received a supplemental 
payment; and narrative information describing the methodology used to 
calculate a provider's payment, criteria used to determine which 
providers qualifies to receive a payment, and explanation describing 
how the supplemental payments comply with section 1902(a)(30)(A) of the 
Act. Section 1903(bb)(1)(C) of the Act requires us to make State-
reported supplemental payment information publicly available. For 
States making or wishing to make supplemental payments, including for 
inpatient behavioral health services, States must report supplemental 
payment information to us and we must make that information public and, 
therefore, transparent. Though this proposed rule seeks to increase 
transparency, with the

[[Page 28007]]

proposed provisions under Sec.  447.203(b)(1) through (5) focusing on 
transparency of FFS Medicaid base payment rates, including inpatient 
behavioral health services as a category of service in Sec.  
447.203(b)(2) subject to the comparative payment rate analysis would be 
duplicative of the existing upper payment limit and supplemental 
payment reporting requirements, which capture and make transparent base 
and supplemental payment information for inpatient behavioral health 
services. However, we are seeking public comment regarding our decision 
not to include inpatient behavioral health services as one of the 
categories of services subject to the comparative payment rate analysis 
requirements in proposed Sec.  447.203(b)(2) in the final rule, should 
we finalize the comparative payment rate analysis proposal.
    The AMRP process also currently includes in Sec.  
447.203(b)(5)(ii)(D) pre- and post-natal obstetric services including 
labor and delivery; we are proposing to include these services in the 
comparative payment rate analysis requirements under proposed Sec.  
447.203(b)(2)(ii), but intend to broaden the scope of this category of 
services to include both obstetrical and gynecological services. This 
expanded proposed provision would capture a wider array of services, 
both obstetrical and gynecological services, for States and CMS to 
assess and ensure access to care in Medicaid FFS is at least as great 
for beneficiaries as is generally available to the general population 
in the geographic area, as required by with section 1902(a)(30)(A) of 
the Act. Lastly, similar to current Sec.  447.203(b)(5)(ii)(E), which 
specifies that Home health services are included in the AMRP process, 
we are proposing to include personal care, home health aide, and 
homemaker services, provided by individual providers and providers 
employed by an agency. This refined proposed provision would help 
ensure a more standardized effort to monitor access across Medicaid 
delivery systems, including for Medicaid-covered LTSS. We believe this 
proposal also addresses public comments received in response to the 
February 2022 RFI.\148\ Many commenters highlighted the workforce 
crisis among direct care workers and the impact on HCBS. Specifically, 
commenters indicated that direct care workers receive low payment 
rates, and for agency-employed direct care workers, home health 
agencies often cite low Medicaid payment as a barrier to raising wages 
for workers. Commenters suggested that States should be collecting and 
reporting to CMS the average of direct care worker wages while 
emphasizing the importance of data transparency and timeliness. We are 
responding to these public comments through this proposed rule by 
proposing to require States to transparently publish a payment rate 
disclosure that collects and reports the average hourly rate paid to 
individual providers and providers employed by an agency for services 
provided by certain direct care workers (personal care, home health 
aide, and homemaker services).
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    \148\ Summary of Public Comments in response to the CMS 2022 
Request for Information: Access to Coverage and Care in Medicaid & 
CHIP. December 2022. For the report, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-report.pdf.
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    In public comments that we received during the public comment 
period for the 2015 final rule with comment period, many commenters 
requested that we require States to publish access to care analyses for 
pediatric services, including pediatric primary care, behavioral 
health, and dental care. At the time, we responded that pediatric 
services did not need to be specified in the required service 
categories because States were already required through Sec.  
447.203(b)(1)(iv) to consider the characteristics of the beneficiary 
population, ``including . . . payment variations for pediatric and 
adult populations,'' within the AMRPs.\149\ Although we are proposing 
to eliminate the AMRP requirements, our proposed rule continues to 
include special considerations for pediatric populations that are 
addressed in the discussion of proposed paragraph (b)(2).
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    \149\ 80 CFR 67576 at 67592.
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    We are proposing to eliminate the following from the current AMRP 
process without replacement in the proposed comparative payment rate 
analysis requirement, Sec.  447.203(b)(5)(ii)(F): Any additional types 
of services for which a review is required under current Sec.  
447.203(b)(6); Sec.  447.203(b)(5)(ii)(G): Additional types of services 
for which the State or CMS has received a significantly higher than 
usual volume of beneficiary, provider or other interested party access 
complaints for a geographic area, including complaints received through 
the mechanisms for beneficiary input consistent with current Sec.  
447.203(b)(7); and Sec.  447.203(b)(5)(ii)(H): Additional types of 
services selected by the State.
    We propose to eliminate Sec.  447.203(b)(5)(ii)(F) and (G) without 
a direct replacement because the proposed State Analysis Procedures for 
Rate Reduction or Restructuring described in Sec.  447.203(c) are 
inclusive of and more refined than the current AMRP requirements for 
additional types of services for which a review is required under 
current Sec.  447.203(b)(6). Specifically, as discussed later in this 
section, we are proposing in Sec.  447.203(c)(1) that States seeking to 
reduce provider payment rates or restructure provider payments would be 
required to provide written assurance and relevant supporting 
documentation that three conditions are met to qualify for a 
streamlined SPA review process, including that required public 
processes yielded no significant access to care concerns for 
beneficiaries, providers, or other interested parties, or if such 
processes did yield concerns, that the State can reasonably respond to 
or mitigate them, as appropriate. If the State is unable to meet all 
three of the proposed conditions for streamlined SPA review, including 
the absence of or ability to appropriately address any access concern 
raised through public processes, then the State would be required to 
submit additional information to support that its SPA is consistent 
with the access requirement in section 1902(a)(30)(A) of the Act, as 
proposed in Sec.  447.203(c)(2). We are proposing to modify this aspect 
of the current AMRP process, because our implementation experience 
since the 2017 SMDL has shown that States typically have been able to 
work directly with the public (including beneficiaries and beneficiary 
advocacy groups, and providers) to resolve access concerns, which 
emphasizes that public feedback continues to be a valuable source of 
knowledge regarding access in Medicaid. We believe this experience 
demonstrates that public processes that occur before the submission of 
a payment SPA to CMS often resolve initial access concerns, and where 
concerns persist, they will be addressed through the SPA submission and 
our review process, as provided in proposed Sec.  447.203(c). Rather 
than services affected by proposed provider rate reductions or 
restructurings (current Sec.  447.203(b)(5)(ii)(F)) and services for 
which the State or CMS received significantly higher than usual volume 
of complaints (current Sec.  447.203(b)(5)(ii)(G)) being addressed 
through an AMRP, these services subject to rate reductions or 
restructurings and services where a high volume of complaints have been 
expressed would now be addressed by the State analysis procedures in 
proposed Sec.  447.203(c). We believe this approach would ensure public 
feedback is fully considered in the context of a payment SPA, without 
the need to specifically require a

[[Page 28008]]

comparative payment rate analysis for the service(s) subject to payment 
rate reduction or restructuring under proposed Sec.  447.203(b)(2).
    Lastly, we propose to eliminate current Sec.  447.203(b)(5)(ii)(H), 
requiring the AMRP include analysis regarding ``Additional types of 
services selected by the State,'' without a direct replacement because 
our implementation experience has shown that the majority of States did 
not select additional types of service to include in their AMRPs beyond 
the required services Sec.  447.203(b)(5)(ii)(A) through (G). When 
assessing which services to include in this proposed rule, we 
determined that the absence of an open-ended type of service option, 
similar to Sec.  447.203(b)(5)(ii)(H) is unlikely to affect the quality 
of the analysis proposed in this rule and therefore, we are not 
including it in the proposed set of services required for the 
comparative payment rate analysis. These shifts in policy were informed 
by our implementation experience and our consideration of State 
concerns about the burden and value of the AMRP process.
    In paragraph (b)(3), we propose that the State agency would be 
required to develop and publish, consistent with the publication 
requirements described in paragraph (b)(1) of this section for payment 
rate transparency data, a comparative payment rate analysis and payment 
rate disclosure. This comparative payment rate analysis is divided into 
two sections based on the categories of services and the organization 
of each analysis or disclosure. Paragraph (b)(3)(i) describes the 
comparative payment rate analysis for the categories of service 
described in paragraphs (b)(2)(i) through (iii): primary care services, 
obstetrical and gynecological services, and outpatient behavioral 
health services. Paragraph (b)(3)(ii) describes the payment rate 
disclosure for the categories of service described in paragraphs 
(b)(2)(iv): personal care, home health aide, and homemaker services 
provided by individual providers and providers employed by an agency.
    Specifically, in paragraph (b)(3)(i), we propose that for the 
categories of service described in paragraphs (b)(2)(i) through (iii), 
the State's analysis would compare the State's Medicaid FFS payment 
rates to the most recently published Medicare payment rates effective 
for the same time period for the E/M CPT/HCPCS codes applicable to the 
category of service. The proposed comparative payment rate analysis of 
FFS Medicaid payment rates to FFS Medicare payment rates would be 
conducted on a code-by-code basis at the CPT/HCPCS code level using the 
most current set of codes published by us. It is intended to provide an 
understanding of how Medicaid payment rates compare to the payment 
rates established and updated under the FFS Medicare program.
    We would expect to publish the E/M CPT/HCPCS codes to be used for 
the comparative payment rate analysis in subregulatory guidance along 
with the final rule, if this proposal is finalized. We propose that we 
would identify E/M CPT/HCPCS codes to be included in the comparative 
payment rate analysis based on the following criteria: the code is 
effective for the same time period of the comparative payment rate 
analysis; the code is classified as an E/M CPT/HCPCS code by the 
American Medical Association (AMA) CPT Editorial Panel; the code is 
included on the Berenson-Eggers Type of Service (BETOS) code list 
effective for the same time period as the comparative payment rate 
analysis and falls into the E/M family grouping and families and 
subfamilies for primary care services, obstetrics and gynecological 
services, and outpatient behavioral services; and the code has an A 
(Active), N (Non-Covered), R (Restricted), or T (Injections) code 
status on the Medicare PFS with a Medicare established relative value 
unit (RVU) and payment amount for the same time period of the 
comparative payment rate analysis.150 151 152
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    \150\ https://www.ama-assn.org/practice-management/cpt/cpt-evaluation-and-management.
    \151\ https://data.cms.gov/provider-summary-by-type-of-service/provider-service-classifications/restructured-betos-classification-system.
    \152\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeesched.
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    The CMS published list of E/M CPT/HCPCS codes subject to the 
comparative payment rate analysis would classify each E/M CPT/HCPCS 
code into a corresponding category of service as described in proposed 
Sec.  447.203(b)(2)(i) through (iii). As previously discussed, by 
narrowing the comparative payment rate analysis to CMS-specified E/M 
CPT/HCPCS codes, we are proposing States' analyses include a broad 
range of core services which would cover a variety of commonly provided 
services that fall into the categories of service proposed in 
paragraphs (b)(2)(i) through (iii), while also limiting the services to 
those delivered primarily by physicians and NPPs in an office-based 
setting. Based on the categories of services specified in proposed 
Sec.  447.203(b)(2)(i) through (iii), we expect the selected E/M CPT/
HCPCS codes to fall under mandatory Medicaid benefit categories, and 
therefore, we expect that all States would cover and pay for the 
selected E/M CPT/HCPCS codes. To clarify, we did not narrow the list of 
E/M CPT/HCPCS codes to those with an A (Active), N (Non-Covered), R 
(Restricted), or T code status on the Medicare PFS with a Medicare 
established relative value unit (RVU) and payment amount on the basis 
of Medicare coverage of a particular code. We are cognizant that codes 
with N (Non-Covered), R (Restricted), or T code statuses have limited 
or no Medicare coverage, however, Medicare may establish RVUs and 
payment amounts for these codes. Therefore, when Medicare does 
establish RVUs and payment amounts for codes with N (Non-Covered), R 
(Restricted), or T (Injections) code statuses on the Medicare PFS, we 
are proposing to include these codes in the comparative payment rate 
analysis in order to ensure the analysis includes a comprehensive set 
of codes, for example pediatric services, including well child visits 
(for example, 99381 through 99384), that are commonly provided services 
that fall into the categories of service proposed in paragraphs 
(b)(2)(i) through (iii) and delivered primarily by physicians and NPPs 
in an office-based setting, as previously described.
    As discussed later in this rule, we propose that the comparative 
payment rate analysis would be updated no less than every 2 years. 
Therefore, prior to the start of the calendar year in which States 
would be required to update their comparative payment rate analysis, we 
would intend to publish an updated list of E/M CPT/HCPCS codes for 
States to use for their comparative payment rate analysis updates 
through subregulatory guidance. The updated list of E/M CPT/HCPCS codes 
would incorporate changes made by to the AMA CPT Editorial Panel (such 
as additions, removals, or amendments to a code definition where there 
is a change in the set of codes classified as an E/M CPT/HCPCS code 
billable for primary care services, obstetrics and gynecological 
services, or outpatient behavioral services) and changes to the 
Medicare PFS based on the most recent Medicare PFS final rule (such as 
changes in code status or creation of Medicare-specific codes).\153\
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    \153\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.
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    We intend to publish the initial and subsequent updates of the list 
of E/M CPT/HCPCS codes subject to the comparative payment rate analysis 
in a timely manner that allows States approximately one full calendar 
year between the publication of the CMS-

[[Page 28009]]

published list of E/M CPT/HCPCS codes and the due date of the 
comparative payment rate analysis, if this proposal is finalized. We 
are aware that Medicare may issue a correction to the Medicare PFS 
after the final rule is in effect, and this correction may impact our 
published list of E/M CPT/HCPCS codes. In this instance, for codes 
included on our published list of E/M CPT/HCPCS codes that are affected 
by a correction to the most recent Medicaid PFS final rule, we may add 
or remove an E/M CPT/HCPCS code from the published list, as 
appropriate, depending on the change to the Medicare PFS. 
Alternatively, depending on the nature of the change, we would expect 
States to accurately identify which code(s) are used in the Medicaid 
program during the relevant period that best correspond to the CMS-
identified E/M CPT/HCPCS code(s) affected by the Medicare PFS 
correction. We would expect States to rely on the CMS published list of 
E/M CPT/HCPCS codes subject to the comparative payment rate analysis 
for complying with the proposed requirements in paragraphs (b)(2) 
through (4).
    We acknowledge that there are limitations to relying on E/M CPT/
HCPCS codes to select payment rates for comparative payment rate 
analysis to aid States, CMS, and other interested parties in assessing 
if 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. Providers across the country and within each State 
deliver a variety of services to patients, including individuals with 
public and private sources of coverage, and then bill them under a 
narrow subset of CPT/HCPCS codes that fit into the E/M classification 
as determined by the AMA CPT Editorial Panel. The actual services 
delivered can require a wide array of time, skills, and experience of 
the provider which must be represented by a single five digit code for 
billing to receive payment for the services delivered. While there are 
general principles that guide providers in billing the most 
representative E/M CPT/HCPCS code for the service they delivered, two 
providers might perform substantially similar activities when 
delivering services and yet bill different E/M CPT/HCPCS codes for 
those activities, or bill the same E/M CPT/HCPCS code for furnishing 
two very different services. The E/M CPT/HCPCS code itself is not a 
tool for capturing the exact service that was delivered, but medical 
documentation helps support the billing of a particular E/M CPT/HCPCS 
code.
    Although they do not encompass all Medicaid services covered and 
paid for in the Medicaid program which are subject to the requirements 
in section 1902(a)(30)(A) of the Act, E/M CPT/HCPCS codes are some of 
the most commonly billed codes and including them in the comparative 
payment rate analysis would allow us to uniformly compare Medicaid 
payment rates for these codes to Medicare PFS rates. As such, to 
balance administrative burden on States and our enforcement 
responsibilities, we are proposing to use E/M CPT/HCPCS codes in the 
comparative payment rate analysis to define the parameters of our 
analysis to how much Medicaid and the FFS Medicare program would pay 
for services that can be classified into a particular E/M CPT/HCPCS 
code. We are seeking public comment on the proposed comparative payment 
rate analysis requirement in Sec.  447.203(b)(3)(i), including the 
proposed requirement to conduct the analysis at the CPT/HCPCS code 
level, the proposed criteria that we would apply in selecting E/M CPT/
HCPCS codes for inclusion in the required analysis, and the proposed 
requirement for States to compare Medicaid payment rates for the 
selected E/M CPT/HCPCS codes to the most recently published Medicare 
non-facility payment rate as listed on the Medicare PFS effective for 
the same time period which is discussed in more detail later in this 
rule when describing the proposed provisions of Sec.  
447.203(b)(3)(i)(C).
    In paragraph (b)(3)(i), we further propose that the State's 
comparative payment rate analysis would be required to meet the 
following requirements: (A) the analysis must be organized by category 
of service as described in Sec.  447.203(b)(2)(i) through (iii); (B) 
the analysis must clearly identify the Medicaid base payment rates for 
each E/M CPT/HCPCS code identified by us under the applicable category 
of service, including, if the rates vary, separate identification of 
the payment rates by population (pediatric and adult), provider type, 
and geographical location, as applicable; (C) the analysis must clearly 
identify the Medicare PFS non-facility payment rates effective for the 
same time period for the same set of E/M CPT/HCPCS codes, and for the 
same geographical location as the Medicaid base payment rates, that 
correspond to the Medicaid payment rates identified under paragraph 
(b)(3)(i)(B); (D) the analysis must specify the Medicaid payment rate 
identified under paragraph (b)(3)(i)(B) as a percentage of the Medicare 
payment rate identified under paragraph (b)(3)(i)(C) for each of the 
services for which the Medicaid payment rate is published under 
paragraph (b)(3)(i)(B); and (E) the analysis must specify the number of 
Medicaid-paid claims within a calendar year for each of the services 
for which the Medicaid payment rate is published under paragraph 
(b)(3)(i)(B). We are seeking public comment on the proposed 
requirements and content of the items in proposed Sec.  
447.203(b)(3)(i)(A) through (E).
    In paragraph (b)(3)(i)(A), we propose to require States to organize 
their comparative payment rate analysis by the service categories 
described in paragraphs (b)(2)(i) through (iii) of this section. This 
proposed requirement is included to ensure the analysis breaks out the 
payment rates for primary care services, obstetrical and gynecological 
services, and outpatient behavioral health services separately for 
individual analyses of the payment rates for each CMS-selected E/M CPT/
HCPCS code, grouped by category of service. We are seeking public 
comment on the proposed requirement for States to break out their 
payment rates at the CPT/HCPCS code level for primary care services, 
obstetrical and gynecological services, and outpatient behavioral 
health services, separately, in the comparative payment rate analysis 
as specified in proposed Sec.  447.203(b)(3)(i)(A).
    In paragraph (b)(3)(i)(B), after organizing the analysis by Sec.  
447.203(b)(2)(i) through (iii) categories of service and CMS-specified 
E/M CPT/HCPCS code, we propose to require States to clearly identify 
the Medicaid base payment rate for each code, including, if the rates 
vary, separate identification of the payment rates by population 
(pediatric and adult), provider type, and geographical location, as 
applicable. We propose that the Medicaid base payment rate in the 
comparative payment rate analysis would only include the State's 
Medicaid fee schedule rate, that is, the State's Medicaid base rate for 
each E/M CPT/HCPCS code. By specifying the services included in the 
comparative payment rate analysis by E/M CPT/HCPCS code, we expect the 
Medicaid base payment rate in the comparative payment rate analysis 
would only include the State's Medicaid fee schedule rate for that 
particular E/M CPT/HCPCS code as published on the State's Medicaid fee 
schedule effective for the same time period covered by the comparative 
payment rate analysis. As an example,

[[Page 28010]]

the State's Medicaid fee schedule rate as published on the Medicaid fee 
schedule effective for the time period of the comparative payment rate 
analysis for 99202 is listed as $50.00. This rate would be the Medicaid 
base payment rate in the State's comparative payment rate analysis for 
comparison to the Medicare non-facility rate which is discussed later 
in this section.
    Medicaid base payment rates are typically determined through one of 
three methods: the resource-based relative value scale (RBRVS), a 
percentage of Medicare's fee, or a State-developed fee schedule using 
local factors.\154\ The RBRVS system, initially developed for the 
Medicare program, assigns a relative value to every physician procedure 
based on the complexity of the procedure, practice expense, and 
malpractice expense. States may also adopt the Medicare fee schedule 
rate, which is also based on RBRVS, but select a fixed percentage of 
the Medicare amount to pay for Medicaid services. States can develop 
their own PFSs, typically determined based on market value or an 
internal process, and often do this in situations where there is no 
Medicare or private payer equivalent or when an alternate payment 
methodology is necessary for programmatic reasons. States often adjust 
their payment rates based on provider type, geography, site of 
services, patient age, and in-State or out-of-State provider status. 
Additionally, Medicaid base payment rates can be paid to physicians in 
a variety of settings, including clinics, community health centers, and 
private offices.
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    \154\ https://www.macpac.gov/wp-content/uploads/2017/02/Medicaid-Physician-Fee-for-Service-Payment-Policy.pdf.
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    We acknowledge that only including Medicaid base payments in the 
analysis does not necessarily represent all of a provider's revenues 
that may be related to furnishing services to Medicaid beneficiaries, 
and that other revenues not included in the proposed comparative 
analysis may be relevant to a provider's willingness to participate in 
Medicaid (such as beneficiary cost sharing payments, disproportionate 
share hospital payments for qualifying hospitals, supplemental 
payments, etc.). Public comments we received on the 2011 proposed rule 
and responded to in the 2015 final rule with comment period regarding 
the AMRPs expressed differing views regarding which provider 
``revenues'' should be included within comparisons of Medicaid to 
Medicare payment rates. One commenter ``noted that the preamble of the 
2011 proposed rule refers to `payments' and `rates' interchangeably but 
that courts have defined payments to include all Medicaid provider 
revenues rather than only Medicaid FFS rates.'' The commenter stated 
that if the final rule consider[ed] all Medicaid revenues received by 
providers, States may be challenged to make any change to the Medicaid 
program that might reduce provider revenues.'' \155\ This proposed rule 
narrows the Medicaid base payment rates to the amount listed on the 
State's fee schedule in order for the comparative payment rate analysis 
to accurately and analogously compare Medicaid fee schedule rates to 
Medicare fee schedule rates as listed on the Medicare PFS.
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    \155\ 80 FR 67576 at 67581.
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    We believe this proposal represents the best way to create a 
consistent metric across States against which to evaluate access. To be 
specific, we are not proposing to include supplemental payments in the 
comparative payment rate analysis. Requiring supplemental payment data 
be collected and included under this rule would be duplicative of 
existing requirements. State supplemental payment and DSH payment data 
are already subject to our review in various forms, such as through DSH 
audits for DSH payments, and through annual upper payment limits 
demonstrations, and through supplemental payment reporting under 
section 1903(bb) of the Act.156 157 As such, we do not see a 
need to add additional reporting requirements concerning supplemental 
payments as part of the proposals in this rulemaking to allow us the 
opportunity to review the data. Also, supplemental payments are often 
made for specific Medicaid-covered services and targeted to a subset of 
Medicaid-participating providers; not all Medicaid-participating 
providers, and not all providers of a given Medicaid-covered service, 
may receive supplemental payments in a State. Therefore, including 
supplemental payments in the comparative payment rate analysis would 
create additional burden for States without then also providing an 
accurate benchmark of how payments may affect beneficiary access due to 
the potentially varied and uneven distribution of supplemental 
payments. Accordingly, we are proposing to require that States conduct 
the comparative payment rate analysis for only Medicaid base payment 
rates for selected E/M CPT/HCPCS codes. For each proposed category of 
service listed in paragraphs (b)(2)(i) through (iii), this would result 
in a transparent and parallel comparison of Medicaid base payment rates 
that all Medicaid-participating providers of the service would receive 
to the payment rates that Medicare would pay for the same E/M CPT/HCPCS 
codes.
---------------------------------------------------------------------------

    \156\ CMS State Medicaid Director Letter: SMDL 13-003. March 
2013. Federal and State Oversight of Medicaid Expenditures. 
Available at https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/SMD-13-003-02.pdf.
    \157\ CMS State Medicaid Director Letter: SMDL 21-006. December 
2021. New Supplemental Payment Reporting and Medicaid 
Disproportionate Share Hospital Requirements under the Consolidated 
Appropriations Act, 2021. Available at https://www.medicaid.gov/federal-policy-guidance/downloads/smd21006.pdf.
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    Additionally, in paragraph (b)(3)(i)(B), we propose that, if the 
States' payment rates vary, the Medicaid base payment rates must 
include a breakdown by payment rates paid to providers delivering 
services to pediatric and adult populations, by provider type, and 
geographical location, as applicable, to capture this potential 
variation in the State's payment rates. This proposed provision to 
breakdown the Medicaid payment rate is first stated in proposed 
paragraph (b)(2) and carried through in proposed paragraph (b)(3)(i)(B) 
to provide clarity to States about how the Medicaid payment rate should 
be reported in the comparative payment rate analysis.
    In paragraph (b)(3)(i)(C), we propose to require States' 
comparative payment rate analysis clearly identify the Medicare non-
facility payment rates effective for the same time period for the same 
set of E/M CPT/HCPCS codes, and for the same geographical location, 
that correspond to the Medicaid payment rates identified under 
paragraph (b)(3)(i)(B), including, separate identification of the 
payment rates by provider type. We are not proposing to establish a 
threshold percentage of Medicare non-facility payment rates that States 
would be required to meet when setting their Medicaid payment rates. 
Rather, we are proposing to use Medicare non-facility payment rates as 
listed on the Medicare PFS as a benchmark to which States would compare 
their Medicaid payment rates to inform their and our assessment of 
whether the State's payment rates are compliant with section 
1902(a)(30)(A) of the Act. Benchmarking against FFS Medicare, another 
of the nation's large public health coverage programs, serves as an 
important data point in determining whether payment rates are likely to 
be sufficient to ensure access for Medicaid beneficiaries at least as 
great as for the general population in the geographic area, and whether 
any identified access concerns may be related to payment sufficiency. 
Similar to Medicaid, Medicare provides health coverage for a 
significant number of

[[Page 28011]]

Americans across the country. In December 2022, total Medicaid 
enrollment was at 85.2 million individuals \158\ while total Medicare 
enrollment was at 65.4 million individuals.159 160 Both the 
Medicare and Medicaid programs cover and pay for services provided to 
beneficiaries residing in every State and territory of the United 
States. As previously described, Medicare non-facility payment rates as 
listed on the Medicare PFS for covered, non-covered, and limited 
coverage services generally are determined on a national level as well 
as adjusted to reflect the variation in practice costs from one 
geographical location to another. Medicare also ensures that their 
payment rate data are publicly available in a format that can be 
analyzed. The accessibility and consistency of the Medicare non-
facility payment rates as listed on the Medicare PFS, compared to 
negotiated private health insurance payment rates that typically are 
considered proprietary information and, therefore, not generally 
available to the public, makes Medicare non-facility payment rates as 
listed on the Medicare PFS an available and reliable comparison point 
for States to use in the comparative payment rate analysis.
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    \158\ https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/December-2022-medicaid-chip-enrollment-trend-snapshot.pdf.
    \159\ Total Medicare enrollment equals the Tot_Benes variable in 
the Medicare Monthly Enrollment Data for December (Month) 2022 
(Year) at the national level (Bene_Geo_Lvl). Tot_Benes is a count of 
all Medicare beneficiaries, including beneficiaries with Original 
Medicare and beneficiaries with Medicare Advantage and Other Health 
Plans. We utilized the count of all Medicare beneficiaries because 
Original Medicare, Medicare Advantage, and other Health Plans offer 
fee-for-service payments to providers. See the Medicare Monthly 
Enrollment Data Dictionary for more information about the variables 
in the Medicare Monthly Enrollment Data: https://data.cms.gov/sites/default/files/2023-02/1ec24f76-9964-4d00-9e9a-78bd556b7223/Medicare%20Monthly%20Enrollment_Data_Dictionary%2020230131_508.pdf.
    \160\ https://data.cms.gov/summary-statistics-on-beneficiary-enrollment/medicare-and-medicaid-reports/medicare-monthly-enrollment.
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    Additionally, Medicare is widely accepted nationwide according to 
recent findings from the National Electronic Health Records Survey. In 
2019, 95 percent of physicians accepting new patients overall, and 89 
percent of office-based physicians, were accepting new Medicare 
patients, and the percentage of office-based physicians accepting new 
Medicare patients has remained stable since 2011 when the value was 88 
percent, with modest fluctuations in the years in between.\161\ In 
regards to physician specialties that align with the proposed 
categories of services in this rule, 81 percent of general practice/
family medicine physicians and 81 percent of physicians specializing in 
internal medicine were accepting new Medicare patients, 93 percent of 
physicians specializing obstetrics and gynecology were accepting new 
Medicare patients, and 60 percent of psychiatrists were accepting new 
Medicare patients in 2019. Although the percentage of psychiatrists who 
accept Medicare is lower than other types physicians providing services 
included in the comparative payment rate analysis, this circumstance is 
not unique to Medicare amongst payers. For example, 60 percent of 
psychiatrists were also accepting new privately insured patients in 
2019. Therefore, the decreased rate of acceptance by psychiatrists 
relative to certain other physician specialists does not make Medicare 
an inappropriate benchmark when evaluated against other options for 
comparison.\162\
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    \161\ https://www.kff.org/medicare/issue-brief/most-office-based-physicians-accept-new-patients-including-patients-with-medicare-and-private-insurance/.
    \162\ https://www.kff.org/medicare/issue-brief/faqs-on-mental-health-and-substance-use-disorder-coverage-in-medicare/.
---------------------------------------------------------------------------

    Historically, Medicare has low rates of physicians formally opting 
out of the Medicare program with 1 percent of physicians consistently 
opting out between 2013 and 2019 and of that 1 percent of physicians 
opting out of Medicare, 42 percent were psychiatrists.\163\ This 
information suggests that Medicare's payment rates generally are 
consistent with a high level of physician willingness to accept new 
Medicare patients, with the vast majority of physicians willing to 
accept Medicare's payment rates. For the reasons previously described, 
we are proposing to use Medicare non-facility payment rates as listed 
on the Medicare PFS as a national benchmark for States to compare their 
Medicaid payment rates in the comparative payment rate analysis because 
we believe that the Medicare payment rates for these services are 
likely to serve as a reliable benchmark for a level of payment 
sufficient to enlist providers to furnish the relevant services to an 
individual. We are seeking public comment on the proposed used of 
Medicare non-facility payment rates as listed on the Medicare PFS as a 
benchmark for States to compare their Medicaid payment rates to in the 
comparative payment rate analysis requirements in proposed Sec.  
447.203(b)(3)(i) to help assess if Medicaid 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.
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    \163\ Physicians and practitioners who do not wish to enroll in 
the Medicare program may ``opt-out'' of Medicare. This means that 
neither the physician, nor the beneficiary submits the bill to 
Medicare for services rendered. Instead, the beneficiary pays the 
physician out-of-pocket and neither party is reimbursed by Medicare. 
A private contract is signed between the physician and the 
beneficiary that states, that neither one can receive payment from 
Medicare for the services that were performed. See 2022 opt-out 
affidavit data published by the Centers for Medicare & Medicaid 
services: https://data.cms.gov/provider-characteristics/medicare-provider-supplier-enrollment/opt-out-affidavits.
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    Specifically, in paragraph (b)(3)(i)(C), we propose to require 
States to compare their Medicaid payment rates to the Medicare non-
facility payment rates effective for the same time period as the same 
set of E/M CPT/HCPCS codes paid under Medicaid as specified under 
paragraph (b)(3)(i)(B) of this section, including, separate 
identification of the payment rates by provider type. We propose to 
require States to compare their payment rates to the corresponding 
Medicare PFS non-facility rates because we are seeking a payment 
analysis that compares Medicaid payment rates to Medicare payment rates 
at comparable location of service delivery (that is, in a non-clinic, 
non-hospital, ambulatory setting such as a physician's office). States 
often pay physicians operating in an office based on their Medicaid fee 
schedule whereas they may pay physicians operating in hospitals or 
clinics using an encounter rate. The Medicaid fee schedule rate 
typically reflects payment for an individual service that was rendered, 
for example, an office visit that is billed as a single CPT/HCPCS code. 
An encounter rate often reflects reimbursement for total facility 
specific costs divided by the number of encounters to calculate a per 
visit or per encounter rate that is paid to the facility for all 
services received during an encounter, regardless of which specific 
services are provided during a particular encounter. For example, the 
same encounter rate may be paid for a beneficiary who has an office 
visit with a physician, a dental examination and cleaning from a 
dentist, and laboratory tests and for a beneficiary who receives an 
office visit with a physician and x-rays. Encounter rates are typically 
paid to facilities, such as hospitals, FQHCs, RHCs, or clinics, many of 
which function as safety net providers that offer a wide variety of 
medical services. Within the Medicaid program, encounter rates can vary

[[Page 28012]]

widely in the rate itself and services paid for through the encounter 
rate. Proposing States demonstrate the economy and efficiency of their 
encounter rates would be an entirely different exercise to the fee 
schedule rate comparison proposed in this rule because encounter rates 
are often based on costs unique to the provider, and States often 
require providers to submit cost reports to States for review to 
support payment of the encounter rate. Comparing cost between the 
Medicaid and Medicare program would require a different methodology, 
policies, and oversight than what is proposed in this rule due to the 
differences within and between each program. While the Medicare program 
has a broad, national policy for calculating encounter rates for 
providers, including prospective payment systems for hospitals, FQHCs, 
and other types of facilities, Medicare calculates these encounter 
rates differently than States may calculate analogous rates in 
Medicaid. Therefore, proposing States disaggregate each of their 
encounter rates and services covered in each encounter rate to compare 
to Medicare's encounter rates would be challenging for States.
    From that logic, we likewise determined that the Medicare non-
facility payment rates as listed on the Medicare PFS rate afforded the 
best point of comparison because it is the most accurate and most 
analogous comparison of a service-based access analysis using Medicare 
non-facility payment rates as listed on the Medicare PFS as a benchmark 
to compare Medicaid fee schedule rates on a CPT/HCPCS code level basis, 
as opposed to an encounter rate which could include any number of 
services or specialties. The Medicare non-facility payment rate as 
listed on the Medicare PFS is described as ``. . . the fee schedule 
amount when a physician performs a procedure in a non-facility setting 
such as the office'' and ``[g]enerally, Medicare gives higher payments 
to physicians and other health care professionals for procedures 
performed in their offices [compared to those performed elsewhere] 
because they must supply clinical staff, supplies, and equipment.'' 
\164\ As such, we believe the Medicaid fee schedule best represents the 
payment intended to pay physicians and non-physician practitioners for 
delivery of individual services in an office (non-facility) setting, 
and the Medicare non-facility payment rate as listed on the Medicare 
PFS represents the best equivalent to that amount and consideration.
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    \164\ https://www.cms.gov/files/document/physician-fee-schedule-guide.pdf.
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    For the purposes of the comparative payment rate analysis, we would 
expect States to source the Medicare non-facility payment rate from the 
published Medicare fee schedule amounts on the Medicare PFS through one 
or both of the following sources: the Physician Fee Schedule Look-Up 
Tool \165\ on cms.gov or Excel file downloads of the Medicare PFS 
Relative Value Files \166\ for the relevant calendar year from cms.gov. 
We encourage States to begin sourcing Medicare non-facility payment 
rates from the Physician Fee Schedule Look-Up Tool and utilize the 
Physician Fee Schedule Guide for instructions on using the Look-Up 
Tool. When codes are not available in the Look-Up Tool, we would direct 
States to the Excel file downloads of the Medicare PFS Relative Value 
Files where States can find necessary information for calculating 
Medicare non-facility payment rates.
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    \165\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PFSlookup.
    \166\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeesched/pfs-relative-value-files.
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    As described in the Medicare Claims Processing Manual, most 
physician services are paid according to the Medicare PFS and the fee 
schedule amounts for a particular procedure code (including HCPCS, CPT, 
and CDT) are computed using a resource-based formula made up of three 
components of a procedure's RVU: physician work, practice expense, and 
malpractice as well as geographical differences in each locality area 
of the country.\167\ The resource-based formula also includes 
adjustments to reflect the variation in practice costs from one 
geographical location to another. Medicare establishes a geographic 
practice cost index (GPCI) for every Medicare payment locality for each 
of the three components of a procedure's RVU for physician work, 
practice expense, and malpractice and applies the GPCIs in the 
calculation of a fee schedule payment amount by multiplying the RVU for 
each component times the GPCI for that component.\168\
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    \167\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c12.pdf.
    \168\ https://www.cms.gov/medicare/physician-fee-schedule/search/overview.
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    Medicare also includes adjustments to the fee schedule amounts, for 
example, based on site of service (non-facility versus facility 
setting), where the rate, facility or non-facility, that a physician 
service is paid under the PFS is determined by the place of service 
(POS) code that is used to identify the setting where the beneficiary 
received the face-to-face encounter with the billing practitioner. We 
are proposing States use the Medicare non-facility payment rate as 
listed on the Medicare PFS in the comparative payment rate analysis. 
For codes that are not available in the Look-Up Tool, we would direct 
States to the Excel file downloads of the Medicare PFS Relative Value 
Files which include the RVUs, GPCI, and the ``National Physician Fee 
Schedule Relative Value File Calendar Year 2023'' file which contains 
the associated relative value units (RVUs), a fee schedule status 
indicator, and various payment policy indicators needed for payment 
adjustment (i.e., payment of assistant at surgery, team surgery, 
bilateral surgery, etc.). We expect States to utilize the formula for 
the Non-Facility Pricing Amount in ``National Physician Fee Schedule 
Relative Value File Calendar Year 2023'' file to calculate the ``Non-
Facility Price'' using the RVUs, GPCIs, and conversion factors for 
codes not available in the Look-Up Tool. For codes available in the 
Look-Up Tool, we expect States to specifically use the Medicare payment 
rates listed under the ``Non-Facility Price'' header as described on 
the Medicare PFS. The Non-Facility Price is the established Medicare 
payment rate as listed on the Medicare PFS which includes the amount 
that Medicare pays for the claim and any applicable co-insurance and 
deductible amounts owed by the patient.
    Medicaid fee-schedule rates should be representative of the total 
computable payment amount a provider would expect to receive as 
payment-in-full for the provision of Medicaid services to individual 
beneficiaries. 42 CFR 447.15 defines payment-in-full as ``the amounts 
paid by the agency plus any deductible, coinsurance or copayment 
required by the plan to be paid by the individual.'' Therefore, the 
State's Medicaid base payment rate used for comparison should be 
inclusive of total base payment from the Medicaid agency plus any 
applicable coinsurance and deductibles to the extent that a beneficiary 
is expected to be liable for those payments. If a State Medicaid fee 
schedule does not include these additional beneficiary cost-sharing 
payment amounts, then the Medicaid fee schedule amounts would need to 
be modified to align with the inclusion of expected beneficiary cost 
sharing in Medicare's non-facility payment rates as listed on the 
Medicare PFS.\169\
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    \169\ According to the Medicare Physician Fee Schedule Guide, 
for most codes, Medicare pays 80% of the amount listed and the 
beneficiary is responsible for 20 percent.

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[[Page 28013]]

    In paragraph (b)(3)(i)(C), we propose that the Medicare non-
facility payment rates must be effective for the same time period for 
the same set of E/M CPT/HCPCS codes that correspond to the Medicaid 
base payment rates identified under paragraph (b)(3)(i)(B) of this 
section. We included this language to ensure the comparative payment 
rate analysis is as accurate and analogous as possible by proposing 
that the Medicaid and Medicare payment rates that are effective during 
the same time period for the same set of E/M CPT/HCPCS codes. As later 
described in this rule, in paragraph (b)(4), we propose the initial 
comparative payment rate analysis and payment rate disclosure of its 
Medicaid payment rates would be a retroactive analysis of payment rates 
that are in effect as of January 1, 2025, with the analysis and 
disclosure published no later than January 1, 2026. For example, the 
first comparative payment rate analysis a State develops and publishes 
would compare Medicaid base payment rates in effect as of January 1, 
2025, to the Medicare non-facility payment rates effective January 1, 
2025, to ensure the Medicare non-facility payment rates are effective 
for the same time period for the same set of E/M CPT/HCPCS codes that 
correspond to the Medicaid base payment rates identified under 
paragraph (b)(3)(i)(B) of this section.
    Additionally, in paragraph (b)(3)(i)(C), we propose that the 
Medicare non-facility payment rates as listed on the Medicare PFS used 
for the comparison must be for the same geographical location as the 
Medicaid base payment rates. For States that pay Medicaid payment rates 
based on geographical location (for example, payment rates that vary by 
rural or non-rural location, by zip code, or by metropolitan 
statistical area), we propose that States comparative payment rate 
analysis would need to utilize the Medicare non-facility payment rates 
as listed on the Medicare PFS for the same geographical location as the 
Medicaid base payment rates to achieve an equivalent comparison. We 
would expect States to review Medicare's published listing of the 
current PFS locality structure organized by State, locality area, and 
when applicable, counties assigned to each locality area and identify 
the comparable Medicare locality area for the same geographical area as 
the Medicaid base payment rates.\170\
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    \170\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Locality.
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    We recognize that States that make Medicaid payment based on 
geographical location may not use the same locality areas as Medicare. 
For example, a State may use its own State-determined geographical 
designations, resulting in 5 geographical areas in the State for 
purposes of Medicaid payment while Medicare recognizes 3 locality areas 
for the State based on Metropolitan Statistical Area (MSA) delineations 
determined by the US Office of Management and Budget (OMB) and are the 
result of the application of published standards to Census Bureau 
data.\171\ In this instance, we would expect the State to determine an 
appropriate method to accomplish the comparative payment rate analysis 
that aligns the geographic area covered by each payer's rate as closely 
as reasonably feasible. For example, if the State identifies two 
geographic areas for Medicaid payment purposes that are contained 
almost entirely within one Medicare geographic area, then the State 
reasonably could determine to use the same Medicare non-facility 
payment rate as listed on the Medicare PFS in the comparative payment 
rate analysis for each Medicaid geographic area. As another example, if 
the State defined a single geographic area for Medicaid payment 
purposes that contained two Medicare geographic areas, then the State 
might determine a reasonable method to weight the two Medicare payment 
rates applicable within the Medicaid geographic area, and then compare 
the Medicaid payment rate for the Medicaid-defined geographic area to 
this weighted average of Medicare payment rates. Alternatively, as 
discussed in the next paragraph, the State could determine to use the 
unweighted arithmetic mean of the two Medicare payment rates applicable 
within the Medicaid-defined geographic area. We are seeking public 
comment on the proposed use of Medicare non-facility payment rates as 
listed on the Medicare PFS as a benchmark for States to compare their 
Medicaid payment rates to in the comparative payment rate analysis 
requirements in proposed Sec.  447.203(b)(3)(i) to help assess if 
Medicaid 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.
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    \171\ https://www.census.gov/programs-surveys/metro-micro/about/delineation-files.html.
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    We are aware that States may not determine their payment rates by 
geographical location. For States that do not pay Medicaid payment 
rates based on geographical location, we propose that States compare 
their Medicaid payment rates (separately identified by population, 
pediatric and adult, and provider type, as applicable) to the Statewide 
average of Medicare non-facility payment rates as listed on the 
Medicare PFS for a particular CPT/HCPCS code. The Statewide average of 
the Medicare non-facility payment rates as listed on the Medicare PFS 
for a particular CPT/HCPCS code would be calculated as a simple average 
or arithmetic mean where all Medicare non-facility payment rates as 
listed on the Medicare PFS for a particular CPT/HCPCS code for a 
particular State would be summed and divided by the number of all 
Medicare non-facility payment rates as listed on the Medicare PFS for a 
particular CPT/HCPCS code for a particular State. This calculated 
Statewide average of the Medicare non-facility payment rates as listed 
on the Medicare PFS would be calculated for each CPT/HCPCS code subject 
to the comparative payment rate analysis using the Non-Facility Price 
for each locality in the State rates as listed on the Medicare PFS. As 
previously mentioned, Medicare has published a listing of the current 
PFS locality structure organized by State, locality area, and when 
applicable, counties assigned to each locality area and we would expect 
States to utilize this listing to identify the Medicare locality areas 
in their State. For example, the Specific Medicare Administrative 
Contractor (MAC) for Maryland is 12302 and there are two Specific 
Locality codes, 1230201 for BALTIMORE/SURR. CNTYS and 1230299 for REST 
OF STATE. When using the Medicare Physician Fee Schedule Look Up Tool 
to identify the Medicare Non-Facility Price(s) for CY 2023 for 99202 in 
the Specific MAC locality code for Maryland (12302 MARYLAND), the 
following search results are populated: Medicare Non-Facility Price of 
$77.82 for BALTIMORE/SURR. CNTYS and $74.31 for REST OF STATE.\172\ 
These two Medicare Non-Facility Price(s) would be averaged to obtain a 
calculated Statewide average for Maryland of $76.07.
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    \172\ https://www.cms.gov/medicare/physician-fee-schedule/search?Y=0&T=4&HT=0&CT=1&H1=99202&C=43&M=5.
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    For States that do not determine their payment rates by 
geographical location, we propose that States would use the Statewide 
average of the Medicare Non-Facility Price(s) as listed on the PFS, as 
previously described, because it ensures consistency across all States' 
comparative payment rate analysis,

[[Page 28014]]

aligns with the geographic area requirement of section 1902(a)(30)(A) 
of the Act, and ensures the Medicare non-facility payment rates as 
listed on the Medicare PFS that States use in their comparative payment 
rate analysis accurately reflect how Medicare pays for services. This 
proposal ensures that all States' comparative payment rate analyses 
consistently incorporate Medicare geographical payment rate adjustments 
as proposed in paragraph (b)(3)(i)(C). As previously discussed, we 
propose that States that do pay varying rates by geographical location 
would need to identify the comparable Medicare locality area for the 
same geographical area as their Medicaid base payment rates. However, 
for States that do not pay varying rates by geographical location, at 
the operational level, the State is effectively paying a Statewide 
Medicaid payment rate, regardless of geographical location, that cannot 
be matched to a Medicare non-facility payment rate in a comparable 
Medicare locality area for the same geographical area as the Medicaid 
base payment rates. Therefore, in order consistently apply the proposed 
provision that the Medicare non-facility payment rate must be for the 
same geographical location as the Medicaid base payment rates, States 
that do not pay varying rates by geographical location would be 
required to calculate a Statewide average of the Medicare non-facility 
payment rate to compare the State's Statewide Medicaid payment rate.
    Additionally, we propose that States that do not determine their 
payment rates by geographical location should use the Statewide average 
of the Medicare non-facility payment rates as listed on the Medicare 
PFS to align the implementing regulatory text with the statute's 
geographic area requirement in section 1902(a)(30)(A) of the Act. 
Section 1902(a)(30)(A) of the Act requires that Medicaid payments 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. Therefore, the proposed provisions of this rule, which are 
implementing section 1902(a)(30)(A) of the Act, must include a method 
of ensuring we have sufficient information for determining sufficiency 
of access to care as compared to the general population in the 
geographic area. As we have proposed to use Medicare non-facility 
payment rates as a benchmark for comparing Medicaid base payment rates, 
we believe that utilizing a Statewide average of Medicare non-facility 
payment rates as listed on the Medicare PFS for States that do not pay 
varying rates by geographical location would align the geographic area 
requirement of section 1902(a)(30)(A) of the Act, treating the entire 
State (throughout which the Medicaid base payment rate applies 
uniformly) as the relevant geographic area.
    We considered requiring States weight the Statewide average of the 
Medicare non-facility payment rates by the proportion of the Medicare 
beneficiary population covered by each rate, but we did not propose 
this due to the additional administrative burden this would create for 
States complying with the proposed comparative payment rate analysis as 
well as limited availability of Medicare beneficiary and claims data 
necessary to weight the Statewide average of the Medicare non-facility 
payment rates as described above. As proposed, States that do not 
determine their payment rates by geographical location would be 
required to consider Medicare's geographically determined payment rates 
by Statewide average of the Medicare non-facility payment rates. We 
believe that proposing an additional step to weight the Statewide 
average by the proportion of the Medicare beneficiary population 
covered by each rate would create would not result in a practical 
version of the Medicare non-facility payment rate for purposes of the 
comparative payment rate analysis. Additionally, proposing only States 
that do not determine their payment rates by geographical location 
would result in additional administrative burden that is not imposed on 
States who do determine their payment rates by geographical location. 
Additionally, in order to accurately weight the Statewide average of 
the Medicare non-facility payment rates by the proportion of the 
Medicare beneficiary population covered by each rate, States would 
likely require Medicare-paid claims data for each code subject to the 
comparative payment rate analysis, broken down by each of the 
comparable Medicare locality areas for the same geographical area as 
the Medicaid base payment rates that are included in the Statewide 
average of Medicare non-facility payment rates. While total Medicare 
beneficiary enrollment data broke down by State and county level is 
publicly available on data.cms.gov, Medicare-paid claims data broken 
down by the Medicare locality areas used in the Medicare PFS and by 
code level is not published by CMS and would be inaccessible for the 
State to utilize in weighting the Statewide average of the Medicare 
non-facility payment rates by the proportion of the Medicare 
beneficiary population covered by each rate. As proposed, we believe 
that States that do not determine their payment rates by geographical 
location calculating simple Statewide average of the Medicare non-
facility rates in their State ensures consistency across all States' 
comparative payment rate analysis, aligns with the geographic area 
requirement of section 1902(a)(30)(A) of the Act, and ensures the 
Medicare non facility payment rates as listed on the Medicare PFS that 
States use in their comparative payment rate analysis accurately 
reflect how Medicare pays for services. We are seeking public comment 
regarding our decision not to propose requiring States that do not pay 
varying Medicaid rates by geographical location weight the Statewide 
average of the Medicare non-facility payment rates by the distribution 
of Medicare beneficiaries in the State.
    Furthermore, in paragraph (b)(3)(i)(C), we propose that the 
Medicare non-facility payment rate must separately identify the payment 
rates by provider type. We previously discussed that some States and 
Medicare pay a percentage less than 100 percent of their fee schedule 
payment rates to NPPs, including, for example, nurse practitioners, 
physician assistants, and clinical nurse specialists. To ensure a 
State's comparative payment rate analysis is as accurate as possible 
when comparing their Medicaid payment rates to Medicare, we are 
proposing that States include a breakdown of Medicare's non-facility 
payment rates by provider type. The proposed breakdown of Medicare's 
payment rates by provider type would be required for all States, 
regardless of whether or how the State's Medicaid payment rates vary by 
provider type, because it ensures the comparative payment rate analysis 
accurately reflects this existing Medicare payment policy on the 
Medicare side of the analysis. Therefore, every comparative payment 
rate analysis would include the following Medicare non-facility payment 
rates for the same set of E/M CPT/HCPCS codes paid under Medicaid as 
described in Sec.  447.203(b)(3)(i)(B): the non-facility payment rate 
as listed on Medicare PFS rate as the Medicare payment rate for 
physicians and the non-facility payment rate as listed on Medicare PFS 
rate multiplied by 0.85 as the Medicare payment rate for NPPs.
    As previously mentioned in this proposed rule, Medicare pays nurse 
practitioners, physician assistants, and clinical nurse specialists at 
85 percent of the Medicare PFS rate. Medicare

[[Page 28015]]

implements a payment policy where the fee schedule amounts, including 
the Medicare non facility payment rates, as listed on the Medicare PFS 
are reduced to 85 percent when billed by NPPs, including nurse 
practitioners, physician assistants, and clinical nurse specialists, 
whereas physicians are paid 100 percent of the fee schedule amounts as 
listed on the Medicare PFS.\173\ As proposed, States' comparative 
payment rate analysis would need to match their Medicaid payment rates 
for each provider type to the corresponding Medicare non-facility 
payment rates for each provider type, regardless of the State paying 
varying or the same payment rates to their providers for the same 
service. As an example of a State that pays varying rates based on 
provider type, if a State's Medicaid fee schedule lists a rate of 
$100.00 when a physician delivers and bills for 99202, then the $100.00 
Medicaid base payment rate would be compared to 100 percent of the 
Medicare non-facility payment rate as listed on the Medicare PFS. If 
the same State's Medicaid fee schedule lists a rate of $75 when a nurse 
practitioner delivers and bills for 99202 (or the State's current 
approved State plan language states that a nurse practitioner is paid 
75 percent of the State's Medicaid fee schedule rate), then the $75 
Medicaid base payment rate would be compared to the Medicare non-
facility payment rate as listed on the Medicare PFS multiplied by 0.85. 
Both Medicare non-facility payments rates would need to account for any 
applicable geographical variation, including the Non-Facility Price as 
listed on the Medicare PFS for each relevant locality area or the 
calculated Statewide average of the Non-Facility Price as listed on the 
Medicare PFS for all relevant areas of a State, as previously discussed 
in this section, for an accurate comparison to the corresponding 
Medicaid payment rate. Alternatively, if a State pays the same $80 
Medicaid base payment rate for the service when delivered by physicians 
and by nurse practitioners, then the $80 would be listed separately for 
physicians and nurse practitioners as the Medicaid base payment rate 
and compared to the Medicare non-facility payment rate as listed on the 
Medicare PFS for physicians and the Medicare non-facility payment rate 
as listed on the Medicare PFS multiplied by 0.85 for nurse 
practitioners.
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    \173\ https://www.cms.gov/files/document/physician-fee-schedule-guide.pdf.
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    This granular level of comparison provides States with the 
opportunity to benchmark their Medicaid payment rates against Medicare 
as part of the State's and our process for ensuring compliance with 
section 1902(a)(30)(A) of the Act. For example, a State's comparative 
payment rate analysis may show that the State's Medicaid base payment 
rate for physicians is 80 percent of the Medicare non-facility payment 
rate and their Medicaid base payment rate for nurse practitioners is 71 
percent of the Medicare non-facility payment rate for NPPs, because the 
State pays a reduced rate to nurse practitioners. Although Medicare 
also pays a reduced rate to nurse practitioners, the reduced rate the 
State pays to nurse practitioners compared to Medicare's reduced rate 
is still a lower percentage than the physician rate. However, another 
State's comparative payment rate analysis may show that the State's 
Medicaid base payment rate for physicians is 95 percent of the Medicare 
non-facility payment rate and their Medicaid base payment rate for 
nurse practitioners is 110 percent of the Medicare non-facility payment 
rate because the State pays all providers the same Medicaid base 
payment rate while Medicare pays a reduced rate of 85 percent of the 
Medicare non-facility payment rate as listed on the Medicare PFS when 
the service is furnished by an NPP. By conducting this level of 
analysis through the comparative payment rate analysis, States would be 
able to pinpoint where there may be existing or potential future access 
to care concerns rooted in payment rates. We are seeking public comment 
on the proposed requirement for States to compare their Medicaid 
payment rates to the Medicare non-facility payment rate as listed on 
the Medicare PFS, effective for the same time period for the same set 
of E/M CPT/HCPCS codes, and for the same geographical location as the 
Medicaid base payment rates, that correspond to the Medicaid base 
payment rates identified under paragraph (b)(3)(i)(B) of this section, 
including, separate identification of the payment rates by provider 
type, as proposed in Sec.  447.203(b)(3)(i)(C).
    In paragraph (b)(3)(i)(D), we propose to require States specify the 
Medicaid base payment rate identified under proposed Sec.  
447.203(b)(3)(i)(B) as a percentage of the Medicare non-facility 
payment rate identified under proposed Sec.  447.203(b)(3)(i)(C) for 
each of the services for which the Medicaid base payment rate is 
published under proposed Sec.  447.203(b)(3)(i)(B). For each E/M CPT/
HCPCS code that we select, we propose that States would calculate each 
Medicaid base payment rate as specified in paragraph (b)(3)(i)(B) as a 
percentage of the corresponding Medicare non-facility payment rate 
specified in paragraph (b)(3)(i)(C). Both rates would be required to be 
effective for the same time period of the comparative payment rate 
analysis. As previous components of the proposed comparative payment 
rate analysis have considered variance in payment rates based on 
population the service is delivered to (adult or pediatric), provider 
type, and geographical location to extract the most granular and 
accurate Medicaid and Medicare payment rate data, we propose that 
States would calculate the Medicaid base payment rate as a percentage 
of the Medicare non-facility payment rate in the comparative payment 
rate analysis to obtain an informative metric that can be used in the 
State's and our assessment of whether the State's payment rates are 
compliant with section 1902(a)(30)(A) of the Act. As previously 
discussed, benchmarking against Medicare serves as an important data 
point in determining whether payment rates are likely to be sufficient 
to ensure access for Medicaid beneficiaries at least as great as for 
the general population in the geographic area, and whether any 
identified access concerns may be related to payment sufficiency. We 
propose that States would calculate their Medicaid payment rates as a 
percentage of the Medicare non-facility payment rate because it is a 
common, simple, and informative statistic that can provide us with a 
gauge of how Medicaid payment rates compare to Medicare non-facility 
payment rates in the same geographic area. Initially and over time, 
States, CMS, and other interested parties would be able to compare the 
State's Medicaid payment rates as a percentage of Medicare's non-
facility payment rates to identify how the percentage changes over 
time, in view of changes that may take place to the Medicaid and/or the 
Medicare payment rate. Being able to track and analyze the change in 
percentage over time would help States and CMS identify possible access 
concerns that may be related to payment insufficiency.
    The organization and content of the comparative payment rate 
analysis, including the expression of the Medicaid base payment rate as 
a percentage of the Medicare payment rate, can provide us with a great 
deal of information about access in the State. For example, we would be 
able to identify when and how the Medicaid base payment rate as a 
percentage of the Medicare non-facility payment rate for E/M CPT/HCPCS 
codes for primary care

