DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
CMCS Informational Bulletin 
 
DATE:   June 24, 2016 
 
FROM:  Vikki Wachino, Director 
Center for Medicaid and CHIP Services 
 
SUBJECT:  Federal public notice and public process requirements for changes to Medicaid 
payment rates 
 
The purpose of this CMCS Informational Bulletin is to summarize procedures states must follow 
when making changes to provider payments under the Medicaid state plan and to emphasize the 
importance of public notice content and timing requirements.  Specific to payment changes, there 
are three types of procedures: 
  public notice policies that pertain to all proposed changes to provider payment rates or 
methodologies 
  public input process policies, which apply when states reduce rates or restructure 
payments, and are designed to obtain input related access to care  
  public input process policies that are specific to changes to institutional provider payment 
rates 
Some of these requirements are longstanding; others were codified in CMS November 2, 2015 
final rule: Medicaid Program: Methods for Assuring Access to Covered Medicaid Services (80 
FR 67576).  This rule updated public notice requirements and provided guidance on public 
process procedures to identify and analyze access to care concerns, among other policies.  The 
final rule established a new transparent, data-driven process for states to document whether 
Medicaid payments are sufficient to enlist providers to assure beneficiary access to covered care 
and services consistent with section 1902(a)(30)(A) of the Social Security Act (the Act).  The 
final rule applies to services covered under the Medicaid state plan and paid on a fee-for-service 
basis.  Where relevant, these new requirements are noted below.  
Public Notice for All Proposed Changes to Payment Rates or Methodologies 
Longstanding federal regulations at 42 CFR 447.205 require states to issue public notice of 
proposed changes in statewide methods and standards for setting Medicaid payment rates.  
Public notice is necessary to inform providers and other stakeholders of any changes states 
intend to make to their Medicaid payment methodologies, so that providers and others do not 
rely on prior payment methodologies.  The notice must be issued at least one day prior to the 
effective date of the states proposed change.  CMS November 2015 final rule modified these 
requirements slightly to authorize states to issue public notice on state websites or, as was 
previously allowable, in newspapers and state registers.    CMCS Informational Bulletin - Page 2  
Importantly, the final rule issued in November 2015 did not modify the requirements regarding 
the content states must include in the public notice, which have been in place for many years.  
Failure to issue proper public notice can result in states being required to re-issue notice and a 
delay in the effective date of the state plan amendment (SPA) implementing the proposed 
change.  It can also result in disapproval of the SPA.   
Public Input Processes Related to Access to Care 
The final rule also described new requirements for provider and public input processes to inform 
determinations about access to care when states propose to reduce rates or restructure Medicaid 
payments.  These new requirements, effective January 4, 2016, were established in the 
November 2015 final rule and are described in regulations at 42 CFR 447.204.  Prior to 
submitting SPAs to CMS, states are required to make information available so that beneficiaries, 
providers and other stakeholders may provide input on beneficiary access to the affected services 
and the impact that the proposed payment change will have, if any, on continued service access.  
States are expected to obtain input from beneficiaries, providers and other stakeholders, and 
analyze the input to identify and address access to care concerns.  States must obtain this 
information prior to submitting a SPA to CMS and maintain a record of the public input and how 
the agency responded to the input.  When a state submits the SPA to CMS, the regulation 
requires the state to also submit a specific analysis of the information and concerns expressed in 
input from affected stakeholders.  CMS will rely on this and other documentation submitted by 
the state to inform our SPA approval decisions.  Failure to conduct the public processes and 
analyze input from beneficiaries, providers and stakeholders on the impact payment changes will 
have, if any, on access to care can also result in a delay of the SPA approval or disapproval of the 
SPA.   
Public Input Processes Specific to Changes to Institutional Provider Rates 
Specific public input processes pertain when states propose to change institutional provider 
payment methodologies.  These are described in statute at section 1903(a)(13)(A) of the Act and 
predate the November 2015 rulemaking.1  These public input processes are designed to give 
providers and other affected stakeholders an opportunity to review and comment on changes to   
institutional provider payment rates. 
The attachment to this informational bulletin, Summary of Public Notice and Public Process 
Requirements, provides a summary of the three above requirements. 
Public Notice Content Requirements:  
To meet CMS public notice requirements, states must include all of the information required by 
42 CFR 447.205 in their public notice of rate changes.  The public notice must identify the 
                                                           
