48604 Federal Register / Vol. 72, No. 164 / Friday, August 24, 2007 / Proposed Rules 

second paragraph of the column, the 

language ‘‘Responsiveness Test: 

Charitable Trusts. Before enactment of 

the PPA,’’ is corrected to read 

‘‘Responsiveness Test: Charitable 

Trusts. Before enactment of the PPA,’’. 

2. On page 42336, column 2, in the 

preamble, under the paragraph heading 

‘‘Qualification Requirements for Type III 

Supporting Organizations Prior to 

Enactment of the Pension Protection 

Act’’, seventh line of the second 

paragraph of the column, the language 

‘‘trust under state law, (2) each 

publicly’’ is corrected to read ‘‘trust 

under State law, (2) each publicly’’. 

3. On page 42336, column 3, in the 

preamble, under the paragraph heading 

‘‘PPA Amendments to Qualification 

Requirements for Type III Supporting 

Organizations’’, second line of the 

second paragraph, the language 

‘‘enacted Code sections 509(d) and’’ is 

corrected to read ‘‘enacted Code 

sections 509(f) and’’. 

4. On page 42336, column 3, in the 

preamble, under the paragraph heading 

‘‘PPA Amendments to Qualification 

Requirements for Type III Supporting 

Organizations’’, third line from the 

bottom of the column, the language 

‘‘Protection of 2006,’’ as Passed by the’’

is corrected to read ‘‘Protection Act of 

2006,’’ as Passed by the’’. 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. E7–16715 Filed 8–23–07; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 440 

[CMS–2234–P] 

RIN 0938–A045 

Medicaid Program; State Option To 

Establish Non-Emergency Medical 

Transportation Program 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

implement section 6083 of the Deficit 

Reduction Act of 2005 which provides 

States with additional State plan 

flexibility to establish a non-emergency, 

medical transportation brokerage 

program, and to receive the Federal 

medical assistance percentage rate. This 

authority supplements the current 

authority that States have to provide 

non-emergency medical transportation 

to Medicaid beneficiaries who need 

access to medical care, but have no 

other means of transportation. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on September 24, 2007. 

ADDRESSES: In commenting, please refer 

to file code CMS–2234–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments on specific issues 

in this regulation to http:// 

www.cms.hhs.gov/eRulemaking. Click 

on the link ‘‘Submit electronic 

comments on CMS regulations with an 

open comment period.’’ (Attachments 

should be in Microsoft Word, 

WordPerfect, or Excel; however, we 

prefer Microsoft Word.) 

2. By regular mail. You may mail 

written comments (one original and two 

copies) to the following address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–2244–

P, P.O. Box 8017, Baltimore, MD 21244–

8017. 

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 (one 

original and two copies) to the following 

address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–2234–

P, Mail Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

7195 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH Building is not readily available to 

persons without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

the CMS drop slots located in the main 

lobby of the building. A stamp-in clock 

is available for persons wishing to retain 

a proof of filing by stamping in and 

retaining an extra copy of the comments 

being filed.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by mailing 

your comments to the addresses 

provided at the end of the ‘‘Collection 

of Information Requirements’’ section in 

this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Donna Schmidt, (410) 786–5532. 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

policies. You can assist us by 

referencing the file code CMS–2234–P 

and the specific ‘‘issue identifier’’ that 

precedes the section on which you 

choose to comment. 

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 Web 

site as soon as possible after they have 

been received: http://www.cms.hhs.gov/ 

eRulemaking. Click on the link 

‘‘Electronic Comments on CMS 

Regulations’’ on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

A. General 

For more than a decade, States have 

been asking for the tools to modernize 

their Medicaid programs. With the 

enactment of section 6083 of the Deficit 

Reduction Act of 2005 (DRA), Pub. L. 

109–171, on February 8, 2006, States 


rfrederick on PROD1PC67 with PROPOSALS
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now have new options to create 

programs that are more aligned with 

today’s Medicaid populations and the 

health care environment. Cost sharing, 

benefit flexibility through benchmark 

plans, the health opportunity accounts 

(HOA), and the flexibility to design costeffective transportation programs 

provide opportunities to modernize 

Medicaid, make the cost of the program 

and health care more affordable, and 

expand coverage for the uninsured. 