[[Page 28016]]

services may decrease over time if Medicare adjusts its rates and a 
State does not, and use this information to more closely examine for 
possible access concerns. This type of analysis would provide us with 
actionable information to help ensure consistency with section 
1902(a)(30)(A) of the Act by using Medicare non-facility payment rates 
paid across the same geographical areas of the State as a point of 
comparison for payment rate sufficiency as a critical element of 
beneficiary access to care. When explaining the rationale for proposing 
to use Medicare non-facility payment rates for comparison earlier in 
this rule, we emphasized the ability to demonstrate to States that 
certain Medicaid payment rates have not kept pace with changes to 
Medicare non-facility payment rates and how the comparative payment 
rate analysis would help them identify areas where they also might want 
to consider rate increases that address market changes. We are seeking 
public comment on the proposed requirement for States to calculate 
their Medicaid payment rates as a percentage of the Medicare non-
facility payment rate for each of the services for which the Medicaid 
base payment rate is published under proposed paragraph (b)(3)(i)(B), 
as described in proposed Sec.  447.203(b)(3)(i)(D). We are also seeking 
public comment on any challenges States might encounter when comparing 
their Medicaid payment rates to Medicare non-facility payment rates 
under proposed Sec.  447.203(b)(3)(i)(D), particularly for any of the 
proposed categories of service in paragraphs (b)(2)(i) through (iii), 
as well as suggestions for an alternative comparative analysis that 
might be more helpful, or less burdensome and equally helpful, for 
States, CMS, and other interested parties to assess whether a State's 
Medicaid payment rates are consistent with the access standard in 
section 1902(a)(30)(A) of the Act.
    We are aware that provider payment rates are an important factor 
influencing beneficiary access; as expressly indicated in section 
1902(a)(30)(A) of the Act, insufficient provider payment rates are not 
likely to enlist enough providers willing to serve Medicaid 
beneficiaries to ensure broad access to care; however, there may be 
situations where access issues are principally due to other causes. For 
example, even if Medicaid payment rates are generally consistent with 
amounts paid by Medicare (and those amounts have been sufficient to 
ensure broad access to services for Medicare beneficiaries), Medicaid 
beneficiaries may have difficulty scheduling behavioral health care 
appointments because the overall number of behavioral health providers 
within a State is not sufficient to meet the demands of the general 
population. Therefore, a State's rates may be consistent with the 
requirements of section 1902(a)(30)(A) of the Act even when access 
concerns exist, and States and CMS may need to examine other strategies 
to improve access to care beyond payment rate increases. By contrast, 
comparing a State's Medicaid behavioral health payment rates to 
Medicare may demonstrate that the State's rates fall far below Medicare 
non-facility payment rates, which would likely impede beneficiaries 
from accessing needed care when the demand already exceeds the supply 
of providers within a State. In that case, States may need to evaluate 
budget priorities and take steps to ensure behavioral health rates are 
consistent with section 1902(a)(30)(A) of the Act.
    Lastly, in paragraph (b)(3)(i)(E), we propose to require States to 
specify in their comparative payment rate analyses the number of 
Medicaid-paid claims and the number of Medicaid enrolled beneficiaries 
who received a service within a calendar year for each of the services 
for which the Medicaid base payment rate is published under paragraph 
(b)(3)(i)(B). The previous components of the comparative payment rate 
analysis focus on the State's payment rate for the E/M CPT/HCPCS code 
and comparing the Medicaid base payment rate to the Medicare non-
facility payment rate for the same code (separately, for each Medicaid 
base payment rate by population (adult or pediatric), provider type, 
and geographic area, as applicable). This component examines the 
Medicaid-paid claims volume of each E/M CPT/HCPCS code included in the 
comparative payment rate analysis relative to the number of Medicaid 
enrolled beneficiaries receiving each service within a calendar year. 
We propose to limit the claims volume data to Medicaid-paid claims, and 
the number of beneficiaries would be limited to Medicaid-enrolled 
beneficiaries who received a service in the calendar year of the 
comparative payment rate analysis, where the service would fall into 
the list of CMS-identified E/M CPT/HCPCS code(s). In other words, a 
beneficiary would be counted in the comparative payment rate analysis 
for a particular calendar year when the beneficiary received a service 
that is included in one of the categories of services described in 
paragraphs (b)(2)(i) through (iii) for which the State has a Medicaid-
based payment rate (the number of Medicaid-enrolled beneficiaries who 
received a service). A claim would be counted in the comparative 
payment rate analysis for a particular calendar year when that 
beneficiary had a claim submitted on their behalf by a provider who 
billed one of the codes from the list of CMS-identified E/M CPT/HCPCS 
code(s) to the State and the State paid the claim (number of Medicaid-
paid claims). With this proposal, we are seeking to ensure the 
comparative payment rate analysis reflects actual services received by 
beneficiaries and paid for by the State, or realized access.\174\
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    \174\ Andersen, R.M., and P.L. Davidson. 2007. Improving access 
to care in America: Individual and contextual indicators. In 
Changing the U.S. health care system: Key issues in health services 
policy and management, 3rd edition, Andersen, R.M., T.H. Rice, and 
G.F. Kominski, eds. San Francisco, CA: John Wiley & Sons.
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    We considered but did not propose States identify the number of 
unique Medicaid-paid claims and the number of unique Medicaid-enrolled 
beneficiaries who received a service within a calendar year for each of 
the services for which the Medicaid base payment rate is published 
pursuant to paragraph (b)(3)(i)(B). We considered this detail in order 
to identify the unique, or deduplicated, number of beneficiaries who 
received a service that falls into one of the categories of services 
described in in paragraph (b)(2)(i) through (iii) in a calendar year. 
For example, if a beneficiary has 6 visits to their primary care 
provider in a calendar year and the provider bills 6 claims with 99202 
for the same beneficiary, then the beneficiary and claims for 99202 
would only be counted as one claim and one beneficiary. Therefore, we 
chose not to propose this aspect because we intend for the comparative 
payment rate analysis to capture the total amount of actual services 
received by beneficiaries and paid for by the State. We are seeking 
public comment regarding our decision not to propose States identify 
the number of unique Medicaid-paid claims and the number of unique 
Medicaid enrolled beneficiaries who received a service within a 
calendar year for each of the services for which the Medicaid base 
payment rate is published pursuant to paragraph (b)(3)(i)(B) in 
comparative payment rate analysis as proposed Sec.  
447.203(b)(3)(i)(E).
    We also considered but did not propose States identify the total 
Medicaid-enrolled population who could potentially receive a service 
within a calendar year for each of the services for which the Medicaid 
base

[[Page 28017]]

payment rate is published pursuant to paragraph (b)(3)(i)(B), in 
addition to the proposing States identify the number of Medicaid-
enrolled beneficiaries who received a service. This additional data 
element in the comparative payment rate analysis would reflect the 
number of Medicaid-enrolled beneficiaries who could have received a 
service, or potential access, in comparison to the number of Medicaid-
enrolled beneficiaries who actually received a service. We did not 
propose this aspect because this could result in additional 
administrative burden on the State, as we already collect and publish 
similar data through Medicaid and CHIP Enrollment Trends Snapshots 
published on Medicaid.gov. We are also seeking public comment regarding 
our decision not to propose States identify the total Medicaid-enrolled 
population who could receive a service within a calendar year for each 
of the services for each of the services for each of the services for 
which the Medicaid base payment rate is published pursuant to paragraph 
(b)(3)(i)(B) in the comparative payment rate analysis as proposed Sec.  
447.203(b)(3)(i)(E).
    We propose to include beneficiary and claims information in the 
comparative payment rate analysis to contextualize the payment rates in 
the analysis, and to be able to identify longitudinal changes in 
Medicaid service volume in the context of the Medicaid beneficiary 
population receiving services, since utilization changes could be an 
indication of an access to care issue. For example, a decrease in the 
number of Medicaid-paid claims for primary care services furnished to 
Medicaid beneficiaries in an area (when the number of Medicaid-enrolled 
beneficiaries who received primary care services in the area is 
constant or increasing) could be an indication of an access to care 
issue. Without additional context provided by the number of Medicaid 
enrolled beneficiaries who received a service, changes in claims volume 
could be attributed to a variety of changes in the beneficiary 
population, such as a temporary loss of coverage when enrollees 
disenroll and then re-enroll within a short period of time.
    Further, if the Medicaid base payment rate for the services with 
decreasing Medicaid service volume has failed to keep pace with the 
corresponding Medicare non-facility payment rate over the period of 
decrease in utilization (as reflected in changes in the Medicaid base 
payment rate expressed as a percentage of the Medicare non-facility 
payment rate as required under proposed Sec.  447.203(b)(3)(i)(D)), 
then we would be concerned and would further scrutinize whether any 
access to care issue might be caused by insufficient Medicaid payment 
rates for the relevant services. With each biennial publication of the 
State's comparative payment rate analysis, as proposed in Sec.  
447.203(b)(4), discussed later in this section, States and CMS would be 
able to compare the number of paid claims in the context of the number 
of Medicaid enrolled beneficiaries receiving services within a calendar 
year for the services subject to the comparative payment rate analysis 
with previous years' comparative payment rate analyses. Collecting and 
comparing the number of paid claims data in the context of the number 
of Medicaid enrolled beneficiaries receiving services alongside 
Medicaid base payment rate data may reveal trends where an increase in 
the Medicaid base payment rate is correlated with an increase in 
service volume and utilization, or vice versa with a decrease in the 
Medicaid base payment rate is correlated with a decrease in service 
volume and utilization. As claims utilization and number of Medicaid 
enrolled beneficiaries receiving services are only correlating trends, 
we acknowledge that there may be other contextualizing factors outside 
of the comparative payment rate analysis that affect changes in service 
volume and utilization and we would (and would expect States and other 
interested parties to) take such additional factors into account in 
analyzing and ascribing significance to changes in service volume and 
utilization. We are seeking public comment on the proposed requirement 
for States to include the number of Medicaid-paid claims and the number 
of Medicaid enrolled beneficiaries who received a service within a 
calendar year for which the Medicaid base payment rate is published 
under proposed paragraph (b)(3)(i)(B), as specified in proposed Sec.  
447.203(b)(3)(i)(E).
    We believe the comparative payment rate analysis proposed in 
paragraph (b)(3) is needed to best enable us to ensure State compliance 
with the requirement in section 1902(a)(30)(A) of the Act that payments 
are sufficient to enlist enough providers so that care and services are 
available to Medicaid beneficiaries at least to the extent they are 
available to the general population in the geographic area. As 
demonstrated by the findings of Sloan, et al.,\175\ which have since 
been supported and expanded upon by numerous researchers, multiple 
studies examining the relationship between Medicaid payment and 
physician participation,176 177 at the State level,\178\ and 
among specific provider types,179 180 have found a direct, 
positive association between Medicaid payment rates and provider 
participation in the Medicaid program. While multiple factors may 
influence provider enrollment (such as administrative burden), section 
1902(a)(30)(A) of the Act specifically concerns the sufficiency of 
provider payment rates. Given this statutory requirement, a comparison 
of Medicaid payment rates to other payer rates is an important 
barometer of whether State payment policies are likely to support the 
statutory standard of ensuring access for Medicaid beneficiaries such 
that covered care and services are available to them at least to the 
extent that the same care and services are available to the general 
population in the geographic area.
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    \175\ Sloan, F. et al. ``Physician Participation in State 
Medicaid Programs.'' The Journal of Human Resources, Volume 13, 
Supplement: National Bureau of Economic Research Conference on the 
Economics of Physician and Patient Behavior, 1978, p. 211-245. 
https://www.jstor.org/stable/145253?seq=1#metadata_info_tab_contents. Accessed August 16, 2022.
    \176\ Chen, A. ``Do the Poor Benefit from More Generous Medicaid 
Policies'' SSRN Electronic Journal, January 2014., p. 1-46. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2444286. Accessed June 
16, 2022.
    \177\ Holgash, K. and Martha Heberlein, ``Physician Acceptance 
of New Medicaid Patients: What Matters and What Doesn't'' Health 
Affairs, April 10, 2019. https://www.healthaffairs.org/do/10.1377/
forefront.20190401.678690/#:~:text=Physicians% 
E2%80%99%20acceptance%20of%20new 
%20Medicaid%20patients%20is%20only,of%20Medicaid%20patients%20already
%20in%20the%20physician%E2%80%99s%20care. Accessed June 16, 2022.
    \178\ Fakhraei, H. ``Payments for Physician Services: An 
analysis of Maryland Medicaid Reimbursement Rates'' International 
Journal of Healthcare Technology and Management, Volume 7, Numbers 
1-2, January 2005, p. 129-142. https://www.researchgate.net/publication/228637758_Payments_for_physician_services_An_analysis_of_Maryland_Medicaid_reimbursement_rates. Accessed June 16, 2022.
    \179\ Berman, S., et al. ``Factors that Influence the 
Willingness of Private Primary Care Pediatricians to Accept More 
Medicaid Patients,'' Pediatrics, Volume 110, Issue 2, August 2002, 
p. 239-248. https://publications.aap.org/pediatrics/article-abstract/110/2/239/64380/Factors-That-Influence-the-Willingness-of-Private?redirectedFrom=fulltext?autologincheck=redirected. Accessed 
June 16, 2022.
    \180\ Suk-fong S., Tang, et al. ``Increased Medicaid Payment and 
Participation by Office-Based Primary Care Pediatricians,'' 
Pediatrics, Volume 141, number 1, January 2018, p. 1-9. https://publications.aap.org/pediatrics/article/141/1/e20172570/37705/Increased-Medicaid-Payment-and-Participation-by. Accessed June 16, 
2022.
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    The AMRP requirements currently address this standard under section 
1902(a)(30)(A) of the Act by requiring States to compare Medicaid 
payment rates to the payment rates of other

[[Page 28018]]

public and private payers in current Sec.  447.203(b)(1)(v) and (b)(3). 
While we are proposing to eliminate the AMRP requirements with this 
proposed rule, we believe that our proposal to require States to 
compare their Medicaid payment rates for services under specified E/M 
CPT/HCPCS codes against Medicare non-facility payment rates for the 
same codes, as described in Sec.  447.203(b)(3), would well position 
States and CMS to continue to meet the statutory access requirement. 
Some studies examining the relationship between provider payments and 
various access measures have quantified the relationship between the 
Medicaid-Medicare payment ratio and access measures. Two studies 
observed that increases in the Medicaid-Medicare payment ratio is 
associated with higher physician acceptance rates of new Medicaid 
patients and with an increased probability of a beneficiary having an 
office-based physician as the patient's usual source of 
care.181 182 These studies led us to conclude that Medicare 
non-facility payment rates are likely to be a sufficient benchmark for 
evaluating access to care, particularly ambulatory physician services, 
based on provider payment rates.
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    \181\ Holgash, K. and Martha Heberlein, Health Affairs, April 
10, 2019.
    \182\ Cohen, J.W., Inquiry, Fall 1993.
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    By comparing FFS Medicaid payment rates to corresponding FFS 
Medicare non-facility payment rates, where Medicare is a public payer 
with large populations of beneficiaries and participating providers 
whose payment rates are readily available, we aim to establish a 
uniform benchmarking approach that allows for more meaningful oversight 
and transparency and reduces the burden on States and CMS relative to 
the current AMRP requirements that do not impose specific 
methodological standards for comparing payment rates and that 
contemplate the availability of private payer rate information that has 
proven difficult for States to obtain due to its often proprietary 
nature. This aspect of the proposal specifically responds to States' 
expressed concerns that the AMRP requirement to include ``actual or 
estimated levels of provider payment available from other payers, 
including other public and private payers'' was challenging to 
accomplish based on the general unavailability of this information, as 
discussed elsewhere in this proposed rule.
    Following the 2011 proposed rule, and as addressed by us through 
public comment response in the 2015 final rule with comment period, 
States expressed concerns that private payer payment rates were 
proprietary information and not available to them and that large 
private plans did not exist within some States so there were no private 
payer rates to compare to, therefore, the State would need to rely on 
State employee health plans or non-profit insurer rates.\183\ States 
also expressed that other payer data, including public and private 
payers, in general may be unsound for comparisons because of a lack of 
transparency about the payment data States would have compared their 
Medicaid payment rates to. Since 2016, we have learned a great deal 
from our implementation experience of the AMRP process. We have learned 
that very few States were able to include even limited private payer 
data in their AMRPs. States that were able include private payer data 
were only able to do so because the State had existing Statewide all 
payer claiming or rate-setting systems, which gave them access to 
private payer data in their State, or the State previously based their 
State plan payment rates off of information about other payers (such as 
the American Dental Association's Survey of Dental Fees) that gave them 
access to private payer data.\184\ Based on our implementation 
experience and concerns from States about the current requirement in 
Sec.  447.203(b)(1)(v) to obtain private payer data, we are proposing 
to require States only compare their Medicaid payment rates to 
Medicare's, for which payment data are readily and publicly available.
---------------------------------------------------------------------------

    \183\ Alaska Department of Health and Social Services, Comment 
Letter on 2011 Proposed Rule (July 7, 2011), https://www.regulations.gov/comment/CMS-2011-0062-0102.
    \184\ https://www.medicaid.gov/sites/default/files/2019-12/co-amrp-2016.pdf, https://www.medicaid.gov/sites/default/files/2019-12/md-amrp-16.pdf, https://www.medicaid.gov/sites/default/files/2019-12/sd-amrp-16.pdf.
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    Next, in paragraph (b)(3)(ii), we propose that for each category of 
services described in proposed paragraph (b)(2)(iv), the State agency 
would be required to publish a payment rate disclosure that expresses 
the State's payment rates as the average hourly payment rates, 
separately identified for payments made to individual providers and to 
providers employed by an agency, if the rates differ. The payment rate 
disclosure would be required to meet specified requirements. The reason 
for including this proposal builds on our justification for including 
personal care, home health aide, and homemaker services provided by 
individual providers and providers employed by an agency in this 
proposed rule, which is to remain consistent with the proposed HCBS 
provisions at Sec.  441.311(d)(2) and (e) and take specific action 
regarding direct care workers per Section 2402(a) of the Affordable 
Care Act. HCBS and direct care workers that deliver these services are 
unique to Medicaid and often not covered by other payers, which is why 
we are proposing a different analysis of payment rates for providers of 
these services that does not involve a comparison to Medicare. As 
previously stated, Medicare covers part-time or intermittent home 
health aide services (only if a Medicare beneficiary is also getting 
other skilled services like nursing and/or therapy at the same time) 
under Medicare Part A (Hospital Insurance) or Medicare Part B (Medical 
Insurance); however, Medicare does not cover personal care or homemaker 
services. Therefore, comparing personal care and homemaker services to 
Medicare, as we proposed in paragraph (b)(3)(i) for other specified 
categories of services, would not be feasible for States, and a 
comparison of Medicaid home health aide average hourly payment rates to 
analogous rates for Medicare would be of limited utility given the 
differences in circumstances when Medicaid and Medicare may pay for 
such services.
    As previously discussed, private payer data are often considered 
proprietary and not available to States, thereby eliminating private 
payers as feasible point of comparison. Even if private payer payment 
rate data were more readily available, like Medicare, many private 
payers do not cover HCBS as HCBS is unique to the Medicaid program, 
leaving Medicaid as the largest or the only payer for personal care, 
home health aide, and homemaker services. Given Medicaid's status as 
the most important payer for HCBS, we believe that scrutiny of Medicaid 
HCBS payment rates themselves, rather than a comparison to other payer 
rates that frequently do not exist, is most important in ascertaining 
whether such Medicaid payment rates are sufficient to enlist adequate 
providers so that the specified services are available to Medicaid 
beneficiaries at least to the same extent as to the general population 
in the geographic area. We acknowledge that individuals without 
insurance may self-pay for medical services provided in their home or 
community; however, similar to private payer data, self-pay data is 
unlikely to be available to States. Because HCBS coverage is unique to 
Medicaid, Medicaid beneficiaries are generally the only individuals in 
a given geographic area with access to HCBS. Through the proposed 
payment rate disclosure, Medicaid payments rates

[[Page 28019]]

would be transparent and comparable among States and would assist 
States to analyze if and how their payment rates are compliant with 
section 1902(a)(30)(A) of the Act.
    As noted previously in this section, we propose to require States 
to express their rates separately as the average hourly payments made 
to individual providers and providers employed by an agency, if the 
rates differ, as applicable for each category of service specified in 
proposed Sec.  447.203(b)(2)(iv). We believe expressing the data in 
this manner would best account for variations in types and levels of 
payment that may occur in different settings and employment 
arrangements. Individual providers are often self-employed or contract 
directly with the State to deliver services as a Medicaid provider 
while providers employed by an agency are employed by the agency which 
works directly with the Medicaid agency to provide Medicaid services. 
These differences in employment arrangements often include differences 
in the hourly rate a provider would receive for services delivered, for 
example, providers employed by an agency typically receive benefits, 
such as health insurance, and the cost of those benefits are factored 
into the hourly rate that the State pays for the services delivered by 
providers employed by an agency (even though the employed provider does 
not retain the entire amount as direct monetary compensation). However, 
these benefits are not always available for individual providers who 
may need to separately purchase a marketplace health plan or be able to 
opt into the State-employee health plan, for example. Therefore, the 
provider employed by an agency potentially could receive a higher 
hourly rate because benefits are factored into the hourly rate they 
receive for delivering services, whereas the individual provider might 
be paid a rate that does not reflect employment benefits.
    With States expressing their payment rates separately as the 
average hourly payment rate made to individual and agency employed 
providers for personal care, home health aide, and homemaker services, 
States, CMS, and other interested parties would be able to compare 
payment rates among State Medicaid programs. Such comparisons may be 
particularly relevant for States in close geographical proximity to 
each other or that otherwise may compete to attract providers of the 
services specified in proposed paragraph (b)(2)(iv) or where such 
providers may experience similar costs or other incentives to provide 
such services. For example, from reviewing all States' payment rate 
analyses for personal care, home health aide, and homemaker services, 
we would be able to learn that two neighboring States have similar 
hourly rates for providers of these services, but a third neighboring 
State has much lower hourly rates than both of its neighbors. This 
information could highlight a potential access issue, since providers 
in the third State might have an economic incentive to move to one of 
the two neighboring States where they could receive higher payments for 
furnishing the same services. Such movement could result in 
beneficiaries in the third State having difficulty accessing covered 
services, compared to the general population in the tri-State 
geographic area.
    Additionally in paragraph (b)(3)(ii), we propose that the State's 
payment rate disclosure must meet the following requirements: (A) the 
State must organize the payment rate disclosure by category of service 
as specified in proposed paragraph (b)(2)(iv); (B) the disclosure must 
identify the average hourly payment rates, including, if the rates 
vary, separate identification of the average hourly payment rates for 
payments made to individual providers and to providers employed by an 
agency by population (pediatric and adult), provider type, and 
geographical location, as applicable; and (C) the disclosure must 
identify the number of Medicaid-paid claims and the number of Medicaid 
enrolled beneficiaries who received a service within a calendar year 
for each of the services for which the Medicaid base payment rate is 
published under proposed paragraph (b)(3)(ii)(B). We are seeking public 
comment on the proposed requirements and content of the items in 
proposed Sec.  447.203(b)(3)(ii)(A) through (C).
    In paragraph (b)(3)(ii)(A), we propose to require States to 
organize their payment rate disclosures by each of the categories of 
services specified in proposed paragraph (b)(2)(iv), that is, to break 
out the payment rates for personal care, home health aide, and 
homemaker services provided by individual providers and providers 
employed by an agency, separately for individual analyses of the 
payment rates for each category of service and type of employment 
structure. We are seeking public comment on the proposed requirement 
for States to break out their payment rates for personal care, home 
health aide, and homemaker services separately for individual analyses 
of the payment rates for each category of service in the comparative 
payment rate analysis, as described in proposed Sec.  
447.203(b)(3)(ii)(A).
    In paragraph (b)(3)(ii)(B), we propose to require States identify 
in their disclosure the Medicaid average hourly payment rates by 
applicable category of service, including, if the rates vary, separate 
identification of the average hourly payment rates for payments made to 
individual providers and to providers employed by an agency, as well as 
by population (pediatric and adult), provider type, and geographical 
location, as applicable. Given that direct care workers deliver unique 
services in Medicaid that are often not covered by other payers, we are 
proposing to require a payment rate disclosure, instead of comparative 
payment rate analysis. To be clear, we are not proposing to require a 
State's payment rate disclosure for personal care, home health aide, 
and homemaker services be broken down and organized by E/M CPT/HCPCS 
codes, nor are we proposing States compare their Medicaid payment rates 
to Medicare for these services.
    We propose to require States calculate their Medicaid average 
hourly payment rates made to providers of personal care, home health 
aide, and homemaker services, separately, for each of these categories 
of services, by provider employment structures (individual providers 
and agency employed providers). For each of the categories of services 
in paragraph (b)(3)(ii)(A), one Medicaid average hourly payment rate 
would be calculated as a simple average or arithmetic mean where all 
payment rates would be adjusted to an hourly figure, summed, then 
divided by the number of all hourly payment rates. As an example, the 
State's Medicaid average hourly payment rate for personal care 
providers may be $10.50 while the average hourly payment rate for a 
home health aide is $15.00. A more granular analysis may show that 
within personal care providers receiving a payment rate of $10.50, an 
individual personal care provider is paid an average hourly payment 
rate of $9.00, while a personal care provider employed by an agency is 
paid an average hourly payment rate of $12.00 for the same type of 
service. Similarly for home health aides, a more granular analysis may 
show that within home health aides receiving a payment rate of $15.00, 
an individual home health aide is paid an average hourly payment rate 
of $13.00, while a home health aide employed by an agency is paid an 
average hourly payment rate of $17.00.
    We understand that States may set payment rates for personal care, 
home health aide, and homemaker services based on a particular unit of 
time for delivering the service, and that time

[[Page 28020]]

may not be in hourly increments. For example, different States might 
pay for personal care services using 15-minute increments, on an hourly 
basis, through a daily rate, or based on a 24-hour period. By proposing 
to require States to represent their rates as an hourly payment rate, 
we would be able to standardize the unit (hourly) and payment rate for 
comparison across States, rather than comparing to Medicare. To the 
extent a State pays for personal care, home health aide, or homemaker 
services on an hourly basis, the State would simply use that hourly 
rate in its Medicaid average hourly payment rate calculation of each 
respective category of service. However, if for example a State pays 
for personal care, home health aide, or homemaker services on a daily 
basis, we would expect the State to divide that rate by the number of 
hours covered by the rate.
    Additionally, and similar to proposed paragraph (b)(3)(i)(E), we 
propose in paragraph (b)(3)(ii)(B), that, if the States' Medicaid 
average hourly payment rates vary, the rates must separately identify 
the average hourly payment rates for payments made to individual 
providers and to providers employed by an agency, by population 
(pediatric and adult), provider type, and geographical location, as 
applicable. We include this proposed provision with the intent of 
ensuring the payment rate disclosure contains the highest level of 
granularity in each element. As previously discussed, States may pay 
providers different payment rates for billing the same service based on 
the population being served, provider type, and geographical location 
of where the service is delivered. We are seeking public comments on 
the proposed requirement for States to calculate the Medicaid average 
hourly payment rate made separately to individual providers and to 
agency employed providers, which accounts for variation in payment 
rates by population (pediatric and adult), provider type, and 
geographical location, as applicable, in the payment rate disclosure as 
discussed in this section about proposed Sec.  447.203(b)(3)(ii)(B).
    In paragraph (b)(3)(ii)(C), we propose to require that the State 
disclosure must identify the number of Medicaid-paid claims and the 
number of Medicaid enrolled beneficiaries who received a service within 
a calendar year for each of the services for which the Medicaid payment 
rate is published under proposed paragraph (b)(3)(ii)(B), so that 
States, CMS, and other interested parties would be able to 
contextualize the previously described payment rate information with 
information about the volume of paid claims and number of beneficiaries 
receiving personal care, home health aide, and homemaker services.
    We propose that the number of Medicaid-paid claims and number of 
Medicaid enrolled beneficiaries who received a service be reported 
under the same breakdown as paragraph (b)(3)(ii), where the State 
provides the number of paid claims and number of beneficiaries 
receiving services from individual providers versus agency-employed 
providers of personal care, home health aide services, and homemaker 
services. As with the comparative payment rate analysis, we are 
proposing the claims volume data would be limited to Medicaid-paid 
claims and the number of beneficiaries would be limited to Medicaid 
enrolled beneficiaries who received a service in the calendar year of 
the payment rate disclosure, where the services would fall into the 
categories of service for which the average hourly payment rates are 
published pursuant to paragraph (b)(3)(ii)(B). In other words, 
beneficiary would be counted in the payment rate disclosure for a 
particular calendar year when the beneficiary received a service that 
is included in one of the categories of services described in paragraph 
(b)(2)(iv) that the State has calculated average hourly payment rates 
for (the number of Medicaid enrolled beneficiaries who received a 
service). A claim would be counted when that beneficiary had a claim 
submitted on their behalf by a provider who billed for one of the 
categories of services described in paragraph (b)(2)(iv) and the State 
paid the claim (number of Medicaid-paid claims). We are seeking to 
ensure the payment rate disclosure reflects actual services received by 
beneficiaries and paid for by the State, or realized access.\185\
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    \185\ Andersen, R.M., and P.L. Davidson. 2007. Improving access 
to care in America: Individual and contextual indicators. In 
Changing the U.S. health care system: Key issues in health services 
policy and management, 3rd edition, Andersen, R.M., T.H. Rice, and 
G.F. Kominski, eds. San Francisco, CA: John Wiley & Sons.
---------------------------------------------------------------------------

    Similar to the comparative payment rate analysis, we considered but 
did not propose States identify the number of unique Medicaid-paid 
claims and the number of unique Medicaid enrolled beneficiaries who 
received a service within a calendar year for each of the services for 
which the average hourly payment rates are published pursuant to 
paragraph (b)(3)(ii)(B). We also considered but did not propose States 
identify the total Medicaid enrolled population who could receive a 
service within a calendar year for each of the services for which the 
average hourly payment rates are published pursuant to paragraph 
(b)(3)(ii)(B) in addition to the proposing States identify the number 
of Medicaid enrolled beneficiaries who received a service. As discussed 
in the comparative payment rate discussion, we are requesting public 
comment on our decision not to require these levels of detail for the 
payment rate disclosure. Also similar to the comparative payment rate 
analysis requirement under proposed paragraph (b)(3)(i)(E), this 
disclosure element would help States, CMS, and other interested parties 
identify longitudinal changes in Medicaid service volume and 
beneficiary utilization changes that may be an indication of an access 
to care issue. Again, with each biennial publication of the State's 
comparative payment rate analysis and payment rate disclosure, States 
and CMS would be able to compare the number of Medicaid-paid claims and 
number of Medicaid enrolled beneficiaries who received a service within 
a calendar year for services subject to the payment rate disclosure 
with previous years' disclosures. Collecting and comparing data on the 
number of paid claims and number of Medicaid enrolled beneficiaries 
alongside Medicaid average hourly payment rate data may reveal trends, 
such as where a provider type that previously delivered a low volume of 
services to beneficiaries has increased their volume of services 
delivered after receiving an increase in their payment rate.
    We acknowledge that one limitation of using the average hourly 
payment rate is that the statistic is sensitive to highs and lows so 
one provider receiving an increase in their average hourly payment rate 
would bring up the average overall while other providers may not see an 
improvement. As these are only correlating trends, we also acknowledge 
that there may be other contextualizing factors outside of the payment 
rate disclosure that may affect changes in service volume and 
utilization. We are seeking public comments on the proposed requirement 
for States to include the number of Medicaid-paid claims and number of 
Medicaid enrolled beneficiaries who received a service within a 
calendar year for which the Medicaid payment rate is published under 
paragraph (b)(3)(ii)(B), as specified in proposed Sec.  
447.203(b)(3)(ii)(C).
    Additionally, in recognition of the importance of services provided 
to individuals with intellectual or developmental disabilities and in 
an effort to remain consistent with the proposed HCBS provisions at

[[Page 28021]]

Sec.  441.302(k)(3)(i), we are seeking public comment on whether we 
should propose a similar provision that would require at least 80 
percent of all Medicaid FFS payments with respect to personal care, 
home health aide, and homemaker services provided by individual 
providers and providers employed by an agency must be spent on 
compensation for direct care workers.
    In paragraph (b)(4), we propose to require the State agency to 
publish the initial comparative payment rate analysis and payment rate 
disclosure of its Medicaid payments in effect as of January 1, 2025, as 
required under Sec.  447.203(b)(2) and (b)(3), by no later than January 
1, 2026. Thereafter, the State agency would be required to update the 
comparative payment rate analysis and payment rate disclosure no less 
than every 2 years, by no later than January 1 of the second year 
following the most recent update. The comparative payment rate analysis 
and payment rate disclosure would be required to be published 
consistent with the publication requirements described in proposed 
Sec.  447.203(b)(1) for payment rate transparency data.
    As previously discussed in this proposed rule, we propose that the 
Medicaid payment rates included in the initial comparative payment rate 
analysis and payment rate disclosure would be those in effect as of 
January 1, 2025. Specifically, for the comparative payment rate 
analysis, we propose States would conduct a retrospective analysis to 
ensure CMS can publish the list of E/M CPT/HCPCS codes for the 
comparative payment rate analysis and States have timely access to all 
information required to complete comparative payment rate analysis. As 
described in paragraph (b)(3)(i)(C), we propose States would compare 
their Medicaid payment rates to the Medicare non-facility payment rates 
effective for the same time period for the same set of E/M CPT/HCPCS 
codes, therefore, the Medicare non-facility payment rates as published 
on the Medicare PFS for the same time period as the State's Medicaid 
payment rates would need to be available to States in a timely manner 
for their analysis and disclosure to be conducted and published as 
described in paragraph (b)(4). Medicare publishes its annual PFS final 
rule in November of each year and the Medicare non-facility payment 
rates as listed on the Medicare PFS are effective the following January 
1. For example, the 2025 Medicare PFS final rule would be published in 
November 2024 and the Medicare non-facility payment rates as listed on 
the Medicare PFS would be effective January 1, 2025, so States would 
compare their Medicaid payment rates effective as of January 1, 2025, 
to the Medicare PFS payment rates effective January 1, 2025 when 
submitting the initial comparative payment rate analysis that is due on 
January 1, 2026.
    Also previously discussed in this proposed rule, we intend to 
publish the initial and subsequent updates to the list of E/M CPT/HCPCS 
codes subject to the comparative payment rate analysis in a timely 
manner that allows States approximately one full calendar year between 
the publication of the CMS-published list of E/M CPT/HCPCS codes and 
the due date of the comparative payment rate analysis. Because the list 
of E/M CPT/HCPCS codes is derived from the relevant calendar year's 
Medicare PFS, the Medicare non-facility payment rates the State would 
need to include in their comparative payment rate analysis would also 
be available to States. We expect approximately one full calendar year 
of the CMS-published list of E/M CPT/HCPCS codes and Medicare non-
facility payment rates as listed on the Medicare PFS being available to 
States would provide the States with sufficient time to develop and 
publish their comparative payment rate analyses as described in 
paragraph (b)(4). We considered proposing the same due date and 
effective time period for Medicaid and Medicare payment rates where the 
initial publication of the comparative payment rate analysis would be 
due January 1, 2026, and would contain payment rates effective January 
1, 2026; however, we believe a two month time period between Medicare 
publishing its PFS payment rates in November and the PFS payment rates 
taking effect on January 1 would be an insufficient amount of time for 
CMS to publish the list of E/M CPT/HCPCS codes subject to the 
comparative payment rate analysis and for States to develop and publish 
their comparative payment rate analyses by January 1. While the 
proposed payment rate disclosure would not require a comparison to 
Medicare, we are proposing to use the same due date and effective 
period of Medicaid payment rates for both the proposed comparative 
payment rate analysis and payment rate disclosure to maintain 
consistency.
    We expect the proposed initial publication timeframe to provide 
sufficient time for States to gather necessary data, perform, and 
publish the first required comparative payment rate analysis and 
payment rate disclosure. We determined this timeframe was sufficient 
based on implementation experience from the AMRP process, where we 
initially proposed a 6-month timeframe between the January 4, 2016 
effective date of the 2015 final rule with comment period in the 
Federal Register, and the due date of the first AMRP, July 1, 2016. At 
the time, we believed that this timeframe would be sufficient for 
States to conduct their first review for service categories newly 
subject to ongoing AMRP requirements; however, after receiving several 
public comments from States on the 2015 final rule with comment period 
that State agency staff may have difficulty developing and submitting 
the initial AMRPs within the July 1, 2016 timeframe, we modified the 
policy as finalized in the 2016 final rule.\186\ Specifically, we 
revised the deadline for submission of the initial AMRP until October 
1, 2016 and we made a conforming change to the deadline for submission 
in subsequent review periods at Sec.  447.203(b)(5)(i) to October 
1.\187\ We also found that, despite this additional time, some State 
were still late in submitting their first AMRP to us. Therefore, we 
believe that proposing an initial publication date of January 1, 2026, 
thereby providing States with approximately 2 years between the 
effective date of the final rule, if this proposal is finalized, and 
the due date of the first comparative payment rate analysis and payment 
rate disclosure, would be sufficient. In alignment with the proposed 
payment rate transparency requirements, if this rule is finalized at a 
time that does not allow for States to have a period of 2 years from 
the effective date of the final rule and the proposed January 1, 2026 
date to publish the initial comparative payment rate analysis and 
payment rate disclosure, then we would propose an alternative date of 
July 1, 2026 for the initial comparative payment rate analysis and 
payment rate disclosure and for the initial comparative payment rate 
analysis and payment rate disclosure to include Medicaid payment rates 
approved as of July 1, 2025 to allow more time for States to comply 
with the initial comparative payment rate analysis and payment rate 
disclosure requirements. We acknowledge that the date of the initial 
comparative payment rate analysis and payment rate disclosure 
publication is subject to change based on the final rule publication 
schedule and effective date, if this rule is finalized. If further 
adjustment is necessary beyond the July 1, 2026 timeframe to allow more 
time for States to comply with the payment rate transparency 
requirements, then we would adjust date of the initial payment

[[Page 28022]]

rate transparency publication in 6-month intervals, as appropriate.
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    \186\ 81 FR 21479 at 21479-21480.
    \187\ 81 FR 21479 at 21480.
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    Also, in Sec.  447.203(b)(4), we propose to require the State 
agency to update the comparative payment rate analysis and payment rate 
disclosure no less than every 2 years, by no later than January 1 of 
the second year following the most recent update. We propose that the 
comparative payment rate analysis and payment rate disclosure would be 
required to be published consistent with the publication requirements 
described in proposed paragraph (b)(1) for payment rate transparency 
data. After publication of the 2011 proposed rule, and as we worked 
with States to implement the current AMRP requirements after 
publication of the 2015 final rule with comment period, many States 
expressed concerns that the current requirements of Sec.  447.203, 
specifically those in current Sec.  447.203(b)(6) that impose 
additional analysis and monitoring requirements in the case of provider 
rate reductions or restructurings that could result in diminished 
access, are overly burdensome. As described in the 2018 and 2019 
proposed rules, ``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 FFS delivery system.'' 
188 189
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    \188\ 83 FR 12696 at 12697.
    \189\ 84 FR 33722 at 33723.
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    Additionally, from our implementation experience, we learned that 
the triennial due date for updated AMRPs required by current Sec.  
447.203(b)(5)(ii) was too infrequent for States or CMS to identify and 
act on access concerns identified by the AMRPs. For example, one State 
timely submitted its initial ongoing AMRP on October 1, 2016, 
consistent with the requirements in Sec.  447.203(b)(1) through (5), 
and timely submitted its first AMRP update (the next ongoing AMRP) 3 
years later, on October 1, 2019. The 2016 AMRP included data about 
beneficiary utilization and Medicaid-participating providers accepting 
new Medicaid patients from 2014 to 2015 (the most recent data available 
at the time the State was developing the AMRP), while the 2019 AMRP 
update included similar data for 2016 to 2017 (the most recent data 
then available). The 2019 AMRP showed that the number of Medicaid-
participating providers accepting new Medicaid patients significantly 
dropped in 2016, and the State received a considerable number of public 
comments during the 30-day public comment period for the 2019 AMRP 
update prior to submission to us per the requirements in Sec.  
447.203(b) and (b)(2). This data lag between a drop in Medicaid-
participating providers accepting new Medicaid patients in 2016 and CMS 
receiving the next AMRP update with information about related concerns 
in 2019 illustrates how the infrequency of the triennial due date for 
the AMRP updates could allow a potential access concern to develop 
without notice by the State or CMS in between the due dates of the 
ongoing AMRP updates. Although Sec.  447.203(b)(7) currently requires 
States to have ongoing mechanisms for beneficiary and provider input on 
access to care, and States are expected to promptly respond to concerns 
expressed through these mechanisms that cite specific access problems, 
beneficiaries and providers themselves may not be aware of even 
widespread access issues if such issues are not noticed before 
published data reveal them.
    We also learned from our AMRP implementation experience that the 
timing of the ongoing AMRP submissions required by current Sec.  
447.203(b)(5)(ii) and access reviews associated with rate reduction or 
restructuring SPA submissions required by Sec.  447.203(b)(6) have led 
to confusion about the due date and scope of routine, ongoing AMRP 
updates and SPA-connected access review submissions, particularly when 
States were required to submit access reviews within the 3-year period 
between AMRP updates when proposing a rate reduction or restructuring 
SPA, per the requirements in current Sec.  447.203(b)(6). For example, 
one State timely submitted its initial ongoing AMRP on October 1, 2016, 
consistent with the requirements in Sec.  447.203(b)(1) through (5), 
then the State submitted a SPA that proposed to reduce provider payment 
rates for physical therapy services with an effective date of July 1, 
2018, along with an access review for the affected service completed 
within the prior 12 months, consistent with the requirements in Sec.  
447.203(b)(6). The State's access review submission consisted of its 
2016 AMRP submission, updated with data from the 12 months prior to 
this SPA submission, with the addition of physical therapy services for 
which the SPA proposed to reduce rates. Because the State submitted an 
updated version of its 2016 AMRP in 2018 in support of the SPA 
submission, the State was confused whether its next AMRP update 
submission was due in 2019 (3 years from 2016), or in 2021 (3 years 
from 2018). Based on the infrequency of a triennial due date for AMRP 
updates and the numerous instances of similar State confusion during 
the implementation process for the AMRPs, we identified that the 
triennial timeframe was insufficient for the proposed comparative 
payment rate analysis and payment rate disclosure. As we considered a 
new timeframe for updates to the comparative payment rate analysis and 
payment rate disclosure to propose in this rulemaking, we initially 
considered proposing to require annual updates. However, we believe 
annual updates would add unnecessary administrative burden as annual 
updates would be too frequent because many States do not update their 
Medicaid fee schedule rates for the codes subject to the comparative 
payment rate analysis and payment rate disclosure on an annual basis.
    As proposed, the payment rates for the categories of services 
subject to the proposed comparative payment rate analysis and payment 
rate disclosure are for office-based visits and, in our experience, the 
Medicaid payment rates generally do not change much over time due to 
the nature of an office visit.\190\ Office visits primarily include 
vitals being taken and the time a patient meets with a physician or 
NPP; therefore, States would likely have a considerable amount of 
historical payment data for supporting the current payment rates for 
such services. Given the relatively stable nature of payment rates for 
office visits, we aim to help ensure the impact of the comparative 
payment rate analysis is maximized for ensuring compliance with section 
1902(a)(30)(A) of the Act while minimizing unnecessary burden on States 
by holding all States to a proposed update frequency of 2 years to 
capture all Medicaid (and corresponding Medicare) payment rate changes.
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    \190\ We acknowledge that Medicaid primary care payment 
increase, a provision in the Patient Protection and Affordable Care 
Act (ACA, Pub. L. 111-148, as amended), temporarily raised Medicaid 
physician fees for evaluation and management services (Current 
Procedural Terminology codes 99201-99499) and vaccine administration 
services and counseling related to children's vaccines (Current 
Procedural Terminology codes 90460, 90461, and 90471-90474). This 
provision expired on December 31, 2014. https://www.macpac.gov/wp-content/uploads/2015/03/An-Update-on-the-Medicaid-Primary-Care-Payment-Increase.pdf.
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    As this proposed rule strives to reduce the amount of 
administrative burden from AMRPs on States while also fulfilling our 
oversight responsibilities, we believe updating the comparative payment 
rate analysis and

[[Page 28023]]

payment rate disclosure no less than every 2 years achieves an 
appropriate balance between administrative burden and our oversight 
responsibilities with regard to section 1902(a)(30)(A) of the Act. We 
intend for the comparative payment rate analysis and payment rate 
disclosure States develop and publish to be time-sensitive and useful 
sources of information and analysis to help ensure compliance with 
section 1902(a)(30)(A) of the Act. If this proposal is finalized, both 
the comparative payment rate analysis and payment rate disclosure would 
provide the State, CMS, and other interested parties with cross-
sectional data of Medicaid payment rates at various points in time. 
This data could be used to track Medicaid payment rates over time as a 
raw dollar amount and as a percentage of Medicare non-facility payment 
rates as listed on the Medicare PFS as well as changes in the number of 
Medicaid-paid claims volume and number of Medicaid enrolled 
beneficiaries who received a service over time. The availability of 
this data could be used to inform State policy changes, to compare 
payment rates across States, or be used for research on Medicaid 
payment rates and policies. While we believe the comparative payment 
rate analysis and payment rate disclosure would provide useful and 
actionable information to States, we do not want to overburden States 
with annual updates to the comparative payment rate analysis and 
payment rate disclosure. As we are proposing to replace the triennial 
AMRP process with less administratively burdensome processes (payment 
rate transparency publication, comparative payment rate analysis, 
payment rate disclosure, and State analysis procedures for rate 
reductions and restructurings) for ensuring compliance with section 
1902(a)(30)(A) of the Act, we believe annual updates to the comparative 
payment rate analysis and payment rate disclosure would negate at least 
a portion of the decrease in administrative burden from eliminating the 
AMRP process.
    With careful consideration, we believe that our proposal to require 
updates to the comparative payment rate analysis and payment rate 
disclosure to occur no less than every 2 years is reasonable. We expect 
the proposed biennial publication requirement for the comparative 
payment rate analysis and payment rate disclosure after the initial 
publication date would be feasible for State agencies, provide a 
straightforward timeline for updates, limit unnecessary State burden, 
help ensure public payment rate transparency, and enable us to conduct 
required oversight. We are seeking public comment on the proposed 
timeframe for the initial publication and biennial update requirements 
for the comparative payment rate analysis and payment rate disclosure 
as proposed in Sec.  447.203(b)(4).
    Lastly, we also propose in paragraph (b)(4) to require States to 
publish the comparative payment rate analysis and payment rate 
disclosure consistent with the publication requirements described in 
proposed paragraph (b)(1) for payment rate transparency data. Paragraph 
(b)(1) would require the website developed and maintained by the single 
State Agency to be accessible to the general public. We are proposing 
States utilize the same website developed and maintained by the single 
State Agency to publish their Medicaid FFS payment rates and their 
comparative payment rate analysis and payment rate disclosure. We are 
seeking public comment on the proposed required location for States to 
publish their comparative payment rate analysis and payment rate 
disclosure proposed in Sec.  447.203(b)(4).
    In Sec.  447.203(b)(5), we propose a mechanism to ensure compliance 
with paragraphs (b)(1) through (b)(4). Specifically, we propose that, 
if a State fails to comply with the payment rate transparency and 
comparative payment rate analysis and payment rate disclosure 
requirements in paragraphs (b)(1) through (b)(4) of proposed Sec.  
447.203, including requirements for the time and manner of publication, 
that, under section 1904 of the Act and procedures set forth in 
regulations at 42 CFR part 430 subparts C and D, future grant awards 
may be reduced by the amount of FFP we estimate is attributable to the 
State's administrative expenditures relative to the total expenditures 
for the categories of services specified in paragraph (b)(2) of 
proposed Sec.  447.203 for which the State has failed to comply with 
applicable requirements, until such time as the State complies with the 
requirements. We also propose that unless otherwise prohibited by law, 
FFP for deferred expenditures would be released after the State has 
fully complied with all applicable requirements. This proposed 
enforcement mechanism is similar in structure to the mechanism that 
applies with respect to the Medicaid Disproportionate Share Hospital 
(DSH) reporting requirements in Sec.  447.299(e), which specifies that 
State failure to comply with reporting requirements will lead to future 
grant award reductions in the amount of FFP CMS estimates is 
attributable to expenditures made for payments to the DSH hospitals as 
to which the State has not reported properly. We are proposing this 
long-standing and effective enforcement mechanism in this proposed rule 
because we believe it is proportionate and clear, and to remain 
consistent with other compliance actions we take for State non-
compliance with statutory and regulatory requirements. We are seeking 
public comment on the proposed method for ensuring compliance with the 
payment rate transparency and comparative payment rate analysis and 
payment rate disclosure requirements, as specified in proposed Sec.  
447.203(b)(5).
    A fundamental element of ensuring access to covered services is the 
sufficiency of a provider network. As discussed elsewhere in this rule, 
the HCBS direct care workforce is currently experiencing notable worker 
shortages.\191\ A robust workforce providing HCBS allows more 
beneficiaries to obtain necessary services in home and community-based 
settings. We are proposing to use data-driven benchmarks in requiring 
comparative payment rate analyses relative to Medicare non-facility 
payment rates for the categories of service specified in proposed Sec.  
447.203(b)(2)(i) through (iii), but Medicare non-facility payment rates 
are generally not relevant in the context of HCBS, as discussed earlier 
in this section. Furthermore, data alone cannot replace the lived 
experience of direct care workers and recipients of the services they 
provide.
---------------------------------------------------------------------------

    \191\ https://www.macpac.gov/wp-content/uploads/2022/03/MACPAC-brief-on-HCBS-workforce.pdf.
---------------------------------------------------------------------------

    Understanding how Medicaid payment rates compare in different 
geographic areas of a State and across State programs is also an 
important access to care data point for covered benefits where Medicaid 
is a predominant payer of services, as in the case of HCBS. In the 
absence of HCBS coverage and a lack of available payment rate and 
claims utilization data from other health payers, such as Medicare or 
private insurers, and with the significant burden and potential 
infeasibility associated with gathering payment data for individuals 
who pay out of pocket (that is, self-pay), we believe it would be a 
reasonable standard for States to compare their rates to geographically 
similar State Medicaid program payment rates as a basis for 
understanding compliance with section 1902(a)(30)(A) of the Act for 
those services. In addition, even for services where other payers 
establish

[[Page 28024]]

payment rates, comparisons to rates paid by other geographically 
similar States could be important to understanding compliance with 
section 1902(a)(30)(A) of the Act since Medicaid beneficiaries may have 
unique health care needs that are not typical of the general population 
in particular geographic areas.
    Section 2402(a) of the Affordable Care Act directs the Secretary to 
promulgate regulations ensuring that all States develop service systems 
that, among other things, improve coordination and regulation of 
providers of HCBS to oversee and monitor functions, including a 
complaint system, and ensure that there are an adequate number of 
qualified direct care workers to provide self-directed services. This 
statutory mandate, coupled with the workforce shortages exacerbated by 
the COVID-19 pandemic, necessitates action specific to direct care 
workers. As such, we are proposing to require States to establish an 
interested parties' advisory group to advise and consult on FFS rates 
paid to direct care workers providing self-directed and agency-directed 
HCBS, at a minimum for personal care, home health aide, and homemaker 
services as described in Sec.  440.180(b)(2) through (4), and States 
may choose to include other HCBS. The definition of direct care workers 
is proposed elsewhere in this rule under Sec.  441.302(k)(1)(ii). We 
propose to utilize that definition, to consider a direct care worker a 
registered nurse, licensed practical nurse, nurse practitioner, or 
clinical nurse specialist who provides nursing services to Medicaid-
eligible individuals receiving HCBS; a licensed nursing assistant who 
provides such services under the supervision of a registered nurse, 
licensed practical nurse, nurse practitioner, or clinical nurse 
specialist; a direct support professional; a personal care attendant; a 
home health aide; or other individuals who are paid to provide services 
to address activities of daily living or instrumental activities of 
daily living directly to Medicaid-eligible individuals receiving HCBS 
available under part 441, subpart G. A direct care worker may be 
employed by a Medicaid provider, State agency, or third party; 
contracted with a Medicaid provider, State agency, or third party; or 
delivering services under a self-directed service model.
    We propose that the group would consult on rates for service 
categories under the Medicaid State plan, section 1915(c) waiver and 
demonstration programs, as applicable, where payments are made to 
individual providers or providers employed by an agency for, at a 
minimum, the previously described types of services, including for 
personal care, home health aide, and homemaker services provided under 
sections 1905(a), 1915(i), 1915(j), and 1915(k) State plan authorities, 
and section 1915(c) waivers. These proposed requirements also would 
extend to rates for HCBS provided under section 1115 demonstrations, as 
is typical for rules pertaining to HCBS authorized using demonstration 
authority. The interested parties advisory group may consult on other 
HCBS, at the State's discretion.
    Specifically, in Sec.  447.203(b)(6), we propose that the State 
agency would be required to establish an advisory group for interested 
parties to advise and consult on provider rates with respect to service 
categories under the Medicaid State plan, section 1915(c) waiver and 
demonstration programs, as applicable, where payments are made to the 
direct care workers specified in Sec.  441.302(k)(1)(ii) for the self-
directed or agency-directed services found at Sec.  440.180(b)(2) 
through (4). The interested parties' advisory group would be required 
to include, at a minimum, direct care workers, beneficiaries and their 
authorized representatives, and other interested parties. ``Authorized 
representatives'' refers to individuals authorized to act on the behalf 
of the beneficiary, and other interested parties may include 
beneficiary family members and advocacy organizations. To the extent a 
State's MAC established under proposed Sec.  431.12, if finalized, 
meets the requirements of this regulation, the State could utilize that 
committee for this purpose. However, we note the roles of the MAC under 
proposed Sec.  431.12 and the interested party advisory group under 
proposed Sec.  447.203(b)(6) would be distinct, and the existence or 
absence of one committee or group (for example, if one of these 
proposals is not finalized) would not affect the requirements with 
respect to the other as established in a final rule.
    We further propose in Sec.  447.203(b)(6)(iii) that the interested 
parties' advisory group would advise and consult with the Medicaid 
agency on current and proposed payment rates, HCBS payment adequacy 
data as required at Sec.  441.311(e), and access to care metrics 
described in Sec.  441.311(d)(2), associated with services found at 
Sec.  440.180(b)(2) through (4), to ensure the relevant Medicaid 
payment rates are sufficient to ensure access to homemaker services, 
home health aide services, and personal care services for Medicaid 
beneficiaries at least as great as available to the general population 
in the geographic area and to ensure an adequate number of qualified 
direct care workers to provide self-directed personal assistance 
services.
    In proposed Sec.  447.203(b)(6)(iv), we propose that the interested 
parties advisory group would meet at least every 2 years and make 
recommendations to the Medicaid agency on the sufficiency of State 
plan, 1915(c) waiver, and demonstration direct care worker payment 
rates, as applicable. The State agency would be required to ensure the 
group has access to current and proposed payment rates, HCBS provider 
payment adequacy minimum performance and reporting standards as 
described in Sec.  441.311(e), and applicable access to care metrics 
for HCBS as described in Sec.  441.311(d)(2) to produce these 
recommendations. These materials would be required to be made be 
available with sufficient time for the advisory group to consider them, 
formulate recommendations, and transmit those recommendations to the 
State. If the State has asked the group to consider a proposed rate 
change, they would need to provide the group with sufficient time to 
review and produce a recommendation within the State's intended rate 
adjustment schedule. This would be necessary because the group's 
recommendation would be considered part of the interested parties input 
described in proposed Sec. Sec.  447.203(c)(4) and 447.204(b)(3), which 
States would be required to consider and analyze. The interested 
parties' advisory group would make recommendations to the Medicaid 
agency on the sufficiency of the established and proposed State plan, 
section 1915(c) waiver and demonstration payment rates, as applicable. 
In other words, the group would provide information to the State 
regarding whether, based on the group's knowledge and experience, 
current payment rates are sufficient to enlist a sufficiently large 
work force to ensure beneficiary access to services, and whether a 
proposed rate change would be consistent with a sufficiently large work 
force or would disincentivize participation in the work force in a 
manner that might compromise beneficiary access.
    We propose to require States to convene this interested parties' 
advisory group every 2 years, at a minimum, to advise and consult on 
current and suggested payment rates and the sufficiency of these rates 
to ensure access to HCBS for beneficiaries consistent with section 
1902(a)(30)(A) of the Act. This timing aligns with the comparative 
payment rate analysis and payment rate disclosure publication 
requirements proposed in Sec.  447.203(b)(4), although we note that

[[Page 28025]]

this would be a minimum requirement and a State may find that more 
frequent meetings would be necessary or helpful for the advisory group 
to provide meaningful and actionable feedback. We further propose that 
the process by which the State selects its advisory group members and 
convenes meetings would be required to be made publicly available, but 
other matters, such as the tenure of members, would be left to the 
State's discretion.
    Finally, in Sec.  447.203(b)(6)(v), we propose that the Medicaid 
agency would be required to publish the recommendations of the 
interested parties' advisory group consistent with the publication 
requirements described in paragraph (b)(1) of this section for payment 
rate transparency data, within 1 month of when the group provides the 
recommendation to the agency. We intend that States would consider, but 
not be required to adopt, the recommendations of the advisory group. 
Under this proposal, the work of the advisory group would be regarded 
as an element of the State's overall rate-setting process. 
Additionally, the feedback of this advisory group would not be required 
for rate changes. That is to say, should a State need or want to adjust 
rates and it is not feasible to obtain a recommendation from the 
advisory group in a particular instance, the State would still be 
permitted to submit its rate change SPA to CMS. However, to the extent 
the group comments on proposed rate changes, its feedback would be 
considered part of the interested parties input described in proposed 
Sec. Sec.  447.203(c)(4) and 447.204(b)(3), which States would be 
required to consider and analyze, and submit such analysis to us, in 
connection with any SPA submission that proposes to reduce or 
restructure Medicaid service payment rates. In addition, by way of 
clarification, we intend that the advisory group would be permitted to 
suggest alternate rates besides those proposed by the State for 
consideration.
    We are seeking public comment on the proposed interested parties 
advisory group and about whether other categories of services should be 
included in the requirement for States to consult with the interested 
parties advisory group.
3. State Analysis Procedures for Rate Reduction or Restructuring (Sec.  
447.203(c))
    As stated previously, the Supreme Court's Armstrong decision 
underscored the importance of CMS' administrative review of Medicaid 
payment rates to ensure compliance with section 1902(a)(30)(A) of the 
Act. CMS' oversight role is particularly important when States propose 
to reduce provider payment rates or restructure provider payments, 
since provider payment rates can affect provider participation in 
Medicaid, and therefore, beneficiary access to care. In Sec.  
447.203(c), we propose a process for State access analyses that would 
be required whenever a State submits a SPA proposing to reduce provider 
payment rates or restructure provider payments.
    As noted previously, the 2015 final rule with comment period 
required that, for any SPA proposing to reduce provider payment rates 
or restructure provider payments in circumstances when the changes 
could result in diminished access, States must submit a detailed 
analysis of access to care under Sec. Sec.  447.203(b)(1) and (b)(6) 
and 447.204(b)(1). This analysis includes, under current Sec.  
447.203(b)(1), the extent to which beneficiary needs are fully met; the 
availability of care through enrolled providers to beneficiaries in 
each geographic area, by provider type and site of service; changes in 
beneficiary utilization of covered services in each geographic area; 
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, by provider type and 
site of service. Currently, this information is required for any SPA 
that proposes to reduce provider payment rates or restructure provider 
payments in circumstances when the changes could result in diminished 
access, regardless of the provider payment rates or levels of access to 
care before the proposed reduction or restructuring.
    Following the implementation of the 2015 final rule with comment 
period, as we worked with States to implement the AMRP requirements, 
many States expressed concerns that the requirements that accompany 
proposed rate reductions or restructurings are overly burdensome. 
Specifically, States pointed to instances where proposed reductions or 
restructurings are nominal, or where rate changes are made via the 
application of a previously approved rate methodology, such as when the 
State's approved rate methodology ties Medicaid payment rates to a 
Medicare fee schedule and the Medicare payment rate is reduced. We 
acknowledged these concerns through previous proposed rulemaking. In 
the 2018 proposed rule, we agreed that our experience implementing the 
AMRP process from the 2015 final rule with comment period raised 
questions about the benefit of the access analysis when proposed rate 
changes include nominal rate reductions or restructurings that are 
unlikely to result in diminished access to care.\192\
---------------------------------------------------------------------------

    \192\ 83 FR 12696 at 12697.
---------------------------------------------------------------------------

    We did not finalize the 2018 proposed rule; instead, in response to 
feedback, we proposed a rescission of the AMRP process in the 2019 
proposed rule.\193\ In that proposed rule, we indicated that future 
guidance would be forthcoming to provide information on the required 
data and analysis that States might submit with rate reduction or 
restructuring SPAs in place of the AMRPs to support compliance with 
section 1902(a)(30)(A) of the Act.\194\ We did not finalize the 
rescission proposed in the 2019 proposed rule. Although we are 
concerned that the current AMRP process is overly burdensome for States 
and CMS in relation to the benefit obtained in helping ensure 
compliance with the access requirement in section 1902(a)(30)(A) of the 
Act, our 2018 and 2019 proposed rules did not adequately consider our 
need for information and analysis from States seeking to reduce 
provider payment rates or restructure provider payments to enable us to 
determine that the statutory access requirement is met when making SPA 
approval decisions.
---------------------------------------------------------------------------