1 Section 1902(a)(13)(A) of the Act requires a public process for institutional payment rate or methodology changes.  
For more information see State Medicaid Directors letter dated 12/10/97: https://www.medicaid.gov/Federal-
Policy-Guidance/downloads/SMD121097.pdf .  
  CMCS Informational Bulletin - Page 3  
specific services and/or benefits that are affected by changes in state plan methods and standards 
for setting payment rates.  In addition, states should not rely on information referenced external 
to the public notice, such as state legislative websites or provider bulletins, to meet the content 
requirements in the regulation.  The actual published notice must include all of the required 
content.   
The public notice content requirements are described in Federal regulations:  
42 CFR 447.205(c) Content of notice. The notice must  
(1) Describe the proposed change in methods and standards;  
(2) Give an estimate of any expected increase or decrease in annual aggregate 
expenditures;  
(3) Explain why the agency is changing its methods and standards;  
(4) Identify a local agency in each county (such as the social services agency or health 
department) where copies of the proposed changes are available for public review;  
(5) Give an address where written comments may be sent and reviewed by the public; 
and 
(6) If there are public hearing, give the location, date and time for hearing or tell how 
this information may be obtained.   
With respect to the above regulations, CMS expects states will issue public notices that: 
1)  Explicitly identify the Medicaid service(s) being affected by the proposed payment 
change. 
2)  Identify the dollar amount of any rate change(s) or the percent increase or decrease in the 
rate(s). 
3)  Explain the expected increase or decrease in annual aggregate expenditures by the benefit 
category or service being affected. 
4)  In instances where the changes in methods and standards are applied across benefit 
categories, such as across the board percentage rate increases or decreases, provide a 
comprehensive list of the services that will be affected by the change. 
5)  Provide all relevant information required by the regulation within the text of the public 
notice without reliance on websites or documents external to the public notice.   
Efficiencies for Operationalizing Notices and Processes: 
States may find it efficient to coordinate the implementation of these public notice and public 
input process requirements.  States may use a single mechanism to meet all three requirements as 
long as: 
  all of the statutory and regulatory requirements for each process are met;   CMCS Informational Bulletin - Page 4  
  the public is notified of changes in state plan methods and standards for setting payment 
rates prior to the effective date of the change; 
  parties interested in institutional rates have a reasonable opportunity for review and 
comment on the proposed rates, methodologies, and justifications; and  
  beneficiaries, providers and stakeholders are able to provide input to the Medicaid agency 
on the impact payment changes will have on access to care before the state submits the 
SPA to CMS for review.  These processes could include input received through: face-to-
face meetings, written letters, emails, online forms, or other effective mechanisms a state 
uses to solicit public input.    
For example, a state proposing to decrease inpatient hospital payment rates could use the state 
Medicaid agencys website as the source of public notice and the processes for institutional rate-
setting and informing access to care.  Prior to submitting the SPA to CMS, the state could issue a 
public notice that includes all of the information required for the notice, the proposed inpatient 
hospital rates, methodologies and justifications, and a state agency email box address available 
for stakeholders to submit comments and concerns about the rates or the effects the changes may 
have on beneficiary access to care.  The state would need to analyze and consider the public 
input and republish the rates once they are finalized.  The state would also need to submit its 
analysis of the public comments on access to care to CMS with the SPA submission.  Such a 
process would fulfill the three requirements for notice and public process. 
If states have further questions, they may contact their CMS Regional Office. 
 
 
 
 
 
 
 
 
 
  CMCS Informational Bulletin - Page 5  
Requirement  Authority  Timing  Purpose 
Public Process for  1903(a)(13)(A)  The state agency must  Gives interested parties a reasonable opportunity for review 
Determining  allow time to publish  and comment on the proposed rates, methodologies, and 
Institutional Rates  the proposed rates,  justifications.  
allow for review and   
comments, and publish  In the case of hospitals, such rates must take into account the 
the final rates.  situation of hospitals which serve a disproportionate number 
of low-income patients with special needs. 
 
States must publish proposed and final rates, the 
methodologies underlying the rates, and justifications for the 
rates. 
 
Public Process to  1902(a)(30)(A)  Before the state submits  Ensures beneficiaries, providers and other affected 
Inform Access to Care  42 CFR 447.204  the SPA to CMS for  stakeholders an opportunity to provide input on the impact 
consideration.  that proposed payment changes will have, if any, on 
continued service access.  
 
The state should maintain a record of the public input and 
how it responded to such input.  States must also conduct a 
specific analysis of the information and concerns expressed 
in input from affected stakeholders. 
 
Public Notice of  1902(a)(4)  At least one day before  Ensures providers are aware of changes in payment methods 
Changes in Statewide  1902(a)(30)  the effective date of the  and standards and are not relying on prior payment 
Methods and Standards  42 CFR 447.205  methodology change.   methodologies.  
for Setting Payment  Prior to CMS SPA   
Rates  approval.  See informational bulletin for content of notice requirements.  
Attachment: Summary of Public Notice and Public Process Requirements