B. Statutory Authority 

Section 6083 of the DRA amended 

section 1902(a) of the Social Security 

Act (the Act) by adding a new section 

1902(a)(70), which allows States to 

amend their Medicaid State plans to 

establish a non-emergency medical 

transportation brokerage program 

without regard to statutory requirements 

for comparability, state-wideness, and 

freedom of choice. This proposed 

regulation would provide States with 

the flexibility granted by the statute. 

II. Provisions of the Proposed 

Regulations 

[If you choose to comment on issues in 

this section, please include the caption 

‘‘Provisions of the Proposed 

Regulations’’ at the beginning of your 

comments.] 

A. Overview 

The Department of Health and Human 

Services (DHHS) began issuing guidance 

about the new flexibilities available to 

States within months of the enactment 

of the DRA. On March 31, 2006, DHHS 

issued a State Medicaid Director letter 

providing guidance on the 

implementation of section 6083 of the 

DRA. The proposed regulation would 

formalize the guidance issued on nonemergency medical transportation 

programs. The proposed regulation 

would add a new paragraph (4) to 42 

CFR 440.170(a). 

B. Requirements of the Provision for 

State Plans 

Under § 431.53, States are required in 

their Title XIX State plans to ensure 

necessary transportation of Medicaid 

beneficiaries to and from providers. 

Expenditures for transportation may be 

claimed as administrative costs, or a 

State may elect to include transportation 

as medical assistance under its State 

Medicaid plan. 

Before enactment of the DRA, if a 

State wanted to provide transportation 

as medical assistance under the State 

plan, it could not restrict beneficiary 

choice by selectively contracting with a 

broker, nor could it provide services 

differently in different areas of the State 

without receiving, under section 1915(b) 

of the Act, a waiver of freedom of 

choice, comparability, and statewideness otherwise required at section 

1902(a) of the Act. These waivers 

allowed States to selectively contract 

with brokers and to operate their 

programs differently in different areas of 

the State. 

The DRA gives the States greater 

flexibility in providing non-emergency 

medical transportation. States are no 

longer required to obtain a section 

1915(b) waiver in order to provide nonemergency transportation as an optional 

medical service through a competitively 

contracted broker. A State plan 

amendment for such a brokerage 

program eliminates the administrative 

burden of the 1915(b) biannual waiver 

renewal. Under new section 1902(a)(70) 

of the Act, a State may now use a nonemergency medical transportation 

brokerage program when providing 

transportation as medical assistance 

under the State plan, notwithstanding 

the provisions of sections 1902(a)(1), 

1902(a)(10)(B), and 1902(a)(23) of the 

Act, concerning state-wideness, 

comparability, and freedom of choice, 

respectively. 

Current regulations provide that when 

a State includes transportation in its 

State plan as medical assistance, it is 

required to use a direct vendor payment 

system that is consistent with applicable 

regulations at § 440.170(a), and it must 

also comply with all other requirements 

related to medical services, including 

freedom of choice, comparability, and 

state-wideness. To implement the 

provisions of section 1902(a)(70) of the 

Act, we propose revising § 440.170(a) to 

add a new paragraph (4), Nonemergency medical transportation 

brokerage program, to reflect the 

increased flexibility allowed by the 

DRA. 

We propose allowing, at the option of 

the State, the establishment of a nonemergency medical transportation 

brokerage program. We believe that this 

may prove to be a more cost-effective 

way of providing transportation for 

individuals eligible for medical 

assistance under the State plan, who 

need access to medical care or services 

and have no other means of 

transportation. 

As provided by the statute, we 

propose specifying in § 440.170(a)(4) 

that the broker could provide for 

transport services that include 

wheelchair vans, taxis, stretcher cars, 

bus passes and tickets, secured 

transportation. We are interpreting 

‘‘secured transportation’’ in this context 

to mean a form of transportation 

containing an occupant protection 

system that addresses the safety needs 

of disabled or special needs individuals. 