    \193\ 84 FR 3372.2.
    \194\ Id at 33723.
---------------------------------------------------------------------------

    To improve the efficiency of our administrative procedures and 
better inform our SPA approval decisions, this proposed rule would 
establish standard information that States would be required to submit 
with any proposed rate reductions or proposed payment restructurings in 
circumstances when the changes could result in diminished access, 
including a streamlined set of data when the reductions or 
restructurings are nominal, the State rates are above a certain 
percentage of Medicare payment rates, and there are no evident access 
concerns raised through public processes; and an additional set of data 
elements that would be required when States propose FFS provider 
payment rate reductions or restructurings in circumstances when the 
changes could result in diminished access and these criteria are not 
met. For both sets of required or potentially required elements, we are 
proposing to standardize the data and information States would be 
required to submit with rate reduction or restructuring SPAs. Although 
the AMRP processes have helped to improve our administrative

[[Page 28026]]

reviews and helped us make informed SPA approval determinations, the 
procedures within this proposed rule would provide us with similar 
information in a manner that reduces State burden. Additionally, the 
proposed procedures would provide States increased flexibility to make 
program changes with submission of streamlined supporting data to us 
when current Medicaid rates and proposed changes fall within specified 
criteria that create a reasonable presumption that proposed reductions 
or restructuring would not reduce beneficiary access to care in a 
manner inconsistent with section 1902(a)(30)(A) of the Act.
    This proposed rule seeks to achieve a more appropriate balance 
between reducing unnecessary burden for States and CMS, and ensuring 
that we have the information necessary to make appropriate 
determinations for whether a rate reduction or restructuring SPA might 
result in beneficiary access to covered services failing to meet the 
standard in section 1902(a)(30)(A) of the Act. In Sec.  447.203(c), we 
propose to establish analyses that States would be required to perform, 
document, and submit concurrently with the submission of rate reduction 
and rate restructuring SPAs, with additional analyses required in 
certain circumstances due to potentially increased access to care 
concerns.
    We are proposing a two-tiered approach for determining the level of 
access analysis States would be required to conduct when proposing 
provider payment rate reductions or payment restructurings. The first 
tier of this approach, proposed at Sec.  447.203(c)(1), sets out three 
criteria for States to meet when proposing payment rate reductions or 
payment restructurings in circumstances when the changes could result 
in diminished access that, if met, would not require a more detailed 
analysis to establish that the proposal meets the access requirement in 
section 1902(a)(30)(A) of the Act. The State agency would be required 
to provide written assurance and relevant supporting documentation that 
the three criteria specified in those paragraphs are met, as well as a 
description of the State's procedures for monitoring continued 
compliance with section 1902(a)(30)(A) of the Act. As explained in more 
detail later in this section, these criteria proposed in Sec.  
447.203(c)(1) represent thresholds we believe would likely assure that 
Medicaid payment rates would continue to be sufficient following the 
change 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.
    We note that, in the course of our review of a payment SPA that 
meets these criteria, as with any SPA review, we may need to request 
additional information to ensure that all Federal SPA requirements are 
met. We also note that meeting the three criteria described in proposed 
Sec.  447.203(c)(1) does not guarantee that the SPA would be approved, 
if other applicable Federal requirements are not met. Furthermore, if 
any criterion in the first tier is not met, we propose a second tier in 
Sec.  447.203(c)(2), which would require the State to conduct a more 
extensive access analysis in addition to providing the results of the 
analysis in the first tier. A detailed discussion of the second tier 
follows the details of the first tier in this section.
    Under proposed Sec.  447.203(c)(1)(i), the State would be required 
to provide a supported assurance that Medicaid payment rates in the 
aggregate (including base and supplemental payments) following the 
proposed reduction or restructuring for each benefit category affected 
by the proposed reduction or restructuring would be at or above 80 
percent of the most recently published Medicare payment rates for the 
same or a comparable set of Medicare-covered services.
    In proposed Sec.  447.203(c)(1)(i), we mean for ``benefit 
category'' to refer to all individual services under a category of 
services described in section 1905(a) of the Act for which the State is 
proposing a payment rate reduction or restructuring. Comparing the 
payment rates in the aggregate would involve first performing a 
comparison of the Medicaid to the Medicare payment rate on a code-by-
code basis, meaning CPT, CDT, or HCPCS as applicable, to derive a ratio 
for individual constituent services, and then the ratios for all codes 
within the benefit category would be averaged by summing the individual 
ratios then dividing the sum by the number of ratios. For example, if 
the State is seeking to reduce payment rates for a subset of physician 
services, the State would review all current payment rates for all 
physician services and determine if the proposed reduction to the 
relevant subset of codes would result in an average Medicaid payment 
rate for all physician services that is at or above 80 percent of the 
average corresponding Medicare payment rates. For supplemental 
payments, we are relying upon the definition of supplemental payments 
in section 1903(bb)(2) of the Act, which defines supplemental payments 
as ``a payment to a provider that is in addition to any base payment 
made to the provider under the State plan under this title or under 
demonstration authority . . . [b]ut such term does not include a 
disproportionate share hospital payment made under section 1923 [of the 
Act].'' With the inclusion of supplemental payments, States would need 
to aggregate the supplemental payments paid to qualifying providers 
during the State fiscal year and divide by all providers' total service 
volume (including service volume of providers that do not qualify for 
the supplemental payment) to establish an aggregate, per-service 
supplemental payment amount, then add that amount to the State's fee 
schedule rate to compare the aggregate Medicaid payment rate to the 
corresponding Medicare payment rate. As this supportive assurance in 
proposed Sec.  447.203(c)(1)(i) is expected to be provided with an 
accompanying SPA, CMS may ask the State to explain how the analysis was 
conducted if additional information is needed as part of the analysis 
of the SPA. We are requesting comment on the proposed Sec.  
447.203(c)(1)(i) supported assurance that Medicaid payment rates in the 
aggregate (including base and supplemental payments) following the 
proposed reduction or restructuring for each benefit category affected 
by the proposed reduction or restructuring would be at or above 80 
percent of the most recently published Medicare payment rates for the 
same or a comparable set of Medicare-covered services should include a 
weighted average of the payment rate analysis by service volume, number 
of beneficiaries receiving the service, and total amount paid by 
Medicaid for the code in a year using State's Medicaid utilization data 
from the MMIS claims system rather than using a straight code-by-code 
analysis.
    We understand that this approach may have a smoothing effect on the 
demonstrated overall levels of Medicaid payment within a benefit 
category under the State plan. In many circumstances, only a subset of 
providers are recipients of Medicaid supplemental payments with the 
rest of the providers within the benefit category simply receiving the 
State plan fee schedule amount. This could result in a demonstration 
showing the Medicaid payments being high relative to Medicare, but the 
actual payments to a large portion of the providers would be less than 
the overall demonstration would suggest. As an alternative, we 
considered whether to adopt separate comparisons for

[[Page 28027]]

providers who do and who do not receive supplemental payments, where a 
State makes supplemental payments for a service to some but not all 
providers of that service. We are requesting comments on the proposed 
approach and this alternative.
    We selected FFS Medicare, as opposed to Medicare Advantage, as the 
proposed payer for comparison for a number of reasons. A threshold 
issue is payment rate data availability: private payer data may be 
proprietary or otherwise limited in its availability for use by States. 
In addition, Medicare sets its prices rather than negotiating them 
through contracts with providers, and is held to many similar statutory 
standards as Medicaid with respect to those prices, such as efficiency, 
access, and quality.\195\ For example, section 1848(g)(7) of the Act 
directs the Secretary of HHS to monitor utilization and access for 
Medicare beneficiaries provided through the Medicare fee schedule 
rates, and directs that the Medicare Payment Advisory Commission 
(MedPAC) shall comment on the Secretary's recommendations. In 
developing its comments, MedPAC convenes and consults a panel of 
physician experts to evaluate the implications of medical utilization 
patterns for the quality of and access to patient care. In a March 2001 
report, MedPAC summarized its evaluation of Medicare rates, stating 
``Medicare buys health care products and services from providers who 
compete for resources in private markets. To ensure beneficiaries' 
access to high-quality care, Medicare's payment systems therefore must 
set payment rates for health care products and services that are: high 
enough to stimulate adequate numbers of providers to offer services to 
beneficiaries, sufficient to enable efficient providers to supply high-
quality services, given the trade-offs between cost and quality that 
exist with current technology and local supply conditions for labor and 
capital, and low enough to avoid imposing unnecessary burdens on 
taxpayers and beneficiaries through the taxes and premiums they pay to 
finance program spending.'' \196\ Medicare's programmatic focus on 
beneficiary access aligns with the requirements of section 
1902(a)(30)(A) of the Act.
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    \195\ https://www.healthcarevaluehub.org/advocate-resources/publications/medicare-rates-benchmark-too-much-too-little-or-just-right.
    \196\ MedPAC. Report to the Congress: Medicare Payment Policy, 
March 2001. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/Mar01Ch1.pdf. Accessed 
December 20, 2022.
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    In addition, Medicare fee schedule rates are stratified by 
geographic areas within the States, which we seek to consider, as well 
to ensure that payment rates are consistent with section 1902(a)(30)(A) 
of the Act. The Medicare PFS pricing amounts are adjusted to reflect 
the variation in practice costs from area to area. Medicare established 
GPCI for every Medicare payment locality for each of the three 
components of a procedure's relative value unit (that is, the RVUs for 
work, practice expense, and malpractice). The current Medicare PFS 
locality structure was implemented in 2017 in accordance with the 
Protecting Access to Medicare Act of 2014 (PAMA 2014). Under the 
current locality structure, there are 112 total PFS localities.\197\
---------------------------------------------------------------------------

    \197\ Section 220(b) of PAMA 204 added section 1848(e)(6) of the 
Act, which requires that, for services furnished on or after January 
1, 2017, the locality definitions for California, which has the most 
unique locality structure, be based on the Metropolitan Statistical 
Area (MSA) delineations as defined by the Office of Management and 
Budget (OMB). The resulting modifications to California's locality 
structure increased its number of localities from 9 under the 
previous structure to 27 under the MSA-based locality structure 
(operational note: for the purposes of payment the actual number of 
localities under the MSA-based locality structure is 32). Of the 112 
total PFS localities, 34 localities are Statewide areas (that is, 
only one locality for the entire State). There are 75 localities in 
the other 16 States, with 10 States having 2 localities, 2 States 
having 3 localities, 1 State having 4 localities, and 3 States 
having 5 or more localities. The District of Columbia, Maryland, and 
Virginia suburbs, Puerto Rico, and the Virgin Islands are additional 
localities that make up the remainder of the total of 112 
localities. Medicare PFS Locality Configuration. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Locality. Accessed December 21, 2022.
---------------------------------------------------------------------------

    When considering geography in their rate analyses, CMS expects 
States to conduct a code-by-code analysis of the ratios of Medicaid-to-
Medicare provider payment rates for all applicable codes within the 
benefit category, either for each of the GPCIs within the State, or by 
calculating an average Medicare rate across the GPCIs within the State 
(such as in cases where a State does not vary its rates by region). In 
cases where a State does vary its Medicaid rates based on geography, 
but that variation does not align with the Medicare GPCI, the State 
should utilize the Medicare payment rates as published by Medicare for 
the same geographical location as the Medicaid base payment rates to 
achieve an equivalent comparison and align the Medicare GPCI to the 
locality of the Medicaid payment rates, using the county and locality 
information provided by Medicare for the GPCIs, for purposes of 
creating a reasonable comparison of the payment rates.\198\ To conduct 
such an analysis that meets the requirements of proposed Sec.  
447.203(c)(1)(i), States may compare the Medicaid payment rates 
applicable to the same Medicare GPCI to each Medicare rate by GPCI 
individually, and then aggregate that comparison into an average rate 
comparison for the benefit category. To the extent that Medicaid 
payment rates do not vary by geographic locality within the State, the 
State may also calculate a Statewide average Medicare rate based upon 
all of the rates applicable to the GPCIs within that State, and compare 
that average Medicare rate to the average Medicaid rate for the benefit 
category.
---------------------------------------------------------------------------

    \198\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Locality.
---------------------------------------------------------------------------

    Once we decided to propose using Medicare payment rates as a point 
of comparison, we needed to decide what threshold ratio of proposed 
Medicaid to Medicare payment rates should trigger additional 
consideration and review for potential access issues. First, we 
considered how current levels of Medicaid payment compares to the 
Medicare payment for the same services. In a 2021 Health Affairs 
article, Zuckerman, et al, found that ``Medicaid physician fees were 72 
percent of Medicare physician fees for twenty-seven common procedures 
in 2019.'' \199\ This ratio varied by service type. For example, ``the 
2019 Medicaid-to-Medicare fee index was lower for primary care (0.67) 
than for obstetric care (0.80) or for other services (0.78).'' The 
authors also found that ``between 2008 and 2019 Medicare and Medicaid 
fees both increased (23.6 percent for Medicare fees and 19.9 percent 
for Medicaid fees), leaving the fee ratios similar.'' \200\
---------------------------------------------------------------------------

    \199\ Zuckerman, S. et al. ``Medicaid Physician Fees Remained 
Substantially Below Fees Paid By Medicare in 2019,'' Health Affairs, 
Volume 40, Number 2, February 2021. Available at https://doi.org/10.1377/hlthaff.2020.00611 (accessed December 23, 2022).
    \200\ Id.
---------------------------------------------------------------------------

    Next, considering that Medicaid rates are generally lower than 
Medicare, we wanted to examine the relationship between these rates and 
a beneficiary's ability to access covered services. This led us to 
first look into a comparison of physician new patient acceptance rates 
based on a prospective new patient's payer. In a June 2021 fact sheet, 
the Medicaid and CHIP Payment and Access Commission (MACPAC) found ``in 
2017 (the most recent year available), physicians were significantly 
less likely to accept new patients insured by Medicaid (74.3 percent) 
than those with Medicare (87.8 percent) or

[[Page 28028]]

private insurance (96.1 percent).'' \201\ MACPAC found this to be true 
``regardless of physician demographic characteristics (age, sex, region 
of the country); and type and size of practice.'' \202\
---------------------------------------------------------------------------

    \201\ MACPAC. ``Physician Acceptance of New Medicaid Patients: 
Finding from the National Electronic Health Records Survey.'' June. 
2021. Available at https://www.macpac.gov/wp-content/uploads/2021/06/Physician-Acceptance-of-New-Medicaid-Patients-Findings-from-the-National-Electronic-Health-Records-Survey.pdf (accessed December 23, 
2023).
    \202\ Id.
---------------------------------------------------------------------------

    We then wanted to confirm whether this was related to the rates 
themselves. In a 2019 Health Affairs article, the authors found that, 
``higher payment continues to be associated with higher rates of 
accepting new Medicaid patients . . . physicians most commonly point to 
low payment as the main reason they choose not to accept patients 
insured by Medicaid.'' \203\ The study found that physicians in States 
that pay above the median Medicaid-to-Medicare fee ratio accepted new 
Medicaid patients at higher rates than those in States that pay below 
the median, with acceptance rates increasing by nearly 1 percentage 
point (0.78) for every percentage point increase in the fee ratio.\204\
---------------------------------------------------------------------------

    \203\ Holgash, K. and Martha Heberlein, ``Physician Acceptance 
Of New Medicaid Patients: What Matters And What Doesn't.'' Health 
Affairs, April 10, 2019. Available at https://www.healthaffairs.org/do/10.1377/forefront.20190401.678690/full/ (accessed February 22, 
2023).
    \204\ Id.
---------------------------------------------------------------------------

    Similarly, in a 2020 study published by the National Bureau of 
Economic Research, researchers found that there was a positive 
association between increasing Medicaid physician fees and increased 
likelihood of having a usual source of care, improved access to 
specialty doctor care, and large improvements in caregivers' 
satisfaction with the adequacy of health coverage, among children with 
special health care needs with a public source of health coverage.\205\ 
Further, Berman, et al, focused on pediatricians looked at Medicaid-
Medicare fee ratio quartiles and found that the percent of 
pediatricians accepting all Medicaid patients and relative pediatrician 
participation in Medicaid increased at each quartile, but improvement 
was most significant up to the third quartile.\206\ According to the 
Kaiser Family Foundation, in 2016, following the expiration of section 
1202 of the Affordable Care Act (Pub. L. 111-148), which amended 
section 1902(a)(13) of the Act to implement a temporary payment floor 
for certain Medicaid primary care physician services, the third 
quartile of States had Medicaid-Medicare fee ratios of between 79 and 
86 percent for all services provided under all State Medicaid fee-for-
service programs.\207\ Importantly, considering the proposed 
requirements at paragraph (c) pertain to proposed payment rate 
reductions or payment restructurings in circumstances when the changes 
could result in diminished access, multiple recent studies have also 
shown that the association between Medicaid physician fees and measures 
of beneficiary access are consistent whether physician payments are 
increased or decreased to reach a particular level at which access is 
assessed.\208\
---------------------------------------------------------------------------

    \205\ Chatterji, P. et al. ``Medicaid Physician Fees and Access 
to Care Among Children with Special Health Care Needs'' National 
Bureau of Economic Research, Working Paper 26769, February 2020, p. 
2-54. Medicaid Physician Fees and Access to Care among Children with 
Special Health Care Needs [bond] NBER. Accessed June 16, 2022.
    \206\ Berman, S., et al. ``Factors that Influence the 
Willingness of Private Primary Care Pediatricians to Accept More 
Medicaid Patients'' Pediatrics.
    \207\ https://www.kff.org/medicaid/state-indicator/medicaid-to-medicare-fee-index.
    \208\ Candon, M., et al. ``Declining Medicaid Fees and Primary 
Care Appointment Availability for New Medicaid Patients'' JAMA 
Internal Medicine, Volume 178, Number 1, January 2018, p. 145-146. 
Available at https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2663253. Accessed June 16, 2022.
---------------------------------------------------------------------------

    The Kaiser Family Foundation found that 23 States have Medicaid-to-
Medicare fee ratios of at least 80 percent for all services, 17 States 
have fee ratios of 80 percent for primary care services, 32 States have 
fee ratios of 80 percent for obstetric care, and 27 States have fee 
ratios of 80 percent for other services.\209\ Additional studies 
support the Holgash and Heberlein findings that physicians most 
commonly point to low payment as the main reason they choose not to 
accept patients insured by Medicaid, showing that States with a 
Medicaid to Medicare fee ratio at or above 80 percent show improved 
access for children to a regular source of care,\210\ and decreased use 
of hospital-based facilities, versus States with a lower Medicaid to 
Medicare fee ratio.
---------------------------------------------------------------------------

    \209\ https://www.kff.org/medicaid/state-indicator/medicaid-to-medicare-fee-index.
    \210\ Chatterji, P. et al. ``Medicaid Physician Fees and Access 
to Care Among Children with Special Health Care Needs'' National 
Bureau of Economic Research, Working Paper 26769, February 2020, p. 
2-54. Available at https://www.nber.org/papers/w26769. Accessed 
August 16, 2022.
---------------------------------------------------------------------------

    In general, we are concerned that higher rates of acceptance by 
some providers of new patients with payers other than Medicaid 
(specifically, Medicare and private coverage), and indications by some 
providers that low Medicaid payments are a primary reason for not 
accepting new Medicaid patients, may suggest that some beneficiaries 
could have a more difficult time accessing covered services than other 
individuals in the same geographic area. We are encouraged by findings 
that suggest that some increases in Medicaid payment rates may drive 
increases in provider acceptance of new Medicaid patients, with one 
study finding that new Medicaid patient acceptance rates increased by 
0.78 percent for every percentage point increase in the Medicaid-to-
Medicare fee ratio, for certain providers for certain States above the 
median Medicaid-to-Medicare fee ratio.211 212 In line with 
the Berman study, which found that increases in the percentage of 
pediatricians participating in Medicaid and of pediatricians accepting 
new Medicaid patients occurred with Medicaid payment rate increases at 
each quartile of the Medicaid-to-Medicare fee ratio but were most 
significant up to the third quartile, we believe that beneficiaries in 
States that provide this level of Medicaid payment generally may be 
less likely to encounter access to care issues at rates higher than the 
general population.\213\ In line with the Kaiser Family Foundation 
reporting of the Medicaid-to-Medicare fee ratio third quartile as 
ranging from 79 to 86 percent in 2016, depending on the service, we 
believe that a minimum 80 percent Medicaid-to-Medicare fee ratio is a 
reasonable threshold to propose in Sec.  447.203(c)(1)(i) as one of 
three criteria State proposals to reduce or restructure provider 
payments would be required to meet to qualify for the proposed 
streamlined documentation process.\214\ As documented by the Kaiser 
Family Foundation, many States currently satisfy this ratio for many 
Medicaid-covered services, and according to findings by Zuckerman, et 
al. in Health Affairs, in 2019, the average nationwide fee ratio for 
obstetric care met this

[[Page 28029]]

proposed threshold.215 216 We propose that this percentage 
would hold across benefit categories, because we did not find any 
indication that a lower threshold would be adequate, or that a higher 
threshold would be strictly necessary, to support a level of access to 
covered services for Medicaid beneficiaries at least as great as for 
the general population in the geographic area. It is worth noting that 
the disparities in provider participation for some provider types may 
be larger than this overview suggests, as such we are proposing a 
uniform standard in the interest of administrative simplicity, but note 
that States must meet all three of the criterion in proposed paragraph 
(c)(1) to qualify for the streamlined analysis process; otherwise, the 
additional analysis specified in proposed paragraph (c)(2) would be 
required.
---------------------------------------------------------------------------

    \211\ MACPAC. ``Physician Acceptance of New Medicaid Patients: 
Finding from the National Electronic Health Records Survey.'' June. 
2021. Available at https://www.macpac.gov/wp-content/uploads/2021/06/Physician-Acceptance-of-New-Medicaid-Patients-Findings-from-the-National-Electronic-Health-Records-Survey.pdf (accessed December 23, 
2023).
    \212\ Holgash, K. and Martha Heberlein, ``Physician Acceptance 
Of New Medicaid Patients: What Matters And What Doesn't.'' Health 
Affairs, April 10, 2019. Available at https://www.healthaffairs.org/do/10.1377/forefront.20190401.678690/full/ (accessed February 22, 
2023).
    \213\ Berman, S., et al. ``Factors that Influence the 
Willingness of Private Primary Care Pediatricians to Accept More 
Medicaid Patients'' Pediatrics.
    \214\ https://www.kff.org/medicaid/state-indicator/medicaid-to-medicare-fee-index.
    \215\ Id.
    \216\ Zuckerman, S. et al. ``Medicaid Physician Fees Remained 
Substantially Below Fees Paid By Medicare in 2019,'' Health Affairs, 
Volume 40, Number 2, February 2021. Available at https://doi.org/10.1377/hlthaff.2020.00611 (accessed December 23, 2022).
---------------------------------------------------------------------------

    Given the results of this literature review, and by proposing this 
provision as only one part of a three-part assessment of the likely 
effect of a proposed payment rate reduction or payment restructuring on 
access to care, as further discussed in this section, we propose 80 
percent of the most recently published Medicare payment rates, as 
identified on the applicable Medicare fee schedule for the same or a 
comparable set of Medicare-covered services, as a benchmark for the 
level of Medicaid payment for benefit categories that are subject to 
proposed provider payment reductions or restructurings that is likely 
to enlist enough providers so that care and services are available to 
Medicaid beneficiaries at least to the extent as to the general 
population in the geographic area, where the additional tests in 
proposed Sec.  447.203(c)(1) also are met. The published Medicare 
payment rates means the amount per applicable procedure code identified 
on the Medicare fee schedule. The established Medicare fee schedule 
rate includes the amount that Medicare pays for the claim and any 
applicable co-insurance and deductible amounts owed by the patient. 
Medicaid fee-schedule rates should be representative of the total 
computable payment amount a provider would expect to receive as 
payment-in-full for the provision of Medicaid services to individual 
beneficiaries. Section 447.15 defines payment-in-full as ``the amounts 
paid by the agency plus any deductible, coinsurance or copayment 
required by the plan to be paid by the individual.'' Therefore, State 
fee schedule should be inclusive of total base payment from the 
Medicaid agency plus any applicable coinsurance and deductibles to the 
extent that a beneficiary is expected to be liable for those payments. 
If a State Medicaid fee schedule does not include these additional 
beneficiary cost-sharing payment amounts, then the Medicaid fee 
schedule amounts would need to be modified to include expected 
beneficiary cost sharing to align with Medicare's fee schedule.
    We note that Medicaid benefits that do not have a reasonably 
comparable Medicare-covered analogue, and for which a State proposes a 
payment rate reduction or payment restructuring in circumstances when 
the changes could result in diminished access, would be subject to the 
expanded review criteria proposed in Sec.  447.203(c)(2), because the 
State would be unable to demonstrate its Medicaid payment rates are at 
or above 80 percent of Medicare payment rates for the same or a 
comparable set of Medicare-covered services after the payment rate 
reduction or payment restructuring in circumstances when the changes 
could result in diminished access. For identifying a comparable set of 
Medicare-covered services, we would expect to see services that bear a 
reasonable relationship to each other. For example, the clinic benefit 
in Medicaid does not have a directly analogous clinic benefit in 
Medicare. In Medicaid, clinic services generally are defined in Sec.  
440.90, as ``preventive, diagnostic, therapeutic, rehabilitative, or 
palliative services that are furnished by a facility that is not part 
of a hospital but is organized and operated to provide medical care to 
outpatients.'' This can include a number of primary care services 
otherwise available through physician practices and other primary care 
providers, such as nurse practitioners. Therefore, in seeking to 
construct a comparable set of Medicare-covered services to which the 
State could compare its proposed Medicaid payment rates, the State 
reasonably could include Medicare payment rates for practitioner 
services, such as physician and nurse practitioner services, or 
payments for facility-based services that bear a reasonable similarity 
to clinic services, potentially including those provided in Ambulatory 
Surgical Centers. We would expect the State to develop a reasonably 
comparable set of Medicare-covered services to which its proposed 
Medicaid payment rates could be compared and to include with its 
submission an explanation of its reasoning and methodology for 
constructing the Medicare rate to compare Medicaid payment rates to.
    In Sec.  447.203(c)(1)(ii), we propose that the State would be 
required to provide a supported assurance that the proposed reduction 
or restructuring, including the cumulative effect of all reductions or 
restructurings taken throughout the State fiscal year, would result in 
no more than a 4 percent reduction in aggregate FFS Medicaid 
expenditures for each benefit category affected by proposed reduction 
or restructuring within a single State fiscal year. The documentation 
would need to show the change stated as a percentage reduction in 
aggregate FFS Medicaid expenditures for each affected benefit category. 
We recognize that the effects of payment rate reductions and payment 
restructurings on beneficiary access generally cannot be determined 
through any single measure, and applying a 4 percent threshold without 
sufficient additional safeguards would not be prudent. Therefore, we 
are proposing to limit the 4 percent threshold as the cumulative 
percentage of rate reductions or restructurings applied to the overall 
FFS Medicaid expenditures for a particular benefit category affected by 
the proposed reduction(s) or restructuring(s) within each State fiscal 
year. We are proposing the cumulative application of the threshold to 
State plan actions taken within a State fiscal year as opposed to a 
SPA-specific application to avoid circumstances where a State may 
propose rate reductions or restructurings that cumulatively exceed the 
4 percent threshold across multiple SPAs without providing additional 
analysis.
    For example, if a State proposed to reduce payment rates for a 
broad set of obstetric services by 3 percent in State fiscal year 2023 
and had not proposed any other payment changes affecting the benefit 
category of obstetric care during the same State fiscal year, that 
payment change would meet the criterion proposed in Sec.  
447.203(c)(1)(ii) because it would be expected to result in no more 
than a 3 percent reduction in aggregate Medicaid expenditures for 
obstetric care within a State fiscal year. However, if the State had 
received approval earlier in the State fiscal year to revise its 
obstetric care payment methodology to include value-based arrangements 
expected to reduce overall Medicaid expenditures for obstetric care by 
2 percent per State fiscal year, then it is likely that the cumulative 
effect of the proposal to reduce payment rates for a broad set of 
obstetric services by 3 percent and the Medicaid obstetric care

[[Page 28030]]

expenditure reductions under the earlier-approved payment restructuring 
would result in an aggregate reduction to FFS Medicaid expenditures for 
obstetric services of more than 4 percent in a State fiscal year. If 
so, the State's proposal would not meet the criterion proposed in Sec.  
447.203(c)(1)(ii), and the proposal would be subject to the additional 
review criteria proposed in Sec.  447.203(c)(2). The State would need 
to document for our review whether the three percent payment rate 
reduction proposal for the particular subset of obstetric services 
would be likely to result in a greater than 2 percent further reduction 
in aggregate FFS Medicaid expenditures for obstetric care as compared 
to the expected expenditures for such services for the State fiscal 
year before any payment rate reduction or payment restructuring; if 
this expected aggregate reduction is demonstrated to be 2 percent or 
less, then the proposal still could meet the criterion proposed in 
Sec.  447.203(c)(1)(ii).
    We propose to codify a 4 percent reduction threshold for aggregate 
FFS Medicaid expenditures in each benefit category affected by a 
proposed payment rate reduction or payment restructuring within a State 
fiscal year. This threshold is consistent with one we proposed in the 
2018 proposed rule, which proposed to require the States to submit an 
AMRP with any SPA that proposed 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 2 consecutive State fiscal years, 
or restructure provider payments in circumstances when the changes 
could result in diminished access.\217\ The proposed rule received 
positive feedback from States regarding its potential for mitigating 
administrative burden, and providing States with flexibility to 
administer their programs and make provider payment rate changes. Some 
States and national organizations requested that we increase the rate 
reduction threshold to 5 percent and increase the consecutive year 
threshold to 8 percent.218 219 Non-State commenters 
cautioned CMS against providing too much administrative flexibility and 
to not abandon the Medicaid access analysis the current regulations 
require. Commenters also raised that 4 and 6 percent may seem nominal 
for larger medical practices and health care settings, but for certain 
physician practices or direct care workers a 6 percent reduction in 
payment could be considerable.\220\ This feedback has been essential in 
considering how we proceed with this proposed rule, in which we 
emphasize that the size of the rate reduction threshold proposed in 
Sec.  447.203(c)(1)(ii) would operate in conjunction with the two other 
proposed elements in Sec.  447.203(c)(1)(i) and (iii) to qualify the 
State for a streamlined analysis process and would not exempt the 
proposal from scrutiny for compliance with section 1902(a)(30)(A) of 
the Act.
---------------------------------------------------------------------------

    \217\ 83 FR 12696 at 12698.
    \218\ Connecticut Department of Social Services. Comment Letter 
on 2018 Proposed Rule (May 21, 2018), https://downloads.regulations.gov/CMS-2018-0031-0021/attachment_1.pdf.
    \219\ National Association of Medicaid Directors. Comment Letter 
on 2018 Proposed rule (June 1, 2018), https://downloads.regulations.gov/CMS-2018-0031-0115/attachment_1.pdf.
    \220\ American Academy of Family Physicians, Comment Letter on 
2018 Proposed Rule (May 21, 2018), https://downloads.regulations.gov/CMS-2018-0031-0017/attachment_1.pdf.
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    We are proposing a 4 percent threshold on cumulative provider 
payment rate reductions throughout a single State fiscal year as one of 
the criteria of the streamlined process in proposed paragraph (c)(1), 
and therefore, emphasizing that while we believe this payment threshold 
to be nominal and unlikely to diminish access to care, we propose to 
include paragraph (c)(1)(i) to require States to review current levels 
of provider payment in relation to Medicare and propose to include 
paragraph (c)(1)(iii) to require that States rely on the public process 
to inform the determination on the sufficiency of the proposed payment 
rates after reduction or restructuring, with consideration for 
providers and practice types that may be disproportionately impacted by 
the State's proposed rate reductions or restructurings.
    As previously noted, we would not consider any payment rate 
reduction or payment rate restructuring proposal to qualify for the 
streamlined analysis process in the proposed paragraph (c)(1) unless 
all three of the proposed paragraph (c)(1) criteria are met. Using 
information from the Kaiser Family Foundation's Medicaid-to-Medicare 
fee index \221\ as an example, only 15 States could have reduced 
primary care service provider payment rates by up to 4 percent in 2019 
and continued to meet the 80 percent of Medicare threshold in proposed 
paragraph (c)(1). Even those 15 States with rates above the 80 percent 
of Medicare threshold would be subject to proposed paragraph (c)(2) 
requirements if the State received significant public feedback that the 
proposed payment reduction or restructuring would result in an access 
to care concern, if the State were unable to reasonably respond to or 
mitigate such concerns. All States with primary care service payment 
rates below the 80 percent of Medicare threshold, no matter the size of 
the payment rate reduction or restructuring and no matter whether 
interested parties expressed access concerns through available public 
processes, would have to conduct an additional access analysis required 
under proposed paragraph (c)(2).
---------------------------------------------------------------------------

    \221\ https://www.kff.org/medicaid/state-indicator/medicaid-to-medicare-fee-index/.
---------------------------------------------------------------------------

    We issued SMDL #17-004 to provide States with guidance on complying 
with regulatory requirements to help States avoid unnecessary burden 
when seeking approval of and implementing payment changes, because 
States often seek to make payment rate and/or payment structure changes 
for a variety of programmatic and budgetary reasons with limited or 
potentially no effect on beneficiary access to care, and we recognized 
that State legislatures needed some flexibility to manage State budgets 
accordingly. We discussed a 4 percent spending reduction threshold with 
respect to a particular service category in SMDL #17-004 as an example 
of a targeted reduction where the overall change in net payments within 
the service category would be nominal and any effect on access 
difficult to determine (although we reminded States that they should 
document that the State followed the public process under Sec.  
447.204, which could identify access concerns even with a seemingly 
nominal payment rate reduction). To our knowledge, since the release of 
SMDL #17-004, the 4 percent threshold for regarding a payment rate 
reduction as nominal has not resulted in access to care concerns in 
State Medicaid programs, and it received significant State support for 
this reason in comments submitted in response to the 2018 proposed 
rule.\222\
---------------------------------------------------------------------------

    \222\ See, for example: Indiana Family and Social Services 
Administration. Comment Letter on 2018 Proposed Rule (May 24, 2018), 
https://downloads.regulations.gov/CMS-2018-0031-0055/attachment_1.pdf; Colorado Department of Health Care Policy and 
Financing. Comment Letter on 2018 Proposed Rule (May 24, 2018), 
https://downloads.regulations.gov/CMS-2018-0031-0087/attachment_1.pdf; The Commonwealth of Massachusetts Executive Office 
of Health and Human Services Office of Medicaid. Comment Letter on 
2018 Proposed Rule (May 21, 2018), https://downloads.regulations.gov/CMS-2018-0031-0020/attachment_1.pdf.
---------------------------------------------------------------------------

    In instances where States submitted payment rate reduction SPAs 
after the publication of SMDL #17-004, we routinely have asked the 
State for an explanation of the purpose of the proposed change, whether 
the FFS Medicaid expenditure impact for the

[[Page 28031]]

service category would be within a 4 percent reduction threshold, and 
for an analysis of public comments received on the proposed change, and 
approved those SPAs to the extent that the State was able to resolve 
any potential access to care issues and determined that access would 
remain consistent for the Medicaid population. For example, of the 849 
SPAs approved in 2019, there were 557 State payment rate changes. Of 
those, 39 were classified as payment rate reductions or methodology 
changes that resulted in a reduction in overall provider payment. 
Within those 39, there were 18 SPAs that sought to reduce payments by 
less than 4 percent of overall spending within the benefit category, 
most of which were decreases related to changes in Medicare payment 
formulas. Sixteen of the remaining 21 SPAs fell into an area discussed 
in SMDL #17-004 as being unlikely to result in diminished access to 
covered services, where with the State's analytical support, we were 
able to determine that the payment rates would continue to comply with 
section 1902(a)(30)(A) of the Act without submitting an AMRP with the 
SPA. Six of these SPAs represented rate freezes meant to continue 
forward a prior year's rates or eliminated an inflation adjustment. Six 
SPAs reduced a payment rate to comply with Federal requirements, such 
as the Medicaid UPLs in Sec. Sec.  447.272 and 447.321, the Medicaid 
DME FFP limit in section 1903(i)(27) of the Act, or the Medicaid 
hospice rate, per section 1902(a)(13)(B) of the Act. Four SPAs 
contained reductions that resulted from programmatic changes such as 
the elimination of a Medicaid benefit or shifting the delivery system 
for a benefit to coverage by a pre-paid ambulatory health plan. 
Finally, we found five SPAs for which States were required to submit 
AMRPs, three of which were submitted to us in 2017 and updated for 
2019. Overall, our review of SPAs revealed that smaller reductions may 
often be a result of elements of the State's approved payment 
methodology or other requirements that may be outside of the State's 
control, such as Federal payment limits or changes in the Medicare 
payment rate formulas that might be incorporated into a State's 
approved payment methodology, or coding changes that might affect the 
amount of payment related to the unit of service. We determined, using 
this information, that it is necessary to provide States with some 
degree of flexibility in making changes, even if that change is a 
reduction in provider payment. For example, if a State submits a SPA to 
reduce or restructure inpatient hospital base or supplemental payments, 
where inaction on the State's part would result in the State exceeding 
the applicable UPL, the State would need to reduce inpatient hospital 
payments or risk a compliance action against the State for violating 
Medicaid UPL requirements authorized under section 1902(a)(30)(A) of 
the Act and implementing regulations in 42 CFR 447 subparts C and F. We 
recognize that this flexibility does not eliminate the need to monitor 
or consider access to care when making payment rate decisions, but also 
recognize the need to provide some relief in circumstances where the 
State must take a rate action to address an issue of compliance with 
another statutory or regulatory requirement.
    Accordingly, we propose that, where a State has provided the 
information required under proposed paragraphs (c)(1)(i) through (iii), 
we would consider that the proposed reduction would result in a nominal 
payment adjustment unlikely to diminish access below the level 
consistent with section 1902(a)(30)(A) of the Act and would approve the 
SPA, provided all other criteria for approval also are met, without 
requiring the additional analysis that otherwise would be required 
under proposed Sec.  447.203(c)(2).
    Finally, in Sec.  447.203(c)(1)(iii), we propose that the State 
would be required to provide a supported assurance that the public 
processes described in Sec.  447.203(c)(4) yielded no significant 
access to care concerns or yielded concerns that the State can 
reasonably respond to or mitigate, as appropriate, as documented in the 
analysis provided by the State under Sec.  447.204(b)(3). The State's 
response to any access concern identified through the public processes, 
and any mitigation approach, as appropriate, would be expected to be 
fully described in the State's submission to us.
    We note that the proposed requirement in Sec.  447.203(c)(4) would 
not duplicate the requirements in current Sec.  447.204(a)(2), as the 
current Sec.  447.204(a)(2) requires States to consider provider and 
beneficiary input as part of the information that States are required 
to consider prior to the submission of any SPA that proposes to reduce 
or restructure Medicaid service payment rates. The proposed Sec.  
447.203(c)(4) describes material that States would be required to 
include with any SPA submission that proposes to reduce or restructure 
provider payment rates. As discussed in the CMCS informational bulletin 
dated June 24, 2016,\223\ before submitting SPAs to us, States are 
required under Sec.  447.204(a)(2) to make information available so 
that beneficiaries, providers, and other interested parties may provide 
input on beneficiary access to the affected services and the impact 
that the proposed payment change would have, if any, on continued 
service access. States are expected to obtain input from beneficiaries, 
providers, and other interested parties, and analyze the input to 
identify and address access to care concerns. States must obtain this 
information prior to submitting a SPA to us and maintain a record of 
the public input and how the agency responded to the input. When a 
State submits the SPA to us, Sec.  447.204(b)(3) requires the State to 
also submit a specific analysis of the information and concerns 
expressed in input from affected interested parties. We would rely on 
this and other documentation submitted by the State, including under 
proposed Sec.  447.203(c)(1)(iii), (c)(2)(vi), and (c)(4), to inform 
our SPA approval decisions.
---------------------------------------------------------------------------

    \223\ CMCS Informational Bulletin, ``Federal public notice and 
public process requirements for changes to Medicaid payment rates.'' 
Published June 24, 2016. https://www.medicaid.gov/federal-policy-guidance/downloads/cib062416.pdf. Accessed November 3, 2022.
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    In addition, States are required use the applicable public process 
required under section 1902(a)(13) of the Act, as applicable, and 
follow the public notice requirement in Sec.  447.205, as well as any 
other public processes required by State law (for example, State-
specified budgetary process requirements), in setting payment rates and 
methodologies in view of potential access to care concerns. States have 
an important role in identifying access to care concerns, including 
through ongoing and collaborative efforts with beneficiaries, 
providers, and other interested parties. We understand that not every 
concern would be easily resolvable, but we anticipate that States would 
be meaningfully engaged with their beneficiary, provider, and other 
interested party communities to identify and mitigate issues as they 
arise. As discussed herein, we would consider information about access 
concerns raised by beneficiaries, providers, and other interested 
parties when States propose SPAs to reduce Medicaid payment rates or 
restructure Medicaid payments and would not approve proposals that do 
not comport with all applicable requirements, including the access 
standard in section 1902(a)(30)(A) of the Act.
    In feedback received regarding implementation of the AMRP

[[Page 28032]]

requirements in the 2015 final rule with comment period, States 
expressed concern about burdensome requirements to draft, seek public 
input on, and update their AMRP after receiving beneficiary or provider 
complaints that were later resolved by the State's engagement with 
beneficiaries and the provider community. Our proposal to require 
access review procedures specific to State proposals to reduce payment 
rates or restructure payments would provide an opportunity for the 
State meaningfully to address and respond to interested parties' input, 
and seeks to balance State burden concerns with the clear need to 
understand the perspectives of interested parties most likely to be 
affected by a Medicaid payment rate reduction or payment restructuring. 
Currently, Sec.  447.203(b)(7) requires States to have ongoing 
mechanisms for beneficiary and provider input on access to care through 
various mechanisms, and to maintain a record of data on public input 
and how the State responded to such input, which must be made available 
to us upon request. We propose to retain this important mechanism and 
to relocate it to Sec.  447.203(c)(4). Through the cross reference to 
proposed Sec.  447.203(c)(4) in proposed Sec.  447.203(c)(1)(iii), we 
would require States to use the ongoing beneficiary and provider 
feedback mechanisms to aid in identifying and assessing any access to 
care issues in cooperation with their interested parties' communities, 
as a component of the streamlined access analysis criteria in proposed 
Sec.  447.203(c)(1).
    Together, we believe the proposed criteria of Sec.  
447.203(c)(1)(i) through (iii), where all are met, would establish that 
a State's proposed Medicaid payment rates and/or payment structure are 
consistent with the access requirement in section 1902(a)(30)(A) of the 
Act at the time the State proposes a payment rate reduction or payment 
restructuring in circumstances when the changes could result in 
diminished access. Importantly, as noted above, proposed Sec.  
447.203(c)(4) (proposed to be relocated from current Sec.  
447.203(b)(7)) would ensure that States have ongoing procedures for 
compliance monitoring independent of any approved Medicaid payment 
changes.
    We previously outlined in SMDL #17-004 several circumstances where 
Medicaid payment rate reductions generally would not be expected to 
diminish access: reductions necessary to implement CMS Federal Medicaid 
payment requirements; reductions that will be implemented as a decrease 
to all codes within a service category or targeted to certain codes, 
but for services where the payment rates continue to be at or above 
Medicare and/or average commercial rates; and reductions that result 
from changes implemented through the Medicare program, where a State's 
service payment methodology adheres to the Medicare methodology. This 
proposed rule would not codify this list of policies that may produce 
payment rate reductions unlikely to diminish access to Medicaid-covered 
services. However, as a possible addition to the proposed streamlined 
access analysis criteria in proposed Sec.  447.203(c)(1), we are 
requesting comment on whether this list of circumstances discussed in 
SMDL #17-004 should be included in a new paragraph under proposed Sec.  
447.203(c)(1) and, if one or more of these circumstances were 
applicable, the State's proposal would be considered to qualify for the 
streamlined analysis process under proposed Sec.  447.203(c)(1) 
notwithstanding the other proposed criteria in proposed 
paragraph(c)(1).
    Proposed paragraph (c)(1) discusses the full set of written 
assurances and relevant supporting documentation that States would be 
required to submit with a proposed payment rate reduction or payment 
restructuring SPA in circumstances when the changes could result in 
diminished access, where the requirements in proposed paragraphs 
(c)(1)(i) through (c)(1)(iii) are met. The inclusion of documentation 
that confirms all criteria proposed in paragraph (c)(1) are met would 
exempt the State from the requirements in proposed Sec.  447.203(c)(2), 
discussed later in this section; however, it would not guarantee SPA 
approval. Proposed payment rate reduction SPAs and payment rate 
restructuring SPAs meeting the requirements in proposed Sec.  
447.203(c)(1) would still be subject to CMS' standard review 
requirements for all proposed SPAs to ensure compliance with section 
1902(a) of the Act, including implementing regulations in part 430. 
Specifically, and without limitation, this includes compliance with 
sections 1902(a)(2) of the Act, requiring financial participation by 
the State in payments authorized under section 1903 of the Act. CMS 
reviews SPAs involving payments to ensure that the State has identified 
an adequate source of non-Federal share financing for payments under 
the SPA so that section 1902(a)(2) of the Act is satisfied; in 
particular, section 1903(w) of the Act and its implementing regulations 
establish requirements for certain non-Federal share financing sources 
that CMS must ensure are met. We further note that a proposed SPA's 
failure to meet the criteria in proposed paragraph (c)(1) would not 
result in automatic SPA disapproval; rather, such proposals would be 
subject to additional documentation and review requirements, as 
described in proposed Sec.  447.203(c)(2).
    In paragraph (c)(2), we propose the additional, more rigorous State 
access analysis that States would be required to submit where the State 
proposes to reduce provider payment rates or restructure provider 
payments in circumstances when the changes could result in diminished 
access where the requirements in paragraphs (c)(1)(i) through (iii) are 
not met. We believe this more rigorous access analysis should be 
required because we believe that, where the State is unable to 
demonstrate that the proposed paragraph (c)(1) criteria are met, more 
scrutiny is needed to ensure that the proposed payment rates and 
structure would be sufficient to enlist enough providers so that 
covered services would be available to beneficiaries at least to the 
same extent as to the general population in the geographic area. 
Accordingly, we are proposing in Sec.  447.203(c)(2) to have States 
document current and recent historical levels of access to care, 
including a demonstration of counts and trends of actively 
participating providers, counts and trends of FFS Medicaid 
beneficiaries who receive the services subject to the proposed payment 
rate reduction or payment restructuring; and service utilization 
trends, all for the 3-year period immediately preceding the submission 
date of the proposed rate reduction or payment restructuring SPA, as a 
condition for approval. As with the current AMRP process, the 
information provided by the State would serve as a baseline of 
understanding current access to care within the State's program, from 
which the State's payment rate reduction or payment restructuring 
proposal would be scrutinized.
    The 2015 final rule with comment period included requirements that 
the AMRP process include data on the following topics, in current Sec.  
447.203(b)(1)(i) through (v): the extent to which beneficiary needs are 
fully met; the availability of care through enrolled providers to 
beneficiaries in each geographic area, by provider type and site of 
service; changes in beneficiary utilization of covered services in each 
geographic area; the characteristics of the beneficiary population 
(including considerations for care, service and payment variations for 
pediatric and adult populations and for

[[Page 28033]]

individuals with disabilities); and actual or estimated levels of 
provider payment available from other payers, including other public 
and private payers, by provider type and site of service. The 
usefulness of the ongoing AMRP data was directly related to the quality 
of particular data measures that States selected to use in their AMRPs, 
and one of the biggest concerns we heard about the process was that 
States were not always certain that they were providing us with the 
relevant data that we needed to make informed decisions about Medicaid 
access to care because the 2015 final rule provided States with a 
considerable amount of flexibility in determining the type of data that 
may be provided in support of the State's access analysis included in 
their AMRP. In addition, States were required to consult with the 
State's medical advisory committees and publish the draft AMRP for no 
less than 30 days for public review and comment, per Sec.  447.203(b). 
Therefore, the final AMRP, so long as the base data elements were met 
and supported the State's conclusion that access to care in the 
Medicaid program met the requirements of section 1902(a)(30)(A) of the 
Act, then the AMRP was accepted by us. As a result, the AMRPs were 
often very long and complex documents that sometimes included data that 
was not necessarily useful for understanding the extent of beneficiary 
access to services in the State or for making administrative decisions 
about SPAs. In an effort to promote standardization of data measures 
and limit State submissions to materials likely to assist in ensuring 
consistency of payment rates with the requirements of section 
1902(a)(30)(A) of the Act, we are proposing to maintain a number of the 
currently required data elements from the AMRP but to be more precise 
about the type of information that would be required.
    In Sec.  447.203(c)(2), we propose that, for any SPA that proposes 
to reduce provider payment rates or restructure provider payments in 
circumstances when the changes could result in diminished access, where 
the requirements in paragraphs (c)(1)(i) through (iii) are not met, the 
State would be required to also provide specified information to us as 
part of the SPA submission as a condition of approval, in addition to 
the information required under paragraph (c)(1), in a format prescribed 
by us. Specifically, in Sec.  447.203(c)(2)(i), we propose to require 
States to provide a summary of the proposed payment change, including 
the State's reason for the proposal and a description of any policy 
purpose for the proposed change, including the cumulative effect of all 
reductions or restructurings taken throughout the current State fiscal 
year in aggregate FFS Medicaid expenditures for each benefit category 
affected by proposed reduction or restructuring within a State fiscal 
year. We are proposing to collect this information for SPAs that 
require a Sec.  447.203(c)(2) analysis, but for those that meet the 
criteria proposed under Sec.  447.203(c)(1), we are not proposing to 
require a summary of the proposed payment change, including the State's 
reason for the proposal and a description of any policy purpose for the 
proposed change beyond that which is already provided as part of a 
normal State plan submission or as may be requested by CMS through the 
normal State plan review process; we are requesting comment whether 
these elements should apply to both proposed Sec.  447.203(c)(1) and 
(c)(2) equally.
    In Sec.  447.203(c)(2)(ii), we propose to require the State to 
provide Medicaid payment rates in the aggregate (including base and 
supplemental payments) before and after the proposed reduction or 
restructuring for each benefit category affected by proposed reduction 
or restructuring, and a comparison of each (aggregate Medicaid payment 
before and after the reduction or restructuring) to the most recently 
published Medicare payment rates for the same or a comparable set of 
Medicare-covered services and, as reasonably feasible, to the most 
recently available payment rates of other health care payers in the 
State or the geographic area for the same or a comparable set of 
covered services. This proposed element is similar to the current Sec.  
447.203(b)(1)(v) rate comparison requirement, which requires the AMRP 
to include ``[a]ctual or estimated levels of provider payment available 
from other payers, including other public and private payers, by 
provider type and site of service.'' However, the proposed analysis 
specifically would require an aggregate comparison including Medicaid 
base and supplemental payments, as applicable, before and after the 
proposed reduction or restructuring are implemented, compared to the 
most recently published Medicare payment rates for the same or 
comparable set of Medicare-covered services and, as reasonably 
feasible, to the most recently available payment rates of other health 
care payers in the State or the geographic area for the same or a 
comparable set of covered services. We found that, first, States 
struggled with obtaining and providing private payer data as 
contemplated by the 2015 final rule with comment period, and, second, 
States were confused about how to compare Medicaid rates to Medicare 
rates where there were no comparable services between Medicare and 
Medicaid. We wanted to acknowledge the feedback we received from States 
during the AMRP process and modify the requirements in the proposed 
rule by focusing on the more readily available Medicare payment data as 
the most relevant payment comparison for Medicaid in this proposed 
rule, as discussed in detail above. We believe that the E/M CPT/HCPCS 
code comparison methodology included in the proposed Sec.  
447.203(b)(3)(i) and the payment rate disclosure in proposed Sec.  
447.203(b)(3)(ii) can serve, at a minimum, as frameworks for States 
that struggled to compare Medicaid rates to Medicare where there may be 
no other comparable services between the two programs. Otherwise where 
comparable services exist, States would be required to compare all 
applicable Medicaid payment rates within the benefit category to the 
Medicare rates for the same or comparable services under proposed Sec.  
447.203(c)(2)(ii). For reasons mentioned previously in this section, 
Medicare through MEDPAC engages in substantial analysis of access to 
care as it reviews payment rates for services, so we believe this is a 
sufficient benchmark for the Medicaid payment rate analysis.
    In Sec.  447.203(c)(2)(iii), we are proposing to require States to 
provide information about the number of actively participating 
providers of services in each benefit category affected by the proposed 
reduction or restructuring. For this purpose, an actively participating 
provider is a provider that is participating in the Medicaid program 
and actively seeing and providing services to Medicaid beneficiaries or 
accepting Medicaid beneficiaries as new patients. The State would be 
required to provide the number of actively participating providers of 
services in each affected benefit category for each of the 3 years 
immediately preceding the SPA submission date, by State-specified 
geographic area (for example, by county or parish), provider type, and 
site of service. The State would be required to document observed 
trends in the number of actively participating providers in each 
geographic area over this period. The State could provide estimates of 
the anticipated effect on the number of actively participating 
providers of services in each benefit category affected by the proposed

[[Page 28034]]

reduction or restructuring, by geographic area. This data element is 
similar to current Sec.  447.203(b)(1)(ii), under which States must 
analyze the availability of care through enrolled providers to 
beneficiaries in each geographic area, by provider type and site of 
service, in the AMRP; however, the proposal would require specific 
quantitative information describing the number of providers, by 
geographic area, provider type, and site of service available to 
furnish services to Medicaid beneficiaries and leaves less discretion 
to the States on specific data measures. With all of the data elements 
included in proposed paragraph (c)(2), we are proposing that the data 
come from the 3 years immediately preceding the State plan amendment 
submission date, as this would provide us with the most recent data and 
would allow for considerations for data anomalies that might otherwise 
distort a demonstration of access to care if only 1 year of data was 
used.
    In Sec.  447.203(c)(2)(iv), we are proposing to require States to 
provide information about the number of Medicaid beneficiaries 
receiving services through the FFS delivery system in each benefit 
category affected by the proposed reduction or restructuring. The State 
would be required to provide the number of beneficiaries receiving 
services in each affected benefit category for each of the 3 years 
immediately preceding the SPA submission date, by State-specified 
geographic area (for example, by county or parish). The State would be 
required to document observed trends in the number of Medicaid 
beneficiaries receiving services in each affected benefit category in 
each geographic area over this period. The State would be required to 
provide quantitative and qualitative information about the beneficiary 
populations receiving services in the affected benefit categories over 
this period, including the number and proportion of beneficiaries who 
are adults and children and who are living with disabilities, and a 
description of the State's consideration of the how the proposed 
payment changes may affect access to care and service delivery for 
beneficiaries in various populations. The State would be required to 
provide estimates of the anticipated effect on the number of Medicaid 
beneficiaries receiving services through the FFS delivery system in 
each benefit category affected by the proposed reduction or 
restructuring, by geographic area. This proposed provision is a 
combination of current Sec.  447.203(b)(1)(i) and (iv), which require 
States to provide an analysis of the extent to which beneficiary needs 
are met, and the characteristics of the beneficiary population 
(including considerations for care, service and payment variations for 
pediatric and adult populations and for individuals with disabilities). 
Even though we are not proposing to require this analysis to be updated 
broadly with respect to many benefit categories on an ongoing basis, we 
would require current information on the number of beneficiaries 
currently receiving services through the FFS delivery system in each 
benefit category affected by the proposed reduction or restructuring to 
inform our SPA review process to ensure that the statutory access 
standard is met. The inclusion of this beneficiary data is relevant 
because it provides information about the recipients of Medicaid 
services and where, geographically, these populations reside to ensure 
that the statutory access standard is met.
    In Sec.  447.203(c)(2)(v), we are proposing to require information 
about the number of Medicaid services furnished through the FFS 
delivery system in each benefit category affected by the proposed 
reduction or restructuring. The State would be required to provide the 
number of Medicaid services furnished in each affected benefit category 
for each of the 3 years immediately preceding the SPA submission date, 
by State-specified geographic area (for example, by county or parish), 
provider type, and site of service. The State would be required to 
document observed trends in the number of Medicaid services furnished 
in each affected benefit category in each geographic area over this 
period. The State would be required to provide quantitative and 
qualitative information about the Medicaid services furnished in the 
affected benefit categories over this period, including the number and 
proportion of Medicaid services furnished to adults and children and 
who are living with disabilities, and a description of the State's 
consideration of the how the proposed payment changes may affect access 
to care and service delivery. The State would be required to provide 
estimates of the anticipated effect on the number of Medicaid services 
furnished through the FFS delivery system in each benefit category 
affected by the proposed reduction or restructuring, by geographic 
area. This proposed data element is similar to that currently required 
in Sec.  447.203(b)(1)(iii), which requires an analysis of changes in 
beneficiary utilization of covered services in each geographic area. 
However, as stated earlier, the difference here is that this proposed 
analysis would be limited to the beneficiary populations impacted by 
the rate reduction or restructuring, for a more narrow set of data 
points, rather than requiring the State to conduct a full review of the 
Medicaid beneficiary population every 3 years on an ongoing basis. Even 
though we are not proposing to require this analysis to be updated 
broadly with respect to many benefit categories on an ongoing basis, we 
would require current information on the number and types of Medicaid 
services being delivered to Medicaid beneficiaries through the FFS 
delivery system in each benefit category affected by the proposed 
reduction or restructuring to inform our SPA review process to ensure 
that the statutory access standard is met. The inclusion of this data 
is relevant because it provides information about the actual 
distribution of care received by Medicaid beneficiaries and where, 
geographically, these services are provided to ensure that the 
statutory access standard is met.
    Finally, in Sec.  447.203(c)(2)(vi), we are proposing to require a 
summary of, and the State's response to, any access to care concerns or 
complaints received from beneficiaries, providers, and other interested 
parties regarding the service(s) for which the payment rate reduction 
or restructuring is proposed as required under Sec.  447.204(a)(2). 
This proposed requirement mirrors the requirement in Sec.  
447.204(b)(3), which requires that for any SPA submission that proposes 
to reduce or restructure Medicaid service payment rates, a specific 
analysis of the information and concerns expressed in input from 
affected interested parties must be provided at the time of the SPA 
submission. The new proposed Sec.  447.203(c)(2)(vi) requires the same 
analysis while providing more detail as to what we expect the State to 
provide. Specifically, proposed Sec.  447.203(c)(2)(vi) would require 
information about concerns and complaints from beneficiaries and 
providers specifically, as well as from other interested parties, and 
would underscore that the required analysis would be required to 
include the State's responses.
    Where any of the previously discussed proposed data elements 
requires an analysis of data over a 3-year period, we are proposing 
this time span to smooth statistical anomalies, and so that data 
variations can be understood. For example, any 3-year period look-back 
that includes portions of time