The Deficit Reduction Act also 

provides that other forms of 

transportation may be included as 

determined by the Secretary to be 

appropriate. At this time, we are not 

proposing to determine any additional 

transportation services to be generally 

appropriate. We are proposing, 

however, to allow States to identify 

additional transportation alternatives 

that are otherwise covered under the 

State plan (and not specific to services 

available through transportation 

brokers). CMS will review these 

alternatives in the State plan 

amendment approval process for 

transportation services generally. In that 

process, we will consider individual 

circumstances in the State and 

applicable utilization controls. For 

example, air transportation may be 

appropriate in States with significant 

rural populations and low population 

density, but not in other States. Even in 

those States, air transportation may only 

be appropriate with appropriate 

utilization controls. Thus, we are 

proposing to make this determination in 

the context of our review of State plan 

amendments based on the information 

furnished by the State. 

At § 440.170(a)(4), we propose that 

the competitive bidding process be 

consistent with applicable Department 

regulations at 45 CFR 92.36, based on 

the State’s evaluation of the broker’s 

experience, performance, references, 

resources, qualifications and cost, and 

that the contract with the broker include 

oversight procedures to monitor 

beneficiary access and complaints, and 

ensure that transport personnel are 

licensed, qualified, competent, and 

courteous. We are proposing that State 

and local bodies that wish to serve as 

brokers compete on the same terms as 

non-governmental entities. 

We propose in paragraph (a)(4)(iv) to 

include prohibitions on broker selfreferrals and conflict of interest, based 

on the prohibitions on physician 

referrals under section 1877 of the Act 

(42 U.S.C. 1395(nn)). Section 1877 of 

the Act generally prohibits a physician 

from making referrals for certain 

designated health services payable by 

Medicare to an entity, with which he or 

she (or an immediate family member) 

has a financial relationship (ownership 

or compensation) unless an exception 

applies. In addition, to prevent other 

types of fraud and abuse, the antikickback provisions in section 

1128B(b)of the Act (42 U.S.C. 1320a–

7b(b)) and the provisions in the civil 

False Claims Act (31 U.S.C. 3729) also 

apply to this transportation program as 


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48606 Federal Register / Vol. 72, No. 164 / Friday, August 24, 2007 / Proposed Rules 

they apply to the Medicaid program 

generally. 

We believe that the Congress intended 

that section 1877 of the Act and the 

applicable regulations be used as a 

model for establishing broker 

prohibitions on referrals, conflicts of 

interest, and impermissible kickbacks, 

in order to prevent fraud and abuse. 

A financial relationship, as defined in 

our regulations implementing section 

1877 of the Act at § 411.354(a), includes 

any direct or indirect ownership or 

investment interest in the entity that 

furnishes designated health services and 

any compensation arrangement between 

such an entity and the physician or an 

immediate family member of the 

physician. 

Section 1877 of the Act includes 

certain ownership and investment 

exceptions, compensation exceptions, 

and some exceptions that apply to 

ownership, investment, and 

compensation relationships. In addition, 

section 1877(b)(4) of the Act allows the 

Secretary to create an exception in the 

case of any other financial relationship 

that does not pose a risk of program or 

patient abuse. 

For purposes of new § 440.170(a), we 

propose that the term ‘‘transportation 

broker’’ include contractors, owners, 

investors, Boards of Directors, corporate 

officers, and employees. 

We propose to use the definition of 

‘‘financial relationship’’ as set forth in 

regulations at § 411.354(a) by means of 

cross-reference, with the term 

‘‘transportation broker’’ substituted for 

‘‘physician’’ and ‘‘non-emergency 

transportation’’ substituted for ‘‘DHS.’’

We propose to use the definition of 

‘‘immediate family member’’ or member 

of a ‘‘physician’s immediate family’’ as 

set forth in the physician self-referral 

provisions in § 411.351, with the term 

‘‘transportation broker’’ substituted for 

‘‘physician.’’

Based on the prohibitions in section 

1877 of the Act, we propose that the 

broker be an independent entity, in that 

the broker may not itself provide 

transportation under the contract with 

the State and that the broker may not 

refer or subcontract to a transportation 

service provider with which it has 

certain financial relationships, unless 

certain exceptions apply. Federal funds 

may not be used for any prohibited 

referrals. 

Similar to some of the ownership 

exceptions in section 1877 of the Act, 

we propose including exceptions for a 

non-governmental broker that provides 

transportation in a rural area when there 

is no other qualified provider available; 

when the necessary transportation 

provided by the non-governmental 

broker is so specialized that no other 

qualified provider is available; or when 

the availability of qualified providers 

other than the non-governmental broker 

is insufficient to meet the existing need. 

For purposes of this regulation we 

propose that a qualified provider would 

be any Medicaid participating provider 

or other provider determined by the 

State to be qualified. A ‘‘rural area,’’ as 

defined in § 412.62(f)(iii), is any area 

that is outside an urban area. These 

exceptions address specific 

circumstances in which there is a lack 

of transportation resources and there is 

documentation to support these 

exceptions. 

Governmental Brokerages 

We did not wish to prevent a 

government entity that is awarded a 

brokerage contract through the 

competitive bidding process from 

referring an individual in need of 

transportation service to a government 

transportation provider that is generally 

available in the community. Therefore, 

we have included an exception to allow 

such a governmental broker to provide 

an individual transportation service or 

to arrange for the individual 

transportation service by referring to or 

subcontracting with another 

government-owned or -controlled 

transportation provider, when certain 

conditions have been met that will 

assure an arms-length transaction. 

The broker would first be required to 

be a distinct governmental unit, and the 

contract could not include payment of 

costs other than those unique to the 

distinct brokerage function. This means 

the contract could not provide for 

payment of costs normally shared with 

or paid by other governmental units 

(such as a regional transportation 

authority). This requirement would 

ensure that the distinct broker unit did 

not have direct financial conflicts of 

interest resulting from commingling 

funding with State or local general 

revenue funds. Second, the broker 

would have to document, after 

considering the specific transportation 

needs of the individual, that the 

government provider was the most 

appropriate, effective, and lowest cost 

alternative for each individual 

transportation service. And third, the 

broker would have to document that for 

each individual transportation service, 

the Medicaid program was paying no 

more than the rate charged to the 

general public. Because there could still 

be conflicts of interest resulting from 

management oversight from a parent or 

related governmental unit, we 

considered proposing to limit the 

exception to circumstances where the 

distinct unit governmental broker was 

independent of external review and 

oversight by the parent entity. However, 

we currently believe that the proposed 

conditions would be sufficient to 

protect against inappropriate intergovernmental referrals. 

We are soliciting comments, 

suggestions, and examples regarding the 

following exceptions mentioned above: 

the service area is rural and there is no 

other Medicaid participating or 

qualified provider available except the 

non-governmental broker; the 

transportation provided by the nongovernmental broker is so specialized 

that no other qualified provider is 

available (including comments on how 

‘‘specialized’’ should be defined); 

available qualified providers other than 

the non-governmental broker are 

insufficient to meet the need; the broker 

is a distinct government unit and is paid 

only for costs that are unique to the 

distinct brokerage function and the 

broker documents that services 

provided by any other governmental 

entity are the most appropriate, least 

costly alternative, and the Medicaid 

program is paying no more than the rate 

charged to the public. 

Additionally, we are proposing to 

include a prohibition on a broker 

accepting any form of remuneration or 

payment from a transportation provider 

in exchange for influencing a referral or 

subcontract for transportation services. 

We also propose that in referring or 

subcontracting with transportation 

providers, the broker be prohibited from 

withholding necessary transportation 

from a recipient or providing 

transportation that is not the most 

appropriate and cost-effective means of 

transportation. 

Under section 1905(a)(28) of the Act, 

the Secretary is given the authority to 

specify any other medical care which 

can be covered by the State. We would 

therefore use authority to make Federal 

financial participation available at the 

medical assistance rate for the cost of 

the brokerage contract, providing that 

such a contract complied with the 

requirements set forth in this regulation. 