[[Page 28035]]

during a public health emergency, such as that for the COVID-19 
pandemic, might include much more variation in the access to care 
measures than periods before or after the public health emergency. By 
using a 3-year period, it is more likely that the State, CMS, and other 
interested parties would be able to identify and appropriately account 
for short term disruptions in access-related measures, for example, 
when the number of services performed dropped precipitously in 2020 as 
elective visits and procedures were postponed or canceled due to the 
public health emergency.\224\ If the proposed rule only included a 12-
month period, for example, it might not be clear that the data 
represent an accurate reflection of access to care at the time of the 
proposed reduction or restructuring. For example, a State may see 
variation in service utilization if there have been programmatic 
changes that are introduced over time, such as a move to increase care 
provided through a managed care delivery system in the State through 
which the fee-for-service utilization declines steadily until managed 
care enrollment targets are achieved, but a one-time review of that 
fee-for-service utilization capturing just a 12-month period might not 
capture data most reflective of the current fee-for-service utilization 
demonstrating access to care consistent with section 1902(a)(30)(A) of 
the Act. We are seeking public comment on the proposed use of a 3-year 
period where the proposed rule would require data about trends over 
time in the data elements proposed to be required under Sec.  
447.203(c)(2). We are also seeking public comment on the data elements 
required in Sec.  447.203(c)(2) as additional State rate analysis.
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    \224\ Stuart, B. ``How The COVID-19 Pandemic Has Affected 
Provision Of Elective Services: The Challenges Ahead.'' Health 
Affairs, October 8, 2020. Available at https://www.healthaffairs.org/do/10.1377/forefront.20201006.263687 (accessed 
February 27, 2023).
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    Proposed paragraph (c)(2) would require that States conduct and 
provide to us a rigorous analysis of a proposed payment rate 
reduction's or payment restructuring's potential to affect beneficiary 
access to care. However, by limiting these analyses to only those 
proposed payment rate reductions and payment restructurings in 
circumstances when the changes could result in diminished access that 
do not meet the criteria in proposed paragraph (c)(1), we believe that 
the requirements proposed in paragraph (c)(2) would help to enable us 
to determine whether the proposed State Medicaid payment rates and 
payment methodologies are consistent with section 1902(a)(30)(A) of the 
Act while minimizing State and Federal administrative burden, to the 
extent possible. We would use this State-provided information and 
analysis to help us understand the current levels of access to care in 
the State's program, and determine, considering the provider, 
beneficiary, and other interested party input collected through 
proposed Sec.  447.203(c)(4), whether the proposed payment rate 
reduction or payment restructuring likely would reduce access to care 
for the particular service(s) consistent with the statutory standard in 
section 1902(a)(30)(A) of the Act. If we approve the State's proposal, 
the data provided would serve as a baseline for prospective monitoring 
of access to care within the State.
    The proposed analysis and documentation requirements in paragraph 
(c)(2) draw, in part, from the current requirements of the AMRP process 
in the current Sec.  447.203(b)(1), and reflect the diverse methods and 
measures that are and can be used to monitor access to care. We also 
drew on some of the comments received on the 2011 proposed rule, as 
discussed in the 2015 final rule with comment period, where several 
commenters recommended that CMS consider identifying a set of uniform 
measures that States must collect data on or that CMS weighs more 
heavily in its analysis.\225\ We are proposing to provide more 
specificity on the types of uniform data elements in this proposed rule 
in Sec.  447.203(c) than is provided under current Sec.  447.203(b)(1). 
States have shown that they have access to the data listed in the 
proposed Sec.  447.203(c)(2) when we have requested it during SPA 
reviews and through the AMRP process, and through this proposed rule, 
we are proposing to specify the type of data that we would expect 
States to provide with rate reduction or restructuring SPAs that do not 
meet the proposed criteria for streamlined analysis under Sec.  
447.203(c)(1). As noted elsewhere in the preamble, the ongoing AMRP 
requirements have presented an administratively burdensome process for 
States to follow every 3 years, particularly where we did not provide 
States with the specific direction on the types of data elements we 
preferred for States to include. However, the data elements involved in 
the current AMRP process in Sec.  447.203(b)(1) can provide useful 
information about beneficiary access to care in current Sec.  
447.203(b)(1)(i), (iii), and (iv); Medicaid provider availability in 
current Sec.  447.203(b)(1)(ii); and about payment rates available from 
other payers, which may affect Medicaid beneficiaries' relative ability 
to access care, in current Sec.  447.203(b)(1)(v). We found that the 
AMRPs were most relevant when updated to accompany a submission of rate 
reduction or restructuring SPAs as specified in the current Sec.  
447.203(b)(6); accordingly, to better balance ongoing State and Federal 
administrative burden with our need to obtain access-related 
information to inform our approval decisions for payment rate reduction 
or restructuring SPAs, we are proposing to end the ongoing AMRP 
requirement but maintain a requirement that States include similar data 
elements when submitting such SPAs to us that do not qualify for the 
proposed streamlined analysis process under Sec.  447.203(c)(1).
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    \225\ 80 FR 67576 at 67590.
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    The proposed analyses in paragraph (c)(2) would enable us to focus 
our review of Medicaid access to care on proposals that may result in 
diminished access to care, enabling us to more substantively review a 
proposed rate reduction's or restructuring's potential impact on access 
(for example, counts of participating providers), realized access (for 
example, service utilization trends), and the beneficiary experience of 
care (for example, characteristics of the beneficiary population, 
beneficiary utilization data, and information related to feedback from 
beneficiaries and other interested parties collected during the public 
process and through ongoing beneficiary feedback mechanisms, along with 
the State's responses to that feedback), while also being able to more 
quickly work through a review of nominal rate reduction SPAs for which 
States have demonstrated certain levels of payment and for which the 
public process did not generate access to care concerns. By including 
information on provider type and site of service, we believe States 
would be able to demonstrate access to the services provided under a 
specific benefit category within a number different settings across the 
Medicaid program, such as the availability of physicians services 
delivered in a physician practice, clinic setting, FQHC or RHC, or even 
in a hospital-based office setting. We believe that by defining 
specific data elements which must be provided to support a payment rate 
reduction SPA would create a more predictable process for States and 
for CMS in conducting the SPA review than under the current AMRP 
process in Sec.  447.203(b)(6).
    Furthermore, data elements proposed to be required under proposed 
Sec.  447.203(c)(2) would be based on State-specified geographic 
stratifications, to help ensure we can perform access

[[Page 28036]]

review consistent with the requirements of section 1902(a)(30)(A) of 
the Act. We expect that States would have readily available access to 
geographically differential beneficiary and provider data. Some of this 
information is available through CMS-maintained resources, such as the 
Transformed Medicaid Statistical Information System (T-MSIS), and other 
data is available through the National Plan and Provider Enumeration 
System (NPPES), but we believe that States should have their own data 
systems that would allow them to generate the most up-to-date 
beneficiary utilization and provider enrollment data, stratified by 
geographic areas within the State. States should use the most recent 
complete data available for each of the proposed data elements, and 
each would be required to be demonstrated to CMS by State-specified 
geographic area. We believe that the geographic stratification would 
enable CMS to establish a baseline for Medicaid access to care within 
the geographic areas so that we can determine if current levels of 
access to care are consistent with section 1902(a)(30)(A) of the Act, 
and can make future determinations if access is diminished in the 
future within the geographic area. For all of the data elements in 
proposed Sec.  447.203(c)(2), the more geographic differentiation that 
can be provided (that is, the smaller and more numerous the distinct 
geographic areas of the State that are selected for separate analysis), 
the more we believe that the State can meaningfully demonstrate that 
the proposed rate changes are consistent with the access standard in 
section 1902(a)(30)(A) of the Act, which requires that States assure 
that payments 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.
    If finalized, we anticipate releasing subregulatory guidance, 
including a template to support completion of the analysis that would 
be required under paragraph (c)(2), prior to the beginning date of the 
Comparative Payment Rate Analysis Timeframe proposed in Sec.  
447.203(b)(4). In the intervening period, we anticipate working 
directly with States through the SPA review process to ensure 
compliance with section 1902(a)(30)(A) of the Act.
    In Sec.  447.203(c)(3), we propose mechanisms for ensuring 
compliance with requirements for State analysis for rate reduction or 
restructuring, as specified in proposed paragraphs (c)(1) and (c)(2), 
as applicable. We propose that a State that submits a SPA that proposes 
to reduce provider payments or restructure provider payments that fails 
to provide the required information and analysis to support approval as 
specified in proposed paragraphs (c)(1) and (2), as applicable, may be 
subject to SPA disapproval under Sec.  430.15(c). Additionally, States 
that submit relevant information, but where there are unresolved access 
to care concerns related to the proposed SPA, including any raised by 
CMS in our review of the proposal and any raised through the public 
process as specified in proposed paragraph (c)(4) of this section, or 
under Sec.  447.204(a)(2), may be subject to SPA disapproval under 
Sec.  430.15(c). Disapproving a SPA means that the State would not have 
authority to implement the proposed rate reduction or restructuring and 
would be required to continue to pay providers according to the rate 
methodology described in the approved State plan. Proposed paragraph 
(c)(3) would further provide that if, after approval of a proposed rate 
reduction or restructuring, State monitoring of beneficiary access 
shows a decrease in Medicaid access to care, such as a decrease in the 
provider-to-beneficiary ratio for any affected service, or the State or 
CMS experiences an increase in the number of beneficiary or provider 
complaints or concerns about access to care that suggests possible 
noncompliance with the access requirements in section 1902(a)(30)(A) of 
the Act, we may take a compliance action. As described in Sec.  
447.204(d), compliance actions would be carried out using the 
procedures described in Sec.  430.35.
    As discussed in the prior section, we are proposing to move current 
Sec.  447.203(b)(7) to proposed Sec.  447.203(c)(4). We are not 
proposing any changes to the public process described in current 
paragraph (b)(7). If the other provisions of this proposed rule are 
finalized, we would redesignate paragraph (b)(7) as paragraph (c)(4). 
The ability for providers and beneficiaries to provide ongoing feedback 
to the State regarding access to care and a beneficiary's ability to 
access Medicaid services is essential to the Medicaid program in that 
it provides the primary interested parties the opportunity to 
communicate with the State and for the State to track and take account 
of those interactions in a meaningful way. The ongoing mechanisms for 
provider and beneficiary feedback must be retained in this proposed 
rule as this process serves an important role in determining whether or 
not the public has raised concerns regarding access to Medicaid-covered 
services, which would inform the State's approach to ongoing Medicaid 
provider payment rates and methodologies, and whether related proposals 
would be approvable.
    We are proposing to move current Sec.  447.203(b)(8) to proposed 
Sec.  447.203(c)(5) to better organize Sec.  447.203 to reflect the 
policies in this proposed rule. We are not proposing any changes to the 
methods for addressing access questions and remediation of inadequate 
access to care, as described in current paragraph (b)(8). If the other 
provisions of this proposed rule are finalized, we would redesignate 
paragraph (b)(8) as paragraph (c)(5). It is important to retain this 
provision because we acknowledge that there may be access issues that 
come about apart from a specific State payment rate action, and there 
must be mechanisms through which those issues can be identified and 
corrective action taken.
    Finally, we are proposing to move current Sec.  447.204(d) to 
proposed Sec.  447.203(c)(6). We believe the subject matter, of 
compliance actions for an access deficiency, is better aligned to the 
proposed changes in Sec.  447.203. We are not proposing any changes to 
defining the remedy for the identification of an unresolved access 
deficiency, as described in current Sec.  447.204(d). If the other 
provisions of this proposed rule are finalized, we would redesignate 
Sec.  447.204(d) as paragraph (c)(6).
    We are seeking public comment on our proposed procedures and 
requirements for State analysis for payment rate reduction or payment 
restructuring SPAs, including the qualification criteria for 
streamlined analysis proposed in Sec.  447.203(c)(1), the proposed 
additional analysis elements in Sec.  447.203(c)(2) for those proposed 
payment rate reductions or payment restructurings that do not meet the 
criteria in paragraph (c)(1), the proposed methods for ensuring 
compliance in Sec.  447.203(c)(3), the proposed mechanisms for ongoing 
beneficiary and provider input in Sec.  447.203(c)(4), the proposed 
methods to address access questions and remediation of inadequate 
access to care in Sec.  447.203(c)(5), and the proposed compliance 
actions for access deficiencies in Sec.  447.203(c)(6).
4. Medicaid Provider Participation and Public Process To Inform Access 
to Care (Sec.  447.204)
    In Sec.  447.204, we propose conforming changes to reflect proposed 
changes in Sec.  447.203, if finalized. These conforming edits are 
limited to Sec.  447.204(a)(1) and (b) and are necessary

[[Page 28037]]

for consistency with the newly proposed changes in Sec.  447.203(b). 
The remaining paragraphs of Sec.  447.204 would be unchanged.
    Specifically, we propose to update the language of Sec.  
447.204(a)(1), which currently references Sec.  447.203, to reference 
Sec.  447.203(c). Because we are proposing wholesale revisions to Sec.  
447.203(b) and the addition of Sec.  447.203(c), the proposed data and 
analysis referenced in the current citation to Sec.  447.203 would be 
located more precisely in Sec.  447.203(c). Current Sec.  447.204(b)(1) 
refers to the State's most recent AMRP performed under current Sec.  
447.203(b)(6) for the services at issue in the State's payment rate 
reduction or payment restricting SPA; we propose to remove this 
requirement to align with our proposal to rescind the AMRP requirements 
in current Sec.  447.203(b). Current Sec.  447.204(b)(2) and (3) 
require the State to submit with such a payment SPA an analysis of the 
effect of the change in the payment rates on access and a specific 
analysis of the information and concerns expressed in input from 
affected interested parties; we believe these current requirements are 
addressed in proposed Sec.  447.203(c)(1) and (2), as applicable. We 
believe that the continued inclusion of these paragraphs (b)(2) and (3) 
would be unnecessary or redundant in light of the proposals in Sec.  
447.203(c)(1) and (2), if finalized. The objective processes proposed 
under Sec.  447.203(c)(1) and (2), which would require States to submit 
quantitative and qualitative information with a proposed payment rate 
reduction or payment restructuring SPA, would be sufficient for us to 
obtain the information necessary to assess the State's proposal with 
the same or similar information as currently is required under Sec.  
447.204(b)(2) and (3).
    With the removal of Sec.  447.204(b)(1) through (b)(3), we propose 
to revise Sec.  447.204(b) to read, ``[t]he State must submit to us 
with any such proposed State plan amendment affecting payment rates 
documentation of the information and analysis required under Sec.  
447.203(c) of this chapter.''
    Finally, as noted in the previous section, we propose to remove and 
relocate Sec.  447.204(d), as we felt the nature of that provision is 
better suited to codification in Sec.  447.203(c)(6).
    We are seeking public comment on the proposed amendments to Sec.  
447.204.

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 the 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 information collection 
requirements (see section III.E. of this preamble for further 
information). Comments, if received, will be responded to within the 
subsequent final rule.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' (BLS's) May 2021 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 BLS' mean hourly wage, 
our estimated cost of fringe benefits and other indirect costs \226\ 
(calculated at 100 percent of salary), and our adjusted hourly wage.
---------------------------------------------------------------------------

    \226\ https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.

                          Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                   Occupational     Mean hourly    benefits and      Adjusted
                Occupation title                       code         wage ($/hr)   other indirect  hourly wage ($/
                                                                                   costs ($/hr)         hr)
----------------------------------------------------------------------------------------------------------------
Administrative Services Manager.................         11-3012           54.34           54.34          108.68
Business Operations Specialist..................         13-1000           38.64           38.64           77.28
Business Operations Specialist, All Other.......         13-1199           38.10           38.10           76.20
Chief Executive.................................         11-1011          102.41          102.41          204.82
Compensation, Benefits, and Job Analyst.........         13-1141           35.49           35.49           70.98
Computer and Information Analyst................         15-1210           50.40           50.40          100.80
Computer Programmer.............................         15-1251           46.46           46.46           92.92
Data Entry Keyers...............................         43-9021           17.28           17.28           34.56
General and Operations Manager..................         11-1021           55.41           55.41          110.82
Human Resources Manager.........................         11-3121           65.67           65.67          131.34
Management Analyst..............................         13-1111           48.33           48.33           96.66
Social and Community Service Managers...........         11-9151           36.92           36.92           73.84
Social Science Research Assistants..............         19-4061           27.13           27.13           54.26
Statistician....................................         15-2041           47.81           47.81           95.62
Survey Researcher...............................         19-3022           31.10           31.10           62.20
Training and Development Specialist.............         13-1151           32.51           32.51           65.02
----------------------------------------------------------------------------------------------------------------

    For States and the private sector the employee hourly wage 
estimates have been adjusted by a factor of 100 percent. This is 
necessarily a rough adjustment, both because fringe benefits and other 
indirect costs vary significantly across employers, and because methods 
of estimating these costs vary widely across studies. Nonetheless, we 
believe

[[Page 28038]]

that there is no practical alternative and that doubling the hourly 
wage to estimate total cost is a reasonably accurate estimation method.
    We believe that the costs for beneficiaries undertaking 
administrative and other tasks on their own time is a post-tax hourly 
wage rate of $20.71/hr.
    We adopt an hourly value of time based on after-tax wages to 
quantify the opportunity cost of changes in time use for unpaid 
activities. This approach matches the default assumptions for valuing 
changes in time use for individuals undertaking administrative and 
other tasks on their own time, which are outlined in an ASPE report on 
``Valuing Time in U.S. Department of Health and Human Services 
Regulatory Impact Analyses: Conceptual Framework and Best Practices.'' 
[*] We start with a measurement of the usual weekly earnings of wage 
and salary workers of $998. [**] We divide this weekly rate by 40 hours 
to calculate an hourly pre-tax wage rate of $24.95. We adjust this 
hourly rate downwards by an estimate of the effective tax rate for 
median income households of about 17 percent, resulting in a post-tax 
hourly wage rate of $20.71. We adopt this as our estimate of the hourly 
value of time for changes in time use for unpaid 
activities.227 228 Unlike our State and private sector wage 
adjustments, we are not adjusting beneficiary wages for fringe benefits 
and other indirect costs since the individuals' activities, if any, 
would occur outside the scope of their employment.
---------------------------------------------------------------------------

    \227\ Department of Health and Human Services, Office of the 
Assistant Secretary for Planning and Evaluation. 2017. ``Valuing 
Time in U.S. Department of Health and Human Services Regulatory 
Impact Analyses: Conceptual Framework and Best Practices.'' https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework.
    \228\ U.S. Bureau of Labor Statistics. Employed full time: 
Median usual weekly nominal earnings (second quartile): Wage and 
salary workers: 16 years and over [LEU0252881500A], retrieved from 
FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/LEU0252881500A. Annual Estimate, 2021.
---------------------------------------------------------------------------

B. Adjustment to State Cost Estimates

    To estimate the financial burden on States, it was important to 
consider the Federal government's contribution to the cost of 
administering the Medicaid program. The Federal government provides 
funding based on an FMAP that is established for each State, based on 
the per capita income in the State as compared to the national average. 
FMAPs range from a minimum of 50 percent in States with higher per 
capita incomes to a maximum of 83 percent in States with lower per 
capital incomes. For Medicaid, all States receive a 50 percent FMAP for 
administration. States also receive higher Federal matching rates for 
certain systems improvements, redesign, or operations. As such, and 
taking into account the Federal contribution to the costs of 
administering the Medicaid programs for purposes of estimate State 
burden with respect to collection of information, we elected to use the 
higher end estimate that the States would contribute 50 percent of the 
costs, even though the burden would likely be much smaller.
C. Proposed Information Collection Requirements (ICRs)
1. ICRs Regarding Medicaid Advisory Committee and Beneficiary Advisory 
Group (Sec.  431.12)
    The following proposed changes will be submitted to OMB for review 
under control number 0938-TBD (CMS-10845). At this time, the control 
number is to be determined (TBD). OMB will assign the control number 
upon their clearance of this new collection of information request. The 
control number will be set out in the subsequent final rule (CMS-2442-
F).
    Currently, most States have an established Medicaid Advisory 
Committee (MAC, previously known as a Medical Care Advisory Committee, 
or MCAC) whereby each State has the discretion on how to operate its 
MAC. A small number of States also use consumer advisory subcommittees 
as part of their MACs, similar to the Beneficiary Advisory Groups 
(BAGs) in proposed Sec.  431.12. We reviewed data from 10 States to 
determine the current status of MACs and to determine the burden needed 
to comply with the proposed Sec.  431.12 requirements across 50 States 
and the District of Columbia.
    Under the proposed provision, States would be required to:
     Appoint members to the MAC and BAG on a rotating and 
continuous basis.
     Develop and publish a process for MAC and BAG member 
recruitment and appointment and selection of MAC and BAG leadership.
     Develop and publish:
    ++ Bylaws for governance of the MAC.
    ++ A current list of MAC and BAG membership.
    ++ Past meeting minutes, including a summary from the most recent 
BAG Meeting.
     Develop, publish, and implement a regular meeting schedule 
for the MAC and BAG.
    Additionally, the State must provide and post to its website an 
annual report written by the MAC to the State describing its 
activities, topics discussed, recommendations. The report must also 
include actions taken by the State based on the MAC recommendations.
    The proposed requirements would require varying levels of effort by 
States. For example, a handful of States already have a BAG. However, 
we believe that most States will be required to create new structures 
and processes. The majority of States reviewed are already meeting some 
of the new proposed requirements for MACs, such as publication of 
meeting schedules, publication of membership lists, and publication of 
bylaws. However, all MAC bylaws would need to be updated to meet the 
new proposed requirements. Our review showed that most States are not 
currently publishing their recruitment and appointment processes for 
MAC members, and those that did would need to update these processes to 
meet the new proposed requirements. About half of the States reviewed 
published meeting minutes with responses and State actions, as required 
under the new proposed requirements. But only one State reviewed 
published an annual report, so this will likely be a new requirement 
for almost all State MACs. States will not need to modify or build a 
reporting systems to create and post these annual reports. Due to the 
wide range in the use and maturity of current MCACs across the States, 
we are providing a range of estimates to address these variations. We 
recognize that some States, which do not currently operate a MCAC, will 
have a higher burden to implement the requirements of Sec.  431.12 to 
shift to the MAC and BAG structure. However, our research showed that 
the majority of States do have processes and procedures for their 
current MCACs, which will require updating, but at a much lower burden. 
Therefore, we believe it is appropriate to offer average low and high 
burden estimates.
    For a low estimate, we estimate it would take a team of business 
operations specialists 120 hours at $76.20/hr to develop and publish 
the processes and report. In aggregate, we estimate an annual burden of 
6,120 hours (120 hr/response x 51 responses) at a cost of $466,344 
(6,120 hr x $76.20/hr). We also estimate that it would take 40 hours at 
$131.34/hr for a human resources manager to review and approve bylaws 
and help with recruitment and appointment and selection of MAC and BAG 
leadership which would occur every 2 years. In aggregate, we estimate a 
biennial burden of 2,040 hours (40 hr/response x 51

[[Page 28039]]

responses) at a cost of $267,934 (2,040 hr x $131.34/hr). Additionally, 
we estimate it would take 10 hours at $110.82/hr for an operations 
manager to review the updates and prepare the required reports for 
annual publication. In aggregate, we estimate an annual burden of 510 
hours (10 hr/response x 51 responses) at a cost of $56,518 (510 hr x 
$110.82/hr).
    We derived the high estimate by doubling the hours from the low 
estimate. We used this approach because all States already have a MCAC 
requirement which means the type of work being discussed is already 
underway in most States and that there is reference point for the type 
of work described. For example, we estimate it would take a team of 
business operations specialists 240 hours at $76.20/hr to develop and 
publish the processes and annual report. In aggregate, we estimate an 
annual burden of 12,240 hours (240 hr/response x 51 responses) at a 
cost of $932,688 (12,240 hr x $76.20/hr). We also estimate that it 
would take 80 hours at $131.34/hr for a human resources manager to 
review and approve bylaws and help with recruitment and appointment and 
selection of MAC and BAG leadership which would occur every 2 years. In 
aggregate, we estimate a biennial burden of 4,080 hours (80 hr/response 
x 51 responses) at a cost of $535,867 (4,080 hr x $131.34). 
Additionally, we estimate it would take 20 hours at $110.82/hr for an 
operations manager to review the updates and prepare the required 
annual report for publication. In aggregate, we estimate an annual 
burden of 1,020 hours (20 hr/response x 51 responses) at a cost of 
$113,036 (1,020 hr x $110.82/hr).
    We have summarized the total burden in Table 2. To be conservative 
and not underestimate our burden analysis, we are using the high end of 
our estimates to score the PRA-related impact of the proposed 
requirements.

                                  Table 2--Summary of Burden Estimates for Medical Care Advisory Committee Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   431.12 (develop/publish report)              51              51  Annual...................        240     12,240      76.20    932,688    466,344
Sec.   431.12 (review/approve bylaws).              51              51  Biennial.................         80      4,080     131.34    535,867    267,934
Sec.   431.12 (review updates/prepare               51              51  Annual...................         20      1,020     110.82    113,036     56,518
 reports).
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              51             153  Varies...................     Varies     17,340     Varies  1,581,591    790,795
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. ICRs Regarding Person-Centered Service Plans (Sec.  441.301(c)(3); 
Cross-Referenced to Sec. Sec.  441.450(c), 441.540(c), and 441.725(c), 
and Part 438)
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument and burden will be 
made available to the public for their review under the standard non-
rule PRA process which includes the publication of 60- and 30-day 
Federal Register notices. In the meantime, we are setting out our 
preliminary burden figures (see below) as a means of scoring the impact 
of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10854 (OMB control number 0938-TBD). Since 
this would be a new collection of information request, the OMB control 
number has yet to be determined (TBD) but will be issued by OMB upon 
their approval of the new collection of information request.
    Section 1915(c)(1) of the Act requires that services provided 
through section 1915(c) waiver programs be provided under a written 
plan of care (hereinafter referred to as ``person-centered service 
plans'' or ``service plans''). Existing Federal regulations at Sec.  
441.301(c) address the person-centered planning process and include a 
requirement at Sec.  441.301(c)(3) that the person-centered service 
plan be reviewed and revised upon reassessment of functional need, at 
least every 12 months, when the individual's circumstances or needs 
change significantly or at the request of the individual.
    In 2014, we released guidance for section 1915(c) waiver programs 
\229\ (hereinafter the ``2014 guidance'') that included expectations 
for State reporting of State-developed performance measures to 
demonstrate compliance with section 1915(c) of the Act and the 
implementing regulations in part 441, subpart G through six assurances, 
including assurances related to person-centered service plans. The 2014 
guidance also indicated that States should conduct systemic remediation 
and implement a Quality Improvement Project when they score below an 86 
percent threshold on any of their performance measures. Based on 
feedback CMS obtained during various public engagement activities 
conducted with States and other interested parties over the past 
several years about the reporting discussed in the 2014 guidance, as 
well as feedback received through the RFI \230\ discussed earlier about 
the need to standardize reporting and set minimum standards for HCBS, 
we are proposing a different approach for States to demonstrate that 
they meet the statutory requirements in section 1915(c) of the Act and 
the regulatory requirements in part 441, subpart G, including the 
requirements regarding assurances around service plans.
---------------------------------------------------------------------------

    \229\ Modifications to Quality Measures and Reporting in Sec.  
1915(c) Home and Community-Based Waivers. March 2014. Accessed at 
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/3-cmcs-quality-memo-narrative_0_2.pdf.
    \230\ CMS Request for Information: Access to Coverage and Care 
in Medicaid & CHIP. February 2022. For a full list of question from 
the RFI, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.
---------------------------------------------------------------------------

    Within this rule we propose to replace expectations for State 
reporting of State-developed performance measures and the 86 percent 
performance threshold included in the 2014 guidance and codify 
requirements for reporting on standardized measures and a minimum 
performance level for States to demonstrate that they meet the existing 
person-centered service plan requirements at Sec.  441.301(c)(3). 
Specifically, at new Sec.  441.301(c)(3)(ii)(A), we propose to require 
that States demonstrate that a reassessment of functional need was 
conducted at least annually for at least 90 percent of individuals 
continuously enrolled in the waiver for at least 365 days. We also 
propose, at new Sec.  441.301(c)(3)(ii)(B), to require that States 
demonstrate that they reviewed the person-centered service plan and 
revised the plan as appropriate based on the results of the required 
reassessment of functional need at least every 12 months for at least 
90 percent of individuals continuously enrolled in the waiver for at 
least 365 days. At

[[Page 28040]]

Sec.  441.311(b)(3), we propose to modernize the service plan reporting 
requirement by standardizing State reporting through new Federal 
reporting requirements. These performance and reporting requirements, 
in combination with other proposed requirements \231\ identified 
throughout this proposed rule, are intended to supersede and fully 
replace existing reporting requirements and required performance levels 
for section 1915(c) waiver programs, which were established through the 
2014 guidance discussed earlier.\232\ We propose to apply these 
requirements to services delivered under FFS or managed care delivery 
systems. Further, we propose to apply the proposed requirements at 
Sec.  441.301(c)(3) to sections 1915(j), (k), and (i) State plan 
services by cross-referencing at Sec. Sec.  441.450(c), 441.540(c), and 
441.725(c), respectively. In addition, we propose to reposition, 
specify, and remove extraneous language from Sec.  441.301(c)(1).
---------------------------------------------------------------------------

    \231\ The other requirements relate to incident management, 
critical incident, person centered planning, and service provision 
compliance reporting; reporting on the HCBS Quality Measure Set; 
access reporting; and payment adequacy reporting.
    \232\ Modifications to Quality Measures and Reporting in Sec.  
1915(c) Home and Community-Based Waivers. March 2014 Accessed at 
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/3-cmcs-quality-memo-narrative_0_71.pdf.
---------------------------------------------------------------------------

a. One Time Person-Centered Service Plan Requirements: State (Sec.  
441.301(c)(3))
    As discussed above, at new Sec.  441.301(c)(3)(ii)(A), we propose 
to require that States demonstrate that a reassessment of functional 
need was conducted at least annually for at least 90 percent of 
individuals continuously enrolled in the waiver for at least 365 days. 
We also propose, at new Sec.  441.301(c)(3)(ii)(B), to require that 
States demonstrate that they reviewed the person-centered service plan 
and revised the plan as appropriate based on the results of the 
required reassessment of functional need at least every 12 months for 
at least 90 percent of individuals continuously enrolled in the waiver 
for at least 365 days. The burden associated with the person-centered 
service plan reporting requirements proposed at Sec.  
441.301(c)(3)(ii)(A) and (B) will affect the 48 States (including the 
District of Columbia) that deliver HCBS under sections 1915(c), (i), 
(j), or (k) authorities.\233\ We anticipate that States will need to 
update State policy and oversight and monitoring processes related to 
the codification of the new 90 percent minimum performance level 
associated with requirements.
---------------------------------------------------------------------------

    \233\ Arizona, Rhode Island, and Vermont do not have HCBS 
programs under any of these authorities.
---------------------------------------------------------------------------

    However, because we are codifying a minimum performance level 
associated with existing regulations but not otherwise changing the 
regulatory requirements under Sec.  441.301(c)(3)(ii)(A) and (B), we do 
not estimate any additional burden related to those requirements. We 
also hold that there is no additional burden associated with 
repositioning, specifying, and removing extraneous language from the 
regulatory text at Sec.  441.301(c)(1). In this regard we are only 
estimating burden for updating State policy and oversight and 
monitoring processes related to the codification of the new 90 percent 
minimum performance level associated with requirements.
    We estimate it would take 8 hours at $108.68/hr for an 
administrative services manager to update State policy and oversight 
and monitoring processes, 2 hours at $110.82/hr for a general and 
operations manager to review and approve the updates to State policy 
and oversight and monitoring processes, and 1 hour at $204.82/hr for a 
chief executive to review and approve the updates to State policy and 
oversight and monitoring processes. In aggregate, we estimate a one-
time burden of 528 hours (48 States x [8 hr + 2 hr + 1 hr]) at a cost 
of $62,203 (48 States x [(8 hr x $108.68/hr) + (2 hr x $110.82/hr) + (1 
hr x $204.82/hr)]). Taking into account the Federal contribution to 
Medicaid administration, the estimated State share of this cost would 
be $31,102 ($62,203 x 0.50).

           Table 3--Summary of One-Time Burden Estimates for States for the Person-Centered Service Plan Requirements at Sec.   441.301(c)(3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Update State policy and oversight and               48              48  Once.....................          8        384     108.68     41,733     20,867
 monitoring processes.
Review and approval of State policy                 48              48  Once.....................          2         96     110.82     10,639      5,319
 update at the management level.
Review and approval of State policy                 48              48  Once.....................          1         48     204.82      9,831      4,916
 update at the chief executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             144  Once.....................         11        528     Varies     62,203     31,102
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. One Time Person-Centered Service Plan Requirements: Managed Care 
Entities (Sec.  441.301(c)(3))
    As discussed earlier in sections II.B.1 of this preamble, we are 
proposing to also apply, to managed care delivery systems, the 
requirements at Sec.  441.301(c)(3) to demonstrate that a reassessment 
of functional need was conducted at least annually for at least 90 
percent of individuals continuously enrolled in the waiver for at least 
365 days and to demonstrate that they reviewed the person centered 
service plan and revised the plan as appropriate based on the results 
of the required reassessment of functional need at least every 12 
months for at least 90 percent of individuals continuously enrolled in 
the waiver for at least 365 days. As with the burden estimate for 
States, we do not estimate an ongoing burden related to the 
codification of a minimum performance level associated with the 
requirements at Sec.  441.301(c)(3).
    For managed care entities we estimate it would take 5 hours at 
$108.68/hr for an administrative services manager to update 
organizational policy and oversight and monitoring processes related to 
the codification of a new minimum performance level and 1 hour at 
$204.82/hr for a chief executive to review and approve the updates to 
organizational policy and oversight and monitoring processes. In 
aggregate, we estimate a one-time burden of 966 hours (161 managed care 
entities x [5 hr + 1 hr]) at a cost of $120,463 (161 managed care 
entities x [(5 hr x $108.68/hr) + (1 hr x $204.82/hr)]).

[[Page 28041]]



Table 4--Summary of One-Time Burden Estimates for Managed Care Entities (MCEs) for the Person-Centered Service Plan Requirements at Sec.   441.301(c)(3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Update organizational policy and                   161             161  Once.....................          5        805     108.68     87,487        n/a
 oversight and monitoring processes.
Review and approval of policy and                  161             161  Once.....................          1        161     204.82     32,976        n/a
 oversight and monitoring processes.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................             161             322  Once.....................          6        966     Varies    120,463        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. ICRs Regarding Grievance System (Sec.  441.301(c)(7); Cross-
Referenced to Sec. Sec.  441.464(d)(2)(v), 441.555(b)(2)(iv), and 
441.745(a)(1)(iii), and Part 438)
    At Sec.  441.301(c)(7), we propose to require that States establish 
grievance procedures for Medicaid beneficiaries receiving section 
1915(c) waiver program services through a FFS delivery system to file a 
complaint or expression or dissatisfaction related to the State's or a 
provider's compliance with the person-centered planning and service 
plan requirements at Sec.  441.301(c)(1) through (3) and the HCBS 
settings requirements at Sec.  441.301(c)(4) through (6).
    Proposed Sec.  441.301(c)(7)(vii) lists proposed recordkeeping 
requirements related to grievances. Specifically, at Sec.  
441.301(c)(7)(vii)(A), we propose to require that States maintain 
records of grievances and review the information as part of their 
ongoing monitoring procedures. At Sec.  441.301(c)(7)(vii)(B)(1) 
through (7), we propose to require that the record of each grievance 
must contain the following information at a minimum: a general 
description of the reason for the grievance, the date received, the 
date of each review or review meeting (if applicable), resolution and 
date of the resolution of the grievance (if applicable), and the name 
of the beneficiary for whom the grievance was filed. Further, at Sec.  
441.301(c)(7)(vii)(C), we propose to require that grievance records be 
accurately maintained and in a manner that would be available upon our 
request.
    We also propose to apply these proposed requirements in Sec.  
441.301(c)(7) to sections 1915(j), (k), and (i) State plan services by 
cross-referencing at Sec. Sec.  441.464(d)(2)(v), 441.555(b)(2)(iv), 
and 441.745(a)(1)(iii), respectively. However, to avoid duplication 
with the grievance requirements at part 438, subpart F, we do not 
propose to apply these requirements to managed care delivery systems.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our reporting tools 
and survey instrument has been developed. The survey instrument and 
burden will be made available to the public for their review under the 
standard non-rule PRA process which includes the publication of 60- and 
30-day Federal Register notices. In the meantime, we are setting out 
our preliminary burden figures (see below) as a means of scoring the 
impact of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10854 (OMB control number 0938-TBD). Since 
this would be a new collection of information request, the OMB control 
number has yet to be determined (TBD) but will be issued by OMB upon 
their approval of the new collection of information request.
a. States
    The burden associated with the grievance system requirements 
proposed at Sec.  441.301(c)(7) will affect the 48 States (including 
the District of Columbia) that deliver at least some HCBS under 
sections 1915(c), (i), (j), or (k) authorities through FFS delivery 
systems.234 235 While some States may have existing 
grievance systems in place for their FFS delivery systems, we are 
unable to determine the number of States with existing grievance 
systems or whether those grievance systems would meet the proposed 
requirements at Sec.  441.301(c)(7). As a result, we do not take this 
information into account in our burden estimate. We estimate a one-time 
and on-going burden to implement these requirements at the State level.
---------------------------------------------------------------------------

    \234\ Arizona, Rhode Island, and Vermont do not have HCBS 
programs under any of these authorities.
    \235\ While some States deliver the vast majority of HCBS 
through managed care delivery systems, States would be subject to 
these requirements if they deliver any HCBS under section 1915(c), 
(i), (j), or (k) authorities through a fee-for service delivery 
system. Based on data showing that the percent of LTSS expenditures 
delivered through managed LTSS delivery systems varied between 3 
percent and 93 percent in 2019 across all States with managed LTSS, 
we assume that all States deliver at least some HCBS through fee-
for-service delivery systems (https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltssexpenditures2019.pdf). We 
anticipate that the burden associated with implementing these 
requirements will be lower for States that deliver the vast majority 
of HCBS through managed care delivery systems.
---------------------------------------------------------------------------

    Specifically, States will have to: (1) develop and implement 
policies and procedures; (2) establish processes and data collection 
tools for accepting, tracking, and resolving, within required 
timeframes, beneficiary grievances, including processes and tools for: 
providing beneficiaries with reasonable assistance with filing a 
grievance, for accepting grievances orally and in writing, for 
reviewing grievance resolutions with which beneficiaries are 
dissatisfied, and for providing beneficiaries with a reasonable 
opportunity to present evidence and testimony and make legal and 
factual arguments related to their grievance; (3) inform beneficiaries, 
providers, and subcontractors about the grievance system; and (4) 
develop beneficiary notices; and collect and maintain information on 
each grievance, including the reason for the grievance, the date 
received, the date of each review or review meeting (if applicable), 
resolution and date of the resolution of the grievance (if applicable), 
and the name of the beneficiary for whom the grievance was filed.
i. One-Time Grievance System Requirements: States (Sec.  441.301(c)(7))
    With regard to the one-time requirements, we estimate it would 
take: 240 hours at $108.68/hr for an administrative services manager to 
draft policy and procedure content, prepare notices and informational 
materials, draft rules for publication, and conduct public hearings; 
100 hours at $92.92/hr for a computer programmer to build, design, and 
operationalize internal systems for data collection and tracking; 120 
hours at $65.02/hr for a training and development specialist to develop 
and conduct training for staff; 40 hours at $110.82/hr for a general 
and operations manager to review and approve policies, procedures, 
rules for publication, notices, and training materials; and 20

[[Page 28042]]

hours at $204.82/hr for a chief executive to review and approve all 
operations associated with this collection of information requirement. 
In aggregate, we estimate a one-time burden of 24,960 hours (520 hr x 
48 States) at a cost of $2,481,926 (48 States x [(240 hr x $108.68/hr) 
+ (100 hr x $92.92/hr) + (120 hr x $65.02/hr) + (40 hr x $110.82/hr) + 
(20 hr x $204.82/hr)]). Taking into account the Federal contribution to 
Medicaid administration, the estimated State share of this cost would 
be $1,240,963 ($2,481,926 x 0.50).

                 Table 5--Summary of One-Time Burden Estimates for States for the Grievance System Requirements at Sec.   441.301(c)(7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft policy and procedures, rules for              48              48  Once.....................        240     11,520     108.68  1,251,994    625,997
 publication; prepare beneficiary
 notices, informational materials;
 conduct public hearings.
Build, design, operationalize internal              48              48  Once.....................        100      4,800      92.92    446,016    223,008
 systems for data collection and
 tracking.
Develop and conduct training for staff              48              48  Once.....................        120      5,760      65.02    374,515    187,258
Review and approve policies,                        48              48  Once.....................         40      1,920     110.82    212,774    106,387
 procedures, rules for publication,
 notices, and training materials at
 the management level.
Review and approve all operations in                48              48  Once.....................         20        960     204.82    196,627     98,314
 collection of information requirement
 at the chief executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             240  Once.....................        520     24,960     Varies  2,481,926  1,240,964
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. Ongoing Grievance System Requirements: States (Sec.  441.301(c)(7))
    With regard to the on-going requirements, we estimate that 
approximately 2 percent of 1,460,363 Medicaid beneficiaries who receive 
HCBS under section 1915(c), (i), (j), or (k) authorities through FFS 
delivery systems annually \236\ will file a grievance or appeal (29,207 
grievances = 1,460,363 x 0.02).\237\ We estimate it would take: 0.333 
hours or 20 minutes at $76.20/hr for a business operations specialist 
to collect the required information for each grievance from the 
beneficiary, 0.166 hours or 10 minutes at $34.56/hr for a data entry 
worker to record the required information on each grievance, 20 hours 
at $92.92/hr for a computer programmer to maintain the system for 
storing information on grievances, 12 hours at $110.82/hr for a general 
and operations manager to monitor and oversee the collection and 
maintenance of the required information, and 2 hours at $204.82/hr for 
a chief executive to review and approve all operations associated with 
this collection of information requirement. In aggregate, we estimate 
an on-going burden of 16,206 hours at a cost of $1,081,374 ([(29,207 
grievances x 0.333 hr x $76.20/hr) + (29,207 grievances x 0.166 hr x 
$34.56/hr) + (48 States x 20 hr x $92.92/hr) + (48 States x 12 hr x 
$110.82/hr) + (48 States x 2 hr x $204.82/hr)]). Taking into account 
the Federal contribution to Medicaid administration, the estimated 
State share of this cost would be $540,687 ($1,081,374 x 0.50) per 
year.
---------------------------------------------------------------------------

    \236\ https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-user-brief-2019.pdf.
    \237\ We based this percent on an estimate of the percent of 
Medicaid beneficiaries that file appeals and grievances in Medicaid 
managed care in Supporting Statement A for the information 
collection requirements for the Medicaid managed care file rule 
(CMS-2408-F, RIN 0938-AT40). See https://omb.report/icr/202205-0938-015/doc/121334100 for more information.

                       Table 6--Summary of Ongoing Burden for States for the Grievance System Requirements at Sec.   441.301(c)(7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Collect required grievance data and                 48          29,207  On occasion..............      0.333      9,726      76.20    741,116    370,558
 information.
Enter required grievance data and                   48          29,207  On occasion..............      0.166      4,848      34.56    167,559     83,780
 information into data collection and
 tracking system.
Perform maintenance on system for                   48              48  Annually.................         20        960      92.92     89,203     44,602
 storing data and information on
 grievances.
Monitor and oversee the collection and              48              48  Annually.................         12        576     110.82     63,832     31,916
 maintenance of the required
 information at the management level.
Review and approve all operations                   48              48  Annually.................          2         96     204.82     19,663      9,831
 associated with collection of
 information requirement at the
 executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48          58,558  Varies...................     Varies     16,206     Varies  1,081,374    540,687
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. ICRs Regarding Incident Management System (Sec.  441.302(a)(6); 
Cross-Referenced to Sec. Sec.  441.464(e), 441.570(e), 
441.745(a)(1)(v), and Part 438)
    At Sec.  441.302(a)(6), we propose to require that States provide 
an assurance that they operate and maintain an incident management 
system that identifies, reports, triages, investigates, resolves, 
tracks, and trends critical incidents. At Sec.  441.302(a)(6)(i)(A), we 
propose to establish a minimum standard definition of a critical 
incident. At Sec.  441.302(a)(6)(i)(B), we propose to require that 
States have electronic incident management systems that, at a minimum, 
enable electronic collection, tracking (including of the status and

[[Page 28043]]

resolution of investigations), and trending of data on critical 
incidents. At Sec.  441.302(a)(6)(i)(C), we propose to require States 
to require providers to report to States any critical incidents that 
occur during the delivery of section 1915(c) waiver program services as 
specified in a waiver participant's person-centered service plan, or 
are a result of the failure to deliver authorized services. At Sec.  
441.302(a)(6)(i)(D), we propose to require that States use claims data, 
Medicaid Fraud Control Unit data, and data from other State agencies 
such as Adult Protective Services or Child Protective Services to the 
extent permissible under applicable State law to identify critical 
incidents that are unreported by providers and occur during the 
delivery of section 1915(c) waiver program services, or as a result of 
the failure to deliver authorized services. At Sec.  
441.302(a)(6)(i)(E), we propose to require that States share 
information on the status and resolution of investigations if the State 
refers critical incidents to other entities for investigation. We also 
propose, at Sec.  441.302(a)(6)(i)(F), to require States to separately 
investigate critical incidents if the investigative agency fails to 
report the resolution of an investigation within State-specified 
timeframes. At Sec.  441.302(a)(6)(i)(G), we propose to require that 
States meet the reporting requirements at Sec.  441.311(b)(1) related 
to the performance of their incident management systems. We also 
propose to codify minimum performance levels to demonstrate that States 
meet the requirements at Sec.  441.302(a)(6). These performance and 
reporting requirements, in combination with other proposed requirements 
identified throughout this proposed rule, are intended to supersede and 
fully replace existing reporting requirements and required performance 
levels for section 1915(c) waiver programs, which were established in 
2014.\238\
---------------------------------------------------------------------------

    \238\ Modifications to Quality Measures and Reporting in Sec.  
1915(c) Home and Community-Based Waivers. March 2014 Accessed at 
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/3-cmcs-quality-memo-narrative_0_71.pdf.
---------------------------------------------------------------------------

    At Sec.  441.302(a)(6)(iii), we propose to apply these requirements 
to services delivered under FFS or managed care delivery systems. We 
also propose to apply the proposed requirements Sec.  441.302(a)(6) to 
sections 1915(j), (k), and (i) State plan services by cross-referencing 
at Sec. Sec.  441.570(e), 441.464(e), and 441.745(a)(1)(v), 
respectively.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument and burden will be 
made available to the public for their review under the standard non-
rule PRA process which includes the publication of 60- and 30-day 
Federal Register notices. In the meantime, we are setting out our 
preliminary burden figures (see below) as a means of scoring the impact 
of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10854 (OMB control number 0938-TBD). Since 
this would be a new collection of information request, the OMB control 
number has yet to be determined (TBD) but will be issued by OMB upon 
their approval of the new collection of information request.
a. States
    The burden associated with the incident management system 
requirements proposed at Sec.  441.302(a)(6) will affect the 48 States 
(including Washington, DC) that deliver HCBS under section 1915(c), 
(i), (j), or (k) authorities.\239\ We estimate a one-time and on-going 
burden to implement these requirements at the State level. The burden 
for the proposed reporting requirements at Sec.  441.311(b)(1) is 
included in the ICR #8, which is the ICRs Regarding Compliance 
Reporting (Sec.  441.311(b)).
---------------------------------------------------------------------------

    \239\ Arizona, Rhode Island, and Vermont do not have HCBS 
programs under any of these authorities.
---------------------------------------------------------------------------

    All of the States impacted by Sec.  441.302(a)(6)(i)(B), requiring 
that States use an information system, as defined in 45 CFR 164.304 and 
compliant with 45 CFR part 164, have existing incident management 
systems in place. However, we assume that all States will need to make 
at least some changes to their existing systems to fully comply with 
the proposed requirements. Specifically, States will have to update 
State policies and procedures; implement new or update existing 
electronic incident management systems; publish revised provider 
requirements through State notice and publication processes; update 
provider manuals and other policy guidance; amend managed care 
contracts; collect required information from providers; use other 
required data sources to identify unreported incidents; and share 
information with other entities in the State responsible for 
investigating critical incidents.
i. One Time Incident Management System Requirements: States (Sec.  
441.302(a)(6))
    With regard to the one-time requirements related to proposed Sec.  
441.302(a)(6), we estimate it would take: 120 hours at $108.68/hr for 
an administrative services manager to draft policy content, prepare 
notices and draft rules for publication, conduct public hearings, and 
draft contract modifications for managed care plans; 20 hours at 
$96.66/hr for a management analyst to update provider manuals; 80 hours 
at $65.02/hr for a training and development specialist to develop and 
conduct training for providers; 80 hours at $76.20/hr for a business 
operations specialist to establish processes for information sharing 
with other entities; 80 hours at $100.80/hr for a computer and 
information analyst to build, design, and implement reports for using 
claims and other data to identify unreported incidents; 24 hours at 
$110.82/hr for a general and operations manager to review and approve 
managed care contract modifications, policy and rules for publication, 
and training materials; and 10 hours at $204.82/hr for a chief 
executive to review and approve all operations associated with this 
requirement.
    In aggregate, we estimate a one-time burden of 19,872 hours (414 hr 
x 48 States) at a cost of $1,874,125 (48 States x [(120 hr x $108.68/
hr) + (20 hr x $96.66/hr) + (80 hr x $65.02/hr) + (80 hr x $76.20/hr) + 
(80 hr x $100.80/hr) + (24 hr x $110.82/hr) + (10 hr x $204.82/hr)]). 
Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be 
$937,063 ($1,874,125 x 0.50).
    In addition, we estimate that States, based on the results of the 
incident management system assessment discussed earlier in section 
II.B.3. of this preamble, that 82 percent of States, or 39 States (48 
States x 0.82), would need to update existing electronic incident 
management systems, while the remaining 9 States would need to 
implement new electronic incident management systems, to meet the 
proposed requirement at Sec.  441.302(a)(6)(i)(B). We estimate based on 
information reported by some States in spending plans for section 9817 
of the American Rescue Plan Act of 2021 that the cost per State to 
update existing electronic systems is $2 million while the cost per 
State to implement new electronic systems is $5 million.\240\ In

[[Page 28044]]

aggregate, we estimate a one-time technology burden of $123,000,000 
[($2,000,000 x 39 States) + ($5,000,000 x 9 States)]. Taking into 
account the Federal contribution to Medicaid administration, the 
estimated State share of this cost would be $ 61,500,000 ($123,000,000 
x 0.50).
---------------------------------------------------------------------------

    \240\ Enhanced Federal Financial Participation (FFP) is 
available at a 90 percent Federal Medical Assistance Percentage 
(FMAP) rate for the design, development, or installation of 
improvements of mechanized claims processing and information 
retrieval systems, in accordance with applicable Federal 
requirements. Enhanced FFP at a 75 percent FMAP rate is also 
available for operations of such systems, in accordance with 
applicable Federal requirements. However, the receipt of these 
enhanced funds is conditioned upon States meeting a series of 
standards and conditions to ensure investments are efficient and 
effective. As a result, we do not assume for the purpose of this 
burden estimate that States will qualify for the enhanced Federal 
match. This estimate overestimates State burden to the extent that 
States qualify for the enhanced Federal match.

                  Table 7--Summary of One-Time Burden for States for the Incident Management System Requirements (Sec.   441.302(a)(6))
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Time per
          Requirement              Number of         Total          Frequency      response    Total       Wage ($/hr)    Total cost ($)    State share
                                  respondents      responses                         (hr)    time (hr)                                          ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft policy content, prepare               48              48  Once............        120      5,760  108.68/hr.......         625,997         312,998
 notices and draft rules for
 publication, conduct public
 hearings, and draft contract
 modifications for managed
 care plans.
Update provider manuals.......              48              48  Once............         20        960  96.66/hr........          92,794          46,397
Develop and conduct training                48              48  Once............         80      3,840  65.02/hr........         249,677         124,838
 for providers.
Establish processes for                     48              48  Once............         80      3,840  76.20/hr........         292,608         146,304
 information sharing with
 other entities.
Build, design, and implement                48              48  Once............         80      3,840  100.80/hr.......         387,072         193,536
 reports for using claims and
 other data to identify
 unreported incidents.
Review and approve managed                  48              48  Once............         24      1,152  110.82/hr.......         127,665          63,832
 care contract modifications,
 policy and rules for
 publication, and training
 materials at the management
 level.
Review and approve all                      48              48  Once............         10        480  204.82/hr.......          98,314          49,157
 operations associated with
 this requirement at the
 executive level.
Subtotal Labor-Related Burden.              48             336  Once............     Varies     19,872  Varies..........       1,874,125         937,063
Update existing electronic                  39              39  Once............        n/a        n/a  2,000,000/system      78,000,000      39,000,000
 incident management systems.
Implement new electronic                     9               9  Once............        n/a        n/a  5,000,000/system      45,000,000      22,500,000
 systems.
Subtotal Non-Labor Burden.....              48              48  Once............        n/a        n/a  Varies..........     123,000,000      61,500,000
                               -------------------------------------------------------------------------------------------------------------------------
    Total.....................              48             384  Once............        414     19,872  Varies..........     124,874,125      62,437,063
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. Ongoing Incident Management System Requirements: States (Sec.  
441.302(a)(6))
    With regard to the ongoing requirements Sec.  441.302(a)(6), we 
estimate that there are 0.5 critical incidents annually \241\ for each 
of the 1,889,640 Medicaid beneficiaries who receive HCBS under sections 
1915(c), (i), (j), or (k) authorities annually, or 944,820 (1,889,640 x 
0.5) critical incidents annually.\242\ We further estimate that, based 
on data on unreported incidents, these requirements will result in the 
identification of 30 percent more critical incidents annually, or 
283,446 (944,820 x 0.3) critical incidents; \243\ that 76 percent, or 
215,419 (283,446 x 0.76) will be reported for individuals enrolled in 
FFS delivery systems; \244\ and that 10 percent of those for 
individuals enrolled in FFS delivery systems (21,542 = 215,419 x 0.1) 
will be made through provider reports and 90 percent (193,877 = 215,419 
x 0.9) through claims identification and other sources.\245\ We 
estimate 0.166 hr or 10 minutes at $34.56/hr for a data entry worker to 
record the information on each reported critical incident reported by 
providers for individuals enrolled in FFS delivery systems. In 
aggregate, we estimate an ongoing burden each year of 3,576 hours 
(21,542 incidents x 0.166 hr) at a cost of $123,587 (3,576 hr x $34.56/
hr) to record the information on each reported critical incident 
reported by providers for individuals enrolled in FFS delivery systems. 
While States can establish different processes for the reporting of 
critical incidents for individuals enrolled in managed care, we assume 
for the purpose of this analysis that the States would delegate 
provider reporting critical incidents and identification of critical 
incidents through claims and other data sources to managed care 
entities and that the managed care entities would be responsible for 
reporting the identified critical incidents to the State.\246\ We 
further assume that the information reported by managed care entities 
to the State and identified by the State through claims and other data 
sources would be in an electronic form. For the 68,027 more critical 
incidents for individuals enrolled in managed care (283,446 more 
critical incidents identified x 24 percent

[[Page 28045]]

for individuals enrolled in managed care), and the 193,877 more 
critical incidents identified through claims and other data sources for 
individuals enrolled in FFS (283,446 more critical incidents identified 
x 76 percent for individuals enrolled in FFS x 90 percent identified 
through claims and other sources), we estimate 2 minutes (0.0333 hr) at 
$34.56/hr for a data entry worker to record the information on each of 
these 261,904 critical incidents (68,027 + 193,877). In aggregate, for 
Sec.  441.302(a)(6), we estimate an ongoing annual burden of 8,721 
hours (261,904 incidents x 0.0333 hr) at a cost of $301,398 (8,721 hr x 
$34.56/hr) on these critical incidents.
---------------------------------------------------------------------------

    \241\ Data on the number of critical incidents is limited. We 
base our estimate on available public information, such as https://oig.hhs.gov/oas/reports/region7/71806081.pdf and https://dhs.sd.gov/servicetotheblind/docs/2015%20CIR%20Annual%20Trend%20Analysis.pdf.
    \242\ https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-user-brief-2019.pdf.
    \243\ Data on the number of unreported critical incidents is 
limited. We base our estimate on available public information, such 
as https://pennlive.com/news/2020/01/possible-abuse-of-group-home-residents-wasnt-adequately-tracked-in-pa-federal-audit.html and 
https://www.kare11.com/article/news/local/federal-audit-finds-maine-dhhs-failed-to-investigate-multiple-deaths-critical-incidents/97-463258015.
    \244\ https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-user-brief-2019.pdf.
    \245\ Data is limited on the identification of critical 
incidents through various data sources. We conservatively assume 
that 25 percent of more critical incidents identified as a result of 
these requirements will be reported by providers even though claims 
data will likely identify a substantially higher of percentage of 
claims than will be reported by providers.
    \246\ Addressing Critical Incidents in the MLTSS Environment: 
Research Brief, ASPE, https://aspe.hhs.gov/reports/addressing-critical-incidents-mltss-environment-research-brief-0.
---------------------------------------------------------------------------

    In total, for Sec.  441.302(a)(6), we estimate an ongoing burden 
each year of 12,297 hours (3,576 hours + 8,721 hours) at a cost of 
$424,985 ($123,587 + $301,398) to record the information on all 
critical incidents for individuals enrolled in FFS and managed care 
delivery systems across all States. We further estimate it would take 
12 hours at $76.20/hr for a business operations specialist to maintain 
processes for information sharing with other entities; 20 hours at 
$100.80/hr for a computer and information analyst to update and 
maintain reports for using claims and other data to identify unreported 
incidents; 24 hours at $110.82/hr for a general and operations manager 
to monitor the operations associated with this requirement; and 4 hours 
at $204.82/hr for a chief executive to review and approve all 
operations associated with this collection of information requirement 
in each State. In aggregate, we estimate an ongoing burden of 15,177 
hours ([60 hr x 48 States] + 12,297 hr) at a cost of $732,617 ($424,985 
+ [48 States x ((12 hr x $76.20/hr) + (20 hr x $100.80/hr) + (24 hr x 
$110.82/hr) + 4 hr x $204.82/hr)]). In addition, we estimate an on-
going annual technology-related cost of $500,000 per State for States 
to maintain their electronic incident management systems. In aggregate, 
we estimate an ongoing burden of $24,000,000 ($500,000 x 48 States) for 
States to maintain their electronic incident management systems. In 
total, we estimate an ongoing annual burden of 15,177 hours at a cost 
$24,732,617 ($732, 617 + $24,000,000). Taking into account the Federal 
contribution to Medicaid administration, the estimated State share of 
this cost would be $12,366,309 ($24,732,617 x 0.50). Taking into 
account the Federal contribution to Medicaid administration, the 
estimated State share of this cost would be $12,366,309 ($24,732,617 x 
0.50).

                                 Table 8--Summary of Ongoing Burden for States for the Incident Management System Requirements at Proposed Sec.   441.302(a)(6)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Number of         Total                                     Time per       Total time                                                  State share
               Requirement                  respondents      responses             Frequency           response (hr)       (hr)               Wage ($/hr)         Total cost ($)        ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Record the information on each reported               48          21,542  Annually..................           0.166           3,576  34.56/hr..................         123,587          61,793
 critical incident reported by providers
 for individuals enrolled in FFS
 delivery systems.
Record the information on critical                    48         261,904  Annually..................           0.033           8,721  34.56/hr..................         301,398         150,699
 incidents for individuals enrolled in
 managed care and critical incidents
 identified through claims and other
 data sources for individuals enrolled
 in FFS.
Maintain processes for information                    48              48  Annually..................              12             576  76.20/hr..................          43,891          21,946
 sharing with other entities.
Update and maintain reports for using                 48              48  Annually..................              20             960  100.80/hr.................          96,768          48,384
 claims and other data to identify
 unreported incidents.
Monitor operations associated with this               48              48  Annually..................              24           1,152  110.82/hr.................      127,664.64          63,832
 requirement at the management level.
Review and approve all operations                     48              48  Annually..................               4             192  204.82/hr.................       39,325.44       19,662.72
 associated with this collection of
 information requirement at the
 executive level.
Subtotal: Labor Related Burden..........              48         283,638  Annually..................          Varies          15,177  Varies....................         732,634         366,317
Maintain electronic incident management               48              48  Annually..................             n/a             n/a  500,000/system............      24,000,000      12,000,000
 systems (specifically, Sec.
 441.302(a)(6)(i)(B)).
Total Technology Cost...................              48              48  Annually..................             n/a             n/a  500,000/system............      24,000,000      12,000,000
                                         -------------------------------------------------------------------------------------------------------------------------------------------------------
    Total...............................              48         283,638  Annually..................          Varies          15,177  Varies....................      24,732,634      12,366,317
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

b. Service Providers and Managed Care Contractors
    The burden associated with this proposed rule would affect service 
providers that provide HCBS under sections 1915(c), (i), (j), and (k) 
authorities, as well as managed care entities that contract with the 
States to provide managed long-term services and supports.
    The following discussion estimates an ongoing burden for service 
providers to implement these requirements and both a one-time and 
ongoing burden for managed care contractors.

[[Page 28046]]

i. On-Going Incident Management System Requirements: Service Provider
    To estimate the number of service providers that would be impacted 
by this proposed rule, we used unpublished data from the Provider 
Relief Fund to estimate that there are 19,677 providers nationally 
across all payers delivering the types of HCBS that are delivered under 
sections 1915(c), (i), (j), and (k) authorities. We then prorate the 
number to estimate the number of providers in the 48 States that are 
subject to this requirement (19,677 providers nationally x 48 States 
subject to the proposed requirement/51 States = 18,520 providers). We 
used data from the Centers for Disease Control and Prevention \247\ to 
estimate the percentage of these HCBS providers that participate in 
Medicaid and, due to uncertainty in the data and differences in 
provider definitions, estimate both a lower and upper range of 
providers affected. At a low end of 78 percent Medicaid participation, 
we estimate that there are 14,446 providers impacted (18,520 providers 
x 0.78), while at a high end of 85 percent participation, we estimate 
that there are 15,742 providers impacted (18,520 providers x 0.85). To 
be conservative and not underestimate our projected burden analysis, we 
are using the high end of our estimates to score the PRA-related impact 
of the proposed requirements.
---------------------------------------------------------------------------

    \247\ https://www.cdc.gov/nchs/data/series/sr_03/sr03_43-508.pdf.
---------------------------------------------------------------------------

    As discussed earlier, we estimate that providers will report 10 
percent, or 28,345, of the more critical incidents (283,446 more 
critical incidents x 0.10) identified annually as a result of these 
requirements. Based on these figures, we estimate that, on average, 
each provider will report 1.8 (28,345 incidents/15,742 providers) more 
critical incidents annually. We further estimate that, on average, it 
would take a provider 1 hour at $110.82/hr for a general and operations 
manager to collect the required information and report the information 
to the State or to the managed care entity as appropriate for each 
incident.\248\ In aggregate, for Sec.  441.302(a)(6), we estimate an 
ongoing burden of 28,345 hours (28,345 incidents x 1 hr) at a cost of 
$3,141,193 (28,345 hr x $110.82/hr).
---------------------------------------------------------------------------

    \248\ The actual amount of time for each incident will vary 
depending on the nature of the critical incident and the specific 
reporting requirements of each State and managed care entity. This 
estimate assumes that some critical incidents will take 
substantially less time to report, while others could take 
substantially less time.

                        Table 9--Summary of Ongoing Burden for Service Providers for the Incident Management System Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
           Requirement                   Number of         Total responses         Frequency        response    Total     Wage ($/    Total      State
                                        respondents                                                   (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Collect the required information   15,742 providers....  28,345 incidents...  Annually...........          1     28,345     110.82  3,141,193        n/a
 and report the information to
 the State or to the managed care
 entity (Sec.
 441.302(a)(6)(i)(C)).
                                  ----------------------------------------------------------------------------------------------------------------------
    Total........................  15,742 providers....  28,345 incidents...  Annually...........          1     28,345     110.82  3,141,193        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. One Time Incident Management System Requirements: Managed Care 
Entities (Sec.  441.302(a)(6))
    As required under proposed Sec.  441.302(a)(6), while States can 
establish different processes for the reporting of critical incidents 
for individuals enrolled in managed care, we assume for the purpose of 
this analysis that the States would delegate provider reporting of 
critical incidents and identification of critical incidents through 
claims and other data sources to managed care entities and that the 
managed care entities would be responsible for reporting the identified 
critical incidents to the State.\249\ We further assume that the 
information reported by managed care entities to the State would be in 
an electronic form.
---------------------------------------------------------------------------

    \249\ Addressing Critical Incidents in the MLTSS Environment: 
Research Brief, available at https://aspe.hhs.gov/reports/addressing-critical-incidents-mltss-environment-research-brief-0.
---------------------------------------------------------------------------

    We estimated that there are 161 managed long-term services and 
supports plans providing services across 25 States.\250\ With regard to 
the one-time requirements at Sec.  441.302(a)(6), we estimate it would 
take: 20 hours at $108.68/hr for an administrative services manager to 
draft policy for contracted providers; 20 hours at $96.66/hr for a 
management analyst to update provider manuals; 40 hours at $65.02/hr 
for a training and development specialist to develop and conduct 
training for providers; 80 hours at $100.80/hr for a computer and 
information analyst to build, design, and implement reports for using 
claims and other data to identify unreported incidents; and 6 hours at 
$204.82/hr for a chief executive to review and approve all operations 
associated with this requirement. In aggregate, we estimate a one-time 
burden of 26,726 hours (161 managed care entities x 166 hr) at a cost 
of $2,576,084 (161 managed care entities x [(20 hr x $108.68/hr) + (20 
hr x $96.66/hr) + (40 hr x $65.02/hr) + (80 hr x $100.80/hr) + (6 hr x 
$204.82/hr)]).
---------------------------------------------------------------------------

    \250\ ``A View from the States: Key Medicaid Policy Changes: 
Results from a 50-State Medicaid Budget Survey for State Fiscal 
Years 2019 and 2020,'' https://www.kff.org/report-section/a-view-from-the-states-key-medicaid-policy-changes-long-term-services-and-supports/.

      Table 10--Summary of One-Time Burden for Managed Care Entities (MCEs) for the Incident Management System Requirements at Sec.   441.302(a)(6)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft policy for contracted providers.             161             161  Once.....................         20      3,220     108.68    349,950        n/a
Update provider manuals...............             161             161  Once.....................         20      3,220      96.66    311,245        n/a
Develop and conduct training for                   161             161  Once.....................         40      6,440      65.02    418,729        n/a
 providers.
Build, design, and implement reports               161             161  Once.....................         80     12,880     100.80  1,298,304        n/a
 for using claims and other data to
 identify unreported incidents.

[[Page 28047]]

 
Review and approve all operations                  161             161  Once.....................          6        966     204.82    197,856        n/a
 associated with this requirement.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................             161             805  Once.....................     Varies     26,726     Varies  2,576,084        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

iii. Ongoing Incident Management System Requirements: Managed Care 
Entities (Sec.  441.302(a)(6))
    The on-going burden to managed care entities consists of the 
collection and maintenance of information on critical incidents. As 
noted earlier, we estimate that these requirements will result in the 
identification of 283,446 more critical incidents annually than are 
currently identified by States. We further estimate that 24 percent, or 
68,027 (283,446 x 0.24), will be reported for individuals enrolled in 
managed care delivery systems \251\ and that 10 percent, or 6,803 
(68,027 x 0.10), will be made through provider reports and 90 percent, 
or 61,224 (68,027 x 0.90), through claims identification and other 
sources.\252\ We estimate that it would take 0.166 hr at $34.56/hr for 
a data entry worker to record the information on each reported critical 
incident reported by providers (Sec.  441.302(a)(6)(i)(B)(2)). In 
aggregate, we estimate an ongoing burden of 1,129 hours (6,803 critical 
incidents made through provider reports x 0.166 hr) at a cost of 
$39,018 (1,129 hr x $34.56/hr). We also estimate that it would take: 20 
hours at $100.80/hr for a computer and information analyst to update 
and maintain reports for using claims and other data to identify 
unreported incidents (Sec.  441.302(a)(6)(i)(B)(3)); 6 hours at 
$110.82/hr for a general and operations manager to monitor the 
operations associated with this requirement and report the information 
to the State (Sec.  441.302(a)(6)(i)(E)); and 1 hour at $204.82/hr for 
a chief executive to review and approve all operations associated with 
this collection of information requirement (Sec.  441.302(a)(6)(i)(G)). 
In aggregate, we estimate an ongoing burden of 5,476 hours (1,129 hr + 
[161 managed care entities x 27 hr]) at a cost of $503,622 ($39,018 + 
(161 managed care entities x [(20 hr x $100.80/hr) + (6 hr x $110.82/
hr) + (1 hr x $204.82/hr)]).
---------------------------------------------------------------------------

    \251\ https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-user-brief-2019.pdf.
    \252\ Data is limited on the identification of critical 
incidents through various data sources. We conservatively assume 
that 25 percent of additional critical incidents identified as a 
result of these requirements will be reported by providers even 
though claims data will likely identify a substantially higher of 
percentage of claims than will be reported by providers.

                  Table 11--Summary of Ongoing Burden for Managed Care Entities (MCEs) for the Incident Management System Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Record the information on each                     161           6,803  Annually.................      0.166      1,129      34.56     39,029        n/a
 reported critical incident reported
 by providers (Sec.
 441.302(a)(6)(i)(B)(2)).
Update and maintain reports for using              161             161  Annually.................         20      3,220     100.80    324,576        n/a
 claims and other data to identify
 unreported incidents (Sec.
 441.302(a)(6)(i)(B)(3)).
Monitor the operations associated with             161             161  Annually.................          6        966     110.82    107,052        n/a
 this requirement and report the
 information to the State (Sec.
 441.302(a)(6)(i)(E)).
Review and approve all operations                  161             161  Annually.................          1        161     204.82     32,976        n/a
 associated with this requirement
 (Sec.   441.302(a)(6)(i)(G)).
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................             161           7,286  Annually.................     Varies      5,476     Varies    503,633        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. ICRs Regarding HCBS Payment Adequacy (Sec. Sec.  441.302(k) and 
441.311(e); Cross-Referenced to Sec. Sec.  441.464(f), 441.570(f) and 
441.745(a)(1)(iv), and Part 438)
    This proposed rule would update Sec.  441.302, by adding new 
paragraph (k)(2), which would require that at least 80 percent of 
Medicaid payments for the following services be spent on compensation, 
as defined at Sec.  441.302(k)(1)(i), to direct care workers for the 
following services: homemaker services, home health aide services, and 
personal care services.
    Proposed Sec.  441.302(k)(1)(i) defines compensation to include 
salary, wages, and other remuneration as defined by the Fair Labor 
Standards Act and implementing regulations (29 U.S.C. 201 et seq., 29 
CFR parts 531 and 778); benefits (such as health and dental benefits, 
sick leave, and tuition reimbursement); and the employer share of 
payroll taxes for direct care workers delivering services authorized 
under section 1915(c) of the Act. Proposed Sec.  441.302(k)(1)(ii) 
defines direct care workers to include workers who provide nursing 
services, assist with activities of daily living (such as mobility, 
personal hygiene, eating), or provide support with instrumental 
activities of daily living (such as cooking, grocery shopping, managing 
finances). Specifically, direct care workers include nurses (registered 
nurses, licensed practical nurses, nurse practitioners, or clinical 
nurse specialists) who provide nursing services to Medicaid-eligible 
individuals receiving HCBS, licensed or certified nursing assistants, 
direct support professionals, personal care attendants, home health 
aides, and other individuals who are paid to directly provide services 
to Medicaid beneficiaries receiving HCBS to address activities of daily 
living or instrumental activities of daily living. Direct care

[[Page 28048]]

workers include individuals employed by a Medicaid provider, State 
agency, or third party; contracted with a Medicaid provider, State 
agency, or third party; or delivering services under a self-directed 
service model.
    To demonstrate compliance with the requirements proposed at Sec.  
441.302(k), new reporting requirements are proposed at Sec.  
441.311(e). Specifically, States would be required to report separately 
on the percent of payments that are spent on the direct care workforce 
for HCBS services. The services are found at Sec.  440.180(b)(2) 
through (4), and include: homemaker services, home health aide 
services, and personal care services. Separate reporting would be 
required on payment for services that are self-directed.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument will be made 
available to the public for their review under the standard non-rule 
PRA process which includes the publication of 60- and 30-day Federal 
Register notices. In the meantime, we are setting out our preliminary 
burden figures (see below) as a means of scoring the impact of this 
rule's proposed changes. The availability of the survey instrument and 
more definitive burden estimates will be announced in both Federal 
Register notices. The CMS ID number for that collection of information 
request is CMS-10854 (OMB control number 0938-TBD). Since this would be 
a new collection of information request, the OMB control number has yet 
to be determined (TBD) but will be issued by OMB upon their approval of 
the new collection of information request.
a. States
    The burden associated with the proposed requirements would affect 
the 48 States (including Washington, DC) that deliver HCBS under 
sections 1915(c), (i), (j), or (k) authorities.253 254 We 
estimate both a one-time and ongoing burden to implement these 
requirements at the State level. Specifically, under proposed 
Sec. Sec.  441.302(k) and 441.311(e), States would have to: (1) draft 
new policy (one-time); (2) publish the provider requirements through 
State notice and publication processes (one-time); (3) update provider 
manuals and other policy guidance for each of the services subject to 
the requirement (one-time); (4) inform providers of services through 
State notification processes, both initially and annually (one-time and 
ongoing); (5) collect the information from providers for each service 
required (ongoing); (6) aggregate the data broken down by each service 
as well as self-directed services (ongoing); (7) derive an overall 
percentage for each service including self-directed services (ongoing); 
and (8) report to us on an annual basis (ongoing).
---------------------------------------------------------------------------

    \253\ Arizona, Rhode Island, and Vermont do not have HCBS 
programs under any of these authorities.
    \254\ For purposes of this burden analysis, we are not taking 
into consideration temporary wage increases or bonus payments that 
have been or are being made.
---------------------------------------------------------------------------

i. One Time HCBS Payment Adequacy Requirements: State Burden
    With regard to the one-time requirements, we estimate it would 
take: 80 hours at $108.68/hr for an administrative services manager to: 
draft policy content, prepare notices and draft rules for publication, 
conduct public hearings, and draft contract modifications for managed 
care plans; 30 hours at $96.66/hr for a management analyst to update 
provider manuals for each of the affected services, and draft provider 
agreement amendments; 25 hours at $92.92/hr for a computer programmer 
to build, design, and operationalize internal systems for collection, 
aggregation, stratification by service, reporting, and creating 
remittance advice; 60 hours at $65.02/hr for a training and development 
specialist to develop and conduct training for providers; 6 hours at 
$110.82/hr for a general and operations manager to: review, approve 
managed care contract modifications, policy and rules for publication, 
and training materials; and 3 hours at $204.82/hr for a chief executive 
to review and approve all operations associated with this requirement. 
In aggregate, we estimate a one-time burden of 9,792 hours (204 hr x 48 
States) at a cost of $916,693 (48 States x [(80 hr x $108.68/hr) + (30 
hr x $96.66/hr) + (25 hr x $92.92/hr) + (60 hr x $65.02/hr) + (6 hr x 
$110.82/hr) + (3 hr x $204.82/hr)]). Taking into account the Federal 
contribution to Medicaid administration, the estimated State share of 
this cost would be $458,347 ($916,693 x 0.50).

          Table 12--Summary of One-Time Burden for States for the HCBS Payment Adequacy Requirements at Sec.  Sec.   441.302(k) and 441.311(e)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft policy content, prepare notices               48              48  Once.....................         80      3,840     108.68    417,331    208,666
 and draft rules for publication,
 conduct public hearings; and draft
 contract modifications for managed
 care plans.
Update provider manuals for each of                 48              48  Once.....................         30      1,440      96.66    139,190     69,595
 the affected services, draft provider
 agreement amendment.
Build, design, and operationalize                   48              48  Once.....................         25      1,200      92.92    111,504     55,752
 internal systems for collection,
 aggregation, stratification by
 service, reporting, and creating
 remittance advice.
Develop and conduct training for                    48              48  Once.....................         60      2,880      65.02    187,258     93,629
 providers.
Review, approve managed care contract               48              48  Once.....................          6        288     110.82     31,916  15,958.08
 modifications, policy and rules for
 publication, and training materials.
Review and approve all operations                   48              48  Once.....................          3        144     204.82     29,494     14,747
 associated with this requirement.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             288  Once.....................     Varies      9,792     Varies    916,693    458,347
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 28049]]

ii. Ongoing HCBS Payment Adequacy Requirements: State Burden
    With regard to the on-going requirements, we estimate it would take 
6 hours at $92.92/hr for a computer programmer to: (1) collect the 
information from all providers for each service required; (2) aggregate 
and stratify by each service as well as self-directed services; (3) 
derive an overall percentage for each service including self-directed 
services; and (4) develop report to CMS on an annual basis. We also 
estimate it would take 2 hours at $110.82/hr by a general and 
operations manager to review, verify, and approve reporting to CMS and 
1 hour at $204.82/hr for a chief executive to review and approve all 
operations associated with this requirement. In aggregate, we estimate 
an ongoing burden of 432 hours (9 hr x 48 States) at a cost of $47,231 
(48 States x [(6 hr x $92.92/hr) + (2 hr x $110.82/hr) + (1 hr x 
$204.82/hr)]). Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be $23,616 
($47,231 x 0.50) per year.

           Table 13--Summary of Ongoing Burden for States for the HCBS Payment Adequacy Requirements at Sec.  Sec.   441.302(k) and 441.311(e)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Collect information from providers;                 48              48  Annually.................          6        288      92.92     26,761     13,380
 aggregate and stratify data as
 required; derive an overall
 percentage for each service; and
 develop report annually.
Review, verify and approve reporting                48              48  Annually.................          2         96     110.82     10,639      5,319
 to CMS.
Review and approve all operations                   48              48  Annually.................          1         48     204.82      9,831      4,916
 associated with this requirement.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             144  Annually.................     Varies        432     Varies     47,231     23,616
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Service Providers and Managed Care Contractors
    The burden associated with this proposed rule will affect both 
service providers that provide the services listed at Sec.  
440.180(b)(2) through (4) across HCBS programs as well as managed care 
entities that contract with the States to provide managed long-term 
services and supports. We estimate both a one-time and ongoing burden 
to implement the reporting requirements Sec.  441.311(e) for both 
service providers and managed care contractors.
    To estimate the number of service providers that will be impacted 
by this proposed rule, we used unpublished data from the Provider 
Relief Fund to estimate that there are 14,444 providers nationally 
across all payers delivering homemaker, home health aide, and/or 
personal care services. We then prorate the number to estimate the 
number of providers in the 48 States that are subject to this 
requirement (14,444 providers nationally x 48 States subject to the 
proposed requirement/51 States = 13,594 providers). We used data from 
the Centers for Disease Control and Prevention \255\ to estimate the 
percentage of these HCBS providers that participate in Medicaid and, 
due to uncertainty in the data and differences in provider definitions, 
estimate both a lower and upper range of providers affected. At a low 
end of 78 percent Medicaid participation, we estimate that there are 
10,603 providers impacted (13,594 x 0.78), while at a high end of 85 
percent participation, we estimate that there are 11,555 providers 
impacted (13,594 x 0.85). To be conservative and not underestimate our 
projected burden analysis, we are using the high end of our estimates 
to score the PRA-related impact of the proposed requirements.
---------------------------------------------------------------------------

    \255\ https://www.cdc.gov/nchs/data/series/sr_03/sr03-047.pdf.
---------------------------------------------------------------------------

i. One Time HCBS Payment Adequacy Requirements: Service Providers 
(Sec.  441.311(e))
    With regard to the one-time requirements, we estimate it would 
take: 35 hours at $70.98/hr for a compensation, benefits and job 
analysis specialist to calculate compensation, as defined by Sec.  
441.302(k)(1)(i) for each direct care worker defined at Sec.  
441.302(k)(1)(ii); 40 hours at $92.92/hr for a computer programmer to 
build, design and operationalize an internal system to calculate each 
direct care worker's compensation as a percentage of total revenues 
received, aggregate the sum of direct care worker compensation as an 
overall percentage, and separate self-directed services to report to 
the State; and 8 hours at $110.82/hr for a general and operations 
manager to review and approve reporting to the State. In aggregate, we 
estimate a one-time burden of 959,065 hours (11,555 providers x 83 hr) 
at a cost of $81,897,911 (11,555 providers x [(35 hr x $70.98/hr) + (40 
hr x $92.92/hr) + (8 hr x $110.82/hr)]).

               Table 14--Summary of One-Time Burden for Service Providers for the HCBS Payment Adequacy Requirements at Sec.   441.311(e)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Time per    Total                              State
             Requirement                  Number of         Total              Frequency          response     time    Wage  ($/   Total cost    share
                                         respondents      responses                                 (hr)       (hr)       hr)         ($)         ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Calculate compensation for each                11,555          11,555  Once....................         35    404,425      70.98   28,706,087        n/a
 direct care worker.
Build, design and operationalize an            11,555          11,555  Once....................         40    462,200      92.92   42,947,624        n/a
 internal system for reporting to the
 State.
Review and approve reporting to the            11,555          11,555  Once....................          8     92,440     110.82   10,244,200        n/a
 State.
                                      ------------------------------------------------------------------------------------------------------------------
    Total............................          11,555          34,665  Once....................     Varies    959,065     Varies   81,897,911        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 28050]]

ii. Ongoing HCBS Payment Adequacy Requirements: Service Providers 
(Sec.  441.311(e))
    With regard to the on-going requirements, we estimate it would take 
8 hours at $70.98/hr for a compensation, benefits, and job analysis 
specialist to account for new hires and/or contracted employees; 8 
hours at $92.92/hr for a computer programmer to calculate compensation, 
aggregate data, and report to the State as required; and 5 hours at 
$110.82/hr for a general and operations manager to review and approve 
reporting to the State. In aggregate, we estimate an on-going burden of 
242,655 hours (11,555 providers x 21 hr) at a cost of $21,553,542 
(11,555 providers x [(8 hr x $70.98/hr) + (8 hr x $92.92/hr) + (5 hr x 
$110.82/hr)]).

                Table 15--Summary of Ongoing Burden for Service Providers for the HCBS Payment Adequacy Requirements at Sec.   441.311(e)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Time per    Total                                 State
             Requirement                 Number of         Total             Frequency         response     time    Wage  ($/    Total cost      share
                                        respondents      responses                               (hr)       (hr)       hr)           ($)          ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Account for new hires and/or                  11,555          11,555  Once..................          8     92,440      70.98       6,561,391        n/a
 contracted employees.
Calculate compensation, aggregate             11,555          11,555  Once..................          8     92,440      92.92       8,589,525        n/a
 data, and report to the State.
Review and approve reporting to the           11,555          11,555  Once..................          5     57,775     110.82       6,402,626        n/a
 State.
                                     -------------------------------------------------------------------------------------------------------------------
    Total...........................          11,555          34,665  Once..................     Varies    242,655     Varies      21,553,542        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

iii. One Time HCBS Payment Adequacy Requirements: Managed Care Entities 
(Sec.  441.311(e))
    As noted earlier, the burden associated with this proposed rule 
will affect managed care entities (see section d, below) that contract 
with the States to provide managed long-term services and supports. We 
estimate that there are 161 managed long-term services and supports 
plans providing services across 25 States.\256\ We estimate both a one-
time and ongoing burden for managed care entities to implement these 
requirements. Specifically, managed care entities would have to: (1) 
draft new policy (one-time); (2) update provider manuals for each of 
the services subject to the requirement (one-time); (3) inform 
providers of requirements (one-time and ongoing); (4) collect the 
information from providers for each service required (ongoing); (5) 
aggregate the data as required by the States (ongoing); and (6) report 
to the State on an annual basis (ongoing).
---------------------------------------------------------------------------

    \256\ https://www.kff.org/report-section/a-view-from-the-states-key-medicaid-policy-changes-long-term-services-and-supports/; 
Profiles & Program Features [bond] Medicaid.
---------------------------------------------------------------------------

    With regard to the one-time requirements, we estimate it would take 
40 hours at $108.68/hr for an administrative services manager to draft 
policy for contracted providers; 25 hours at $92.92/hr for a computer 
programmer to build, design, and operationalize internal systems for 
data collection, aggregation, stratification by service, and reporting; 
30 hours at $65.02/hr for a training and development specialist to 
develop and conduct training for providers; and 3 hours at $204.82/hr 
for a chief executive to review and approve reporting to the State. In 
aggregate, we estimate a one-time burden of 15,778 hours (161 MCEs x 98 
hr) at a cost of $1,486,877 (161 MCEs x [(40 hr x $108.68/hr) + (25 hr 
x $92.92/hr) + (30 hr x $65.02/hr) + (3 hr x $204.82/hr)]).

          Table 16--Summary of One-Time Burden for Managed Care Entities (MCEs) for the HCBS Payment Adequacy Requirements at Sec.   441.311(e)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft policy for contracted providers.             161             161  Once.....................         40      6,440     108.68    699,899        n/a
Build, design, and operationalize                  161             161  Once.....................         25      4,025      92.92    374,003        n/a
 internal systems for data collection,
 aggregation, stratification by
 service, and reporting.
Develop and conduct training for                   161             161  Once.....................         30      4,830      65.02    314,047        n/a
 providers.
Review and approve reporting to the                161             161  Once.....................          3        483     204.82     98,928        n/a
 State.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................             161             644  Once.....................     Varies     15,778     Varies  1,486,877        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

iv. Ongoing HCBS Payment Adequacy Requirements: Managed Care Entities 
(Sec.  441.311(e))
    With regard to the ongoing requirements, we estimate it would take: 
6 hours at $92.92/hr for a computer programmer to: (1) collect the 
information from all providers for each service required, (2) aggregate 
and stratify data as required, and (3) develop report to the State on 
an annual basis; and 2 hours at $204.82/hr for a chief executive to 
review and approve the reporting to the State. In aggregate, we 
estimate an ongoing burden of 1,288 hours (161 MCEs x 8 hr) at a cost 
of $155,713 (161 MCEs x [(6 hr x $92.92/hr) + (2 hr x $204.82/hr)]).

[[Page 28051]]



          Table 17--Summary of Ongoing Burden for Managed Care Entities (MCEs) for the HCBS Payment Adequacy Requirements at Sec.   441.311(e)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Time per    Total
           Requirement                Number of         Total            Frequency        response     time    Wage  ($/    Total cost      State share
                                     respondents      responses                             (hr)       (hr)       hr)           ($)             ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Collect information from                      161             161  Annually............          6        966      92.92          89,760             n/a
 providers; aggregate and
 stratify data as required; and
 develop report annually.
Review and approve the report....             161             161  Annually............          2        322     204.82          65,952             n/a
                                  ----------------------------------------------------------------------------------------------------------------------
    Total........................             161             322  Annually............     Varies      1,288     Varies         155,713             n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

6. ICRs Regarding Supporting Documentation for HCBS Access (Sec. Sec.  
441.303(f)(6) and 441.311(d)(1))
    Section 1915(c) of the Act authorizes States to set enrollment 
limits or caps on the number of individuals served in a waiver, and 
many States maintain waiting lists of individuals interested in 
receiving waiver services once a spot becomes available. States vary in 
the way they maintain waiting lists for section 1915(c) waivers, and if 
a waiting list is maintained, how individuals may join the waiting 
list. Some States permit individuals to join a waiting list as an 
expression of interest in receiving waiver services, while other States 
require individuals to first be determined eligible for waiver services 
to join the waiting list. States have not been required to submit any 
information on the existence or composition of waiting lists, which has 
led to gaps in information on the accessibility of HCBS within and 
across States. Further, feedback obtained during various interested 
parties' engagement activities conducted with States and other 
interested parties over the past several years about reporting 
requirements for HCBS, as well as feedback received through the RFI 
\257\ discussed earlier, indicate that there is a need to improve 
public transparency and processes related to States' HCBS waiting 
lists.
---------------------------------------------------------------------------

    \257\ CMS Request for Information: Access to Coverage and Care 
in Medicaid & CHIP. February 2022. For a full list of question from 
the RFI, see https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.
---------------------------------------------------------------------------

    We propose to amend Sec.  441.303(f)(6) by adding language to the 
end of the regulatory text: ``If the State has a limit on the size of 
the waiver program and maintains a list of individuals who are waiting 
to enroll in the waiver program, the State must meet the reporting 
requirements at Sec.  441.311(d)(1).''
    For States that limit or cap enrollment in a section 1915(c) waiver 
and maintain a waiting list, States would be required to provide a 
description annually on how they maintain the list of individuals who 
are waiting to enroll in a section 1915(c) waiver program. The 
description must include, but not be limited to, information on whether 
the State screens individuals on the waiting list for eligibility for 
the waiver program, whether the State periodically re-screen 
individuals on the waiver list for eligibility, and the frequency of 
re-screening, if applicable. In addition, States would be required to 
report of the number of people on the waiting list if applicable, as 
well as the average amount of time that individuals newly enrolled in 
the waiver program in the past 12 months were on the waiting list, if 
applicable.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument and burden will be 
made available to the public for their review under the standard non-
rule PRA process which includes the publication of 60- and 30-day 
Federal Register notices. In the meantime, we are setting out our 
preliminary burden figures (see below) as a means of scoring the impact 
of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10854 (OMB control number 0938-TBD). Since 
this would be a new collection of information request, the OMB control 
number has yet to be determined (TBD) but will be issued by OMB upon 
their approval of the new collection of information request.
a. One Time Waiting List Reporting Requirements: States (Sec.  
441.311(d)(1))
    The one-time State burden associated with the waiting list 
reporting requirements proposed in Sec.  441.311(d)(1) will affect the 
39 State Medicaid programs with waiting lists for section 1915(c) 
waivers.\258\ We estimate both a one-time and ongoing burden to 
implement these requirements at the State level. Specifically, States 
will have to query their databases or instruct their contractors to do 
so to collect information on the number of people on existing waiting 
lists and how long they wait; and write or update their existing 
waiting list policies and the information collected. In some States, 
HCBS waivers are administered by more than one operating agency, in 
these cases each will have to report this data up to the Medicaid 
agency for submission to us.
---------------------------------------------------------------------------

    \258\ https://www.kff.org/report-section/state-policy-choices-about-medicaid-home-and-community-based-services-amid-the-pandemic-issue-brief/.
---------------------------------------------------------------------------

    With regard to the one-time requirements, we estimate it would 
take: 16 hours at $108.68/hr for an administrative services manager to 
write or update State policy, direct information collection, compile 
information, and produce a report; 20 hours at $92.92/hr for a computer 
programmer or contractor to query internal systems for reporting 
requirements; 3 hours at $110.82/hr for a general and operations 
manager to review and approve report; and 2 hours at $204.82/hr for a 
chief executive to review and approve all reports associated with this 
requirement. In aggregate, we estimate a burden of 1,599 hours (39 
States x 41 hr) at a cost of $169,236 (39 States x [(16 hr x $108.68/
hr) + (20 hr x $92.92/hr) + (3 hr x $110.82/hr) + (2 hr x $204.82/
hr)]). Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be $84,618 
($169,236 x 0.50).
    Assuming no changes to the State waiting list policies, each year 
States would only need to update the report to reflect the number of 
people on the list of individuals who are waiting to enroll in the 
waiver program and average amount of time that individuals newly 
enrolled in the waiver program in the past 12 months were on the list.

[[Page 28052]]



                   Table 18--Summary of One-Time Burden for States for the Waiting List Reporting Requirements at Sec.   441.311(d)(1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Write or update State policy, direct                39              39  Once.....................         16        624     108.68     67,816     33,908
 information collection, compile
 information, and produce a report.
Query internal systems for reporting                39              39  Once.....................         20        780      92.92     72,478     36,239
 requirements.
Review and approve report at                        39              39  Once.....................          3        117     110.82     12,966      6,483
 management level.
Review and approve all reports                      39              39  Once.....................          2         78     204.82     15,976      7,988
 associated with this requirement at
 the executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              39             156  Once.....................     Varies      1,599     Varies    169,236     84,618
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Ongoing Waiting List Reporting Requirements: States (Sec.  
441.311(d)(1))
    With regard to the on-going burden for the section 1915(c) waiver 
waiting list reporting requirements at Sec.  441.311(d)(1), we estimate 
it would take: 4 hours at $108.68/hr for an administrative services 
managers across relevant operating agencies to direct information 
collection, compile information, and produce a report; 6 hours at 
$92.92/hr for a computer programmer or contractor to query internal 
systems for reporting requirements; 3 hours at $110.82/hr for a general 
and operations manager to review and approve report; and 2 hours at 
$204.82/hr for a chief executive to review and approve all reports 
associated with this requirement. In aggregate, we estimate a burden of 
585 hours (39 States x 15 hr) at a cost of $67,639 (39 States x [(4 hr 
x $108.68/hr) + (6 hr x $92.92/hr) + (3 hr x $110.82/hr) + (2 hr x 
$204.82/hr)]. Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be $33,820 
($67,639 x 0.50) per year.

                   Table 19--Summary of Ongoing Burden for States for the Waiting List Reporting Requirements at Sec.   441.311(d)(1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct information collection, compile              39              39  Annually.................          4        156     108.68     16,954      8,477
 information, and produce a report.
Query internal systems for reporting                39              39  Annually.................          6        234      92.92     21,743     10,872
 requirements.
Review and approve report at the                    39              39  Annually.................          3        117     110.82     12,966      6,483
 management level.
Review and approve all reports                      39              39  Annually.................          2         78     204.82     15,976      7,988
 associated with this requirement at
 the executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              39             156  Annually.................     Varies        585     Varies     67,639     33,820
--------------------------------------------------------------------------------------------------------------------------------------------------------

7. ICRs Regarding Additional HCBS Access Reporting (Sec.  
441.311(d)(2)(i))
    Additional HCBS access reporting is proposed at Sec.  
441.311(d)(2)(i). States would be required to report annually on the 
average amount of time from when homemaker services, home health aide 
services, or personal care services, listed in Sec.  440.180(b)(2) 
through (4), are initially approved to when services began for 
individuals newly approved to begin receiving services within the past 
12 months. For this specific metric, States will be allowed to report 
on a statistically valid random sample of individuals newly approved to 
begin receiving these services within the past 12 months.
    Proposed Sec.  441.311(d)(2)(ii) would require States to report 
annually on the percent of authorized hours for homemaker services, 
home health aide services, or personal care, as listed in Sec.  
440.180(b)(2) through (4), that are provided within the past 12 months. 
States will have the option to report on a statistically valid random 
sample of individuals authorized to receive these services within the 
past 12 months, rather than all individuals authorized to receive these 
services within the past 12 months.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument and burden will be 
made available to the public for their review under the standard non-
rule PRA process which includes the publication of 60- and 30-day 
Federal Register notices. In the meantime, we are setting out our 
preliminary burden figures (see below) as a means of scoring the impact 
of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10854 (OMB control number 0938-TBD). Since 
this would be a new collection of information request, the OMB control 
number has yet to be determined (TBD) but will be issued by OMB upon 
their approval of the new collection of information request.
    The burden associated with the proposed additional HCBS access 
reporting requirements at Sec.  441.311(d)(2) would affect the 48 
States (including Washington DC) that deliver HCBS under sections 
1915(c), (i), (j), or (k) authorities.\259\ Specifically, States will 
have to query their databases or instruct their contractors to do so to 
collect information on the average amount of time from which homemaker 
services, home health aide services, or personal care services, as 
listed in Sec.  440.180(b)(2) through (4), are initially approved to 
when services began, for individuals newly approved to begin receiving 
services within the past 12 months, and the percent of authorized hours 
for these services that are provided within the past 12 months. We 
expect many States will need to analyze report this metric for a 
statistically valid random sample of beneficiaries. They will then need 
to produce a report for

[[Page 28053]]

us within such information. For States with managed long-term services 
and supports, they would need to direct managed care entities to report 
this information up to them.
---------------------------------------------------------------------------

    \259\ Arizona, Rhode Island, and Vermont do not have HCBS 
programs under any of these authorities.
---------------------------------------------------------------------------

    We estimate one-time and ongoing burden to implement the 
requirements at Sec.  441.311(d)(2) at the State level.
a. One-Time HCBS Access Reporting Requirements: States (Sec.  
441.311(d)(2))
    With regard to the one-time burden related to the HCBS access 
reporting requirements, we estimate it would take: 20 hours at $108.68/
hr for an administrative services manager across relevant operating 
agencies to direct information collection, compile information, and 
produce a report; 60 hours at $92.92/hr for a computer programmer or 
contractor to analyze service authorization and claims data; 40 hours 
at $95.62/hr for a statistician to conduct data sampling; 3 hours at 
$110.82/hr for a general and operations manager to review and approve 
report; and 2 hours at $204.82/hr for a chief executive to review and 
approve all reports associated with this requirement. In aggregate, we 
estimate a one-time burden of 6,000 hours (48 States x 125 hr) at a 
cost of $591,154 (48 States x [(20 hr x $108.68/hr) + (60 hr x $92.92/
hr) + (40 hr x $95.62/hr) + (3 hr x $110.82/hr) + (2 hr x $204.82/
hr)]). Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be 
$295,577 ($591,154 x 0.50) per year.

                   Table 20--Summary of One-Time Burden for States for the HCBS Access Reporting Requirements at Sec.   441.311(d)(2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct information collection, compile              48              48  Once.....................         20        960     108.68    104,333     52,166
 information, and produce a report.
Analyze service authorization and                   48              48  Once.....................         60      2,880      92.92    267,610    133,805
 claims data.
Conduct data sampling.................              48              48  Once.....................         40      1,920      95.62    183,590     91,795
Review and approve report at the                    48              48  Once.....................          3        144     110.82     15,958      7,979
 management level.
Review and approve all reports                      48              48  Once.....................          2         98     204.82     19,663      9,831
 associated with this requirement at
 the executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             240  Once.....................     Varies      6,000     Varies    591,154    295,577
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Ongoing HCBS Access Reporting Requirements: States (Sec.  
441.311(d)(2))
    With regard to the on-going burden related to the HCBS access 
reporting requirements for States, we estimate it would take: 10 hours 
at $108.68/hr for an administrative services manager to direct 
information collection, compile information, and produce a report; 20 
hours at $92.92/hr for a computer programmer or contractor to analyze 
service authorization and claims data; 10 hours at $95.62/hr for a 
statistician to conduct data sampling; 3 hours at $110.82/hr for a 
general and operations manager to review and approve report; and 2 
hours at $204.82/hr for a chief executive to review and approve all 
reports associated with this requirement. In aggregate, we estimate a 
burden of 2,160 hours (48 States x 45 hr) at a cost of $222,888 (48 
States x [(10 hr x $108.68/hr) + (20 hr x $92.92/hr) + (10 hr x $95.62/
hr) + (3 hr x $110.82/hr) + (2 hr x $204.82/hr)]). Taking into account 
the Federal contribution to Medicaid administration, the estimated 
State share of this cost would be $111,444 ($222,888 x 0.50) per year.

                    Table 21--Summary of Ongoing Burden for States for the HCBS Access Reporting Requirements at Sec.   441.311(d)(2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct information collection, compile              48              48  Annually.................         10        480     108.68     52,166     26,083
 information, and produce a report.
Analyze service authorization and                   48              48  Annually.................         20        960      92.92     89,203     44,601
 claims data.
Conduct data sampling.................              48              48  Annually.................         10        480      95.62     45,898     22,949
Review and approve report at the                    48              48  Annually.................          3        144     110.82     15,958      7,979
 management level.
Review and approve all reports                      48              48  Annually.................          2         96     204.82     19,663      9,831
 associated with this requirement at
 the executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             240  Annually.................     Varies      2,160     Varies    222,888    111,444
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. One-Time HCBS Access Reporting Requirements: Managed Care Entities 
(Sec.  441.311(d)(2))
    With regard to the one-time proposed HCBS access reporting 
requirements at Sec.  441.311(d)(2) for managed care entities, we 
estimate it would take: 10 hours at $108.68/hr for an administrative 
services manager to direct information collection, compile information, 
and produce a report to the State; 35 hours at $92.92/hr for a computer 
programmer to analyze service authorization and claims data; 10 hours 
at $95.62/hr for a statistician to conduct data sampling; and 2 hours 
at $204.82/hr for a chief executive review and approval. In aggregate, 
we estimate a one-time burden of 9,177 hours (161 MCEs x 57 hr) at a 
cost of $918,479 (161 MCEs x [(10 hr x $108.68/hr) + (35 hr x $92.92/
hr) + (10 hr x $95.62/hr) + (2 hr x $204.82/hr)]).

[[Page 28054]]



            Table 22--Summary of One-Time Burden for Managed Care Entities for the HCBS Access Reporting Requirements at Sec.   441.311(d)(2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct information collection, compile             161             161  Once.....................         10      1,610     108.68    174,975        n/a
 information, and produce a report to
 the State.
Analyze service authorization and                  161             161  Once.....................         35      5,635      92.92    523,604        n/a
 claims data.
Conduct data sampling.................             161             161  Once.....................         10      1,610      95.62    153,948        n/a
Review and approve report.............             161             161  Once.....................          2        322     204.82     65,952        n/a
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................             161             644  Once.....................     Varies      9,177     Varies    918,479        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

d. Ongoing HCBS Access Reporting Requirements: Managed Care Entities 
(Sec.  441.311(d)(2))
    With regard to the ongoing requirements associated with the annual 
collection, aggregation, and reporting the HCBS access measures at 
Sec.  441.311(d)(2), we estimate it would require: 4 hours at $108.68/
hr for an administrative services manager to direct information 
collection, compile information, and produce a report to the State; 20 
hours at $92.92/hr for a computer programmer to analyze service 
authorization and claims data; 8 hours at $95.62/hr for a statistician 
to conduct data sampling; and 2 hours at $204.82/hr for a chief 
executive to review and approve. In aggregate, we estimate a burden of 
5,474 hours (161 MCEs x 34 hr) at a cost of $558,303 (161 MCEs x [(4 hr 
x $108.68/hr) + (20 hr x $92.92/hr) + (8 hr x $95.62/hr) + (2 hr x 
$204.82/hr)]).

     Table 23--Summary of Ongoing Burden for Managed Care Entities (MCEs) for Additional HCBS Access Reporting Requirements at Sec.   441.311(d)(2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response    Trtime   Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct information collection, compile             161             161  Annually.................          4        644     108.68     69,990        n/a
 information, and produce a report to
 the State.
Analyze service authorization and                  161             161  Annually.................         20      3,220      92.92    299,202        n/a
 claims data.
Conduct data sampling.................             161             161  Annually.................          8      1,288      95.62    123,159        n/a
Review and approve report.............             161             161  Annually.................          2        322     204.82     65,952        n/a
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................             161             644  Annually.................     Varies      5,474     Varies    558,303        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

8. ICRs Regarding Compliance Reporting (Sec.  441.311(b))
a. Ongoing Incident Management System Assessment Requirements: States 
(Sec.  441.311(b)(1))
    Through proposed updates to Sec.  441.311(b)(1), as described in 
proposed Sec.  441.302(a)(6), this proposed rulemaking aims to 
standardize CMS expectations and State reporting requirements to ensure 
that States operate and maintain an incident management system that 
identifies, reports, triages, investigates, resolves, tracks, and 
trends critical incidents. The proposed updates were informed by the 
responses to the HCBS Incident Management Survey (CMS-10692; OMB 0938-
1362) recently released to States.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument and burden will be 
made available to the public for their review under the standard non-
rule PRA process which includes the publication of 60- and 30-day 
Federal Register notices. In the meantime, we are setting out our 
preliminary burden figures (see below) as a means of scoring the impact 
of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10692 (OMB control number 0938-1362). We 
estimate that the proposed reporting requirement at Sec.  441.311(b)(1) 
would apply to the 48 States (including Washington, DC) that deliver 
HCBS under sections 1915(c), (i), (j), or (k) authorities. Some States 
employ the same incident management system across their waivers, while 
others employ an incident management system specific to each waiver and 
will require multiple assessments to meet the proposed requirements at 
Sec.  441.311(b)(1). Based on the responses to the previously 
referenced survey, we are estimating that on average States will 
conduct assessments on two incident management systems, totaling 
approximately 96 unique required assessments (48 State Medicaid 
programs x 2 incident management system assessments per State). Because 
the requirements proposed by Sec.  441.311(b)(1) would be required 
every 24 months, we estimate 48 assessments on an annual basis (96 
unique assessments every 2 years). With regard to the ongoing 
requirements, we estimate that it would take 1.5 hours at $73.84/hr for 
a social/community service manager to gather information and complete 
the required assessment; and 0.5 hours at $110.82/hr for a general and 
operations manager to review and approve the assessment. In aggregate, 
we estimate an ongoing annual burden of 96 hours (48 States x 2 hr) at 
a cost of $7,976 (48 States x [(1.5 hr x $73.84/hr) + (0.5 hr x 
$110.82/hr)]). Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be $3,988 
($7,976 x 0.50) per year.

[[Page 28055]]



     Table 24--Summary of the Ongoing Burden for States for the Proposed Incident Management System Assessment Requirements at Sec.   441.311(b)(1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gather information and complete the                 48              48  Annually.................        1.5         72      73.84      5,316      2,658
 required assessment.
Review and appprove the assessment....              48              48  Annually.................        0.5         24     110.82      2,660      1,330
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48              96  Annually.................     Varies         96     Varies      7,976      3,988
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Reporting on Critical Incidents (Sec.  441.311(b)(2)), Person-
Centered Planning (Sec.  441.311(b)(3)), and Type, Amount, and Cost of 
Services (Sec.  441.311(b)(4))
    This proposed rulemaking codifies existing compliance reporting 
requirements on Critical Incidents, Person-Centered Planning, and Type, 
Amount, and Cost of Services. This includes codifying minimum 
performance standards at Sec.  441.311(b)(2) and (3) and making updates 
to critical incident and person-centered planning requirements 
previously described in 2014 guidance,\260\ and moving the existing 
requirement at Sec.  441.302(h)(1) to report on type, amount, and cost 
of services to Sec.  441.311(b)(4) as part of the new consolidated 
compliance reporting section at Sec.  441.311.
---------------------------------------------------------------------------

    \260\ https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/3-cmcs-quality-memo-narrative_0_71.pdf.
---------------------------------------------------------------------------

    This proposed rule would remove our currently approved burden and 
replace it with the burden associated with the proposed amendments to 
Sec.  441.311(b)(2) through (4). In aggregate, the change would remove 
11,132 hours (253 waivers x 44 hr) and $860,281 (11,132 hr x $77.28/hr 
for a business operations specialist). Taking into account the Federal 
contribution to Medicaid administration, the estimated State share of 
this cost reduction would be minus $430,140 (-$860,281 x 0.50).

  Table 25--Summary of the Removal of Approved Ongoing Burden for Form 372(S) as a Result of the Proposed Requirements at Sec.   441.311(b)(2) Through
                                                                         (b)(4)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remove currently approved burden under              48             253  Annually.................       (44)   (11,132)      77.28  (860,281)  (430,140)
 control number 0938-0272 (CMS-372(S)).
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             253  Annually.................       (44)   (11,132)      77.28  (860,281)  (430,140)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We expect to revise the Form CMS-372(S) and the form's instructions 
based on the proposed reporting requirements. The following proposed 
changes will be submitted to OMB for their approval after this proposed 
rule is finalized and our survey instrument has been developed. The 
survey instrument and burden will be made available to the public for 
their review under the standard non-rule PRA process which includes the 
publication of 60- and 30-day Federal Register notices. In the 
meantime, we are setting out our preliminary burden figures (see below) 
as a means of scoring the impact of this rule's proposed changes. The 
availability of the survey instrument and more definitive burden 
estimates will be announced in both Federal Register notices. The CMS 
ID number for that collection of information request is CMS 0938-0272 
(CMS-372(S)). The proposed consolidated reporting requirements at Sec.  
441.311(b)(2) through (4) also assume that 48 States (including 
Washington, DC) are required to submit the Form CMS-372(S) Report on an 
annual basis. However, a separate form would no longer be required for 
each of the 253 approved waivers currently in operation. We estimate a 
burden of 50 hours for a business operations specialist to draft each 
Form CMS-372(S) Report submission. The per response increase reflects 
the proposed increase to the minimum State quality performance level 
for person-centered planning (at proposed Sec.  441.301(c)(3)(ii)) and 
critical incident reporting (at proposed Sec.  441.302(a)(6)(ii)) from 
the 86 percent threshold established by the 2014 guidance to 90 percent 
in this proposed rule. This slight increase to the minimum performance 
level will help ensure that States are sufficiently meeting all section 
1915(c) waiver requirements but may also increase the evidence that 
some States may need to submit to document that appropriate remediation 
is being undertaken to resolve any compliance deficiencies. As a 
result, we now estimate a total of 50 hours for each Form CMS-372(S) 
Report submission, comprised of 30 hours of recordkeeping, collection 
and maintenance of data, and 20 hours of record assembly, programming, 
and completing the Form CMS-372(S) Report in the required format. We 
also estimate 3 hours at $110.82/hr for a general and operations 
manager to review and approve the report to CMS; and 2 hours at 
$204.82/hr for a chief executive to review and approve all reports 
associated with this requirement.

[[Page 28056]]



  Table 26--Summary of the New Burden for Form 372(S) Annual Report on HCBS Waivers, Inclusive of Updates to Proposed Sec.   441.311(b)(2) Through (4)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Draft Form CMS 372(S) Report                        48              48  Annually.................         50      2,400      77.28    185,472     92,736
 submission.
Review and approve the report at the                48              48  Annually.................          3        144     110.82     15,958      7,979
 management level.
Review and approve all reports                      48              48  Annually.................          2         96     204.82     19,663      9,831
 associated with this requirement at
 the executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             144  Annually.................     Varies      2,640     Varies    221,093    110,546
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The net change resulting from reporting requirements on critical 
incidents, person-centered service planning, and type, amount, and cost 
of services, proposed by Sec.  441.311(b)(2) through (4) is a burden 
decrease of 8,492 hours and $319,594 (State share).
9. ICRs Regarding Reporting on the Home and Community-Based Services 
(HCBS) Quality Measure Set (Sec.  441.311(c))
a. States
    At Sec.  441.311(c), we propose to require that States report every 
other year on the HCBS Quality Measure Set, which is described in 
section II.B.8. of the preamble. The proposed reporting requirement 
would affect the 48 States (including Washington, DC) that deliver HCBS 
under section 1915(c), 1915(i), 1915(j), and 1915(k) authorities. We 
estimate both a one-time and ongoing burden to implement these 
requirements at the State level.
    As proposed at Sec.  441.311(c), the data collection would include 
reporting every other year on all measures in the HCBS Quality Measure 
Set that are identified by the Secretary.\261\ For certain measures 
which are based on data already collected by us, the State can elect to 
have the Secretary report on their behalf.
---------------------------------------------------------------------------

    \261\ Available at https://www.medicaid.gov/federal-policy-guidance/downloads/smd22003.pdf.
---------------------------------------------------------------------------

    Under proposed Sec.  441.312(c)(1)(iii), States would also be 
required to establish performance targets, subject to our review and 
approval, for each of the measures in the HCBS Quality Measure Set that 
are identified as mandatory for States to report or are identified as 
measures for which we will report on behalf of States, as well as to 
describe the quality improvement strategies that they will pursue to 
achieve the performance targets for those measures.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument and burden will be 
made available to the public for their review under the standard non-
rule PRA process which includes the publication of 60- and 30-day 
Federal Register notices. In the meantime, we are setting out our 
preliminary burden figures (see below) as a means of scoring the impact 
of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10854 (OMB control number 0938-TBD). Since 
this would be a new collection of information request, the OMB control 
number has yet to be determined (TBD) but will be issued by OMB upon 
their approval of the new collection of information request.
i. One Time HCBS Quality Measure Set Requirements: States (Sec.  
441.311(c))
    This one-time burden analysis assumes that States must newly adopt 
one of the ``experience of care'' surveys cited in the HCBS Quality 
Measure Set: The Consumer Assessment of Healthcare Providers and 
Systems Home and Community-Based (HCBS CAHPS[supreg]) Survey, National 
Core Indicators[supreg]-Intellectual and Developmental Disabilities 
(NCI[supreg]-IDD), National Core Indicators-Aging and Disability (NCI-
AD)TM, or Personal Outcome Measures (POM)[supreg] to fully 
meet the HCBS Quality Measures Set mandatory requirements. Currently 
most States use at least one of these surveys; however, States may need 
to use multiple ``experience of care'' surveys, depending on the 
populations served by the States' HCBS program and the particular 
survey instruments that States select to use, to ensure that all major 
population groups are assessed using the measures in the HCBS Quality 
Measure Set.
    The estimate of one-time burden related to the effort associated 
with the proposed requirements is for the first year of reporting. It 
assumes that the Secretary will initially require 25 of the 97 measures 
currently included in the HCBS Quality Measure Set. The estimate 
disregards costs associated with the voluntary reporting of measures in 
the HCBS Quality Measure Set that are not yet mandatory, and voluntary 
stratification of measures ahead of the phase-in schedule, discussed 
later in this section.
    Additionally, the Secretary will require stratification by 
demographic characteristics of 25 percent of the measures in the HCBS 
Quality Measure Set for which the Secretary has specified that 
reporting should be stratified 3 years after the effective date of 
these regulations, 50 percent of such measures by 5 years after the 
effective date of these regulations, and 100 percent of measures by 7 
years after the effective date of these regulations. The burden 
associated with stratifying data is considered in the ongoing cost 
estimate only. We anticipate that certain costs will decline after the 
first year of reporting, but that some of the reduction will be 
supplanted with costs associated with stratifying data.
    With regard to the one-time requirements at Sec.  441.311(c) for 
reporting on the initial mandatory elements of the HCBS Quality Measure 
Set, we estimate that would take: 540 hours at $108.68/hr for 
administrative services managers to conduct project planning, 
administer and oversee survey administration, compile measures, 
establish and describe performance targets, describe quality 
improvement strategies, and produce a report; 40 hours at $95.62/hr for 
a statistician to determine survey sampling methodology; 500 hours at 
$62.20/hr for survey researcher(s) to be trained in survey 
administration and to administer an in-person survey; 200 hours at 
$34.56/hr for a data entry worker to input the data; 60 hours at 
$92.92/hr for a computer programmer to synthesize the data; and 5 hours 
at $204.82/hr for a chief executive to verify, certify, and approve the 
report. In aggregate, we estimate a one-time burden of 64,560 hours (48 
States x 1,345 hr) at a cost of $5,141,918 (48 States x [(540 hr x 
$108.68/hr) + (40 hr x $95.62/hr) + (500 hr x $62.20/hr) + (200 hr x 
$34.56/hr) + (60 hr x $92.92/hr) + (5 hr x $204.82/

[[Page 28057]]

hr)]) Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be 
$2,570,959 ($5,141,918 x 0.50).

                 Table 27--Summary of the One-Time Burden for States for the HCBS Quality Measure Set Requirements at Sec.   441.311(c)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Conduct project planning, administer                48              48  Once.....................       5200     25,920     108.68  2,816,986  1,408,493
 and oversee survey administration,
 compile measures, establish and
 describe performance targets,
 describe quality improvement
 strategies, and produce a report.
Determine survey sampling methodology.              48              48  Once.....................         40      1,920      95.62    183,590     91,795
Receive training in survey                          48              48  Once.....................        500     24,000      62.20  1,492,800    746,400
 administration and administer an in-
 person survey.
Input data............................              48              48  Once.....................        200      9,600      34.56    346,944    173,472
Synthesize data.......................              48              48  Once.....................         60      2,880      92.92    267,610    133,805
Verify, certify, and approve the                    48              48  Once.....................          5        240     204.82     49,157     24,578
 report.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             288  Once.....................     Varies     64,560     Varies  5,141,918  2,570,959
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. Ongoing HCBS Quality Measure Set Requirements: States (Sec.  
441.311(c))
    With regard to the ongoing burden of fulfilling proposed 
requirements at Sec.  441.311(c), every other year, for reporting on 
mandatory elements of the HCBS Quality Measure Set, including data 
stratification by demographic characteristics, we estimate it would 
take: 520 hours at $108.68/hr for administrative services managers to 
conduct project planning, administer and oversee survey administration, 
compile measures, update performance targets and quality improvement 
strategy description, and produce a report; 80 hours at $95.62/hr for a 
statistician to determine survey sampling methodology; 1,250 hours at 
$62.20/hr for survey researcher(s) to be trained in survey 
administration and to administer an in-person survey; 500 hours at 
$34.56/hr for a data entry worker to input the data; 100 hours at 
$92.92/hr for a computer programmer to synthesize the data; and 5 hours 
at $204.82/hr for a chief executive to verify, certify, and approve a 
State data submission to us. In aggregate, we estimate an ongoing 
burden of 117,840 hours (48 States x 2,455 hr) at a cost of $8,136,446 
(48 States x [(520 hr x $108.68/hr) + (80 hr x $95.62/hr) + (1,250 hr x 
$62.20/hr) + (500 hr x $34.56/hr) + (100 hr x $92.92/hr) + (5 hr x 
$204.82/hr)]). Given that reporting is every other year, the annual 
burden would be 58,920 hours (117,840 hr/2 years) and $4,068,223 
($8,136,446/2 years). Taking into account the Federal contribution to 
Medicaid administration, the estimated State share of this cost would 
be $2,034,112 ($4,068,223 x 0.50).

                  Table 28--Summary of the Ongoing Burden for States for the HCBS Quality Measure Set Requirements at Sec.   441.311(c)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Conduct project planning, administer                48              48  Every other year.........        520     24,960     108.68  2,712,653  1,356,326
 and oversee survey administration,
 compile measures, update performance
 targets and quality improvement
 strategy description, and produce a
 report.
Determine survey sampling methodology.              48              48  Every other year.........         80      3,840      95.62    367,181    183,590
Receive training in survey                          48              48  Every other year.........      1,250     60,000      62.20  3,732,000  1,866,000
 administration and administer an in-
 person survey.
Input data............................              48              48  Every other year.........        500     24,000      34.56    867,360    433,680
Synthesize data.......................              48              48  Every other year.........        100      4,800      92.92    446,016    223,008
Verify, certify, and approve the                    48              48  Every other year.........          5        240     204.82     49,157     24,578
 report.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             576  Every other year.........     Varies    235,680     Varies  8,174,366  4,087,183
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. HCBS Quality Measure Set Requirements: Beneficiary Experience Survey 
(Sec.  441.311(c))
    State adoption of existing beneficiary experience surveys, 
contained in the HCBS Quality Measure Set, to fulfill the proposed 
mandatory reporting requirements would include a burden on 
beneficiaries. As proposed in the previous section, a State must newly 
adopt one of the ``experience of care'' surveys cited in the HCBS 
Quality Measure Set: The Consumer Assessment of Healthcare Providers 
and Systems Home and Community Based (HCBS CAHPS[supreg]) Survey, 
National Core Indicators[supreg] Intellectual and Developmental 
Disabilities (NCI[supreg] IDD), National Core Indicators Aging and 
Disability (NCI AD)TM, or Personal Outcome Measures 
(POM)[supreg].
    With regard to beneficiary burden, we estimate it would take 45 
minutes (0.75 hr) at $20.71/hr for a Medicaid beneficiary to complete a 
survey every other year that will be used to derive one or more of the 
measures in the

[[Page 28058]]

HCBS Quality Measure Set. At 1,000 beneficiaries/State and 48 States, 
we estimate an aggregate burden of 36,000 hours (1,000 beneficiary 
responses/State x 48 States x 0.75 hr/survey) at a cost of $ 745,560 
(36,000 hr x $20.71/hr). Given that survey is every other year, the 
annual burden would be 18,000 hours (36,000 hr/2 years) and $372,780 
($745,560/2 years).