In accordance with Federal 

requirements in sections 1902(a)(2) and 

1903(w) of the Act and applicable 

Federal regulations described at 

§ 433.50 through § 433.74, under the 

brokerage contract with the State 

Medicaid agency, the non-Federal share 

of the Medicaid payments made for 

operating a transportation brokerage 

program could only be derived from 

permissible sources and must comply 

with the applicable statute and 

regulations cited above. Also, the return 

of any Medicaid payments (directly or 


rfrederick on PROD1PC67 with PROPOSALS
Federal Register / Vol. 72, No. 164 / Friday, August 24, 2007 / Proposed Rules 48607 

indirectly) to a State or local 

government entity under the nonemergency transportation brokerage 

program is prohibited. 

We propose that the State, in 

contracting with the broker, would be 

required to specify that violation of 

these provisions would be deemed to be 

a breach of contract and that the State 

could move to terminate the contract 

with the broker. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, 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. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 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: 

Section 6083 of the DRA (Nonemergency Medical Transportation 

Brokerage Program) provides States with 

the option to submit a State Plan 

amendment (SPA) to establish a nonemergency medical transportation 

brokerage program. To effectuate this 

option, States must submit an 

amendment to their existing State Plan. 

CMS has provided States with a letter 

providing guidance on this provision 

and the implementation of the DRA, and 

an associated SPA template for use by 

States to modify their Medicaid State 

plan if they choose to implement this 

option. 

The template is a total of five pages 

and we estimate that it will take no 

more than 12 minutes for a State to 

actually complete and submit the 

template to CMS. The potential number 

of respondents is 56 (50 States, DC, and 

five territories); however, we do not 

expect the territories and/or all 50 states 

to respond. We estimate that only five 

States will submit annually. Once 

approved, the State will not need to 

resubmit unless it is materially changing 

the brokerage program. 

At this rate, it will cost no more than 

$50 (or $50 × 1⁄5 hrs × 5 states); the 

national total for the first year could be 

potentially $560 (56 × $10). 

We have submitted a copy of this 

proposed rule to OMB for its review of 

the information collection requirements 

described above. These requirements are 

not effective until they have been 

approved by OMB. 

If you comment on these information 

collection and recordkeeping 

requirements, please mail copies 

directly to the following: 

Centers for Medicare & Medicaid 

Services, Office of Strategic Operations 

and Regulatory Affairs, Division of 

Regulations Development, Attn: Melissa 

Musotto, [CMS–2234–P], Room C4–26– 

05, 7500 Security Boulevard, Baltimore, 

MD 21244–1850; and 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10235, New Executive 

Office Building, Washington, DC 20503, 

Attn: Katherine Astrich, CMS Desk 

Officer, CMS–2244–P, 

katherine_astrich@omb.eop.gov. Fax 

(202) 395–6974. 

IV. Regulatory Impact Statement 

[If you choose to comment on issues in 

this section, please include the caption 

‘‘Regulatory Impact Statement’’ at the 

beginning of your comments.] 

We have examined the impact of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), and Executive Order 13132. 

Executive Order 12866 directs 

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). A regulatory impact 

analysis (RIA) must be prepared for 

major rules with economically 

significant effects ($100 million or more 

in any 1 year). We estimate that this 

regulation will have estimated budget 

savings of $60 million between FY 2006 

and FY 2010 due to the implementation 

of section 6083 of the Deficit Reduction 

Act of 2005. This rule would not reach 

the economic threshold and thus is not 

considered a major rule. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $6.5 million to $30.5 million in any 

1 year. Individuals and States are not 

included in the definition of a small 

entity. We are not preparing an analysis 

for the RFA because we have 

determined, and the Secretary certifies, 

that this rule would not have a 

significant economic impact on a 

substantial number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan Statistical Area and has 

fewer than 100 beds. We are not 

preparing an analysis for section 1102(b) 

of the Act because we have determined, 

and the Secretary certifies, that this rule 

would not have a significant impact on 

the operations of a substantial number 

of small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 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. 