              Table 29--Summary of Beneficiary Experience Survey Burden for the HCBS Quality Measure Set Requirements at Sec.   441.311(c)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total      State
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)  share ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Complete beneficiary experience survey          48,000          24,000  Annually.................       0.75     18,000      20.71    372,780        n/a
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................          48,000          48,000  Every other Year.........       0.75     18,000      20.71    745,560        n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

10. ICRs Regarding Website Transparency (Sec.  441.313; Cross-
Referenced to Sec. Sec.  441.486, 441.595, and 441.750, as Well as Part 
438)
    The proposed rule adds a new section, at Sec.  441.313, titled, 
``website Transparency, to promote public transparency related to the 
administration of Medicaid-covered HCBS under section 1915(c) of the 
Act.'' Specifically, at Sec.  441.313(a), we propose to require States 
to operate a website that meets the availability and accessibility 
requirements at Sec.  435.905(b) and that provides the data and 
information that States are required to report under the newly proposed 
reporting section at Sec.  441.311. At Sec.  441.313(a)(1), we propose 
to require that the data and information that States are required to 
report under Sec.  441.311 be provided on one website, either directly 
or by linking to the web pages of the managed care organization, 
prepaid ambulatory health plan, prepaid inpatient health plan, or 
primary care case management entity that is authorized to provide 
services. At Sec.  441.313(a)(2), we propose to require that the web 
page include clear and easy to understand labels on documents and 
links.
    At Sec.  441.313(a)(3), we propose to require that States verify 
the accurate function of the website and the timeliness of the 
information and links at least quarterly. At Sec.  441.313(c), we 
propose to apply these requirements to services delivered under FFS or 
managed care delivery systems. At Sec.  441.313(a)(4), we propose to 
require that States explain that assistance in accessing the required 
information on the website is available at no cost and include 
information on the availability of oral interpretation in all languages 
and written translation available in each prevalent non-English 
language, how to request auxiliary aids and services, and a toll-free 
and TTY/TDY telephone number. Further, we propose to apply the proposed 
requirements at Sec.  441.313 to sections 1915(j), (k), and (i) State 
plan services by cross-referencing at Sec. Sec.  441.486, 441.595, and 
441.750, respectively.
    The following proposed changes will be submitted to OMB for their 
approval after this proposed rule is finalized and our survey 
instrument has been developed. The survey instrument and burden will be 
made available to the public for their review under the standard non-
rule PRA process which includes the publication of 60- and 30-day 
Federal Register notices. In the meantime, we are setting out our 
preliminary burden figures (see below) as a means of scoring the impact 
of this rule's proposed changes. The availability of the survey 
instrument and more definitive burden estimates will be announced in 
both Federal Register notices. The CMS ID number for that collection of 
information request is CMS-10854 (OMB control number 0938-TBD). Since 
this would be a new collection of information request, the OMB control 
number has yet to be determined (TBD) but will be issued by OMB upon 
their approval of the new collection of information request.
    The burden associated with the website transparency requirements 
proposed at Sec.  441.313 will affect the 48 States (including 
Washington, DC) that deliver HCBS under sections 1915(c), (i), (j), or 
(k) authorities. We are requiring at Sec.  441.313(c) to apply the 
website transparency requirements to services delivered under FFS or 
managed care delivery systems, and we propose to provide States with 
the option to meet the requirements at Sec.  441.313 by linking to the 
web pages of the managed care organization, prepaid ambulatory health 
plan, prepaid inpatient health plan, or primary care case management 
entity that are authorized to provide services. However, we are not 
requiring managed care entities to report the data and information 
required under Sec.  441.311 on their website. As such, we estimate 
that there is no additional burden for managed care entities associated 
with the requirements to link to the web pages of the managed care 
organization, prepaid ambulatory health plan, prepaid inpatient health 
plan, or primary care case management entity that are authorized to 
provide services for Sec.  441.313. Further, the burden associated with 
the requirements for managed care entities to report the data and 
information required under Sec.  441.311 is estimated in the ICRs 
Regarding Compliance Reporting (Sec.  441.311(b)).
    If a State opts to comply with the requirements at Sec.  441.313 by 
linking to the web pages of the managed care organization, prepaid 
ambulatory health plan, prepaid inpatient health plan, or primary care 
case management entity that are authorized to provide services, the 
State would incur a burden. However, such burden would be less than the 
burden associated with posting the information required under Sec.  
441.311 on their own website. We are unable to estimate the number of 
States that may opt to comply with the requirements at Sec.  441.313 by 
linking to the web pages of the managed care organization, prepaid 
ambulatory health plan, prepaid inpatient health plan, or primary care 
case management entity that are authorized to provide services. As a 
result, we do not take into account the option in our burden estimate 
and conservatively assume that all States subject to the requirements 
at Sec.  441.313 by posting the information required under Sec.  
441.311 on their own website.
    We estimate both a one-time and ongoing burden to implement these 
requirements at the State level.
a. One Time Website Transparency Requirements: States (Sec.  441.313)
    The burden associated with the website transparency requirements 
proposed at Sec.  441.313 will affect the 48 States (including 
Washington, DC) that deliver HCBS under sections 1915(c), (i), (j), or 
(k) authorities. We estimate

[[Page 28059]]

both a one-time and ongoing burden to implement these requirements at 
the State level. In developing our burden estimate, we assumed that 
States would provide the data and information that States are required 
to report under newly proposed Sec.  441.311 through an existing 
website, rather than develop a new website to meet this requirement.
    With regard to the one-time burden, based on the website 
transparency requirements, we estimate it would take: 24 hours at 
$108.68/hr for an administrative services manager to determine the 
content of the website; 80 hours at $92.92/hr for a computer programmer 
or contractor to develop the website; 3 hours at $110.82/hr for a 
general and operations manager to review and approve the website; and 2 
hours at $204.82/hr for a chief executive to review and approve the 
website. In aggregate, we estimate a one-time burden of 5,232 hours (48 
States x 109 hr) at a cost of $517,633 (48 States x [(24 hr x $108.68/
hr) + (80 hr x $92.92/hr) + (3 hr x $110.82/hr) + (2 hr x $204.82/
hr)]). Taking into account the Federal contribution to Medicaid 
administration, the estimated State share of this cost would be 
$258,817 ($517,633 x 0.50) per year.

                     Table 30--Summary of the One-Time Burden for States for the Website Transparency Requirements at Sec.   441.313
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per                                     State
              Requirement                  Number of         Total              Frequency           response    Total     Wage ($/    Total    share ($)/
                                          respondents      responses                                  (hr)    time (hr)     hr)      cost ($)     year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Determine content of website..........              48              48  Once.....................         24      1,152     108.68    125,199     62,600
Develop website.......................              48              48  Once.....................         80      3,840      92.92    356,813    178,406
Review and approve the website at the               48              48  Once.....................          3        144     110.82     15,958      7,979
 management level.
Review and approve the website at the               48              48  Once.....................          2         96     204.82     19,663      9,831
 executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             192  Once.....................     Varies      5,232     Varies    517,633    258,816
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Ongoing Website Transparency Requirements: States (Sec.  441.313)
    With regard to the State on-going burden related to the website 
transparency requirement, per quarter we estimate it would take: 8 
hours at $108.68/hr for an administrative services manager to provide 
updated data and information for posting and to verify the accuracy of 
the website; 20 hours at $92.92/hr for a computer programmer or 
contractor to update the website; 3 hours at $110.82/hr for a general 
and operations manager to review and approve the website; and 2 hours 
at $204.82/hr for a chief executive to review and approve the website. 
In aggregate, we estimate an ongoing annual burden of 6,336 hours (33 
hr x 48 States x 4 quarters) at a cost of $666,228 (48 States x 4 
quarters x [(8 hr x $108.68/hr) + (20 hr x $92.92/hr) + (3 hr x 
$110.82/hr) + (2 hr x $204.82/hr)]). Taking into account the Federal 
contribution to Medicaid administration, the estimated State share of 
this cost would be $333,114 ($666,228 x 0.50) per year.

                     Table 31--Summary of the Ongoing Burden for States for the Website Transparency Requirements at Sec.   441.313
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
              Requirement                  Number of         Total              Frequency           response     time    Wage  ($/    Total      share
                                          respondents      responses                                  (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Provide updated data and information                48             192  Quarterly................          8      1,536     108.68    166,932     83,466
 for posting and verify the accuracy
 of the website.
Update website........................              48             192  Quarterly................         20      3,840      92.92    356,813    178,406
Review and approve website at the                   48             192  Quarterly................          3        576     110.82     63,832     31,916
 management level.
Review and approve website at the                   48             192  Quarterly................          2        384     204.82     78,651     39,325
 executive level.
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              48             768  Quarterly................     Varies      6,336     Varies    666,228    333,114
--------------------------------------------------------------------------------------------------------------------------------------------------------

11. ICRs Regarding Payment Rate Transparency (Sec.  447.203)
    The following proposed changes will be submitted to OMB for review 
under control number 0938-1134 (CMS-10391).
    This proposed rule would update documentation requirements in Sec.  
447.203. To develop the burden estimates associated with these changes, 
we account for the removal of existing information collection 
requirements in current Sec.  447.203(b), and the introduction of new 
requirements at proposed 447.203(b) and (c). As described later in this 
section, we estimate the impact of the proposed revisions to Sec.  
447.203 would result in a net burden reduction. We do not anticipate 
any additional information collection burden from the conforming edits 
proposed in Sec.  447.204, as the conforming edits merely alter the 
items submitted as part of an existing submission requirement, and the 
burden of producing those items is reflected in the estimates related 
to Sec.  447.203, including instances where we propose to move language 
from Sec.  447.204 to Sec.  447.203.
a. Removal of Access Monitoring Review Plan: States (Sec.  
447.203(b)(1) Through (8))
    The burden reduction associated with the removal of Sec.  
447.203(b)(1) through (8) consists of the removal of time and effort 
necessary to develop and publish AMRPs, perform ongoing monitoring, and 
corrective action plans.
    Current Sec.  447.203(b)(1) and (2) describes the minimum factors 
that States must consider when developing an AMRP. Specifically, the 
AMRP must include: input from both Medicaid beneficiaries and Medicaid 
providers, an analysis of Medicaid payment data,

[[Page 28060]]

and a description of the specific measures the State will use to 
analyze access to care. Current Sec.  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 Medicare rates) and private health coverage rates within 
geographic areas of the State. Current Sec.  447.203(b)(4) describes 
the minimum content that must be included in the monitoring plan. 
States are required to describe: 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. Current Sec.  447.203(b)(5) 
describes the timeframe for States to develop the AMRP 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 SPA to reduce or 
restructure provider payments which changes could result in diminished 
access, and additional services as determined necessary by the State or 
CMS based on complaints or as selected by the State. While the initial 
AMRPs have been completed, the plan must be updated at least every 3 
years, but no later than October 1 of the update year. Current Sec.  
447.203(b)(6)(i) requires that any time a State submits a SPA to reduce 
provider payment rates or restructure provider payments in a way that 
could diminish access, the State must submit an AMRP associated with 
the services affected by the payment rate reduction or payment 
restructuring that has been completed within the prior 12 months.
    Section 447.203(b)(6)(ii) requires that States have procedures 
within the AMRP to monitor continued access after implementation of a 
SPA that reduces or restructures payment rates. The monitoring 
procedures must be in place for a period of at least 3 years following 
the effective date of the SPA. However, States were already required to 
submit information on compliance with section 1902(a)(30)(A) of the Act 
prior to the 2015 final rule with comment period. Therefore, removal of 
Sec.  447.203(b)(6)(ii) will result in a burden reduction.
    Finally, we note that this section references the proposed 
rescission of the current AMRP process contained in Sec.  447.203(b)(1) 
to Sec.  447.203(b)(8). However, the requirements of paragraph (b)(7) 
are reflected in proposed paragraph (b)(4), and the requirements of 
paragraph (b)(8) are reflected in proposed paragraph (c)(5). As such, 
there is not a change in impact related to the rescission of these 
specific aspects of the AMRP process, should our proposals be 
finalized, and are not reflected in this section.
    In our currently approved information collection request, we 
estimated that the requirements to develop and make the AMRPs publicly 
available 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 will use that estimate here as well, although we 
note that the figure does not represent solely those States, but may 
include territories not exempt under waivers, and exclude States not 
subject due to reliance entirely on managed care (with no beneficiaries 
receiving any benefits through FFS delivery), and these figures 
fluctuate. As such, for consistency, we will maintain the estimate of 
51 respondents subject to this proposed rule. We further note that the 
one-time cost estimates have already been met for AMRPs, and the 
ongoing monitoring requirements are every 3 years. As such, the 
estimates in this section for burden reduction are for 17 respondents, 
one-third of the 51 affected respondents, to provide an annual estimate 
of the reduced burden.
    We estimated that every 3 years, it would take: 80 hours at $54.26/
hr for a research analyst to gather data, 80 hours at $100.80/hr for an 
information analyst to analyze the data, 100 hours at $96.66/hr for a 
management analyst to develop the content of the AMRP, 40 hours at 
$77.28/hr for a business operations specialist to publish the AMRP, and 
10 hours at $110.82/hr for managerial staff to review and approve the 
AMRP. In aggregate, and as shown in Table 35, we estimate the reduced 
annual burden of the rescission of the ongoing AMRP requirements would 
be minus 5,270 hours (17 States x 310 hr) and minus $446,593 (17 States 
x [(80 hr x $54.26/hr) + (80 hr x $100.80/hr) + (100 hr x $96.66/hr) + 
(40 hr x $77.28/hr) + (10 hr x $110.82/hr)]). Taking into account the 
50 percent Federal contribution for administrative expenditures, the 
rescission represents a saving to States of minus $223,297 ($446,593 x 
0.50).
    The currently approved ongoing burden associated with the 
requirements under Sec.  447.203(b)(6)(ii) is the time and effort it 
takes each of the State Medicaid programs to monitor continued access 
following the implementation of a SPA that reduces or restructures 
payment rates. In our currently approved information collection 
request, we estimate that in each SPA submission cycle, 22 States would 
submit SPAs to implement rate changes or restructure provider payments 
based on the number of submissions received in FY 2010. Using our 
currently approved burden estimates we estimate a reduction of: 40 
hours at $96.66/hr for a management analyst to develop the monitoring 
procedures, 24 hours at $96.66/hr for a management analyst to 
periodically review the monitoring results, and 3 hours at $110.82/hr 
for a general and operations manager to review and approve the 
monitoring procedures. In aggregate, we estimate burden reduction of 
minus 1,474 hours (22 Respondents x 67 hr) and minus $143,411 (22 
States x [(40 hr x $96.66/hr) + (24 hr x $96.66/hr) + (3 hr x $110.82/
hr)]). Accounting for the 50 percent Federal administrative match, the 
total State cost reduction is adjusted to $71,706 ($143,411 x 0.50).

                   Table 32--Summary of Annual Burden Reduction Associated With Removal of Access Monitoring Review Plan Requirements
                                                           [Sec.   447.203(b)(1) through (8)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Time per
             Requirement               Number of      Total            Frequency           response    Total time   Wage  ($/    Total cost  State share
                                      respondents   responses                                (hr)         (hr)         hr)          ($)           ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rescission of Sec.   447.203(b)(1)             17           17  Triennial (figures are         (310)      (5,270)       Varies    (446,593)    (223,297)
 through (b)(6)(i).                                              annualized).
Rescission of Sec.                             22           22  Varies (figures are             (67)      (1,474)       Varies    (143,411)     (71,706)
 447.203(b)(6)(ii).                                              annualized).
                                     -------------------------------------------------------------------------------------------------------------------
    Total...........................           39           39  Varies.................       Varies      (6,744)       Varies    (590,004)    (295,003)
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 28061]]

b. Payment Rate Transparency (Sec.  447.203(b)(1) Through (5))
    We are proposing to replace the AMRP requirements with a new 
payment rate transparency requirement at Sec.  447.203(b)(1) through 
(5). The burden associated with the proposed payment rate transparency 
requirement consists of the time and effort to develop and publish a 
Medicaid FFS provider payment rate information and analysis.
    Proposed Sec.  447.203(b)(1) specifies that all FFS Medicaid 
payments must be published on a publicly accessible website that is 
maintained by the State. Proposed Sec.  447.203(b)(2) specifies the 
service types that are subject to the proposed payment analysis, which 
include: primary care services; obstetrical and gynecological services; 
outpatient behavioral health services; and certain HCBS. Proposed Sec.  
447.203(b)(3) describes the required components of the payment analysis 
to include, for services in proposed Sec.  447.203(b)(2)(i) through 
(iii), a percentage comparison of Medicaid payment rates to the most 
recently published Medicare payment rates effective for the time period 
for each of the service categories specified in paragraph (b)(2). We 
also specify that the payment analysis must include percentage 
comparisons made on the basis of Medicaid base payments. For HCBS 
described in proposed Sec.  447.203(b)(2)(iv), we propose to require a 
State-based comparison of average hourly payment rates. Proposed Sec.  
447.203(b)(4) details the payment analysis timeframe, with the first 
payment analysis required to be published by the State agency by 
January 1, 2026, and updated every 2 years by January 1. Proposed Sec.  
447.203(b)(5) describes our mechanism for ensuring compliance and that 
we may take compliance action against a State that fails to meet the 
requirements of the payment rate transparency, comparative payment rate 
analysis, and payment rate disclosure provisions in preceding proposed 
paragraphs in Sec.  447.203(b) including a deferral or disallowance of 
certain of the State's administrative expenditures following the 
procedures described at part 430, subpart C.
    We estimate that the proposed requirements to complete and make 
publicly available all FFS Medicaid payments and the comparative 
payment rate analysis and payment rate disclosures under Sec.  
447.203(b)(1) through (5) for the specific categories of Medicaid 
services would affect 51 total respondents, based on the estimate in 
the prior section regarding the variation in States and territories 
subject to these requirements. We propose to require applicable States 
and territories to publish all FFS Medicaid payments initially by 
January 1, 2026, while future updates to the payment rate transparency 
information would depend on when a State submits a SPA updating 
provider payments and we have approved that SPA. As such, we assume 51 
one-time respondents for the initial rates publication. Because the 
comparative payment rate analysis and payment rate disclosure 
requirement is biennial, we assume 26 annual respondents in any given 
year, and we will assume this figure would account for the updates made 
following a rate reduction SPA or rate restructuring SPA approval. The 
proposed comparative payment rate analysis would be similar to the 
current requirement at Sec.  447.203(b)(3) that requires AMRPs to 
include a comparative payment rate analysis against public or private 
payers. The inclusion of levels of provider payment available from 
other payers is also one of five required components of the AMRP as 
specified by current Sec.  447.203(b)(1). To estimate the burden 
associated with our proposed comparative payment rate analysis and 
payment rate disclosure provisions, we assume this work would require 
approximately 25 percent of the ongoing labor hour burden that we 
previously estimated to be required by the entire AMRP, to account for 
the service categories subject to the comparative payment rate analysis 
and payment rate disclosure in proposed Sec.  447.203(b)(2) as 
decreased from the full body of AMRP service requirements. We invite 
comment on these estimated proportions.
    With regard to the developing and publishing the payment rate 
transparency data at proposed Sec.  447.203(b)(1), we estimate a low 
one-time and ongoing burden due to the data being available, and the 
main work required to meet the proposed requirement would be formatting 
and web publication. As such, we estimate it would initially take: 5 
hours at $54.26/hr for a research assistant to gather the data, 5 hours 
at $77.28/hr for a business operations specialist to publish, and 1 
hour at $110.82/hr for a general and operations manager to review and 
approve the rate transparency data. In aggregate, we estimate a one-
time burden of 561 hours (51 Respondents x 11 hr) at a cost of $39,195 
(51 Respondents x [(5 hr x $54.26/hr) + (5 hr x $77.28/hr) + (1 hr x 
$110.82/hr)]). Taking into account the Federal administrative match of 
50 percent, the requirement will cost States $19,597 ($39,195 x 0.50).
    For the ongoing cost to update assumed to take place every 2 years 
(although we are proposing that updates would only be required as 
necessary to keep the data current, with any update made no later than 
1 month following the date of CMS approval of the SPA or similar 
amendment providing for the change), we estimate an annualized impact 
on 26 respondents (51 respondents every 2 years) of: 2 hours at $54.26/
hr for a research assistant to update the data, 1 hour at $77.28/hr for 
a business operations specialist to publish the updates, and 1 hour at 
$110.82/hr for a general and operations manager to review and approve 
the rate transparency update. In aggregate, we estimate an annualized 
burden of 104 hours (26 Respondents x 4 hr) at a cost of $7,712 (26 
Respondents x [(2 hr x $54.26/hr) + (1 hr x $77.28/hr) + (1 hr x 
$110.82/hr)]). Taking into account the Federal administrative match of 
50 percent, the requirement will cost States $3,856 ($7,712 x 0.50).
    With regard to developing and publishing the comparative payment 
rate analysis and payment rate disclosure at proposed Sec.  
447.203(b)(2), we estimate it would take: 20 hours at $54.26/hr for a 
research assistant to gather the data, 20 hours at $100.80/hr for an 
information analyst to analyze the data, 25 hours at $96.66/hr for a 
management analyst to design the comparative payment rate analysis, 11 
hours at $77.28/hr for a business operations specialist to publish the 
comparative payment rate analysis and payment rate disclosure, and 3 
hours at $110.82/hr for a general and operations manager to review and 
approve the comparative payment rate analysis and payment rate 
disclosure. In aggregate, we estimate an annualized burden, based on 51 
respondents every 2 years, of 2,054 (26 Respondents x 79 hr) at a cost 
of $174,206 (26 States x [(20 hr x $54.26/hr) + (20 hr x $100.80/hr) + 
(25 hr x $96.66/hr) + (11 hr x $77.28/hr) + (3 hr x $110.82/hr)]). We 
then adjust the total cost to $87,103 ($174,206 x 0.50) to account for 
the 50 percent Federal administrative match. We have summarized the 
total burdens in Table 33.

[[Page 28062]]



                               Table 33--Summary of Burden Associated With Proposed Payment Rate Transparency Requirements
                                                       [Proposed Sec.   447.203(b)(1) through (5)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Time per
             Requirement               Number of      Total            Frequency           response    Total time   Wage  ($/    Total cost  State share
                                      respondents   responses                                (hr)         (hr)         hr)          ($)           ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   447.203(b)(1) Rate                      51           51  One-time...............           11          561       Varies       39,195       19,597
 Transparency.
Sec.   447.203(b)(1) Rate                      26           26  Biannual (figures are              4          104       Varies        7,712        3,856
 Transparency.                                                   annualized).
Sec.   447.203(b)(2) and (3) Rate              26           26  Biannual (figures are             79        2,054       Varies      174,206       87,103
 Analysis.                                                       annualized).
                                     -------------------------------------------------------------------------------------------------------------------
    Total...........................           51          103  Varies.................       Varies        2,719       Varies      221,113      110,557
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Medicaid Payment Rate Interested Parties' Advisory Group (Sec.  
447.203(b)(6))
    The burden associated with the recordkeeping requirements proposed 
Sec.  447.203(b)(6), specifically the online publication associated 
with the reporting and recommendations of the interested parties 
advisory group, would consist of the time and effort for all 50 States 
and the District of Columbia to:
     Appoint members to the interested parties' advisory group.
     Provide the group members with materials necessary to:
    ++ Review current and proposed rates.
    ++ Hold meetings.
    ++ Provide a written recommendation to the State.
     Publish the group's recommendations to a website 
maintained by the single State agency.
    The proposed requirements would require varying levels of efforts 
for States depending on the existence of groups that may fulfil the 
requirements of this group. However, because it is unknown how many 
States would be able to leverage existing practices, and to what 
extent, this estimate does not account for those differences.
    We estimate that it would take 40 hours at $131.34/hr for a human 
resources manager to recruit interested parties and provide the 
necessary materials for the group to meet. In aggregate, we estimate a 
one-time burden of 2,040 hours (51 Respondents x 40 hr) at a cost of 
$267,934 (2,040 hr x $131.34/hr). Taking into account the 50 percent 
administrative match, the total one-time State cost is estimated to be 
$133,967 ($267,934 x 0.50).
    We believe the ongoing work to maintain the needs of this group 
would take a human resources manager 5 hours at $131.34/hr annually. 
Additionally, we estimate it would take 4 hours for the biennial 
requirement, or 2 hours annually at $110.82/hr for an operations 
manager to review and prepare the recommendation for publication. In 
aggregate, we estimate an ongoing annualized burden of 182 hours (26 
Respondents x 7 hr) at a cost of $22,837 (26 Respondents x [(5 hr x 
$131.34/hr) + (2 hr x $110.82/hr)]). Accounting for the 50 percent 
Federal administrative match, the total State cost is adjusted to 
$11,418 ($22,837 x 0.50). We have summarized the total burdens in Table 
34.

                                Table 34--Summary of Burden for Medicaid Payment Rate Interested Parties' Advisory Group
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
               Requirement                  Number of      Total               Frequency            response     time    Wage  ($/    Total      share
                                           respondents   responses                                    (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   447.203(b)(6) (Establish advisory            51           51  One-time....................         40      2,040     131.34    267,934    133,967
 group).
Sec.   447.203(b)(6) (Support and publish           51           26  Biennial (figures are                 7        182     Varies     22,837     11,418
 recommendation).                                                     annualized).
                                          --------------------------------------------------------------------------------------------------------------
    Total................................           51           77  Varies......................     Varies      2,222     Varies    290,771    145,386
--------------------------------------------------------------------------------------------------------------------------------------------------------

d. State Analysis Procedures for Payment Rate Reductions or Payment 
Restructuring (Sec.  447.203(c))
    The proposed State analysis procedures for payment rate reductions 
and payment restructurings at Sec.  447.203(c)(1) through (3) within 
this proposed rule effectively would replace payment rate reduction or 
payment restructuring procedures in current Sec.  447.203(b)(6). As 
noted, the burden reduction associated with the removal of Sec.  
447.203(b)(6)(i) has already been accounted for in the recurring burden 
reduction estimate shown in Table 36 for the removal of the AMRP 
requirements, and the burden reduction associated with the removal of 
monitoring requirements at current Sec.  447.203(b)(6)(ii) has been 
accounted for in Table 37. Our proposed replacement procedures at Sec.  
447.203(c)(1) through (3) would introduce new requirements as follows.
i. Initial State Analysis for Rate Reduction or Restructuring (Sec.  
447.203(c)(1))
    Proposed Sec.  447.203(c)(1) would require that for States 
proposing to reduce or restructure provider payment rates, the State 
must document that their program and proposal meet all of the following 
requirements: (i) Medicaid rates in the aggregate for the service 
category following the proposed reduction(s) or restructurings are at 
or above 80 percent of most recent Medicare prices or rates for the 
same or a comparable set of services; (ii) Proposed reductions or 
restructurings result in no more than a 4 percent reduction of overall 
spending for each service category affected by a proposed reduction or 
restructuring in a single State fiscal year; and (iii) Public process 
yields no significant access concerns or the State can reasonably 
respond to concerns.
    Proposed Sec.  447.203(c)(1) would apply to all States that submit 
a SPA that proposes to reduce or restructure provider payment rates. We 
limited our estimates for new information collection burden to the 
requirements at Sec.  447.203(c)(1)(i) through (ii). Our estimates 
assume States will build off the comparative analysis required by 
proposed Sec.  447.203(b)(2) through (4) to complete the requirements 
proposed by Sec.  447.203(c)(1)(i), which will limit the additional 
information collection burden. We also assume no additional

[[Page 28063]]

information collection burden posed by the public review process 
required by proposed Sec.  447.203(c)(1)(iii), as this burden is 
encapsulated by current public process requirements at Sec.  447.204.
    The requirements of proposed Sec.  447.203(c) apply to all 50 
States and the District of Columbia, as well as US territories. We will 
again use the estimate of 50 utilized in preceding sections, which we 
note may include territories not exempt under waivers, and exclude 
States not subject due to reliance entirely on managed care (with no 
beneficiaries receiving any benefits through FFS delivery), and these 
figures fluctuate. As such, for consistency, we will maintain the 
estimate of 51 respondents subject to this proposed rule. While we 
cannot predict how many States will submit a rate reduction SPA or rate 
restructuring SPA in a given year, the figures from 2019 provide the 
best recent estimate, as the years during the COVID pandemic do not 
reflect typical behavior. In 2019, we approved rate reduction and rate 
restructuring SPAs from 17 unique State respondents. Therefore, to 
estimate the annualized number of respondents subject to this 
information collection burden, we will utilize a count of 17 
respondents.
    With regard to the burden associated with completing the required 
State analysis for proposed rate reductions or restructurings at Sec.  
447.203(c)(1), we estimate that it would take: 20 hours at $96.66/hr 
for a management analyst to structure the rate reduction or 
restructuring analysis, 25 hours at $100.80/hr for an information 
analyst to complete the rate reduction or restructuring analysis, and 3 
hours at $110.82/hr for a general and operations manager to review and 
approve the rate reduction or restructuring analysis. In aggregate, we 
estimate a burden of 816 hours (17 States x 48 hr) at a cost of $81,356 
(17 States x [(20 hr x $96.66/hr) + (25 hr x $100.80/hr) + (3 hr x 
$110.82/hr)]). Accounting for the 50 percent Federal administrative 
reimbursement, this adjusts to a total State cost of $40,678 ($81,356 x 
0.50). We are soliciting public comment on these estimates as well as 
relevant State data to further refine the burden and time estimates.

                         Table 35--Burden Associated With Tier 1 State Analysis Procedures for Rate Reductions or Restructurings
                                                             [Proposed Sec.   447.203(c)(1)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Time per    Total                                        State
            Requirement               Number of      Total            Frequency         response     time         Wage  ($/hr)        Total      share
                                     respondents   responses                              (hr)       (hr)                           cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   447.203(c)(1)...............           17           17  Annual................         48        816  Varies...............     81,356     40,678
                                    --------------------------------------------------------------------------------------------------------------------
    Total..........................           17           17  Annual................         48        816  Varies...............     81,356     40,678
--------------------------------------------------------------------------------------------------------------------------------------------------------

ii. Additional State Rate Analysis (Sec.  447.203(c)(2))
    Proposed Sec.  447.203(c)(2) describes requirements for payment 
proposals that do not meet the requirements in paragraph (c)(1), 
requiring the State to provide the nature of the change and policy 
purpose, the rates compared to Medicare and/or other payers pre- and 
post-reduction or restructuring, counts/trends of actively 
participating providers by geographic areas, counts of FFS Medicaid 
beneficiaries residing in geographic areas/characteristics of the 
beneficiary population, service utilization trends, access to care 
complaints from beneficiaries, providers, and other interested parties, 
and the State's response to access to care complaints.
    The information collection requirements proposed at Sec.  
447.203(c)(2) applies to those States that submit rate reduction or 
restructuring SPAs that do not meet one or more of the criteria 
proposed by Sec.  447.203(c)(1). Using 2019 rate reduction and 
restructuring SPA figures, we estimate that 17 States will submit rate 
reduction or restructuring SPAs per year. Then, a 2019 Urban Institute 
analysis \262\ indicates that 22 States (or 43 percent) have rates that 
meet the 80 percent fee ratio threshold proposed in Sec.  
447.203(c)(1)(i) across all services. Although our proposal does not 
include all services, using this all services amount is our best method 
to estimate how many States may fall below on any given service without 
knowing which. Because we cannot predict the amount a State may propose 
to reduce, once or cumulatively for the SFY, and because failure of any 
one criterion in Sec.  447.203(c)(1) would require additional analysis 
under Sec.  447.203(c)(2), we will use that percentage to assess how 
many States would need to perform additional analysis. Using this 
percentage, we estimate that 7 (43 percent x 17) of the estimated 17 
unique State respondents may submit rate reduction or restructuring 
SPAs meet that criteria for the streamlined analysis process under 
proposed Sec.  447.203(c)(1). Therefore, we assume that 10 out of 17 
unique annual State respondents who submit rate reduction or 
restructuring SPAs would also need to perform the additional analysis 
Sec.  447.203(c)(2).
---------------------------------------------------------------------------

    \262\ Zuckerman, S. et al. ``Medicaid Physician Fees Remained 
Substantially Below Fees Paid By Medicare in 2019.'', Health 
Affairs, Volume 40, Number 2, February 2021, p. 343-348, https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.00611, accessed 
August 31, 2022.
---------------------------------------------------------------------------

    The required components of the review and analysis in proposed 
Sec.  447.203(c)(2) are similar to the AMRP requirements found at 
current Sec.  447.203(b)(1). However, due to the anticipated 
development and release of a template for States to facilitate 
completion of the required analysis, as well as the lack of a 
requirement to publish the analysis, we anticipate a moderately reduced 
burden associated with proposed Sec.  447.203(c)(2) when compared to 
the burden estimated for the AMRPs.
    With regard to our proposed requirements, we estimate that it would 
take: 64 hours at $54.26/hr for a social science research assistant to 
gather data, 64 hours at $100.80/hr for a computer and information 
analyst to analyze data, 80 hours at $96.66/hr for a management analyst 
to structure the analyses and organize output, and 8 hours at $110.82/
hr for a general and operations manager to review and approve the rate 
reduction or restructuring analysis. In aggregate, we estimate a burden 
of 2,160 hours (10 States x 216 hr) at a cost of $185,432 (10 States x 
[(64 hr x $54.26/hr) + (64 hr x $100.80/hr) + (80 hr x $96.66/hr) + (8 
hr x $110.82/hr)]). The total cost is adjusted down to $92,716 
($185,432 x 0.50) for States after accounting for the 50 percent 
Federal administrative match. We are soliciting public comment on these 
estimates as well as relevant State data to further refine the burden 
and time estimates.
    We do not assume any additional information collection imposed by 
the

[[Page 28064]]

compliance procedures proposed by Sec.  447.203(c)(3).
    Table 41 shows our estimated combined annualized burden for Sec.  
447.203(c), which includes 17 States for Sec.  447.203(c)(1) and 10 
States for Sec.  447.203(c)(2). In total, we estimate an annualized 
burden of 4,992 (1,104 hours + 2,160 hours) hours at a cost of $443,848 
($110,070 + $74,172). This cost to States is then adjusted to $221,924 
after the 50 percent Federal administrative reimbursement is applied.

                       Table 36--Summary of Burden Associated With State Analysis Procedures for Rate Reductions or Restructurings
                                                              [Proposed Sec.   447.203(c)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Time per    Total                            State
               Requirement                  Number of      Total               Frequency            response     time    Wage  ($/    Total      share
                                           respondents   responses                                    (hr)       (hr)       hr)     cost  ($)     ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   447.203(c)(1) (initial State                 17           17  Annual......................         48        816     Varies     81,356     40,678
 analysis).
Sec.   447.203(c)(2) (additional State              12           12  Annual......................        216      2,160     Varies    185,432     92,716
 analysis).
                                          --------------------------------------------------------------------------------------------------------------
    Total................................           17           29  Annual......................        264      2,976     Varies    266,788    133,394
--------------------------------------------------------------------------------------------------------------------------------------------------------

D. Proposed Burden Estimate Summary

                                                                      Table 37--Summary of Proposed Annual Burden Estimates
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                        Total
 Regulation section(s) in Title 42    OMB Control Number         Number of         Number of    Time per  response    Total time    Hourly labor Rate     Total labor   State share  beneficiary
            of the CFR                 (CMS ID  Number)         respondents        responses           (hr)              (hr)            ($/hr)            cost  ($)         ($)      cost  ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   431.12 (Table 2) (MACs &     OMB 0938-TBD (CMS-     51 States............          153  Varies..............       17,340  Varies..............       1,581,591      790,795         n/a
 BAGs).                              10845).
Sec.   441.301(c)(3)--One-time      OMB 0938-TBD (CMS-     48 States............          144  Varies..............          528  Varies..............          62,203       31,102         n/a
 burden to States (Table 3)          10854).
 (Person-Centered Service Plans).
Sec.   441.301(c)(3)--One-time      OMB 0938-TBD (CMS-     161 MCEs.............          322  Varies..............          966  Varies..............         120,463          n/a         n/a
 burden to Managed Care Entities     10854).
 (Table 4) (Person-Centered
 Service Plans).
Sec.   441.301(c)(7)--One-time      OMB 0938-TBD (CMS-     48 States............          240  Varies..............       24,960  Varies..............       2,481,926    1,240,964         n/a
 burden to States (Table 5)          10854).
 (Grievance Systems).
Sec.   441.301(c)(7)--Ongoing       OMB 0938-TBD (CMS-     48 States............       58,558  Varies..............       16,206  Varies..............       1,081,374      540,687         n/a
 burden to States (Table 6)          10854).
 (Grievance Systems).
Sec.   441.302(a)(6)--One-time      OMB 0938-TBD (CMS-     48 States............          384  Varies..............       19,872  Varies..............     124,874,125   62,437,063         n/a
 burden to States (Table 7)          10854).
 (Incident Management System).
Sec.   441.302(a)(6)--Ongoing       OMB 0938-TBD (CMS-     48 States............      283,638  Varies..............       15,177  Varies..............      24,732,634   12,366,317         n/a
 burden to States (Table 8)          10854).
 (Incident Management System).
Sec.   441.302(a)(6)--Ongoing       OMB 0938-TBD (CMS-     15,742 providers.....       28,345  1...................       28,345  110.82..............       3,141,193          n/a         n/a
 burden to Service Providers         10854).
 (Table 9) (Incident Management
 System).
Sec.   441.302(a)(6)--One-time      OMB 0938-TBD (CMS-     161 MCEs.............          805  Varies..............       26,726  Varies..............       2,576,084          n/a         n/a
 burden to Managed Care Entities     10854).
 (Table 10) (Incident Management
 System).
Sec.   441.302(a)(6)--Ongoing       OMB 0938-TBD (CMS-     161 MCEs.............        7,286  Varies..............        5,476  Varies..............         503,633          n/a         n/a
 burden to Managed Care Entities     10854).
 (Table 11) (Incident Management
 System).
Sec.   441.302(k)--One-time burden  OMB 0938-TBD (CMS-     48 States............          288  Varies..............        9,792  Varies..............         916,693      458,347         n/a
 to States (Table 12) (HCBS          10854).
 Payment Adequacy).
Sec.   441.302(k)--Ongoing burden   OMB 0938-TBD (CMS-     48 States............          144  Varies..............          432  Varies..............          47,231       23,616         n/a
 to States (Table 13) (HCBS          10854).
 Payment Adequacy).
Sec.   441.302(k)--One-time burden  OMB 0938-TBD (CMS-     11,555 Providers.....       34,665  Varies..............      959,065  Varies..............      81,897,911          n/a         n/a
 to service providers (Table 14)     10854).
 (HCBS Payment Adequacy).
Sec.   441.302(k)--Ongoing burden   OMB 0938-TBD (CMS-     11,555 Providers.....       34,665  Varies..............      242,655  Varies..............      21,553,542          n/a         n/a
 to service providers (Table 15)     10854).
 (HCBS Payment Adequacy).
Sec.   441.302(k)--One-time burden  OMB 0938-TBD (CMS-     161 MCEs.............          644  Varies..............       15,778  Varies..............       1,486,877          n/a         n/a
 to managed care entities (Table     10854).
 16) (HCBS Payment Adequacy).
Sec.   441.302(k)--Ongoing burden   OMB 0938-TBD (CMS-     161 MCEs.............          322  Varies..............        1,288  Varies..............         155,713          n/a         n/a
 to managed care entities (Table     10854).
 17) (HCBS Payment Adequacy).
Sec.   441.303(f)(6), Sec.          OMB 0938-TBD (CMS-     39 States............          156  Varies..............        1,599  Varies..............         169,236       84,618         n/a
 441.311(d)(1)--One-Time burden to   10854).
 States (Table 18) (Supporting
 Documentation for HCBS Access).

[[Page 28065]]

 
Sec.   441.303(f)(6), Sec.          OMB 0938-TBD (CMS-     39 States............          156  Varies..............          585  Varies..............          67,639       33,820         n/a
 441.311(d)(1)--Ongoing burden to    10854).
 States (Table 19) (Supporting
 Documentation for HCBS Access).
Sec.   441.311(d)(2)(i) One-Time    OMB 0938-TBD (CMS-     48 States............          240  Varies..............        6,000  Varies..............         591,154      295,577         n/a
 burden to States (Table 20)         10854).
 (Additional HCBS Access
 Reporting).
Sec.   441.311(d)(2)(i) Ongoing     OMB 0938-TBD (CMS-     48 States............          240  Varies..............        2,160  Varies..............         222,888      111,444         n/a
 burden to States (Table 21)         10854).
 (Additional HCBS Access
 Reporting).
Sec.   441.311(d)(2)(i) One-Time    OMB 0938-TBD (CMS-     161 MCEs.............          644  Varies..............       9, 177  Varies..............         918,479          n/a         n/a
 burden to managed care entities     10854).
 (Table 22) (Additional HCBS
 Access Reporting).
Sec.   441.311(d)(2)(i) Ongoing     OMB 0938-TBD (CMS-     161 MCEs.............          644  Varies..............        5,474  Varies..............         558,303          n/a         n/a
 burden to managed care entities     10854).
 (Table 23) (Additional HCBS
 Access Reporting).
Sec.   441.311(b)(1) Ongoing        OMB 0938-1362 (CMS-    48 States............           96  Varies..............           96  Varies..............           7,976        3,988         n/a
 burden to States (Table 24)         10692).
 (Incident Management System
 Assessment) \a\.
Removal of Current Form 372(S)      OMB 0938-0272 (CMS-    48 States............          253  (44)................     (11,132)  75.32...............       (860,281)    (430,140)         n/a
 Ongoing Reporting Information       372(S)).
 Collection (Table 25).
Form 372(S) Reporting Requirement   OMB 0938-TBD (CMS-     48 States............          144  Varies..............        2,640  Varies..............         221,093      110,546         n/a
 to include Proposed Sec.            10854).
 441.311(b)(2)-(4) (Table 26).
Sec.   441.311(c) One-time burden   OMB 0938-TBD (CMS-     48 States............          288  Varies..............       64,560  Varies..............       5,141,918    2,570,959         n/a
 to States (Table 27) (HCBS          10854).
 Quality Measure Set).
Sec.   441.311(c) Ongoing burden    OMB 0938-TBD (CMS-     24 States............          288  Varies..............      117,840  Varies..............       4,087,183    2,043,592         n/a
 to States (Table 28) (HCBS          10854).
 Quality Measure Set) \b\.
Sec.   441.311(c) Ongoing burden    OMB 0938-TBD (CMS-     48,000 beneficiaries.       24,000  0.75................       18,000  20.71...............             n/a          n/a     372,780
 to beneficiaries (Table 29) (HCBS   10854).
 Quality Measure Set).
Sec.   441.313 One-time burden to   OMB 0938-TBD (CMS-     48 States............          192  Varies..............        5,232  Varies..............         517,633      258,816         n/a
 States (Table 30) (Website          10854).
 Transparency).
Sec.   441.313 Ongoing burden to    OMB 0938-TBD (CMS-     48 States............          768  Varies..............        6,336  Varies..............         666,228      333,114         n/a
 States (Table 31) (Website          10854).
 Transparency) \d\.
Removal of Sec.   447.203(b)(1)-    OMB 0938-1134 (CMS-    51 States and                   17  (310)...............      (5,270)  Varies..............       (446,593)    (223,297)         n/a
 (6)(i)) (Table 32) (Removal of      10391).                Territories.
 AMRP).
Removal of Sec.                     OMB 0938-1134 (CMS-    51 States and                   22  (67)................      (1,474)  Varies..............       (143,411)     (71,706)         n/a
 447.203(b)(6)(ii) (Table 32)        10391).                Territories.
 (Removal of AMRP).
Sec.   447.203(b)(1) (Table 33)     OMB 0938-1134 (CMS-    51 States and                   26  4...................          104  Varies..............           7,712        3,856         n/a
 (Rate transparency).                10391).                Territories.
Sec.   447.203(b)(2) (Table 33)     OMB 0938-1134 (CMS-    51 States and                   26  79..................        2,054  Varies..............         174,206       87,103         n/a
 (Rate analysis).                    10391).                Territories.
Sec.   447.203(b)(6) (Table 34)     OMB 0938-1134 (CMS-    51 States and                   26  7...................          182  Varies..............          22,837       11,418         n/a
 (advisory group).                   10391).                Territories.
Sec.   447.203(c)(1) (Table 35)     OMB 0938-1134 (CMS-    51 States and                   17  48..................          816  Varies..............          81,356       40,678         n/a
 (initial State analysis).           10391).                Territories.

[[Page 28066]]

 
Sec.   447.203(c)(2) (Table 36)     OMB 0938-1134 (CMS-    51 States and                   12  216.................        2,160  Varies..............         185,432       92,716         n/a
 (additional State analysis).        10391).                Territories.
                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total.........................  .....................  Varies...............      478,858  Varies..............    1,600,122  Varies..............     279,404,181   82,205,315     504,180
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The reporting requirement is every other year. Therefore, the on-going burden reflected in this table is half of the on-going burden per State reflected in Table 24.
\b\ The reporting requirement is every other year. Therefore, the on-going burden reflected in this table is half of the on-going burden per State reflected in Table 32.
\c\ The reporting requirement is every other year. Therefore, the on-going burden reflected in this table is half of the on-going burden per discussed above.
\d\ The reporting requirement is quarterly. Therefore, the on-going burden reflected in this table is four times the on-going burden discussed above.

E. 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 requirements. The 
requirements are not effective until they have been approved by OMB.
    To obtain copies of the supporting statement and any related forms 
for the proposed collections discussed above, please visit the CMS 
website at www.cms.hhs.gov/PaperworkReductionActof1995, or call the 
Reports Clearance Office at 410-786-1326.
    We invite public comments on these potential information collection 
requirements. If you wish to comment, please submit your comments 
electronically as specified in the DATES and ADDRESSES section of this 
proposed rule and identify the rule (CMS-2442-P), the ICR's CFR 
citation, and OMB control number.

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

1. Medicaid Advisory Committee
    The changes to Sec.  431.12 are intended to provide beneficiaries a 
greater voice in State Medicaid programs. In making policy and program 
decisions, it is vital for States to incorporate the perspective and 
experience of those served by the Medicaid program. States are 
currently required to operate a MCAC, made up of health professionals, 
consumers, and State representatives to ``advise the Medicaid agency 
about health and medical care services.'' This rule establishes new 
requirements for a MAC in place of the MCAC, with additional membership 
requirements to include a broader group of interested parties, to 
advise the State Medicaid agency on matters related to the effective 
administration of the Medicaid program. We seek to expand the 
viewpoints represented on the MAC, to provider States with richer 
feedback on Medicaid program and policy issues. States are already 
required to set up and use MCACs. The proposed changes will result in 
the State also setting up a smaller group, the BAG which will likely 
have a cost implication. The additional cost will depend on whether or 
not States already have a beneficiary committee--we know that many 
States already do. This smaller group which feeds into the larger MCAC 
will benefit the Medicaid program by creating a forum for beneficiaries 
to weigh in on key topics and share their unique views as Medicaid 
program participants. The new provisions of Sec.  431.12 also enhance 
transparency and accountability through public reporting requirements 
related to the operation and activities of the MAC and BAG, and 
guidelines for operation of both bodies.
2. Home and Community-Based Services (HCBS)
    The proposed changes at part 441, subpart G, seek to amend and add 
new Federal requirements, which are intended to improve access to care, 
quality of care, and health outcomes, and strengthen necessary 
safeguards that are in place to ensure health and welfare, and promote 
health equity for people receiving Medicaid-covered HCBS. The 
provisions in this proposed rule are intended to achieve a more 
consistent and coordinated approach to the administration of policies 
and procedures across Medicaid HCBS programs in accordance with section 
2402(a) of the Affordable Care Act, and is made applicable to part 441, 
subparts J, K, and M, as well as part 438 to achieve these goals.
    Specifically, the proposed rule seeks to: strengthen person-
centered services planning and incident management systems in HCBS; 
require minimum percentages of Medicaid payments for certain HCBS to be 
spent on compensation for the direct care workforce; require States to 
establish grievance systems in FFS HCBS programs; report on waiver 
waiting lists in section 1915(c) waiver programs, service delivery 
timeframes for certain HCBS, and a standardized set of HCBS quality 
measures; and promote public transparency related to the administration 
of Medicaid-covered HCBS through public reporting on measures related 
to incident management systems, critical incidents, person-centered 
planning, quality, access, and payment adequacy.
    In 2014, we released guidance \263\ for section 1915(c) waiver 
programs, which described a process in which States were to report on 
State-developed performance measures to demonstrate that they meet the 
six assurances that are required for section 1915(c) waiver programs. 
Those six assurances include the following:
---------------------------------------------------------------------------

    \263\ https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/3-cmcs-quality-memo-narrative_0_71.pdf.
---------------------------------------------------------------------------

    1. Level of Care: The State demonstrates that it implements the 
processes and instrument(s) specified in its approved waiver for 
evaluating/reevaluating an applicant's/waiver participant's level of 
care consistent with care provided in a hospital, nursing facility, or 
Intermediate Care Facilities for Individuals with Intellectual 
Disabilities.
    2. Service Plan: The State demonstrates it has designed and

[[Page 28067]]

implemented an effective system for reviewing the adequacy of service 
plans for waiver participants.
    3. Qualified Providers: The State demonstrates that it has designed 
and implemented an adequate system for assuring that all waiver 
services are provided by qualified providers.
    4. Health and Welfare: The State demonstrates it has designed and 
implemented an effective system for assuring waiver participant health 
and welfare.
    5. Financial Accountability: The State demonstrates that it has 
designed and implemented an adequate system for insuring financial 
accountability of the waiver program.
    6. Administrative Authority: The Medicaid Agency retains ultimate 
administrative authority and responsibility for the operation of the 
waiver program by exercising oversight of the performance of waiver 
functions by other State and local/regional non-State agencies (if 
appropriate) and contracted entities.
    Despite these assurances, there is evidence that State HCBS systems 
still need to be strengthened and that there are gaps in existing 
reporting requirements. We believe that this proposed rule is necessary 
to address these concerns and strengthen HCBS systems. The requirements 
in this proposed rule are intended to supersede and fully replace the 
reporting and performance expectations described in the 2014 guidance 
for section 1915(c) waiver programs. They are also intended to promote 
consistency and alignment across HCBS programs, as well as delivery 
systems, by applying the requirements (where applicable) to sections 
1915(i), (j), and (k) authorities State plan benefits and to both FFS 
and managed care delivery systems.
3. Fee-for-Service (FFS)
    Provisions under Sec.  447.203 from this proposed rule would impact 
States' required documentation of compliance with section 
1902(a)(30)(A) of the Act to ``assure that payments 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.'' We have received comments from State agencies that the existing 
AMRP requirement first established by the 2015 final rule with comment 
period imposes excessive administrative burden for its corresponding 
value in demonstrating compliance with section 1902(a)(30)(A) of the 
Act.
    This proposed rule would replace the existing AMRP requirement with 
a more limited payment rate transparency requirement under proposed 
Sec.  447.203(b), while requiring a more detailed access impact 
analysis (as described at proposed Sec.  447.203(c)(2)) when a State 
proposes provider rate reductions or restructurings that exceed certain 
thresholds for a streamlined analysis process under proposed Sec.  
447.203(c)(1). By limiting the data collection and publication 
requirements imposed on all States, while targeting certain provider 
rate reductions or restructuring proposals for a more detailed 
analysis, this proposed rule would provide administrative burden relief 
to States while maintaining a transparent and data-driven process to 
assure State compliance with section 1902(a)(30)(A) of the Act.

B. Overall Impact

    We have examined the impacts of this rule as required by E.O. 12866 
on Regulatory Planning and Review (September 30, 1993), E.O. 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), E.O. 13132 on Federalism 
(August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2))
    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 as amended by Executive Order 14094 
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 $200 
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; (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 legal or policy issues for which 
centralized review would meaningfully further the President's 
priorities, or the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major 
rules. Accordingly, this proposed rule is not a ``significant'' rule 
under section 3(f)(1) of the Executive Order, as the aggregate amount 
of benefits and costs will not meet the $200 million threshold in any 1 
year.
    Based on our estimates using a ``no action'' baseline in accordance 
with OMB Circular A-4, (available at https://www.whitehouse.gov/wpcontent/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), OMB's 
Office of Information and Regulatory Affairs has determined that this 
rulemaking is ``significant'' according to section 3(f)(4), raising 
legal or policy issues for which centralized review would meaningfully 
further the President's priorities, or the principles set forth in 
Executive Order 12866. Therefore, OMB has reviewed these proposed 
regulations, and the Departments have provided the following assessment 
of their impact.

C. Detailed Economic Analysis

    As mentioned in the prior section, and in accordance with OMB 
Circular A-4, the following estimates were determined using a ``no 
action'' baseline. That is, our analytical baseline for impact is a 
direct comparison between the proposed provisions and not proposing 
them at all.
1. Benefits
a. Medicaid Advisory Committees (MAC)
    We believe the changes to Sec.  431.12 would benefit State Medicaid 
programs and those they serve by ensuring that beneficiaries have a 
significant role in advising States on the experience of receiving 
health care and services through Medicaid. These benefits cannot be 
quantified. However, the BAG and a more diverse and transparent MAC 
will provide opportunities for richer interested parties feedback and 
expertise to positively impact State decision making on Medicaid 
program and policy chances. For example, beneficiary feedback on 
accessing health care services and the quality of those services can 
inform decisions on provider networks and networks adequacy 
requirements. Issues that States need to address, like cultural 
competency of providers, language accessibility, health equity, and 
disparities and biases in the Medicaid program, can be revealed through 
beneficiary experiences. The MAC falls into the Public Administration 
921 Executive, Legislative, and Other General Government Support.

[[Page 28068]]

b. Person-Centered Service Plans, Grievance Systems, Incident 
Management Systems
    The proposed changes benefit Medicaid beneficiaries and States by 
requiring States to demonstrate through reporting requirements that 
they provide safeguards to assure eligibility for Medicaid-covered care 
and services is determined and provided in a manner that is in the 
Medicaid beneficiaries' best interest, although these potential 
benefits cannot be monetarily quantified at this time. The proposed 
changes would provide further safeguards that ensure health and welfare 
by strengthening the person-centered service plan requirements, 
establishing grievance systems, amending requirements for incident 
management systems, and establishing new reporting requirements for 
States, and contracted managed care entities identified by the North 
American Industry Classification System (NAICS) industry code (Direct 
Health and Medical Insurance Carriers (524114).
    These changes would benefit individuals on HCBS waiver wait lists, 
and individuals who receive homemaker, home health aide, and personal 
care services, under the amended and proposed regulations found at 
Sec. Sec.  441.301(c), 441.302(a)(6), 441.302(h), 441.303(f), 441.311, 
and cross-referenced in Sec. Sec.  441.464, 441.555(b)(2)(iv), 441.570, 
and 441.745(a)(1)(iii). These potential benefits cannot be monetarily 
quantified at this time.
c. Home and Community-Based Services (HCBS) Payment Adequacy
    The proposed rule adds new requirements at Sec. Sec.  441.302(k) 
and 441.311 (cross-referenced at Sec. Sec.  441.464(f) and 
441.745(a)(1)(vi)) that require States to demonstrate through reporting 
that payments to providers are sufficient to provide access to care 
that is at least comparable to that of the general population in the 
same geographic location, in accordance with section 1902(a)(30(A) of 
the Act. This proposed rule seeks to address access to care that is 
being affected by direct care workforce shortages.
    Through this proposed rule, which establishes certain minimum 
thresholds for compensation for direct care workers, we can better 
ensure payment adequacy to a provider population experiencing worker 
shortages that impact beneficiary access. States will be required to 
report annually to us on the percent of payments for certain HCBS that 
are spent on compensation for direct care workers and will be required 
to separately report on payments for services that are self-directed. 
States may benefit from reporting in the aggregate for each service 
subject to the requirement across HCBS programs and delivery systems, 
which minimizes administrative burden while providing us better 
oversight of compensation of the direct care workforce, although these 
potential benefits cannot be monetarily quantified at this time due to 
the variety of State data collection approaches.
d. Home and Community-Based Services (HCBS) Quality Measure Set 
Reporting
    As described in section II.B.8. of this proposed rule, on July 21, 
2022, we issued State Medicaid Director Letter (SMDL) # 22-003 \264\ to 
release the first official version of the HCBS Quality Measure Set. 
This proposed rule provides definitions and sets forth requirements 
proposed at Sec.  441.312 that expand on the HCBS Quality Measure Set 
described in the SMDL. By expanding and codifying aspects of the SMDL, 
we can better drive improvement in quality of care and health outcomes 
for beneficiaries receiving HCBS. States will also benefit from the 
clarity afforded by this proposed rule, and from the assurance that 
other States they may be looking to for comparison are adhering to the 
same requirements. The clarity and assurance, at this time, cannot be 
measured.
---------------------------------------------------------------------------

    \264\ https://www.medicaid.gov/federal-policy-guidance/downloads/smd22003.pdf.
---------------------------------------------------------------------------

e. Fee-for-Service (FFS) Payment Transparency
    The proposed changes to Sec.  447.203 would update requirements 
placed on States to document access to care and service payment rates. 
The proposed updates create a systematic framework through which we can 
ensure compliance with section 1902(a)(30)(A) of the Act, while 
reducing existing burden on States and maximizing the value of their 
efforts, as described in section III.C.11.a of this rule.
    The proposed payment rate transparency provisions at Sec.  
447.203(b) create a process that would facilitate transparent oversight 
by us and other interested parties. By requiring States to calculate 
Medicaid payment rates as a percent of corresponding Medicare payment 
rates, this provision offers a uniform benchmark through which us and 
interested parties can assess payment rate sufficiency. When compared 
to the existing AMRP requirement, the rate analysis proposed by Sec.  
447.203(b) should improve the utility of the reporting, while reducing 
the associated administrative burden, as reflected in the Burden 
Estimate Summary Table 37. Proposed updates at Sec.  447.203(c) specify 
required documentation and analysis when States propose to reduce or 
restructure provider payment rates. By establishing thresholds at Sec.  
447.203(c)(1), this proposed rule would generally limit the more 
extensive access review prescribed by Sec.  447.203(c)(2) to those SPAs 
that we believe more likely to cause access concerns. In doing so, 
these proposed updates reduce the State administrative burden imposed 
by existing documentation requirements for proposed rate reductions or 
restructurings, without impeding our ability to ensure proposed rate 
reduction and restructuring SPAs comply with section 1902(a)(30)(A) of 
the Act. These burden reductions are reflected in the Collection of 
Information section of this rule.
    When considering the benefits of these regulatory updates, we 
considered the possibility that the improved transparency required by 
Sec.  447.203(b) could create upward pressure on provider payment 
rates, and that the tiered nature of documentation requirements set by 
Sec.  447.203(c) could create an incentive for States to moderate 
proposed payment reductions or restructurings that were near the 
proposed thresholds that would trigger additional analysis and 
documentation requirements. If either of these rate impacts were to 
occur, existing literature implies there could be follow-on benefits to 
Medicaid beneficiaries, including but not limited to increased 
physician acceptance rates,\265\ increased appointment 
availability,\266\ and even improved self-reported health.\267\ 
However, nothing in this proposed rulemaking would require States to 
directly adjust payment rates, and we recognize that multiple factors 
influence State rate-setting proposals, including State budgetary 
pressures, legislative priorities, and other forces. These competing 
influences create substantial uncertainty about the specific impact of 
the proposed provisions at Sec.  447.203 on provider payment rate-
setting and beneficiary access. Rather, the specific intent and 
anticipated outcome of these

[[Page 28069]]

provisions is the creation of a more uniform, transparent, and less 
burdensome process through which States can conduct required payment 
rate and access analyses and we can perform our oversight role related 
to provider payment rate sufficiency.
---------------------------------------------------------------------------

    \265\ Holgash, K. and Martha Heberlein, Health Affairs, April 
10, 2019.
    \266\ Candon, M., et al. JAMA Internal Medicine, January 2018, 
p. 145-146.
    \267\ Alexander, D., and Molly Schnell. ``The Impacts of 
Physician Payments on Patient Access, Use, and Health'', National 
Bureau of Economic Research, Working Paper 26095, July 2019 (revised 
August 2020), p. 1-74. https://www.nber.org/papers/w26095. Accessed 
June 16, 2022.
---------------------------------------------------------------------------

2. Costs
a. Medicaid Advisory Committee (MAC)
    States will incur additional costs (estimated below) in appointing 
and recruiting members to the MAC and BAG and also developing and 
publishing bylaws, membership lists, and meeting minutes for the MAC 
and BAG. All of these costs can be categorized under the NAICS Code 921 
(Executive, Legislative, and Other General Government Support) since 
States are the only entity accounted for in the MAC and BAG. How often 
these costs occur will vary in how often the State chooses to make 
changes such as add or replace members of the MAC and BAC or change its 
bylaws. Additionally, there will be new costs, estimated below, for 
States related to meeting logistics and administration for the BAG. All 
of these new costs can also be categorized under the NAICS Code 921 
(Executive, Legislative, and Other General Government Support). Since 
most States are already holding MAC meetings under current regulatory 
requirements, any new costs related to MAC requirements would likely be 
minimal. In terms of the BAG meeting costs, we estimate a total annual 
cost of $532,627 for States. We estimate it will take a business 
operations specialist 10 hours to plan and execute each BAG meeting, at 
a total cost of $155,448 ($76.20/hour x 10 hours x 4 meetings/year) x 
51 States and the District of Columbia). To satisfy the requirements of 
Sec.  431.12(i)(4)(i), a public relations specialist will spend an 
estimated 80 hours/year supporting Medicaid beneficiary MAC and BAG 
members at a total cost of $287,395 ($70.44/hour x 80 hours) x 51 
States and the District of Columbia). A chief executive in State 
government, as required by Sec.  431.12(i)(4)(iii), will spend a total 
of 8 hours a year attending BAG meetings, which we estimate will be 2 
hours in duration, 4 times a year at a total cost of $48,984 ($120.06/
hour x 2 hours/meeting x 4 meetings) x 51 States and the District of 
Columbia). Each meeting of the BAG will cost States an estimated $200 
in meeting costs and telecommunication, at an annual total cost of 
$40,800 ($200 x 4 meetings) x 51 States and the District of Columbia).
    There will also be a per meeting cost to States for financial 
support for beneficiary members participating in MAC and BAG meetings, 
as described in Sec.  431.12(i)(4)(ii). We estimate a cost of $75/
beneficiary/meeting in the form of transportation vouchers, childcare 
reimbursement, meals, and/or other financial compensation. Assuming 4 
meetings per year (with BAG and MAC meetings co-located and occurring 
on the same day) and an average of 8 beneficiary members on the BAG and 
MAC, the cost of financial support for beneficiary members across 
States is estimated to cost approximately $122,400 annually (($75/
beneficiary x 8 beneficiaries x 4 meetings/year) x 51 States and the 
District of Columbia). This cost will vary depending on the decisions 
States make around financial support, the number of beneficiary members 
of the BAG and MAC, and the number of meetings per year. We seek 
comment on the costs associated with planning, execution, and 
participation in the MAC and BAG meetings.

                                                  Table 38--Projected 5-Year Costs for Proposed Updates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Calendar year (CY)
                                       -----------------------------------------------------------------------------------------------   Total CY 2024-
               Provision                   2024  ($ in        2025  ($ in        2026  ($ in        2027  ($ in        2028  ($ in        2028  ($ in
                                            millions)          millions)          millions)          millions)          millions)          millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   431.12 MAC & BAG logistic and                0.533              0.532              0.532              0.532              0.532              2.663
 admin support........................
Sec.   431.12 Financial support to MAC/             0.122              0.122              0.122              0.122              0.122              0.612
 BAG beneficiary members (cost will
 range per State).....................
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              0.655              0.655              0.655              0.655              0.655              3.275
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs will vary depending by State depending on how many in person meetings are held and how many Medicaid beneficiaries are selected for the MAC and
  BAG.

b. Home and Community-Based Services (HCBS)
    Costs displayed in Table 38 are inclusive of both one-time and 
ongoing costs. One-time costs are split evenly over the years leading 
up to the proposed effective date. For example, if a proposed provision 
takes effect 3 years after the final rule's publication, the one-time 
costs would be split evenly across each of the years leading to that 
effective date. Because costs are projected over 5 years, the total 
estimated costs exceed the amounts shown in the COI section. The 
estimates below do not account for higher costs associated with medical 
care, as the costs are related exclusively to reporting costs. Costs to 
States, the Federal government, and managed care entities do not 
account for enrollment fluctuations, as they assume a stable number of 
States operating HCBS programs and managed care entities delivering 
services through these programs. Similarly, costs to providers and 
beneficiaries do not account for enrollment fluctuations. In the COI 
section, costs are based on a projected range of HCBS providers and 
beneficiaries. Given this uncertainty, here, we based cost estimates on 
the mid-point of the respective ranges and kept those assumptions 
consistent over the course of the 5-year projection. Per OMB 
guidelines, the projected estimates for future years do not consider 
ordinary inflation.
    Table 39 summarizes the estimated ongoing costs for States, managed 
care entities (Direct Health and Medical Insurance Carriers (NAICS 
524114)), and providers (Services for the Elderly and Persons with 
Disabilities (NAICS 624120) and Home Health Care Services (NAICS 
621610)) from the COI section of the HCBS provisions of the proposed 
rule projected over 5 years. This comprises the entirety of anticipated 
quantifiable costs associated with proposed changes to part 441, 
subpart G. It is also possible that increasing the threshold from 86 
percent to 90 percent for compliance reporting at Sec.  441.311(b)(2) 
through (3) may lead to additional costs to remediate issues pertaining 
to critical incidents or person-centered planning. However, the various 
avenues through which States could address these concerns creates 
substantial uncertainty as to what those costs may be. While we 
acknowledge the potential for increased costs in a limited number of 
States that may fall within the gap between the existing and

[[Page 28070]]

the proposed compliance thresholds, we do not quantify them here.

                                  Table 39--Projected 5-Year Costs for Proposed Updates to 441 Subparts G, J, K, and M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Calendar year (CY)
                                       -----------------------------------------------------------------------------------------------   Total CY 2024-
               Provision                   2024  ($ in        2025  ($ in        2026  ($ in        2027  ($ in        2028  ($ in        2028  ($ in
                                            millions)          millions)          millions)          millions)          millions)          millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Sec.   441.301(c)(3) (Person-               0.06               0.06               0.06  .................  .................               0.18
 Centered Service Plans)..............
Proposed Sec.   441.301(c)(7)                        1.24               1.24               0.87               0.87               0.87               5.10
 (Grievance Systems)..................
Proposed Sec.   441.302(a)(6)                       41.15              41.15              41.15               6.78               6.78             137.01
 (Incident Management System).........
Proposed Sec.   441.302(k) (HCBS                    21.08              21.08              21.08              21.08              21.73             106.03
 Payment Adequacy)....................
Proposed Sec.   441.303(f)(6), Sec.                  0.06               0.06               0.06               0.07               0.07               0.30
 441.311(d)(1) (Supporting
 Documentation for HCBS Access).......
Proposed Sec.   441.311(d)(2)(i)                     0.50               0.50               0.50               0.78               0.78               3.07
 (Additional HCBS Access Reporting)...
Proposed Sec.   441.311(b)(1)           .................  .................  .................               0.00               0.00               0.01
 (Incident Management System
 Assessment)..........................
Removal of Current Form 372(S) Ongoing  .................  .................  .................             (0.84)             (0.84)             (1.68)
 Reporting Information Collection.....
Proposed Form 372(S) Reporting          .................  .................  .................               0.22               0.22               0.44
 Requirement to include Proposed Sec.
  441.311(b)(2)-(4)...................
Proposed Sec.   441.311(c) (HCBS                     1.72               1.72               1.72               4.59               4.59              14.34
 Quality Measure Set).................
Proposed Sec.   441.313 (Website        .................  .................  .................               1.18               1.18               2.37
 Transparency)........................
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              65.80              65.80              65.44              34.74              35.39             267.18
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The costs displayed in Table 40 are inclusive of costs anticipated 
to be incurred by State Medicaid agencies, the Federal government, 
providers, managed care entities, and beneficiaries. Table 40 
distributes those costs across these respective entities.

                           Table 40--Projected Distribution of Costs for Proposed Updates to 42 CFR 441 Subpart G, J, K, and M
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Calendar year (CY)
 Costs associated with updates to Sec. -----------------------------------------------------------------------------------------------   Total CY 2024-
   42 CFR 441 Subparts G, J, K, and M      2024  ($ in        2025  ($ in        2026  ($ in        2027  ($ in        2028  ($ in        2028  ($ in
                                            millions)          millions)          millions)          millions)          millions)          millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Costs associated with updates to              65.80              65.80              65.44              34.74              35.39             267.18
 42 CFR 441 subparts G, J, K, and M...
State Costs...........................              21.88              21.88              21.69               4.59               4.50              74.54
Federal Costs.........................              21.88              21.88              21.69               4.59               4.50              74.54
HCBS Provider Costs (Services for the               20.47              20.47              20.47              23.62              24.69             109.73
 Elderly and Persons with Disabilities
 (NAICS 624120) and Home Health Care
 Services (NAICS 621610)).............
Managed Care Entity Costs (Direct                    1.58               1.58               1.58               1.43               1.19               7.35
 Health and Medical Insurance Carriers
 (NAICS 524114))......................
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Fee-for-Service (FFS) Payment Rate Transparency
    The costs associated with the payment rate transparency proposals 
are wholly associated with information collection requirements, and as 
such those impacts are reflected in the COI section of this rule. For 
ease of reference, and for projection purposes, we are including those 
costs here in Table 41.

                                         Table 41--Projected 5-Year Costs for Proposed Updates to 42 CFR 447.203
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Calendar year (CY)
                                       -----------------------------------------------------------------------------------------------   Total CY 2024-
               Provision                   2024  ($ in        2025  ($ in        2026  ($ in        2027  ($ in        2028  ($ in        2028  ($ in
                                            millions)          millions)          millions)          millions)          millions)          millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Removal of current Sec.   447.203                  -0.601             -0.601             -0.601             -0.601             -0.601                 -3
 (AMRPs)..............................
Proposed Sec.   447.203(b)............              0.516              0.209              0.209              0.209              0.209              1.353
Proposed Sec.   447.203(c) (SPAs).....              0.276              0.276              0.276              0.276              0.276               1.38
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................              0.191             -0.116             -0.116             -0.116             -0.116             -0.267
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 28071]]


  Table 42--NAICS Classification of Services and Their Distribution of
                                  Costs
------------------------------------------------------------------------
                                                           Percentage of
            Services                      NAICS                costs
                                                             (percent)
------------------------------------------------------------------------
Managed Care Entities..........  Direct Health and                   100
                                  Medical Insurance
                                  Carriers (524114).
Home and Community-Based         Elderly and Persons                  67
 Services (HCBS).                 with Disabilities
                                  (624120).
Home and Community-Based         Home Health Care                     37
 Services (HCBS).                 Services (621610).
------------------------------------------------------------------------


                                  Table 43--One Time and Annual Costs Detailed
----------------------------------------------------------------------------------------------------------------
                                                                             Cost to
                                                  Costs to      Cost to      managed      One time      Annual
                                    Costs to   beneficiaries   providers       care        burden       burden
                                  states  ($)        ($)          ($)        entities     overall      overall
                                                                               ($)       total  ($)   total  ($)
----------------------------------------------------------------------------------------------------------------
Regulatory Review...............    19,587.06     39,174.12   ...........    61,833.66   120,594.84            0
Sec.   431.12 Medical Care            790,795  .............  ...........  ...........  ...........      790,795
 Advisory Committee Requirements
Sec.   441.301(c)(3) (Person-          31,102  .............  ...........      120,463      151,565  ...........
 Centered Service Plans) (Table
 3,4)...........................
Sec.   441.301(c)(7) (Grievance     1,240,964  .............  ...........  ...........    1,240,964  ...........
 Systems) (Table 5).............
Sec.   441.301(c)(7) (Grievance       540,687  .............  ...........  ...........  ...........      540,687
 Systems) (Table 6).............
Sec.   441.302(a)(6) (Incident     62,437,000  .............  ...........    2,576,084   65,009,084  ...........
 Management System) (Table 7,10)
Sec.   441.302(a)(6) (Incident     12,366,317  .............    3,141,193      503,633  ...........   16,011,132
 Management System) (Table 8, 9,
 10, 11)........................
Sec.   441.302(k) (HCBS Payment       458,347  .............  103,451,453    1,486,877  105,396,677  ...........
 Adequacy) (Table 12,14, 16)....
Sec.   441.302(k) (HCBS Payment        23,616  .............   21,553,542      155,713  ...........   21,732,871
 Adequacy) (Table 13,15, 17)....
Sec.   441.303(f)(6), Sec.             84,618  .............  ...........  ...........       84,618  ...........
 441.311(d)(1) Supporting
 Documentation for HCBS Access
 (Table 18).....................
Sec.   441.303(f)(6), Sec.             33,820  .............  ...........  ...........  ...........       33,820
 441.311(d)(1) Supporting
 Documentation for HCBS Access
 (Table 19).....................
Sec.   441.311(d)(2)(i) (HCBS         295,577  .............  ...........      918,479    1,214,056  ...........
 Access Reporting) (Table 20,
 22)............................
Sec.   441.311(d)(2)(i) (HCBS         111,444  .............  ...........      558,303  ...........      669,747
 Access Reporting) (Table 21,
 23)............................
Sec.   441.311(b)(1) (Incident          3,988  .............  ...........  ...........  ...........        3,988
 Management System Assessment)
 (Table 24).....................
Removal of Current Form 372(S)    ($430,140))  .............  ...........  ...........  ...........   ($430,140)
 Ongoing Reporting Information
 Collection (Table 25)..........
Form 372(S) Reporting                 110,546  .............  ...........  ...........  ...........      110,546
 Requirement to include Proposed
 Sec.   441.311(b)(2)-(4) (Table
 26)............................
441.311(c) (Table 27) (HCBS         2,570,959  .............  ...........  ...........    2,570,959  ...........
 Quality Measure Set)...........
441.311(c) (Table 28,29) (HCBS      2,043,592       504,180   ...........  ...........  ...........    2,547,772
 Quality Measure Set)...........
Sec.   441.313 (Table 30)             258,816  .............  ...........  ...........      258,816  ...........
 (Website Transparency).........
Sec.   441.313 (Table 31)             333,114  .............  ...........  ...........  ...........      333,114
 (Website Transparency).........
Sec.   447.203(b)(1) (Table 33)        23,453  .............  ...........  ...........       39,195        7,712
 (Rate transparency)............
Sec.   447.203(b)(2) (Table 33)        87,103  .............  ...........  ...........  ...........      174,206
 (Rate analysis)................
Sec.   447.203(b)(6) (Table 34)       145,386  .............  ...........  ...........      267,934       22,837
 (advisory group)...............
Sec.   447.203(c)(1) (Table 35)        40,678  .............  ...........  ...........  ...........       81,356
 (initial State analysis).......
Sec.   447.203(c)(2) (Table 36)        92,716  .............  ...........  ...........  ...........      185,432
 (additional State analysis)....
----------------------------------------------------------------------------------------------------------------

3. Transfers
    Transfers are payments between persons or groups that do not affect 
the total resources available to society. They are a benefit to 
recipients and a cost to payers, with zero net effects. Because this 
rule proposes changes to requirements to State agencies without changes 
to payments from Federal to State governments, the transfer impact is 
null, and cost impacts are reflected in the other sections of this 
rule.
4. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed or final 
rule, we should estimate the cost associated with regulatory review. 
There is uncertainty involved with accurately quantifying the number of 
entities that will review the rule. However, for the purposes of this 
proposed rule we assume that on average, each of the 51 affected State 
Medicaid agencies will have one contractor per State review this 
proposed rule. This average assumes that some State Medicaid agencies 
may use the same contractor, others may use multiple contractors to 
address the various provisions within this proposed rule, and some 
State Medicaid agencies may perform the review in-house. We also assume 
that each affected managed care entity (estimated in the COI section to 
be 161 managed care entities) will review the proposed rule. Lastly, we 
assume that an average of two advocacy or interest group 
representatives from each State will review this proposed rule. In 
total, we are estimating that 314 entities (51 State Contractors + 161 
Managed Care Entities + 102 Advocacy and Interest Groups) will review 
this proposed rule. We acknowledge that this assumption may understate 
or overstate the costs of reviewing this rule. We welcome any comments 
on the approach in estimating the number of entities which will review 
this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that each 
reviewer reads approximately 50 percent of the rule. We seek comments 
on this assumption.
    Using the wage information from the Bureau of Labor Statistics, 
https://www.bls.gov/oes/current/oes_nat.htm, we consider medical and 
health service managers (Code 11-9111), as including the 51 State 
Contractors, 161 Managed Care Entities and 102 Advocacy and Interest 
Groups identified in the proposed rule, and we estimate that the cost 
of reviewing this rule is $115.22 per hour, including fringe benefits 
and other indirect costs. Assuming an average reading speed of 250 
words per minute, we estimate that it would take approximately 3.33 
hours for each individual to review half of this proposed rule 
([100,000 words x 0.5]/250 words per minute/60 minutes per hour). For 
each entity that reviews the rule, the estimated cost is $384.06 (3.33 
hours x $115.22). Therefore, we estimate

[[Page 28072]]

that the total one-time cost of reviewing this regulation is 
$120,594.84 ($384.06 per individual review x 314 reviewers).

D. Alternatives Considered

1. Medicaid Advisory Committee (MAC)
    In determining the best way to promote beneficiary and interested 
parties' voices in State Medicaid program decision making and 
administration, we considered several ways of revising the MCAC 
structure and administration. We considered setting minimum benchmarks 
for each category of all types of MAC members, but we viewed it as too 
restrictive. We ultimately concluded that only setting minimum 
benchmarks (at least 25 percent) for beneficiary representation on the 
MAC and requiring representation from the other MAC categories would 
give States maximum flexibility in determining the exact composition of 
their MAC. However, we understand that some States may want us to set 
specific thresholds for each MAC category rather than determine those 
categories on their own.
    We also considered having not having a separate BAG, but we 
ultimately determined that requiring States to establish a separate BAG 
assures that there is a dedicated forum for States to receive 
beneficiary input outside of the MAC. In the MAC setting, a beneficiary 
might not feel as comfortable speaking up among other Medicaid program 
interested parties. The BAG also provides an opportunity for 
beneficiaries to focus on the issues that are most important to them, 
and bring those issues to the MAC.
    Finally, we also considered setting specific topics for the MAC to 
provide feedback. However, due to the range of issues specific to each 
State's Medicaid program, we determined it was most conducive to allow 
States work with their MAC to identify which topics and priority issues 
would benefit from interested parties' input.
2. Home and Community-Based Services (HCBS)
a. Person-Centered Service Plans, Grievance Systems, Incident 
Management Systems
    We considered whether to codify the existing 86 percent performance 
level that was outlined in the 2014 guidance for both person-centered 
service plans and incident management systems. We did not choose this 
alternative due to feedback from States and other interested parties of 
the importance of these requirements, as well as concerns that an 86 
percent performance level may not be sufficient to demonstrate that a 
State has met the requirements.
    We considered whether to apply these requirements to section 
1905(a) ``medical assistance'' State Plan personal care, home health, 
and case management services. We decided against this alternative based 
on State feedback that they do not have the same data collection and 
reporting capabilities for these services as they do for HCBS delivered 
under sections 1915(c), (i), (j), and (k) of the Act and because of 
differences between the requirements of those authorities and section 
1905(a) State Plan benefits.
    Finally, we considered allowing a good cause exception to the 
minimum performance level reporting requirements to both the person-
centered service plan and the incident management system. We decided 
against this alternative because the 90 percent performance level is 
intended to account for various scenarios that might impact a State's 
ability to achieve these performance levels. Furthermore, there are 
existing disaster authorities that States could utilize to request a 
waiver of these requirements in the event of a public health emergency 
or a disaster.
b. HCBS Payment Adequacy
    We considered several alternatives to the proposed rule. We 
considered whether the requirements relating to the percent of payments 
going to the direct care workforce should apply to other services, such 
as adult day health, habilitation, day treatment or other partial 
hospitalization services, psychosocial rehabilitation services, and 
clinic services for individuals with mental illness. We decided against 
this alternative because the proposed services (homemaker, home health 
aide, and personal care) are those for which the vast majority of 
payment should be comprised of compensation for direct care workers and 
for which there would be low facility or other indirect costs. We also 
did not include other services for which the percentage might be 
variable due to the diversity of services included or for which worker 
compensation would be reasonably expected to comprise only a small 
percentage of the payment.
    We considered whether to apply these payment adequacy requirements 
to section 1905(a) ``medical assistance'' State Plan personal care and 
home health services, but decided not to, based on State feedback that 
they do not have the same data collection and reporting capabilities 
for these services as they do for sections 1915(c), (i), (j), and (k) 
HCBS.
    We considered whether other reporting requirements such as a State 
assurance or attestation or an alternative frequency of reporting could 
be used to determine State compliance but determined that the proposed 
requirement is necessary to demonstrate compliance.
    We considered whether to require reporting at the delivery system, 
HCBS waiver program, or population level but decided against additional 
levels of reporting because it would increase reporting burden for 
States without providing additional information necessary for 
determining whether States meet the requirements at Sec.  441.302(k).
c. Supporting Documentation Requirements
    No alternatives were considered.
d. HCBS Quality Measure Set Reporting
    We considered giving States the flexibility to choose which 
measures they would stratify and by what factors but decided against 
this alternative as discussed in the Mandatory Medicaid and CHIP Core 
Set Reporting proposed rule (see 87 FR 51313). We believe that 
consistent measurement of differences in health outcomes between 
different groups of beneficiaries is essential to identifying areas for 
intervention and evaluation of those interventions.\268\ Consistency 
could not be achieved if each State made its own decisions about which 
data, it would stratify and by what factors.
---------------------------------------------------------------------------

    \268\ Schlotthauer AE, Badler A, Cook SC, Perez DJ, Chin MH. 
Evaluating Interventions to Reduce Health Care Disparities: An RWJF 
Program. Health Aff (Millwood). 2008;27(2):568-573.
---------------------------------------------------------------------------

3. Payment Rate Transparency
    In developing this proposed rule, we considered multiple 
alternatives. We considered not proposing this rule and maintaining the 
status quo under current regulations at Sec.  447.203 and 204. However, 
as noted throughout the Background and Provisions sections of this 
rule, since the 2011 proposed rule, we have received concerns from 
interested parties, including State agencies, about the administrative 
burden of completing AMRPs and questioning whether they are the most 
efficient way to determine access to care. These comments expressed 
particular concern about the AMRPs' value when they are required to 
accompany a proposed nominal rate reduction or restructuring, or where 
proposed rate changes are made via application of a previously approved 
rate methodology. At the same time, and as we have discussed, the 
Supreme

[[Page 28073]]

Court's 2015 decision in Armstrong v. Exceptional Child Care, Inc., 135 
S. Ct. 1378 (2015) ruled that Medicaid providers and beneficiaries do 
not have private right of action to challenge State-determined Medicaid 
payment rates in Federal courts. This decision emphasized a greater 
importance on our administrative review of SPAs proposing to reduce or 
restructure payment rates. For both of these reasons, this proposed 
rule includes proposals that would create an alternative process that 
both reduces the administrative burden on States and standardizes and 
strengthens our review of proposed payment rate reductions or payment 
restructurings to ensure compliance with section 1902(a)(30)(A) of the 
Act.
    We considered, but did not propose, adopting a complaint-driven 
process or developing a Federal review process for assessing access to 
care concerns. Although such processes could further our goals of 
ensuring compliance with the access requirement in section 
1902(a)(30)(A) of the Act, we concluded similar effects could be 
achieved through methods that did not require the significant amount of 
Federal effort that would be necessary to develop either or both of 
these processes. Additionally, a complaint-driven process would not 
necessarily ensure a balanced review of State-proposed payment rate or 
payment structure changes, and it is possible that a large volume of 
complaints could be submitted with the intended or unintended effect of 
hampering State Medicaid program operations. Therefore, the impact of 
adopting a complaint-driven process or developing a Federal review 
process for assessing access to care concerns may be negligible given 
existing processes. Instead, we believe that relying on existing 
processes that States are already engaged in, such as the ongoing 
provider and beneficiary feedback channels under paragraph (b)(7) in 
Sec.  447.203 and the public process requirement for States submitting 
a SPA that proposed to reduce or restructure Medicaid service payments 
in Sec.  447.204, would be more effective than creating a new process. 
While we are relying on existing public feedback channels and processes 
that States are already engaged in, we are seeking public comment 
regarding our alternative consideration to propose adopting a complaint 
driven process or developing a Federal review process for assessing 
access to care concerns.
    We considered finalizing the 2018 proposed rule that would have 
provided exemptions to the AMRP process for States with high managed 
care penetration or finalizing the 2019 proposed rule that would have 
rescinded the AMRP requirements without substantive replacement. As 
described in the 2018 proposed rule, while we agreed that our 
experience implementing the AMRP process from the 2015 final rule with 
comment period raised questions about the benefit of the access 
analysis when States proposed nominal payment rate reductions or 
payment restructurings that were unlikely to result in diminished 
access to care, we did not believe maintaining the AMRP process was the 
best course of action.\269\ Additionally, after proposing to rescind 
the AMRP requirements through the 2019 proposed rule and issuing a CMCS 
Informational Bulletin about an agency wide effort to establish a new, 
comprehensive access strategy, we decided not to rescind the AMRP 
requirements without another regulation in place to codify the 
requirements for State compliance with section 1902(a)(30)(A) of the 
Act given our oversight responsibility. While we have already received 
and reviewed public comments received on the 2018 proposed rule or the 
2019 proposed rule, we are seeking any additional public comments that 
were not already captured during the comment periods of the 2018 
proposed rule or 2019 proposed rule with regard to finalizing these 
rules as an alternative considered within this proposed rulemaking.
---------------------------------------------------------------------------

    \269\ 83 FR 12696 at 12697.
---------------------------------------------------------------------------

    We considered numerous variations of the individual provisions of 
this proposed rule. We considered, but did not propose, maintaining the 
benefits outlined in the current Sec.  447.203(b)(5)(ii)(A) through (H) 
or requiring all mandatory Medicaid benefit categories be included in 
the comparative payment rate analysis proposed under Sec.  
447.203(b)(2). We also considered, but did not propose, including 
inpatient hospital behavioral health services and covered outpatient 
drugs including professional dispensing fees as additional categories 
of services subject to the comparative payment rate analysis proposed 
under Sec.  447.203(b)(2). We considered, but did not propose, 
requiring States whose Medicaid payment rates vary by provider type, 
calculate an average Medicaid payment rate of all providers for each E/
M CPT code subject to the comparative payment rate analysis. We also 
considered, but did not propose, different points of comparison other 
than Medicare under the comparative payment rate analysis proposed 
under Sec.  447.203(b)(2) or using a peer payment rate benchmarking 
approach for benefit categories where Medicaid is the only or primary 
payer, or there is no comparable Medicare rate under the comparative 
payment rate analysis proposed under Sec.  447.203(b)(2) and (3). We 
considered, but did not propose, varying timeframes for the comparative 
payment rate analysis proposed under Sec.  447.203(b)(2). We also 
considered not proposing the payment rate transparency aspect of this 
rule proposed under Sec.  447.203(b)(1), leaving the comparative 
payment rate analysis to replace the AMRP process as proposed under 
Sec.  447.203(b)(2). With regard to the proposal in Sec.  447.203(c), 
we considered, but did not propose, establishing alternative 
circumstances from those described in the 2017 SMDL for identifying 
nominal payment rate adjustments, establishing a minimum set of 
required data for States above 80 percent of the most recent Medicare 
payment rates after the proposed reduction or restructuring, using 
measures that are different from the proposed measures that would be 
reflected in the forthcoming template, allowing States to use their own 
unstructured data for States that fail to meet all three criteria in 
Sec.  447.203(c)(1), and CMS producing and publishing the comparative 
payment rate analysis proposed in Sec.  447.203(b).
    We considered, but did not propose, maintaining the benefits 
outlined in the current Sec.  447.203(b)(5)(ii)(A) through (H) or 
requiring all mandatory Medicaid benefit categories be included in the 
comparative payment rate analysis proposed under Sec.  447.203(b)(2). 
Maintaining the benefits in current Sec.  447.203(b)(5)(ii)(A) through 
(H) would have simplified the transition from the AMRP process to the 
payment rate transparency and comparative payment rate analysis 
requirements, if this proposed rule is finalized. However, our 
experience implementing the 2015 final rule with comment period, as 
well as interested parties' and States' feedback about the AMRP 
process, encouraged us to review and reconsider the current list of 
benefits subject to the AMRP process under current regulations Sec.  
447.203(b)(5)(ii)(A) through (H) to determine where we could decrease 
the level of effort required from States while still allowing ourselves 
an opportunity to review for access concerns. During our review of the 
current list of benefits under Sec.  447.203(b)(5)(ii)(A) through (H), 
we considered, but did not propose, requiring all mandatory Medicaid 
benefit categories be included in the comparative payment rate 
analysis.

[[Page 28074]]

However, when considering the existing burden of the AMRP process under 
current Sec.  447.203)(b), we believed that expanding the list of 
benefits to include under proposed Sec.  447.203(b) and (c) would not 
support our goal to develop a new access strategy that aims to balance 
Federal and State administrative burden with our shared obligation to 
ensure compliance with section 1902(a)(30)(A) of the Act. As previously 
noted section II. of this rule, we are seeking public comment on 
primary care services, obstetrical and gynecological services, 
outpatient behavioral health services, and personal care, home health 
aide, and homemaker services provided by individual providers and 
providers employed by an agency as the proposed categories of services 
subject to the comparative payment rate analysis requirements in 
proposed Sec.  447.203(b)(2)(i). Additionally, we are seeking public 
comment regarding our alternative consideration to propose maintaining 
the benefits outlined in the current Sec.  447.203(b)(5)(ii)(A) through 
(H) or propose requiring all mandatory Medicaid benefit categories.
    We also considered, but did not propose, including inpatient 
hospital behavioral health services and covered outpatient drugs 
including professional dispensing fees as additional categories of 
services subject to the comparative payment rate analysis proposed 
under Sec.  447.203(b)(2). As previously described in section II. Of 
this proposed rule, we did not propose including inpatient behavioral 
health services as an additional category of service in the comparative 
payment rate analysis due to existing UPL and CAA payment data 
requirements for institutional services. The impact of including 
inpatient behavioral health services in the comparative payment rate 
analysis would have required duplicative effort by States to report the 
same information in a different format to us. Additionally, we 
considered, but did not propose, including covered outpatient drugs 
(including professional dispensing fees) as an additional category of 
service in the comparative payment rate analysis due to the complexity 
of drug pricing policies and use of rebate programs that does not fit 
into our proposed comparative payment rate analysis methodology that 
relies on E/M CPT/HCPCS codes to identify the services subject to the 
analysis.\270\ The impact of including covered outpatient drugs 
(including professional dispensing fees) in the comparative payment 
rate analysis would have resulted in us proposing an entirely different 
process, in addition to the comparative payment rate analysis, for 
States to follow which would create additional burden on States to 
comply with. However, we are still seeking public comment regarding our 
decision not to include inpatient behavioral health services and 
covered outpatient drugs including professional dispensing fees as 
additional proposed categories of services subject to the comparative 
payment rate analysis requirements in proposed Sec.  447.203(b)(2).
---------------------------------------------------------------------------

    \270\ https://www.kff.org/medicaid/issue-brief/pricing-and-payment-for-medicaid-prescription-drugs/.
---------------------------------------------------------------------------

    We considered, but did not propose, requiring States whose Medicaid 
payment rates vary by provider type to calculate an average Medicaid 
payment rate of all provider types for each E/M CPT code subject to the 
comparative payment rate analysis. Rather than proposing States 
distinguish their Medicaid payment rates by each provider type in the 
comparative payment rate analysis, we considered proposing States 
calculate an average Medicaid payment rate of all providers for each E/
M CPT code. This consideration would have simplified the comparative 
payment rate analysis because States would include a single, average 
Medicaid payment rate amount and only need to separately analyze their 
Medicaid payment rates for services delivered to pediatric and adult 
populations, if they varied. However, calculating an average for the 
Medicaid payment rate has limitations, including sensitivity to extreme 
values and inconsistent characterizations of the payment rate between 
Medicaid and Medicare. In this rule, we propose to characterize the 
Medicare payment rate as the non-facility payment rate listed on the 
Medicare PFS for the E/M CPT/HCPCS codes subject to the comparative 
payment rate analysis. If we were to propose the Medicaid payment rate 
be calculated as an average Medicaid payment rate of all provider types 
for the same E/M CPT/HCPCS code, then States' calculated average 
Medicaid payment rate could include a wide variety of provider types, 
from a single payment rate for physicians to an average of three 
payment rates for physicians, physician assistants, and nurse 
practitioners. This wide variation in how the Medicaid payment rate is 
calculated among States would provide a less meaningful comparative 
payment rate analysis to Medicare. The extremes and outliers that would 
be diluted by using an average are not necessarily the same for both 
Medicaid and Medicare, so even if both sides of the comparison used an 
average, we would not be able to look more closely at specific large 
differences between the respective rates. As previously noted in 
section II. of this proposed rule, we are seeking public comment on the 
proposed characterization of the Medicaid payment rate, which accounts 
for variation in payment rates for pediatric and adult populations and 
distinguishes payment rates by provider type, in the comparative 
payment rate analysis. Additionally, we are seeking public comment 
regarding our alternative consideration to propose requiring States 
whose Medicaid payment rates vary by provider type to calculate an 
average Medicaid payment rate of all provider types for each E/M CPT 
code subject to the comparative payment rate analysis.
    We considered, but did not propose, requiring States to use a 
different point of comparison, other than Medicare, for certain 
services where Medicare is not a consistent or primary payer, such as 
pediatric dental services or HCBS. The impact of requiring a different 
point of comparison, other than Medicare, would have carried forward 
the current regulation requiring States to ``include an analysis of the 
percentage comparison of Medicaid payment rates to other public 
(including, as practical, Medicaid managed care rates) and private 
health insurer payment rates within geographic areas of the State'' in 
their AMRPs. As previously discussed in this rule, FFS States expressed 
concerns following the 2015 final rule with comment period that private 
payer payment rates were proprietary information and not available to 
them, therefore, the challenges to comply with current regulations 
would be carried forward into the proposed rule. Therefore, we also 
considered, but did not propose, using various payment rate 
benchmarking approaches for benefit categories where Medicaid is the 
only or primary payer, or there is no comparable Medicare rate. As 
previously noted in section II. of this proposed rule, we considered 
benchmarks based on national Medicaid payment averages for certain 
services included within the LTSS benefit category, benchmarks that use 
average daily rates for certain HCBS that can be compared to other 
State Medicaid programs, and benchmarks that use payment data specific 
to the State's Medicaid program for similarly situated services so that 
the service payments may be benchmarked to national average. 
Notwithstanding the previously described limitations of the alternative 
considered for situations where

[[Page 28075]]

differences between Medicaid and Medicare coverage and payment exists, 
we are seeking public comment regarding our alternative consideration 
to propose States use a different point of comparison, other than 
Medicare, for certain services where Medicare is not a consistent or 
primary payer or States use a payment rate benchmarking approach for 
benefit categories where Medicaid is the only or primary payer, or 
there is no comparable Medicare rate. Specifically, we are seeking 
public comment on the feasibility and burden on States to implement 
these alternatives considered for the proposed comparative payment rate 
analysis. For any comparison to other State Medicaid programs or to a 
national benchmark, we also are seeking public comment on the 
appropriate role for such a comparison in the context of the statutory 
requirement to consider beneficiary access relative to the general 
population in the geographic area.
    We considered, but did not propose, various timeframes for the 
comparative payment rate analysis, including annual (every year), 
triennial (every 3 years), or quinquennial (every 5 years) updates 
after the initial effective date of January 1, 2026. As noted in 
section II. of this proposed rule, we did not propose an annual 
timeframe as we felt that an annual update requirement was too frequent 
due to many State's biennial legislative sessions that provide the 
Medicaid agency with authority it make Medicaid payment rate changes as 
well as create more or maintain a similar level of administrative 
burden of the AMRPs. While some States do have annual legislative 
sessions and may have annual Medicaid payment rate changes, we felt 
that proposing annual updates solely for the purpose of capturing 
payment rate changes in States that with annual legislative sessions 
would be overly burdensome and duplicative for States with biennial 
legislative sessions who do not have new, updated Medicaid payment 
rates to update in their comparative payment rate analysis. Therefore, 
for numerous States with biennial legislative sessions, the resulting 
analysis would likely not vary significantly from year to year. 
Additionally, the comparative payment rate analysis proposes to use the 
most recently published Medicare payment rates and we are cognizant 
that Medicare payment rate updates often occur on a quarterly basis. 
While Medicare often increases rates by the market basket inflation 
amount, as well as through rulemaking, it does not always result in 
payment increases for providers.271 272 We also considered, 
but did not propose, maintaining the triennial (every 3 years) 
timeframe currently in regulation, because we thought it necessary to 
make significant changes to the non-SPA-related reported in Sec.  
447.203(b) that would represent a significant departure from the 
initial AMRP process in the 2015 final rule with comment in the current 
Sec.  447.203(b)(1) and this new proposed approach did not lend itself 
to the triennial timeframe of the current AMRP process. Lastly, we 
considered, but did not propose, the comparative payment rate analysis 
be published on a quinquennial basis (every 5 years), because this 
timeframe was too infrequent for the comparative payment rate analysis 
to provide meaningful, actionable information. As previously noted in 
section II. of this rule, we are seeking public comment on the proposed 
timeframe for the initial publication and biennial update requirements 
of the comparative payment rate analysis as proposed in Sec.  
447.203(b)(4). Additionally, we are seeking public comment regarding 
our alternative consideration to propose an annual, triennial, or 
quinquennial timeframe for the updating the comparative payment rate 
analysis after the initial effective date.
---------------------------------------------------------------------------

    \271\ Although ``market basket'' technically describes the mix 
of goods and services used in providing health care, this term is 
also commonly used to denote the input price index (that is, cost 
category weights and price proxies combined) derived from that 
market basket. Accordingly, the term ``market basket'' as used in 
this document refers to the various CMS input price indexes. A CMS 
market basket is described as a fixed-weight, Laspeyres-type index 
because it measures the change in price, over time, of the same mix 
of goods and services purchased in the base period. FAQ--Medicare 
Market Basket Definitions and General Information, updated May 2022. 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/Downloads/info.pdf 
Accessed January 4, 2023.
    \272\ Medicare Unit Cost Increases Reported as of April 2022. 
https://www.cms.gov/files/document/ffs-trends-2021-2023-april-2022.pdf. Accessed January 4, 2023.
---------------------------------------------------------------------------

    We considered, but did not propose, requiring the comparative 
payment rate analysis be submitted directly to us, as this would not 
achieve the public transparency goal of the proposed rule. As proposed 
in Sec.  447.203(b)(3), we are requiring States develop and publish 
their Medicaid comparative payment rate analysis on the State's website 
in an accessible and easily understandable format. This proposal is 
methodologically similar to the current regulation, which requires 
AMRPs be submitted to us and publicly published by the State and CMS. 
We found this aspect of the rule to be an effective method of publicly 
sharing access to care information, as well as ensuring State 
compliance. As previously noted in section II. of this proposed rule, 
we are seeking public comment on the proposed requirement for States to 
publish their Medicaid FFS payment rates for all services and 
comparative payment rate analysis and payment rate disclosure 
information on the State's website under the proposed Sec.  
447.203(b)(1) and (3), respectively. Additionally, we are seeking 
public comment regarding our alternative consideration to propose 
requiring the comparative payment rate analysis be submitted directly 
to us and not publicly published.
    We considered, but did not propose, that we produce and publish the 
comparative payment rate analysis proposed in Sec.  447.203(b)(2) 
through (3) whereby we would develop reports for all States 
demonstrating Medicaid payment rates for all services or a subset for 
Medicaid services as a percentage of Medicare payment rates. Shifting 
responsibility for this analysis would remove some burden from States 
and allow us to do a full cross-comparison of State Medicaid payment 
rates to Medicare payment rates, while ensuring a consistent rate 
analysis across States. However, this approach would rely on T-MSIS 
data, which would increase the lag in available data due to the need 
for CMS to prepare it, and introduce uncertainty into the results due 
to ongoing variation in State T-MSIS data quality and completeness. 
Although our proposed approach still relies on State-supplied data, 
they are able to perform the comparisons on their own regardless of the 
readiness and compliance of any other State. Furthermore, we would need 
to validate its results with States and work through any discrepancies. 
Ultimately, we determined the increased lag time and uncertainty in 
results would diminish the utility of the rate analyses proposed in 
Sec.  447.203(b), if performed by us instead of the States, to support 
our oversight of State compliance with section 1902(a)(30)(A) of the 
Act. As previously noted in section II. of this rule, we are seeking 
public comment on our proposal to require States to develop and publish 
a comparative payment rate analysis and payment rate disclosure as 
proposed in Sec.  447.203(b)(2) and (3). Additionally, we are seeking 
public comment regarding our alternative consideration to propose that 
we produce and publish the comparative payment rate analysis and 
payment rate disclosure proposed in Sec.  447.203(b)(2) and (3) for all 
States.

[[Page 28076]]

    We considered, but did not propose, establishing alternative 
circumstances from the 2017 SMDL for identifying nominal payment rate 
adjustments when States propose a rate reduction or restructuring. We 
previously outlined in SMDL #17-004 several circumstances where 
Medicaid payment rate reductions generally would not be expected to 
diminish access: reductions necessary to implement CMS Federal Medicaid 
payment requirements; reductions that will be implemented as a decrease 
to all codes within a service category or targeted to certain codes, 
but for services where the payment rates continue to be at or above 
Medicare and/or average commercial rates; and reductions that result 
from changes implemented through the Medicare program, where a State's 
service payment methodology adheres to the Medicare methodology. This 
proposed rule would not codify this list of policies that may produce 
payment rate reductions unlikely to diminish access to Medicaid-covered 
services. We considered, but did not propose, setting a different 
percentage for the criteria that State Medicaid rates for each benefit 
category affected by the reductions or restructurings must, in the 
aggregate, be at or above 80 percent of the most recent comparable 
Medicare payment rates after the proposed reduction or restructuring as 
a threshold. We considered setting the threshold at 100 percent of 
Medicare to remain consistent with the 2017 SMDL. However, after 
conducting a literature review, we determined that 80 percent of the 
most recently published Medicare payment rates is currently the most 
reliable benchmark of whether a rate reduction or restructuring is 
likely to diminish access to care. We also considered, but did not 
propose, setting a different percentage for the criteria that proposed 
reductions or restructurings result in no more than 4 percent reduction 
of overall FFS Medicaid expenditures for a benefit category. We 
considered a variety of percentages, but determined that codifying the 
4 percent threshold from the 2017 SMDL and proposed in the 2018 
proposed rule \273\ was the best option based on our experience 
implementing this established policy after the publication of the 2017 
SMDL. Additionally, we received a significant number of comments in the 
2018 proposed rule from State Medicaid agencies that signaled strong 
support for this percentage threshold as a meaningful threshold for 
future rate changes.274 275 276 Lastly, we considered, but 
did not propose, defining what is meant by ``significant'' access 
concerns received through the public process described in Sec.  447.204 
when a State proposes a rate reduction or restructuring. As proposed, 
we expect State Medicaid agencies to make reasonable determinations 
about which access concerns are significant when raised through the 
public process, and as part of our SPA review, may request additional 
information from the State to better understand any access concerns 
that have been raised through public processes and whether they are 
significant. Based on our experience implementing the policies outlined 
in the 2017 SMDL and a literature review of relevant research about 
payment rate sufficiency, we proposed criteria for States proposing 
rate reductions or restructurings that would reduce the SPA submission 
requirements when those criteria are met. Additionally, each of these 
thresholds is one of a three-part test where States must meet all 
three, or else it will trigger a requirement for additional State 
analysis of the rate reduction or restructuring. As previously noted in 
section II. of this rule, we are seeking public comment on the 
streamlined criteria proposed in Sec.  447.203(c)(1). Additionally, we 
are seeking public comment regarding our alternative consideration to 
propose establishing alternative circumstances from the 2017 SMDL for 
identifying nominal payment rate adjustments when States propose a rate 
reduction or restructuring.
---------------------------------------------------------------------------

    \273\ 83 FR 12696 at 12705.
    \274\ Connecticut Department of Social Services, Comment Letter 
on 2018 Proposed Rule (May 21, 2018), https://downloads.regulations.gov/CMS-2018-0031-0021/attachment_1.pdf.
    \275\ California Department of Health Care Services, Comment 
Letter on 2018 Proposed Rule (May 24, 2018), https://downloads.regulations.gov/CMS-2018-0031-0090/attachment_1.pdf.
    \276\ Florida Agency for Health Care Administration, Comment 
Letter on 2018 Proposed Rule (May 24, 2018), https://downloads.regulations.gov/CMS-2018-0031-0083/attachment_1.pdf.
---------------------------------------------------------------------------

    We considered, but did not propose, establishing a minimum set of 
required data for States above 80 percent of the most recent Medicare 
payment rates after the proposed reduction or restructuring regardless 
of the remaining criteria. This requirement would minimize 
administrative burden on States by not requiring States submit all 
items in Sec.  447.203(c)(2) and establish a baseline for comparison if 
future rate reductions or restructurings are proposed that may lower 
the State's payment rates below 80 percent of the most recent Medicare 
payment rates. However, we determined that, while we believe 80 percent 
to be an effective threshold point, we did not want that to serve as 
the only trigger for additional analysis. As proposed, only States that 
do not meet all of the proposed requirements in Sec.  447.203(c)(1) 
will have to submit the required data outlined in Sec.  447.203(c)(2). 
As previously noted in section II. of this rule, we are seeking public 
comment on our proposal to require all three criteria described in 
Sec.  447.203(c)(1)(i) through (iii) for assessing the effect of a 
proposed payment rate reduction or payment restructuring on access to 
care. Additionally, we are seeking public comment regarding our 
alternative consideration to propose establishing alternative 
circumstances from the 2017 SMDL for identifying nominal payment rate 
adjustments when States propose a rate reduction or restructuring.
    We considered, but did not propose, allowing States to use their 
own unstructured data, similar to the AMRP process, for States that 
fail to meet all three criteria in Sec.  447.203(c)(1), thereby 
eliminating the need for us to develop a template for States proposing 
rate reductions or restructurings. While this would reduce 
administrative burden on us and provide States with flexibility in 
determining relevant data for complying with statutory and regulatory 
requirements, we received feedback after the 2015 final rule with 
comment period that States found developing an AMRP from scratch with 
minimal Federal guidelines a challenging task and other interested 
parties noted that States had too much discretion in documenting 
sufficient access to care. Therefore, we proposed developing a template 
to support State analyses of rate reduction or restructuring SPAs that 
fail to meet the criteria in Sec.  447.203(c)(1). As noted elsewhere in 
the preamble, if finalized, we anticipate releasing subregulatory 
guidance, including a template to support completion of the analysis 
that would be required under paragraph (c)(2), prior to the beginning 
date of the Comparative Payment Rate Analysis and Payment Rate 
Disclosure Timeframe proposed in Sec.  447.203(b)(4), which is proposed 
to begin 2 years after the effective date of the final rule. In the 
intervening period, we anticipate working directly with States through 
the SPA review process to ensure compliance with section 1902(a)(30)(A) 
of the Act. Additionally, we are seeking public comment regarding our 
alternative consideration to propose allowing States to use their own 
unstructured data, similar to the AMRP

[[Page 28077]]

process, for States that fail to meet all three criteria in Sec.  
447.203(c)(1).
    After careful consideration, we ultimately determined that the 
requirements in proposed Sec.  447.203(b) and (c) would strike a more 
optimal balance between alleviating State and Federal administrative 
burden, while ensuring a transparent, data-driven, and consistent 
approach to States' implementation and our oversight of State 
compliance with the access requirement in section 1902(a)(30)(A) of the 
Act.

E. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in 
Table 43 showing the classification of the impact associated with the 
provisions of this proposed rule. Note, Table 43 shown previously in 
this proposed rule provides a summary of the one-time and annual costs 
estimates.

                                           Table 44--Accounting Table
----------------------------------------------------------------------------------------------------------------
                                                                                       Units
                                                                 -----------------------------------------------
                    Category                         Estimates                     Discount rate      Period
                                                                    Year dollar         (%)           covered
----------------------------------------------------------------------------------------------------------------
Regulatory Review Costs:
    Annualized Monetized ($million/year)........            .112            2023               7       2024-2028
                                                            .117            2023               3       2024-2028
Costs to States:
    Annualized Monetized ($million/year)........           72.12            2023               7       2024-2028
                                                           75.22            2023               3       2024-2028
Costs to Beneficiaries:
    Annualized Monetized ($million/year)........            0.47            2023               7       2024-2028
                                                            0.49            2023               3       2024-2028
Costs to Providers:
    Annualized Monetized ($million/year)........          102.05            2023               7       2024-2028
                                                          106.44            2023               3       2024-2028
Costs to Managed Care Entities:
    Annualized Monetized ($million/year)........            6.84            2023               7       2024-2028
                                                            7.13            2023               3       2024-2028
----------------------------------------------------------------------------------------------------------------

F. Regulatory Flexibility Act (RFA)

    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. For purposes of the RFA, we estimate that 
almost all of Home Health Care Services, Services for the Elderly and 
Persons with Disabilities, and Direct Health and Medical Insurance 
Carriers are small entities as that term is used in the RFA (include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions). 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 $8.0 million to $41.5 million in 
any 1 year).
    For purposes of the RFA, approximately 95 percent of the health 
care industries impacted are considered small businesses according to 
the Small Business Administration's size standards with total revenues 
of $41 million or less in any 1 year.
    According to the SBA's website at http://www.sba.gov/content/small-business-size-standards HCBS Provider Costs and Managed care Entity 
fall in the North American Industrial Classification System 621610 Home 
Health Care Services, 624120 Services for the Elderly and Persons with 
Disabilities, and 524114 Direct Health and Medical Insurance Carriers.

                      Table 45--HCBS Providers Costs and Managed Care Entity Size Standards
----------------------------------------------------------------------------------------------------------------
                                                                                     SBA size
                                                                                  standard/small
              NAICS  (6-digit)                  Industry subsector description        entity        Total small
                                                                                     threshold      businesses
                                                                                     (million)
----------------------------------------------------------------------------------------------------------------
621610.....................................  Home Health Care Services..........             $15          20,597
624120.....................................  Services for the Elderly and                     19          20,740
                                              Persons with Disabilities.
524114.....................................  Direct Health and Medical Insurance              47             501
                                              Carriers.
----------------------------------------------------------------------------------------------------------------
Source: 2012 Economic Census. Note, no recent data exist for Enterprise Receipt Size.

    Individuals and States are not included in the definition of a 
small entity. This rule will not have a significant impact measured 
change in revenue of 3 to 5 percent on a substantial number of small 
businesses or other small entities. All the industries combined, 
according to the 2012 Economic Census, earned approximately 
$46,771,961,000.00. Hence, all the costs combined, amounts to about 1 
percent.
    Therefore, as its measure of significant economic impact on a 
substantial number of small entities, HHS uses a change in revenue of 
more than 3 to 5 percent. We do not believe that this threshold will be 
reached by the requirements in this proposed rule. Therefore, the 
Secretary has certified that this proposed will not have a significant 
economic impact on a substantial number of small entities.

[[Page 28078]]

    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 Act. 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 proposed rule will 
not have a significant impact on the operations of small rural 
hospitals since small hospitals are not affected by the proposed rule. 
Therefore, the Secretary has certified that this proposed rule will not 
have a significant impact on the operations of a substantial number of 
small rural hospitals.

G. Unfunded Mandates Reform Act (UMRA)

    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 2023, that 
threshold is approximately $177 million. This proposed rule would not 
impose a mandate that will result in the expenditure by State, local, 
and Tribal Governments, in the aggregate, or by the private sector, of 
more than $177 million in any 1 year.
    Several of the provisions in the proposed rule address gaps in 
existing regulations. In these cases, the costs for States to implement 
those proposals would be minimal. For the remaining areas of the 
proposed rule, we have sought to minimize burden whenever possible 
while still achieving the goals of this rulemaking. We further note 
that, if finalized, States would be able to claim administrative match 
for the work required to implement the proposals.

H. Federalism

    E.O. 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 impose 
substantial direct costs on State or local governments, preempt State 
law, or otherwise have Federalism implications. As mentioned in the 
previous section of this rule, the costs to States by our estimate do 
not rise to the level of specified thresholds for significant burden to 
States. In addition, many proposals amend existing requirements or 
further requirements that already exist in statute, and as such would 
not create any new conflict with State law.

I. Conclusion

    If the policies in this proposed rule are finalized, it will enable 
us to implement enhanced access to health care services for Medicaid 
beneficiaries across FFS, managed care, and HCBS delivery systems.
    The analysis in section V. of this proposed rule, together with the 
rest of this preamble, provides a regulatory impact analysis. In 
accordance with the provisions of E.O. 12866, this proposed rule was 
reviewed by the Office of Management and Budget.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on XX XX, 20XX

List of Subjects

42 CFR Part 431

    Administrative practice and procedure, Consumer protection, Grant 
programs--health, Medicaid, Organization and functions (Government 
agencies), Public assistance programs, Reporting and recordkeeping 
requirement.

42 CFR Part 438

    Administrative practice and procedure, Grant programs--health, 
Health professions, Medicaid, Older adults, People with Disabilities, 
Reporting and recordkeeping requirements.

42 CFR Part 441

    Administrative practice and procedure, Consumer protection, Grant 
programs--health, Health professions, Medicaid, Older adults, People 
with Disabilities, Reporting and recordkeeping requirements

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 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION

0
1. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
2. Revise Sec.  431.12 to read as follows:


Sec.  431.12  Medicaid Advisory Committee and Beneficiary Advisory 
Group.

    (a) Basis and purpose. This section, based on section 1902(a)(4) of 
the Act, prescribes State Plan requirements for establishment and 
ongoing operation of a public Medicaid Advisory Committee (MAC) with a 
dedicated Beneficiary Advisory Group (BAG) comprised of current and 
former Medicaid beneficiaries, their family members and caregivers, to 
advise the State Medicaid agency on matters of concern related to 
policy development, and matters related to the effective administration 
of the Medicaid program.
    (b) State plan requirement. The State Plan must provide for a MAC 
and a BAG that will advise the Medicaid Agency Director on matters of 
concern related to policy development and matters related to the 
effective administration of the Medicaid program.
    (c) Appointment of members. The agency director, or a higher State 
authority, must appoint members to the MAC and BAG on a rotating and 
continuous basis. The State must create a process for recruitment and 
appointment of members and publish this information on the States 
website as specified in paragraph (f).
    (d) MAC membership and composition. The membership of the MAC must 
be composed of the following percentage and representative categories 
of interested parties in the State:
    (1) Minimum of 25 percent of committee members must be from the 
BAG.
    (2) The remaining committee members must include representation of 
at least one from each of the following categories:
    (A) State or local consumer advocacy groups or other community-
based organizations that represent the interests of, or provide direct 
service, to Medicaid beneficiaries.
    (B) Clinical providers or administrators who are familiar with the 
health and social needs of Medicaid beneficiaries and with the 
resources available and required for their care. This includes 
providers or administrators of primary care, specialty care, and long-
term care.
    (C) Participating Medicaid managed care plans, or the State health 
plan association representing such plans, as applicable; and
    (D) Other State agencies that serve Medicaid beneficiaries (for 
example, foster care agency, mental health agency, health department, 
State agencies delegated to conduct eligibility determinations for 
Medicaid, State Unit on Aging), as ex-officio members.

[[Page 28079]]

    (e) Beneficiary Advisory Group. The State must form and support a 
BAG, which can be an existing beneficiary group, that is comprised of: 
Individuals who are currently or have been Medicaid beneficiaries and 
individuals with direct experience supporting Medicaid beneficiaries 
(family members or caregivers of those enrolled in Medicaid), to advise 
and provide input to the State regarding their experience with the 
Medicaid program, on matters of concern related to policy development 
and matters related to the effective administration of the Medicaid 
program.
    (1) The MAC members described in paragraph (d)(1) of this section 
must also be members of the BAG.
    (2) The BAG must meet separately from the MAC, on a regular basis, 
and in advance of each MAC meeting to ensure BAG member preparation for 
each MAC meeting.
    (f) MAC and BAG administration. The State agency must create 
standardized processes and practices for the administration of the MAC 
and the BAG that are available for public review on the State website. 
The State agency must--
    (1) Develop and publish by posting publicly on its website, bylaws 
for governance of the MAC and BAG, a current list of MAC and BAG 
membership, and past meeting minutes of the MAC and BAG meetings, 
including a list of meeting attendees;
    (2) Develop and publish by posting publicly on its website a 
process for MAC and BAG member recruitment and appointment and 
selection of MAC and BAG leadership;
    (3) Develop, publish by posting publicly on its website, and 
implement a regular meeting schedule for the MAC and BAG; the MAC and 
BAG must each meet at least once per quarter and hold off-cycle 
meetings as needed.
    (4) Make at least two MAC meetings per year open to the public and 
those meetings must include a dedicated time during the meeting for the 
public to make comments. The public must be adequately notified of the 
date, location, and time of each public MAC meeting at least 30 
calendar days in advance. BAG meetings are not required to be open to 
the public, unless the State's BAG members decide otherwise. The same 
requirements would apply to States whose BAG meetings were determined, 
by its membership, to be open to the public;
    (5) Offer a variety of in-person and virtual attendance options 
including, at a minimum telephone dial-in options at the MAC and BAG 
meetings for its members. If the MAC or BAG meeting is deemed open to 
the public, the State must offer at a minimum a telephone dial-in 
option for members of the public;
    (6) Ensure meeting times and locations for MAC and BAG meetings are 
selected to maximize member attendance and may vary by meeting; and
    (7) Facilitate participation of beneficiaries by ensuring that that 
meetings are accessible to people with disabilities, that reasonable 
modifications are provided when necessary to ensure access and enable 
meaningful participation, and communications with individuals with 
disabilities are as effective as with others, that reasonable steps are 
taken to provide meaningful access to individuals with Limited English 
Proficiency, and that meetings comply with the requirements at Sec.  
435.905(b) of this chapter and applicable regulations implementing the 
ADA, section 504 of the Rehabilitation Act, and section 1557 of the 
Affordable Care Act at 28 CFR part 35 and 45 CFR parts 84 and 92.
    (g) MAC and BAG participation and scope. The MAC and BAG 
participants must have the opportunity to participate in and provide 
recommendations to the State agency on matters related to policy 
development and matters related to the effective administration of the 
Medicaid program. At a minimum, the MAC and BAG must determine, in 
collaboration with the State, which topics to provide advice on related 
to--
    (1) Additions and changes to services;
    (2) Coordination of care;
    (3) Quality of services;
    (4) Eligibility, enrollment, and renewal processes;
    (5) Beneficiary and provider communications by State Medicaid 
agency and Medicaid managed care plans;
    (6) Cultural competency, language access, health equity, and 
disparities and biases in the Medicaid program; or
    (7) Other issues that impact the provision or outcomes of health 
and medical care services in the Medicaid program as by the MAC, BAG, 
or State.
    (h) State agency staff assistance, participation, and financial 
help. The State agency must provide staff to support planning and 
execution of the MAC and the BAG to include--
    (1) Recruitment of MAC and BAG members;
    (2) Planning and execution of all MAC and BAG meetings and the 
production of meeting minutes that include actions taken or anticipated 
actions by the State in response to interested parties' feedback 
provided during the meeting. The minutes are to be posted on the 
State's website within 30 calendar days following each meeting. 
Additionally, the State must also produce and post on its website an 
annual report as specified in paragraph (i) of this section; and
    (3) The provision of appropriate support and preparation (providing 
research or other information needed) to the Medicaid beneficiary MAC 
and BAG members to ensure meaningful participation. These tasks 
include--
    (i) Providing staff whose responsibilities include facilitating MAC 
and BAG member engagement;
    (ii) Providing financial support, if necessary, to facilitate 
Medicaid beneficiary engagement in the MAC and the BAG.
    (iii) Attendance by at least one staff member from the State 
agency's executive staff at all MAC and BAG meetings.
    (i) Annual report. The MAC, with support from the State, submit an 
annual report describing its activities, topics discussed, and 
recommendations. The State must review the report and include responses 
to the recommended actions. The State agency must then--
    (1) Provide MAC members with final review of the report;
    (2) Ensure that the annual report of the MAC includes a section 
describing the activities, topics discussed, and recommendations of the 
BAG, as well as the State's responses to the recommendations; and
    (3) Post the report to the State's website.
    (j) Federal financial participation. FFP is available at 50 percent 
of expenditures for the MAC and BAG activities.
0
3. Amend Sec.  431.408 by revising paragraph (a)(3)(i) to read as 
follows:


Sec.  431.408  State public notice process.

    (a) * * *
    (3) * * *
    (i) The Medicaid Advisory Committee and Beneficiary Advisory Group 
that operate in accordance with Sec.  431.12 of this subpart; or
* * * * *

PART 438--MANAGED CARE

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

    Authority: 42 U.S.C. 1302.

0
5. Section 438.72 is added to subpart B to read as follows:


Sec.  438.72  Additional requirements for long-term services and 
supports.

    (a) [Reserved]
    (b) Services authorized under section 1915(c) waivers and section 
1915(i), (j), and (k) State plan authorities. The State

[[Page 28080]]

must comply with the review of the person-centered service plan 
requirements at Sec.  441.301(c)(1) through (3), the incident 
management system requirements at Sec.  441.302(a)(6), the payment 
adequacy requirements at Sec.  441.302(k), the reporting requirements 
at Sec.  441.311, and the website transparency requirements at Sec.  
441.313 for services authorized under section 1915(c) waivers and 
section 1915(i), (j), and (k) State plan authorities.

PART 441--SERVICES: REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC 
SERVICES

0
6. The authority citation for part 441 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
7. Amend Sec.  441.301 by revising paragraphs (c)(1) and (3), and 
adding paragraph (c)(7) to read as follows:


Sec.  441.301  Contents of request for a waiver.

* * * * *
    (c) * * *
    (1) Person-centered planning process. The individual, or if 
applicable, the individual and the individual's authorized 
representative, will lead the person-centered planning process. When 
the term ``individual'' is used throughout this section, it includes 
the individual's authorized representative if applicable. In addition, 
the person-centered planning process:
* * * * *
    (3) Review of the person-centered service plan--(i) Requirement. 
The State must ensure that the person-centered service plan is 
reviewed, and revised, as appropriate, based upon the reassessment of 
functional need as required by Sec.  441.365(e), at least every 12 
months, when the individual's circumstances or needs change 
significantly, or at the request of the individual.
    (ii) Minimum performance at the State level. The State must 
demonstrate, through the reporting requirements at Sec.  441.311(b)(3), 
that it meets the following minimum performance levels:
    (A) Complete a reassessment of functional need at least every 12 
months for no less than 90 percent of the individuals continuously 
enrolled in the waiver for at least 365 days; and
    (B) Review and revise, as appropriate, the person-centered service 
plan, based upon the reassessment of functional need, at least every 12 
months for no less than 90 percent of the individuals continuously 
enrolled in the waiver for at least 365 days.
    (iii) Effective date. The performance levels described in paragraph 
(c)(3)(ii) of this section are effective 3 years after the date of 
enactment of this paragraph; and in the case of the State that 
implements a managed care delivery system under the authority of 
sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and includes 
HCBS in the MCO's, PIHP's, or PAHP's contract, the first managed care 
plan contract rating period that begins on or after 3 years after the 
date of enactment of this paragraph.
* * * * *
    (7) Grievance system--(i) Purpose. The State must establish a 
procedure under which a beneficiary may file a grievance related to the 
State or a provider's compliance with paragraphs (c)(1) through (6) of 
this section. This requirement does not apply to a managed care 
delivery system under the authority of sections 1915(a), 1915(b), 
1932(a), or 1115(a) of the Act.
    (ii) Definitions. As used in this section:
    Grievance means an expression of dissatisfaction or complaint 
related to the State's or a provider's compliance with paragraphs 
(c)(1) through (6), regardless of whether remedial action is requested.
    Grievance system means the processes the State implements to handle 
grievances, as well as the processes to collect and track information 
about them.
    (iii) General requirements. (A) The beneficiary or a beneficiary's 
authorized representative, if applicable, may file a grievance. All 
references to beneficiary include the role of the beneficiary's 
representative, if applicable.
    (1) Another individual or entity may file a grievance on behalf of 
the beneficiary with the written consent of the beneficiary or 
authorized representative.
    (2) A provider cannot file a grievance that would violate the 
State's conflict of interest guidelines, as required in Sec.  
441.540(a)(5).
    (B) The State must:
    (1) Base its grievance processes on written policies and procedures 
that, at a minimum, meet the conditions set forth in this subsection;
    (2) Provide beneficiaries reasonable assistance in completing forms 
and taking other procedural steps related to a grievance. This 
includes, but is not limited to, ensuring the grievance system is 
accessible to individuals with disabilities and persons who are limited 
English proficient, consistent with Sec.  435.905(b) of this chapter, 
and includes auxiliary aids and services upon request, such as 
providing interpreter services and toll-free numbers that have adequate 
TTY/TTD and interpreter capability;
    (3) Ensure that punitive action is neither threatened nor taken 
against an individual filing a grievance;
    (4) Accept grievances and requests for expedited resolution or 
extension of timeframes from the beneficiary;
    (5) Provide to the beneficiary the notices and information required 
under this subsection, including information on their rights under the 
grievance system and on how to file grievance, and ensure that such 
information is accessible for individuals with disabilities and 
individuals who are limited English proficient in accordance with Sec.  
435.905(b);
    (6) Review any grievance resolution with which the beneficiary is 
dissatisfied; and
    (7) Provide information about the grievance system to all providers 
and subcontractors approved to deliver services.
    (C) The process for handling grievances must:
    (1) Allow the beneficiary to file a grievance with the State either 
orally or in writing.
    (2) Acknowledge receipt of each grievance.
    (3) Ensure that the individuals who make decisions on grievances 
are individuals:
    (i) Who were neither involved in any previous level of review or 
decision-making related to the grievance nor a subordinate of any such 
individual;
    (ii) Who are individuals who have the appropriate clinical and non-
clinical expertise, as determined by the State; and
    (iii) Who consider all comments, documents, records, and other 
information submitted by the beneficiary without regard to whether such 
information was submitted to or considered previously by the State.
    (4) Provide the beneficiary a reasonable opportunity, face-to-face 
(including through the use of audio or video technology) and in 
writing, to present evidence and testimony and make legal and factual 
arguments related to their grievance. The State must inform the 
beneficiary of the limited time available for this sufficiently in 
advance of the resolution timeframe for grievances as specified in 
paragraphs (c)(7)(v)(B)(1) and (2) of this section.
    (5) Provide the beneficiary their case file, including medical 
records in compliance with 45 CFR 164.510(b), other documents and 
records, and any new or additional evidence considered, relied upon, or 
generated by the State related to the grievance. This information must 
be provided free of charge and sufficiently in advance of the

[[Page 28081]]

resolution timeframe for grievance as specified in paragraphs 
(c)(7)(v)(B)(1) and (2) of this section.
    (6) Provide beneficiaries, free of charge, with language services, 
including written translation and interpreter services in accordance 
with Sec.  435.905(b), to support their participation in grievance 
processes and their use of the grievance system.
    (iv) Filing timeframes. (A) A beneficiary may file a grievance at 
any time.
    (B) The beneficiary may request expedited resolution of a grievance 
whenever there is a substantial risk that resolution within standard 
timeframes will adversely affect the beneficiary's health, safety, or 
welfare, as described in paragraph (c)(7)(v) of this section.
    (v) Resolution and notification--(A) Basic rule. The State must 
resolve each grievance, and provide notice, as expeditiously as the 
beneficiary's health, safety, and welfare requires, within State-
established timeframes that may not exceed the timeframes specified in 
this section.
    (B) Specific timeframes--(1) Standard resolution of grievances. For 
standard resolution of a grievance and notice to the affected parties, 
the timeframe may not exceed 90 calendar days from the day the State 
receives the grievance. This timeframe may be extended under paragraph 
(c)(7)(v)(C) of this section.
    (2) Expedited resolution of grievances. For expedited resolution of 
a grievance and notice to affected parties, the State must establish a 
timeframe that is no longer than 14 calendar days after the State 
receives the grievance. This timeframe may be extended under paragraph 
(c)(7)(v)(C) of this section.
    (C) Extension of timeframes. (1) The States may extend the 
timeframes from those in paragraph (c)(7)(v)(B) of this section by up 
to 14 calendar days if--
    (i) The beneficiary requests the extension; or
    (ii) The State documents that there is need for additional 
information and how the delay is in the beneficiary's interest.
    (D) Requirements following extension. If the State extends the 
timeframes not at the request of the beneficiary, it must complete all 
of the following:
    (1) Make reasonable efforts to give the beneficiary prompt oral 
notice of the delay.
    (2) Within 2 calendar days of determining a need for a delay, but 
no later than the timeframes in paragraph (c)(7)(v)(B) of this section, 
give the beneficiary written notice of the reason for the decision to 
extend the timeframe.
    (3) Resolve the grievance as expeditiously as the beneficiary's 
health condition requires and no later than the date the extension 
expires.
    (vi) Format of notice--(A) Written notice. The State must establish 
a method to notify a beneficiary of the resolution of a grievance and 
ensure that such methods meet, at a minimum, the standards described at 
Sec.  435.905(b) of this chapter.
    (B) Oral notice. For notice of an expedited resolution, the State 
must also make reasonable efforts to provide oral notice.
    (vii) Recordkeeping. (A) The State must maintain records of 
grievances and must review the information as part of its ongoing 
monitoring procedures.
    (B) The record of each grievance must contain, at a minimum, all of 
the following information:
    (1) A general description of the reason for the grievance.
    (2) The date received.
    (3) The date of each review or, if applicable, review meeting.
    (4) Resolution of the grievance, as applicable.
    (5) Date of resolution, if applicable.
    (6) Name of the beneficiary for whom the grievance was filed.
    (C) The record must be accurately maintained in a manner available 
upon request to CMS.
    (viii) Effective date. This requirement is effective 2 years after 
the date of enactment of this paragraph.
0
8. Amend Sec.  441.302 by--
0
a. Adding paragraph (a)(6);
0
b. Revising paragraph (h);
0
c. Adding new paragraph (k).
    The additions and revision read as follows:


Sec.  441.302  State assurances.

* * * * *
    (a) * * *
    (6) Assurance that the State operates and maintains an incident 
management system that identifies, reports, triages, investigates, 
resolves, tracks, and trends critical incidents.
    (i) Requirements. The State must:
    (A) Define critical incident to include, at a minimum--
    (1) Verbal, physical, sexual, psychological, or emotional abuse;
    (2) Neglect;
    (3) Exploitation including financial exploitation;
    (4) Misuse or unauthorized use of restrictive interventions or 
seclusion;
    (5) A medication error resulting in a telephone call to or a 
consultation with a poison control center, an emergency department 
visit, an urgent care visit, a hospitalization, or death; or
    (6) An unexplained or unanticipated death, including but not 
limited to a death caused by abuse or neglect.
    (B) Use an information system, as defined in 45 CFR 164.304 and 
compliant with 45 CFR part 164, that, at a minimum--
    (1) Enables electronic critical incident data collection;
    (2) Tracking (including of the status and resolution of 
investigations), and;
    (3) Trending.
    (C) Require providers to report to the State, within State-
established timeframes and procedures, any critical incident that 
occurs during the delivery of services authorized under section 1915(c) 
of the Act and as specified in the waiver participant's person-centered 
service plan, or occurs as a result of the failure to deliver services 
authorized under section 1915(c) of the Act and as specified in the 
waiver participant's person-centered service plan.
    (D) Use claims data, Medicaid fraud control unit data, and data 
from other State agencies such as Adult Protective Services or Child 
Protective Services to the extent permissible under applicable State 
law to identify critical incidents that are unreported by providers and 
occur during the delivery of services authorized under section 1915(c) 
of the Act and as specified in the waiver participant's person-centered 
service plan, or occur as a result of the failure to deliver services 
authorized under section 1915(c) of the Act and as specified in the 
waiver participant's person-centered service plan.
    (E) Ensure that there is information sharing on the status and 
resolution of investigations, such as through the use of information 
sharing agreements, between the State and the entity or entities 
responsible in the State for investigating critical incidents as 
defined in Sec.  441.302(a)(6)(i)(A) if the State refers critical 
incidents to other entities for investigation;
    (F) Separately investigate critical incidents if the investigative 
agency fails to report the resolution of an investigation within State-
specified timeframes; and
    (G) Demonstrate that it meets the requirements in paragraph (a)(6) 
of this section through the reporting requirement at Sec.  
441.311(b)(1).
    (ii) Minimum performance at the State level. The State must 
demonstrate, through the reporting requirements at Sec.  441.311(b)(2), 
that it meets the following minimum performance levels:
    (A) Initiate an investigation, within State-specified timeframes, 
for no less than 90 percent of critical incidents;
    (B) Complete an investigation and determine the resolution of the 
investigation, within State-specified timeframes, for no less than 90 
percent of critical incidents; and

[[Page 28082]]

    (C) Ensure that corrective action has been completed within State-
specified timeframes, for no less than 90 percent of critical incidents 
that require corrective action.
    (iii) Effective date. This requirement is effective 3 years after 
the date of enactment of this paragraph; and in the case of the State 
that implements a managed care delivery system under the authority of 
sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and includes 
HCBS in the MCO's, PIHP's, or PAHP's contract, the first managed care 
plan contract rating period that begins on or after 3 years after the 
date of enactment of this paragraph.
* * * * *
    (h) Reporting. Assurance that the agency will provide CMS with 
information on the waiver's impact, including the data and information 
as required in Sec.  441.311.
* * * * *
    (k) HCBS payment adequacy. Assurance that payment rates are 
adequate to ensure a sufficient direct care workforce to meet the needs 
of beneficiaries and provide access to services in the amount, 
duration, and scope specified in the person-centered service plan.
    (1) Definitions. As used in this section.
    (i) Compensation means:
    (A) Salary, wages, and other remuneration as defined by the Fair 
Labor Standards Act and implementing regulations (29 U.S.C. 201 et 
seq., 29 CFR parts 531 and 778);
    (B) Benefits (such as health and dental benefits, sick leave, and 
tuition reimbursement); and
    (C) The employer share of payroll taxes for direct care workers 
delivering services authorized under section 1915(c) of the Act.
    (ii) Direct care worker means any of the following individuals:
    (A) A registered nurse, licensed practical nurse, nurse 
practitioner, or clinical nurse specialist who provides nursing 
services to Medicaid-eligible individuals receiving home and community-
based services available under this subpart;
    (B) A licensed or certified nursing assistant who provides such 
services under the supervision of a registered nurse, licensed 
practical nurse, nurse practitioner, or clinical nurse specialist;
    (C) A direct support professional;
    (D) A personal care attendant;
    (E) A home health aide; or
    (F) Other individuals who are paid to provide services to address 
activities of daily living or instrumental activities of daily living, 
behavioral supports, employment supports, or other services to promote 
community integration directly to Medicaid-eligible individuals 
receiving home and community-based services available under this 
subpart.
    (G) A direct care worker may be employed by a Medicaid provider, 
State agency, or third party; contracted with a Medicaid provider, 
State agency, or third party; or delivering services under a self-
directed service model.
    (2) Requirement. The State must demonstrate, through the reporting 
requirements at Sec.  441.311(e), that it meets the minimum performance 
levels in paragraph (k)(3) of this section for the services at Sec.  
440.180(b)(2) through (4) that are delivered by direct care workers and 
authorized under section 1915(c) of the Act.
    (3) Minimum performance at the State level. The State must meet the 
following minimum performance level, calculated as the percentage of 
total payment for a service represented by total compensation to direct 
care workers:
    (i) At least 80 percent of all payments with respect to services at 
Sec.  440.180(b)(2) through (4) must be spent on compensation for 
direct care workers.
    (ii) [Reserved]
    (4) Effective date. This requirement is effective 4 years after the 
date of enactment of this paragraph; and in the case of the State that 
implements a managed care delivery system under the authority of 
sections 1915(a), 1915(b), 1932(a), or 1115(a) of the Act and includes 
HCBS in the MCO's, PIHP's, or PAHP's contract, the first managed care 
plan contract rating period that begins on or after 4 years after the 
date of enactment of this paragraph.
0
9. Amend Sec.  441.303 by revising paragraph (f)(6) to read as follows:


Sec.  441.303  Supporting documentation required.

* * * * *
    (f) * * *
    (6) The State must indicate the number of unduplicated 
beneficiaries to which it intends to provide waiver services in each 
year of its program. This number will constitute a limit on the size of 
the waiver program unless the State requests and the Secretary approves 
a greater number of waiver participants in a waiver amendment. If the 
State has a limit on the size of the waiver program and maintains a 
list of individuals who are waiting to enroll in the waiver program, 
the State must meet the reporting requirements at Sec.  441.311(d)(1).
* * * * *
0
10. Section 441.311 is added to subpart G to read as follows:


Sec.  441.311  Reporting requirements.

    (a) Basis and scope. Section 1902(a)(6) of the Act requires State 
Medicaid agencies to make such reports, in such form and containing 
such information, as the Secretary may from time to time require, and 
to comply with such provisions as the Secretary may from time to time 
find necessary to assure the correctness and verification of such 
reports. Section 1902(a)(19) of the Act requires States to provide 
safeguards to assure that eligibility for Medicaid-covered care and 
services will be determined and provided in a manner that is consistent 
with simplification, simplicity of administration, and in the best 
interest of Medicaid beneficiaries. This section describes the 
reporting requirements for States for section 1915(c) waiver programs, 
under the authority at section 1902(a)(6) and (a)(19) of the Act.
    (b) Compliance reporting--(1) Incident management system. As 
described in Sec.  441.302(a)(6)--
    (i) The State must report, every 24 months, according to the format 
and specifications provided by CMS, on the results of an incident 
management system assessment to demonstrate that it meets the 
requirements in Sec.  441.302(a)(6).
    (ii) CMS may reduce the frequency of reporting to up to once every 
60 months for States with incident management systems that are 
determined by CMS to meet the requirements in Sec.  441.302(a)(6).
    (2) Critical incidents, as defined in Sec.  441.302(a)(6)(i)(A). 
The State must report to CMS annually on the following, according to 
the format and specifications provided by CMS:
    (i) Number and percent of critical incidents for which an 
investigation was initiated within State-specified timeframes;
    (ii) Number and percent of critical incidents that are investigated 
and for which the State determines the resolution within State-
specified timeframes;
    (iii) Number and percent of critical incidents requiring corrective 
action, as determined by the State, for which the required corrective 
action has been completed within State-specified timeframes.
    (3) Person-centered planning, as described in Sec.  441.301(c)(1) 
through (3).
    (i) Percent of beneficiaries continuously enrolled for at least 365 
days for whom a reassessment of functional need was completed within 
the past 12 months. The State may report this metric for a 
statistically valid random sample of beneficiaries.

[[Page 28083]]

    (ii) Percent of beneficiaries continuously enrolled for at least 
365 days who had a service plan updated as a result of a re-assessment 
of functional need within the past 12 months. The State may report this 
metric for a statistically valid random sample of beneficiaries.
    (4) The type, amount, and cost of services provided under the State 
plan.
    (c) Reporting on the Home and Community-Based Services Quality 
Measure Set, as described in Sec.  441.312.
    (1) General rules. The State--
    (i) Must report every other year, according to the format and 
schedule prescribed by the Secretary through the process for developing 
and updating the measure set described in Sec.  441.312(d), on all 
measures in the Home and Community-Based Services Quality Measure Set 
that are identified by the Secretary pursuant to Sec.  
441.312(d)(1)(ii) of this subpart.
    (ii) May report on all other measures in the Home and Community-
Based Services Quality Measure Set that are not described in Sec.  
441.312(d)(1)(ii) and (iii) of this subpart.
    (iii) Must establish, subject to CMS review and approval, State 
performance targets for each of the measures in the Home and Community-
Based Services Quality Measure Set that are identified by the Secretary 
pursuant to Sec.  441.312(d)(1)(ii) and (iii) of this subpart and 
describe the quality improvement strategies that the State will pursue 
to achieve the performance targets.
    (iv) May establish State performance targets for each of the 
measures in the Home and Community-Based Services Quality Measure Set 
that are not identified by the Secretary pursuant to Sec.  
441.312(d)(1)(ii) and (iii) of this subpart and describe the quality 
improvement strategies that the State will pursue to achieve the 
performance targets.
    (2) Measures identified per Sec.  441.312(d)(1)(iii) of this 
subpart will be reported by the Secretary on behalf of the State.
    (3) In reporting on Home and Community-Based Services Quality 
Measure Set measures, the State may, but is not required to:
    (i) Report on the measures identified by the Secretary pursuant to 
Sec.  441.312(c) of this subpart for which reporting will be, but is 
not yet required (that is, reporting has not yet been phased-in).
    (ii) Report on the populations identified by the Secretary pursuant 
to Sec.  441.312(c) of this subpart for whom reporting will be, but is 
not yet required.
    (d) Access reporting. The State must report to CMS annually on the 
following, according to the format and specifications provided by CMS:
    (1) Waiver waiting lists. (i) A description of how the State 
maintains the list of individuals who are waiting to enroll in the 
waiver program, if the State has a limit on the size of the waiver 
program, as described in Sec.  441.303(f)(6), and maintains a list of 
individuals who are waiting to enroll in the waiver program. This 
description must include, but is not limited to:
    (A) Information on whether the State screens individuals on the 
list for eligibility for the waiver program;
    (B) Whether the State periodically re-screens individuals on the 
list for eligibility; and
    (C) The frequency of re-screening, if applicable.
    (ii) Number of people on the list of individuals who are waiting to 
enroll in the waiver program, if applicable.
    (iii) Average amount of time that individuals newly enrolled in the 
waiver program in the past 12 months were on the list of individuals 
waiting to enroll in the waiver program, if applicable.
    (2) Access to homemaker services, home health aide, and personal 
care. (i) Average amount of time from when homemaker services, home 
health aide services, or personal care services, as listed in Sec.  
440.180(b)(2) through (4), are initially approved to when services 
began, for individuals newly approved to begin receiving services 
within the past 12 months. The State may report this metric for a 
statistically valid random sample of beneficiaries.
    (ii) Percent of authorized hours for homemaker services, home 
health aide services, or personal care services, as listed in Sec.  
440.180(b)(2) through (4), that are provided within the past 12 months. 
The State may report this metric for a statistically valid random 
sample of beneficiaries.
    (e) Payment adequacy. The State must report to CMS annually on the 
percent of payments for certain services, as specified in Sec.  
441.302(k)(3)(i), that are spent on compensation for direct care 
workers, at the time and in the form and manner specified by CMS. The 
State must report separately for each service and, within each service, 
must separately report services that are self-directed.
    (1) Services. The State must report on payment adequacy for the 
services at Sec.  440.180(b)(2) through (4) that are authorized under 
section 1915(c) of the Act.
    (2) [Reserved]
    (f) Effective date. (1) The reporting requirements at paragraphs 
(b) through (d) of this section are effective 3 years after the date of 
enactment of this paragraph; and in the case of a State that implements 
a managed care delivery system under the authority of sections 1915(a), 
1915(b), 1932(a), or 1115(a) of the Act and includes HCBS in the MCO's, 
PIHP's, or PAHP's contract, the first managed care plan contract rating 
period that begins on or after 3 years after the date of enactment of 
this paragraph.
    (2) The reporting requirements at paragraph (e) of this section are 
effective 4 years after the date of enactment of this paragraph; and in 
the case of a State that implements a managed care delivery system 
under the authority of sections 1915(a), 1915(b), 1932(a), or 1115(a) 
of the Act and includes HCBS in the MCO's, PIHP's, or PAHP's contract, 
the first managed care plan contract rating period that begins on or 
after 4 years after the date of enactment of this paragraph.
0
11. Section 441.312 is added to subpart G to read as follows:


Sec.  441.312  Home and Community-Based Services Quality Measure Set.

    (a) Basis and scope. Section 1102(a) of the Act provides the 
Secretary of HHS with authority to make and publish rules and 
regulations that are necessary for the efficient administration of the 
Medicaid program. Section 1902(a)(6) of the Act requires State Medicaid 
agencies to make such reports, in such form and containing such 
information, as the Secretary may from time to time require, and to 
comply with such provisions as the Secretary may from time to time find 
necessary to assure the correctness and verification of such reports. 
This section describes the Home and Community-Based Services Quality 
Measure Set, which States are required to use in section 1915(c) waiver 
programs to promote public transparency related to the administration 
of Medicaid covered HCBS, under the authority at sections 1102(a) and 
1902(a)(6) of the Act.
    (b) Definitions. As used in this subpart--
    Attribution rules means the process States use to assign 
beneficiaries to a specific health care program or delivery system for 
the purpose of calculating the measures on the Home and Community-Based 
Services Quality Measure Set.
    Home and Community-Based Services Quality Measure Set means the 
Home and Community-Based Services Quality Measures for Medicaid 
established and updated at least every other year by the Secretary 
through a process that allows for public input and comment,

[[Page 28084]]

including through the Federal Register, as described in paragraph (d) 
of this section.
    (c) Responsibilities of the Secretary. The Secretary shall--
    (1) Identify, and update at least every other year, beginning no 
later than December 31, 2025 and biennially thereafter, the quality 
measures to be included in the Home and Community-Based Services 
Quality Measure Set as defined in paragraph (b) of this section.
    (2) Consult at least every other year with States and other 
interested parties identified in paragraph (g) of this section to--
    (i) Establish priorities for the development and advancement of the 
Home and Community-Based Services Quality Measure Set;
    (ii) Identify newly developed or other measures which should be 
added including to address any gaps in the measures included in the 
Home and Community-Based Services Quality Measure Set;
    (iii) Identify measures which should be removed as they no longer 
strengthen the Home and Community-Based Services Quality Measure Set; 
and
    (iv) Ensure that all measures included in the Home and Community-
Based Services Quality Measure Set reflect an evidence-based process 
including testing, validation, and consensus among interested parties; 
are meaningful for States; are feasible for State-level, program-level, 
or provider-level reporting as appropriate.
    (3) In consultation with States, develop and update, at least every 
other year, the HCBS Quality Measure Set using a process that allows 
for public input and comment as described in paragraph (d) of this 
section.
    (d) Process for developing and updating the HCBS Quality Measure 
Set. The process for developing and updating the HCBS Quality Measure 
Set will address all of the following:
    (1) Identification of all measures in the Home and Community-Based 
Services Quality Measure Set, including:
    (i) Measures newly added and measures removed from the prior 
version of the Home and Community-Based Services Quality Measure Set;
    (ii) The specific measures for which reporting is mandatory;
    (iii) The measures for which the Secretary will complete reporting 
on behalf of States and the measures for which States may elect to have 
the Secretary report on their behalf; and
    (iv) The measures, if any, for which the Secretary will provide 
States with additional time to report, as well as how much additional 
time the Secretary will provide, in accordance with paragraph (c) of 
this section.
    (2) Technical information to States on how to collect and calculate 
the data on the Home and Community-Based Services Quality Measure Set.
    (3) Standardized format and reporting schedule for reporting 
measure data required under this section.
    (4) Procedures that State agencies must follow in reporting measure 
data required under this section.
    (5) Identification of the populations for which States must report 
the measures identified by the Secretary under paragraph (e) of this 
section, which may include, but is not limited to beneficiaries--
    (i) Receiving services through specified delivery systems, such as 
those enrolled in a managed care plan or receiving services on a fee-
for-service basis;
    (ii) Who are dually eligible for Medicare and Medicaid, including 
beneficiaries whose medical assistance is limited to payment of 
Medicare premiums or cost sharing;
    (iii) Who are older adults;
    (iv) Who have physical disabilities;
    (v) Who have intellectual and development disabilities;
    (vi) Who have serious mental illness; and
    (vii) Who have other health conditions.
    (6) Technical information on attribution rules for determining how 
States must report on measures for beneficiaries who are included in 
more than one population, as described in paragraph (d)(5) of this 
section, during the reporting period.
    (7) The subset of measures among the measures in the Home and 
Community-Based Services Quality Measure Set that must be stratified by 
race, ethnicity, sex, age, rural/urban status, disability, language, 
Tribal status, or such other factors as may be specified by the 
Secretary and informed by consultation every other year with States and 
interested parties in accordance with paragraph (b)(2) and subsection 
(g) of this section.
    (8) Describe how to establish State performance targets for each of 
the measures in the Home and Community-Based Services Quality Measure 
Set.
    (e) Phasing in of certain reporting. As part of the process that 
allows for developing and updating the Home and Community-Based 
Services Quality Measure Set described in paragraph (d) of this 
section, the Secretary may provide that mandatory State reporting for 
certain measures and reporting for certain populations of beneficiaries 
will be phased in over a specified period of time, taking into account 
the level of complexity required for such State reporting.
    (f) Selection of measures for stratification. In specifying which 
measures, and by which factors, States must report stratified measures 
consistent with paragraph (d)(7) of this section, the Secretary will 
take into account whether stratification can be accomplished based on 
valid statistical methods and without risking a violation of 
beneficiary privacy and, for measures obtained from surveys, whether 
the original survey instrument collects the variables necessary to 
stratify the measures, and such other factors as the Secretary 
determines appropriate; the Secretary will require stratification of 25 
percent of the measures in the Home and Community-Based Services 
Quality Measure Set for which the Secretary has specified that 
reporting should be stratified by 3 years after the effective date of 
these regulations, 50 percent of such measures by 5 years after the 
effective date of these regulations, and 100 percent of measures by 7 
years after the effective date of these regulations.
    (g) Consultation with interested parties. For purposes of paragraph 
(c)(2) of this section, the Secretary must consult with interested 
parties as described in this paragraph to include the following:
    (1) State Medicaid Agencies and agencies that administer Medicaid-
covered home and community-based services.
    (2) Health care and home and community-based services 
professionals, including members of the allied health professions who 
specialize in the care and treatment of older adults, children and 
adults with disabilities, and individuals with complex medical needs.
    (3) Health care and home and community-based services professionals 
(including members of the allied health professions), providers, and 
direct care workers who provide services to older adults, children and 
adults with disabilities, and individuals with complex medical and 
behavioral health care needs who live in urban and rural medically 
underserved communities or who are members of distinct population sub-
groups at heightened risk for poor outcomes.
    (4) Providers of home and community-based services.
    (5) Direct care workers and national organizations representing 
direct care workers.
    (6) Consumers and national organizations representing older adults, 
children and adults with disabilities,

[[Page 28085]]

and individuals with complex medical needs.
    (7) National organizations and individuals with expertise in home 
and community-based services quality measurement.
    (8) Voluntary consensus standards setting organizations and other 
organizations involved in the advancement of evidence-based measures of 
health care.
    (9) Measure development experts.
    (10) Such other interested parties as the Secretary may determine 
appropriate.
0
12. Section 441.313 is added to subpart G to read as follows:


Sec.  441.313  website transparency.

    (a) The State must operate a website consistent with Sec.  
435.905(b) of this chapter that provides the results of the reporting 
requirements specified at Sec.  441.311. The State must:
    (1) Include all content on one web page, either directly or by 
linking to individual managed care organization, prepaid ambulatory 
health plan, prepaid inpatient health plan, and primary care case 
management, as defined in part 438, entity websites;
    (2) Include clear and easy to understand labels on documents and 
links;
    (3) Verify no less than quarterly, the accurate function of the 
website and the timeliness of the information and links; and
    (4) Include prominent language on the website explaining that 
assistance in accessing the required information on the website is 
available at no cost and include information on the availability of 
oral interpretation in all languages and written translation available 
in each non-English language, how to request auxiliary aids and 
services, and a toll-free and TTY/TDY telephone number.
    (b) CMS must report on its website the results of the reporting 
requirements specified at Sec.  441.311 that the State reports to CMS.
    (c) These requirements are effective 3 years after the date of 
enactment of this paragraph; and in the case of the State that 
implements a managed care delivery system under the authority of 
sections 1915(a), 1915(b), 1932(a), and 1115(a) of the Act and includes 
HCBS in the MCO's, PIHP's, or PAHP's contract, the first managed care 
plan contract rating period that begins on or after 3 years after the 
date of enactment of this paragraph.
0
13. Amend Sec.  441.450 in paragraph (c) by adding, in alphabetical 
order, the definition of ``Service plan'' to read as follows:


Sec.  441.450  Basis, scope, and definitions.

* * * * *
    (c) * * *
    Service plan means the written document that specifies the services 
and supports (regardless of funding source) that are to be furnished to 
meet the needs of a participant in the self-directed PAS option and to 
assist the participant to direct the PAS and to live in the community. 
The service plan is developed based on the assessment of need using a 
person-centered and directed process. The service plan supports the 
participant's engagement in community life and respects the 
participant's preferences, choices, and abilities. The participant's 
representative, if any, families, friends, and professionals, as 
desired or required by the participant, will be involved in the 
service-planning process. Service plans must meet the requirements of 
Sec.  441.301(c)(3).
* * * * *
0
14. Amend Sec.  441.464 by-
0
a. Revising paragraph (d)(2)(v);
0
b. Redesignating current paragraphs (e) and (f) as paragraphs (g) and 
(h); and
0
c. Adding a new paragraphs (e) and (f).
    The revisions and additions read as follows:


Sec.  441.464  State assurances.

* * * * *
    (d) * * *
    (2) * * *
    (v) Grievance process, as defined in Sec.  441.301(c)(7) when self-
directed PAS include services under a section 1915(c) waiver program.
* * * * *
    (e) Incident management system. The State operates and maintains an 
incident management system that identifies, reports, triages, 
investigates, resolves, tracks, and trends critical incidents and 
adheres to requirements of Sec.  441.302(a)(6).
    (f) Payment rates are adequate to ensure a sufficient direct care 
workforce to meet the needs of beneficiaries and provide access to 
services in the amount, duration, and scope specified in the person-
centered service plan, in accordance with Sec.  441.302(k).
* * * * *
0
15. Amend Sec.  441.474 by adding paragraph (c) to read as follows:


Sec.  441.474  Quality assurance and improvement plan.

* * * * *
    (c) The quality assurance and improvement plan must comply with all 
components of Sec. Sec.  441.311 and 441.312 and related reporting 
requirements relevant to the State's self-directed PAS program.
* * * * *
0
16. Section 441.486 is added to subpart J to read as follows:


Sec.  441.486  website transparency.

    For States subject to the requirements of subpart J, the State must 
operate a website consistent with Sec.  441.313.
0
17. Amend Sec.  441.540 by revising paragraph (c) to read as follows:


Sec.  441.540  Person-centered service plan.

* * * * *
    (c) Reviewing the person-centered service plan. The State must 
ensure that the person-centered service plan is reviewed, and revised, 
as appropriate, based upon the reassessment of functional need, at 
least every 12 months, when the individual's circumstances or needs 
change significantly, and at the request of the individual. States must 
adhere to the requirements of Sec.  441.301(c)(3).
* * * * *
0
18. Amend Sec.  441.555 by revising paragraph (b)(2)(iv) to read as 
follows:


Sec.  441.555  Support system.

* * * * *
    (b) * * *
    (2) * * *
    (iv) Grievance process, as defined in Sec.  441.301(c)(7).
* * * * *
0
19. Amend Sec.  441.570 by adding paragraphs (e) and (f) to read as 
follows:


Sec.  441.570  State assurances.

* * * * *
    (e) An incident management system in accordance with Sec.  
441.302(a)(6) is implemented.
    (f) Payment rates are adequate to ensure a sufficient direct care 
workforce to meet the needs of beneficiaries and provide access to 
services in the amount, duration, and scope specified in the person-
centered service plan, in accordance with Sec.  441.302(k).
0
20. Amend Sec.  441.580 by redesignating paragraph (i) as (j), and 
adding a new paragraph (i) to read as follows:


Sec.  441.580  Data collection.

* * * * *
    (i) Data and information as required in Sec.  441.311.
* * * * *
0
21. Amend Sec.  441.585 by adding paragraph (d) to read as follows:


Sec.  441.585  Quality assurance system.

* * * * *
    (d) The State must implement the Home and Community-Based Services 
Quality Measure Set in accordance with Sec.  441.312.

[[Page 28086]]

0
22. Section 441.595 is added to subpart K to read as follows--


Sec.  441.595  website transparency.

    For States subject to the requirements of subpart K, the State must 
operate a website consistent with Sec.  441.313.
0
23. Amend Sec.  441.725 by revising paragraph (c) to read as follows:


Sec.  441.725  Person-centered service plan.

* * * * *
    (c) Reviewing the person-centered service plan. The State must 
ensure that the person-centered service plan is reviewed, and revised, 
as appropriate, based upon the reassessment of functional need as 
required in Sec.  441.720, at least every 12 months, when the 
individual's circumstances or needs change significantly, and at the 
request of the individual. States must adhere to the requirements of 
Sec.  441.301(c)(3).
* * * * *
0
24. Amend Sec.  441.745 by--
0
a. Redesignating paragraph (a)(1)(iii) as paragraph (a)(1)(iv);
0
b. Adding new paragraphs (a)(iii) and (a)(v) through (vii);
0
c. Revising paragraph (b)(1)(i); and
0
d. Adding paragraph (b)(1)(v).
    The revision and additions read as follows:


Sec.  441.745  State plan HCBS administration: State responsibilities 
and quality improvement.

* * * * *
    (a) * * *
    (1) * * *
    (iii) Grievances. A State must provide individuals with the 
opportunity to file a grievance as defined in section Sec.  
441.301(c)(7).
* * * * *
    (v) A State must implement an incident management system in 
accordance with Sec.  441.302(a)(6).
    (vi) A State must assure payment rates are adequate to ensure a 
sufficient direct care workforce to meet the needs of beneficiaries and 
provide access to services in the amount, duration, and scope specified 
in the person-centered service plan, in accordance with Sec.  
441.302(k).
    (vii) A State must assure the submission of data and information as 
required in Sec.  441.311.
* * * * *
    (b) * * *
    (1) * * *
    (i) Incorporate a continuous quality improvement process that 
includes monitoring, remediation, and quality improvement, including 
recognizing and reporting critical incidents, as defined in Sec.  
441.302(a)(6)(i)(A).
* * * * *
    (v) Implementation of the Home and Community-Based Services Quality 
Measure Set in accordance with Sec.  441.312.
* * * * *
0
25. Section Sec.  441.750 is added to subpart M to read as follows--


Sec.  441.750  Website transparency.

    For States subject to the requirements of subpart M, the State must 
operate a website consistent with Sec.  441.313.
* * * * *

PART 447--PAYMENT FOR SERVICES

0
26. The authority citation for part 447 is revised to read as follows:

    Authority:  42 U.S.C. 1302, and 1396r-8, and Pub. L. 111-148.

0
27. Amend Sec.  447.203 by revising paragraph (b) and adding paragraph 
(c) to read as follows:


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

* * * * *
    (b)(1) Payment rate transparency. The State agency is required to 
publish all Medicaid fee-for-service payment rates on a website 
developed and maintained by the single State agency that is accessible 
to the general public. Published Medicaid fee-for-service payment rates 
include fee schedule payment rates made to providers delivering 
Medicaid services to Medicaid beneficiaries through a fee-for-service 
delivery system. The website where the State agency publishes its 
Medicaid fee-for-service payment rates must be easily reached from a 
hyperlink on the State Medicaid agency's website. Medicaid fee-for-
service payment rates must be organized in such a way that a member of 
the public can readily determine the amount that Medicaid would pay for 
the service and, in the case of a bundled or similar payment 
methodology, identify each constituent service included within the rate 
and how much of the bundled payment is allocated to each constituent 
service under the State's methodology. If the rates vary, the State 
must separately identify the Medicaid fee-for-service payment rates by 
population (pediatric and adult), provider type, and geographical 
location, as applicable. The initial publication of the Medicaid fee-
for-service payment rates shall occur no later than January 1, 2026 and 
include approved Medicaid fee-for-service payment rates in effect as of 
January 1, 2026. The agency is required to include the date the payment 
rates were last updated on the State Medicaid agency's website and to 
ensure these data are kept current where any necessary update must be 
made no later than 1 month following the date of CMS approval of the 
State plan amendment, section 1915(c) HCBS waiver amendment, or similar 
amendment revising the provider payment rate or methodology. In the 
event of a payment rate change that occurs in accordance with a 
previously approved rate methodology, the State will update its payment 
rate transparency publication no later than 1 month after the effective 
date of the most recent update to the payment rate.
    (2) Comparative payment rate analysis and payment rate disclosure. 
The State agency is required to develop and publish a comparative 
payment rate analysis of Medicaid payment rates for each of the 
following categories of services in paragraphs (b)(2)(i) through (iii) 
of this section and a payment rate disclosure of Medicaid payment rates 
for each of the following categories of services in paragraph 
(b)(2)(iv) of this section, as specified in paragraph (b)(3) of this 
section. If the rates vary, the State must separately identify the 
payment rates by population (pediatric and adult), provider type, and 
geographical location, as applicable.
    (i) Primary care services.
    (ii) Obstetrical and gynecological services.
    (iii) Outpatient behavioral health services.
    (iv) Personal care, home health aide, and homemaker services, as 
specified in Sec.  440.180(b)(2) through (4), provided by individual 
providers and providers employed by an agency.
    (3) Comparative payment rate analysis and payment rate disclosure 
requirements. The State agency must develop and publish, consistent 
with the publication requirements described in paragraph (b)(1) of this 
section for payment rate transparency data, a comparative payment rate 
analysis and a payment rate disclosure.
    (i) For the categories of services described in paragraph (b)(2)(i) 
through (iii) of this section, the comparative payment rate analysis 
must compare the State agency's Medicaid fee-for-service payment rates 
to the most recently published Medicare payment rates effective for the 
same time period for the evaluation and management (E/M) codes 
applicable to the category of service. The State must conduct the 
comparative payment rate analysis at the Current Procedural Terminology 
(CPT) or Healthcare Common Procedure Coding System (HCPCS) code level, 
as applicable, using the most current set of codes published by CMS, 
and the analysis must meet the following requirements:

[[Page 28087]]

    (A) The State must organize the analysis by category of service as 
described in paragraphs (b)(2)(i) through (iii) of this section.
    (B) The analysis must clearly identify the Medicaid base payment 
rates for each E/M CPT/HCPCS code identified by CMS under the 
applicable category of service, including, if the rates vary, separate 
identification of the payment rates by population (pediatric and 
adult), provider type, and geographical location, as applicable.
    (C) The analysis must clearly identify the Medicare non-facility 
payment rates effective for the same time period for the same set of E/
M CPT/HCPCS codes, and for the same geographical location as the 
Medicaid base payment rates, that correspond to the Medicaid base 
payment rates identified under paragraph (b)(3)(i)(B) of this section, 
including, separate identification of the payment rates by provider 
type.
    (D) The analysis must specify the Medicaid base payment rate 
identified under paragraph (b)(3)(i)(B) of this section as a percentage 
of the Medicare non-facility payment rate identified under paragraph 
(b)(3)(i)(C) of this section for each of the services for which the 
Medicaid base payment rate is published pursuant to paragraph 
(b)(3)(i)(B) of this section.
    (E) The analysis must specify the number of Medicaid-paid claims 
and the number of Medicaid enrolled beneficiaries who received a 
service within a calendar year for each of the services for which the 
Medicaid base payment rate is published pursuant to paragraph 
(b)(3)(i)(B) of this section.
    (ii) For each category of services specified in paragraph 
(b)(2)(iv) of this section, the State agency is required to publish a 
payment rate disclosure that expresses the State's payment rates as the 
average hourly payment rates, separately identified for payments made 
to individual providers and to providers employed by an agency, if the 
rates vary. The payment rate disclosure must meet the following 
requirements:
    (A) The State must organize the payment rate disclosure by category 
of service as specified in paragraph (b)(2)(iv) of this section.
    (B) The disclosure must identify the average hourly payment rates 
by applicable category of service, including, if the rates vary, 
separate identification of the average hourly payment rates for 
payments made to individual providers and to providers employed by an 
agency, by population (pediatric and adult), provider type, and 
geographical location, as applicable.
    (C) The disclosure must identify the number of Medicaid-paid claims 
and the number of Medicaid enrolled beneficiaries who received a 
service within a calendar year for each of the services for which the 
average hourly payment rates are published pursuant to paragraph 
(b)(3)(ii)(B) of this section.
    (4) Comparative payment rate analysis and payment rate disclosure 
timeframe. The State agency must publish the initial comparative 
payment rate analysis and payment rate disclosure of its Medicaid 
payment rates in effect as of January 1, 2025 as required under 
paragraphs (b)(2) and (b)(3) of this section, by no later than January 
1, 2026. Thereafter, the State agency must update the comparative 
payment rate analysis and payment rate disclosure no less than every 2 
years, by no later than January 1 of the second year following the most 
recent update. The comparative payment rate analysis and payment rate 
disclosure must be published consistent with the publication 
requirements described in paragraph (b)(1) of this section for payment 
rate transparency data.
    (5) Compliance with payment rate transparency, comparative payment 
rate analysis, and payment rate disclosure requirements. If a State 
fails to comply with the payment rate transparency, comparative payment 
rate analysis, and payment rate disclosure requirements in paragraphs 
(b)(1) through (b)(4) of this section, including requirements for the 
time and manner of publication, future grant awards may be reduced 
under the procedures set forth at 42 CFR part 430, subparts C and D by 
the amount of FFP CMS estimates is attributable to the State's 
administrative expenditures relative to the total expenditures for the 
categories of services specified in paragraph (b)(2) of this section 
for which the State has failed to comply with applicable requirements, 
until such time as the State complies with the requirements. Unless 
otherwise prohibited by law, deferred FFP for those expenditures will 
be released after the State has fully complied with all applicable 
requirements.
    (6) Interested parties advisory group for rates paid for certain 
services. (i) The State agency must establish an advisory group for 
interested parties to advise and consult on provider rates with respect 
to service categories under the Medicaid State plan, 1915(c) waiver, 
and demonstration programs, as applicable, where payments are made to 
the direct care workers specified in Sec.  441.302(k)(1)(ii) for the 
self-directed or agency-directed services found at Sec.  440.180(b)(2) 
through (4).
    (ii) The interested parties advisory group must include, at a 
minimum, direct care workers, beneficiaries, beneficiaries' authorized 
representatives, and other interested parties impacted by the services 
rates in question, as determined by the State.
    (iii) The interested parties advisory group will advise and consult 
with the Medicaid agency on current and proposed payment rates, HCBS 
payment adequacy data as required at Sec.  441.311(e), and access to 
care metrics described in Sec.  441.311(d)(2), associated with services 
found at Sec.  440.180(b)(2) through (4), to ensure the relevant 
Medicaid payment rates are sufficient to ensure access to personal 
care, home health aide, and homemaker services for Medicaid 
beneficiaries at least as great as available to the general population 
in the geographic area and to ensure an adequate number of qualified 
direct care workers to provide self-directed personal assistance 
services.
    (iv) The interested parties advisory group shall meet at least 
every 2 years and make recommendations to the Medicaid agency on the 
sufficiency of State plan, 1915(c) waiver, and demonstration direct 
care worker payment rates, as applicable. The State agency will ensure 
the group has access to current and proposed payment rates, HCBS 
provider payment adequacy minimum performance and reporting standards 
as described in Sec.  441.311(e), and applicable access to care metrics 
as described in Sec.  441.311(d)(2) for HCBS in order to produce these 
recommendations. The process by which the State selects interested 
party advisory group members and convenes its meetings must be made 
publicly available.
    (v) The Medicaid agency must publish the recommendations produced 
under paragraph (b)(6)(iv) of the interested parties advisory group 
consistent with the publication requirements described in paragraph 
(b)(1) of this section for payment rate transparency data, within 1 
month of when the group provides the recommendation to the agency.
    (c)(1) Initial State analysis for rate reduction or restructuring. 
For any State plan amendment that proposes to reduce provider payment 
rates or restructure provider payments in circumstances when the 
changes could result in diminished access where the criteria in 
paragraphs (c)(1)(i) through (iii) of this section are met, the State 
agency must provide written assurance and relevant supporting 
documentation that the following conditions are met as well as a 
description of the State's procedures for monitoring continued 
compliance with section 1902(a)(30)(A) of the Act, as part of the State 
plan amendment submission in a format

[[Page 28088]]

prescribed by CMS as a condition of approval:
    (i) Medicaid payment rates in the aggregate (including base and 
supplemental payments) following the proposed reduction or 
restructuring for each benefit category affected by the proposed 
reduction or restructuring would be at or above 80 percent of the most 
recently published Medicare payment rates for the same or a comparable 
set of Medicare-covered services.
    (ii) The proposed reduction or restructuring, including the 
cumulative effect of all reductions or restructurings taken throughout 
the current State fiscal year, would be likely to result in no more 
than a 4 percent reduction in aggregate fee-for-service Medicaid 
expenditures for each benefit category affected by proposed reduction 
or restructuring within a State fiscal year.
    (iii) The public processes described in paragraph (c)(4) of this 
section and Sec.  447.204 of this part yielded no significant access to 
care concerns from beneficiaries, providers, or other interested 
parties regarding the service(s) for which the payment rate reduction 
or payment restructuring is proposed, or if such processes did yield 
concerns, the State can reasonably respond to or mitigate the concerns, 
as appropriate, as documented in the analysis provided by the State 
pursuant to Sec.  447.204(b)(3).
    (2) Additional State rate analysis. For any State plan amendment 
that proposes to reduce provider payment rates or restructure provider 
payments in circumstances when the changes could result in diminished 
access where the requirements in paragraphs (c)(1)(i) through (iii) of 
this section are not met, the State must also provide the following to 
CMS as part of the State plan amendment submission as a condition of 
approval, in addition to the information required under paragraph 
(c)(1) of this section, in a format prescribed by CMS:
    (i) A summary of the proposed payment change, including the State's 
reason for the proposal and a description of any policy purpose for the 
proposed change, including the cumulative effect of all reductions or 
restructurings taken throughout the current State fiscal year in 
aggregate fee-for-service Medicaid expenditures for each benefit 
category affected by proposed reduction or restructuring within a State 
fiscal year.
    (ii) Medicaid payment rates in the aggregate (including base and 
supplemental payments) before and after the proposed reduction or 
restructuring for each benefit category affected by proposed reduction 
or restructuring, and a comparison of each (aggregate Medicaid payment 
before and after the reduction or restructuring) to the most recently 
published Medicare payment rates for the same or a comparable set of 
Medicare-covered services and, as reasonably feasible, to the most 
recently available payment rates of other health care payers in the 
State or the geographic area for the same or a comparable set of 
covered services.
    (iii) Information about the number of actively participating 
providers of services in each benefit category affected by the proposed 
reduction or restructuring. For this purpose, an actively participating 
provider is a provider that is participating in the Medicaid program 
and actively seeing and providing services to Medicaid beneficiaries or 
accepting Medicaid beneficiaries as new patients. The State must 
provide the number of actively participating providers of services in 
each affected benefit category for each of the 3 years immediately 
preceding the State plan amendment submission date, by State-specified 
geographic area (for example, by county or parish), provider type, and 
site of service. The State must document observed trends in the number 
of actively participating providers in each geographic area over this 
period. The State may provide estimates of the anticipated effect on 
the number of actively participating providers of services in each 
benefit category affected by the proposed reduction or restructuring, 
by geographic area.
    (iv) Information about the number of Medicaid beneficiaries 
receiving services through the FFS delivery system in each benefit 
category affected by the proposed reduction or restructuring. The State 
must provide the number of beneficiaries receiving services in each 
affected benefit category for each of the 3 years immediately preceding 
the State plan amendment submission date, by State-specified geographic 
area (for example, by county or parish). The State must document 
observed trends in the number of Medicaid beneficiaries receiving 
services in each affected benefit category in each geographic area over 
this period. The State must provide quantitative and qualitative 
information about the beneficiary populations receiving services in the 
affected benefit categories over this period, including the number and 
proportion of beneficiaries who are adults and children and who are 
living with disabilities, and a description of the State's 
consideration of the how the proposed payment changes may affect access 
to care and service delivery for beneficiaries in various populations. 
The State must provide estimates of the anticipated effect on the 
number of Medicaid beneficiaries receiving services through the FFS 
delivery system in each benefit category affected by the proposed 
reduction or restructuring, by geographic area.
    (v) Information about the number of Medicaid services furnished 
through the FFS delivery system in each benefit category affected by 
the proposed reduction or restructuring. The State must provide the 
number Medicaid services furnished in each affected benefit category 
for each of the 3 years immediately preceding the State plan amendment 
submission date, by State-specified geographic area (for example, by 
county or parish), provider type, and site of service. The State must 
document observed trends in the number of Medicaid services furnished 
in each affected benefit category in each geographic area over this 
period. The State must provide quantitative and qualitative information 
about the Medicaid services furnished in the affected benefit 
categories over this period, including the number and proportion of 
Medicaid services furnished to adults and children and who are living 
with disabilities, and a description of the State's consideration of 
the how the proposed payment changes may affect access to care and 
service delivery. The State must provide estimates of the anticipated 
effect on the number of Medicaid services furnished through the FFS 
delivery system in each benefit category affected by the proposed 
reduction or restructuring, by geographic area.
    (vi) A summary of, and the State's response to, any access to care 
concerns or complaints received from beneficiaries, providers, and 
other interested parties regarding the service(s) for which the payment 
rate reduction or restructuring is proposed as required under Sec.  
447.204(a)(2).
    (3) Compliance with requirements for State analysis for rate 
reduction or restructuring. A State that submits a State plan amendment 
that proposes to reduce provider payment rates or restructure provider 
payments in circumstances when the changes could result in diminished 
access that fails to provide the information and analysis to support 
approval as specified in paragraphs (c)(1) and (2) of this section, as 
applicable, may be subject to State plan amendment disapproval under 
Sec.  430.15(c) of this chapter. Additionally, States that submit 
relevant information, but where there are unresolved access to care 
concerns related to the proposed

[[Page 28089]]

State plan amendment, including any raised by CMS in its review of the 
proposal and any raised through the public process as specified in 
paragraph (c)(4) of this section or under Sec.  447.204(a)(2), may be 
subject to State plan amendment disapproval. If State monitoring of 
beneficiary access after the payment rate reduction or restructuring 
takes effect shows a decrease in Medicaid access to care, such as a 
decrease in the provider-to-beneficiary ratio for any affected service, 
or the State or CMS experiences an increase in beneficiary or provider 
complaints or concerns about access to care that suggests possible 
noncompliance with the access requirements in section 1902(a)(30)(A) of 
the Act, CMS may take a compliance action using the procedures 
described in Sec.  430.35 of this chapter.
    (4) Mechanisms for ongoing beneficiary and provider input. (i) 
States must have ongoing mechanisms for beneficiary and provider input 
on access to care (through hotlines, surveys, ombudsman, review of 
grievance and appeals data, or another equivalent mechanisms), 
consistent with the access requirements and public process described in 
Sec.  447.204.
    (ii) States should promptly respond to public input through these 
mechanisms citing specific access problems, with an appropriate 
investigation, analysis, and response.
    (iii) States must maintain a record of data on public input and how 
the State responded to this input. This record will be made available 
to CMS upon request.
    (5) Addressing access questions and remediation of inadequate 
access to care. When access deficiencies are identified, the State 
must, within 90 days after discovery, submit a corrective action plan 
with specific steps and timelines to address those issues. While the 
corrective action plan may include longer-term objectives, remediation 
of the access deficiency should take place within 12 months.
    (i) The State's corrective actions may address the access 
deficiencies through a variety of approaches, including, but not 
limited to: Increasing payment rates, improving outreach to providers, 
reducing barriers to provider enrollment, providing additional 
transportation to services, providing for telemedicine delivery and 
telehealth, or improving care coordination.
    (ii) The resulting improvements in access must be measured and 
sustainable.
    (6) Compliance actions for access deficiencies. To remedy an access 
deficiency, CMS may take a compliance action using the procedures 
described at Sec.  430.35 of this chapter.
0
28. Amend Sec.  447.204 by--
0
a. Revising paragraphs (a)(1) and (b); and
0
b. Removing paragraph (d).
    The revisions read as follows:


Sec.  447.204  Medicaid provider participation and public process to 
inform access to care.

    (a) * * *
    (1) The data collected, and the State analysis performed, under 
Sec.  447.203(c).
* * * * *
    (b) The State must submit to CMS with any such proposed State plan 
amendment affecting payment rates documentation of the information and 
analysis required under Sec.  447.203(c) of this chapter.
* * * * *

    Dated: April 24, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-08959 Filed 4-27-23; 4:15 pm]
BILLING CODE 4120-01-P