That threshold level is currently 

approximately $120 million. This rule 

would have no consequential effect on 

State, local, or tribal governments or on 

the private sector. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule and subsequent final rule 

that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation would not impose 

any costs on State or local governments, 

the requirements of E.O. 13132 are not 

applicable. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects in 42 CFR Part 440 

Grant programs—health, Medicaid. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services would amend 42 CFR 

chapter IV as set forth below: 


rfrederick on PROD1PC67 with PROPOSALS
48608 Federal Register / Vol. 72, No. 164 / Friday, August 24, 2007 / Proposed Rules 

PART 440—SERVICES: GENERAL 

PROVISIONS 

1. The authority citation for part 440 

continues to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act (42 U.S.C. 1302), as amended. 

2. A new authority citation is added 

in numerical order to § 440.1 to read as 

follows: 

§ 440.1 Basis and purpose. 

* * * * * 

1902(a)(70), State option to establish a 

non-emergency medical transportation 

program. 

* * * * * 

3. Section 440.170 is amended by 

revising paragraph (a)(2) and adding 

new paragraph (a)(4) to read as follows: 

§ 440.170 Any other medical care or 

remedial care recognized under State law 

and specified by the Secretary. 

(a) * * * 

(2) Except as provided in paragraph 

(a)(4), transportation, as defined in this 

section, is furnished only by a provider 

to whom a direct vendor payment can 

appropriately be made by the agency. 

(3) * * * 

(4) Non-emergency medical 

transportation brokerage program. At 

the option of the State, and 

notwithstanding § 431.50 (statewide 

operation) and § 431.51 (freedom of 

choice of providers) of this chapter and 

§ 440.240 (comparability of services for 

groups), a State plan may provide for 

the establishment of a non-emergency 

medical transportation brokerage 

program in order to more costeffectively provide non-emergency 

medical transportation services for 

individuals eligible for medical 

assistance under the State plan who 

need access to medical care or services, 

and have no other means of 

transportation. These transportation 

services include wheelchair vans, taxis, 

stretcher cars, bus passes and tickets, 

secured transportation containing an 

occupant protection system that 

addresses safety needs of disabled or 

special needs individuals, and other 

forms of transportation otherwise 

covered under the state plan. 

(i) Non-emergency medical 

transportation services may be provided 

under contract with an individual or 

entity that meets the following 

requirements: 

(A) Is selected through a competitive 

bidding process that is consistent with 

45 CFR part 92.36 and is based on the 

State’s evaluation of the broker’s 

experience, performance, references, 

resources, qualifications, and costs. 

(B) Has oversight procedures to 

monitor beneficiary access and 

complaints and ensure that transport 

personnel are licensed, qualified, 

competent, and courteous. 

(C) Is subject to regular auditing and 

oversight by the State in order to ensure 

the quality of the transportation services 

provided and the adequacy of 

beneficiary access to medical care and 

services. 

(D) Is subject to a written contract that 

imposes the requirements related to 

prohibitions on referrals and conflicts of 

interest described at § 440.170(a)(4)(ii), 

and provides for the broker to be liable 

for the full cost of services resulting 

from a prohibited referral or 

subcontract. 

(ii) Federal financial participation is 

available at the medical assistance rate 

for the cost of a written brokerage 

contract that: 

(A) Except as provided in paragraph 

(a)(4)(ii)(B) of this section, prohibits the 

broker (including contractors, owners, 

investors, Boards of Directors, corporate 

officers, and employees) from providing 

non-emergency medical transportation 

services or making a referral or 

subcontracting to a transportation 

service provider if: 

(1) The broker has a financial 

relationship with the transportation 

provider as defined at § 411.354(a) of 

this chapter with ‘‘transportation 

broker’’ substituted for ‘‘physician’’ and 

‘‘non-emergency transportation’’

substituted for ‘‘DHS’’; or 

(2) The broker has an immediate 

family member, as defined at § 411.351 

of this chapter, that has a direct or 

indirect financial relationship with the 

transportation provider, with the term 

‘‘transportation broker’’ substituted for 

‘‘physician.’’

(B) Exceptions: The prohibitions 

described at clause (A) of this paragraph 

do not apply if there is documentation 

to support the following: 

(1) Transportation is provided in a 

rural area, as defined at § 412.62(f), and 

there is no other available Medicaid 

participating provider or other provider 

determined by the State to be qualified 

except the non-governmental broker. 

(2) Transportation is so specialized 

that there is no other available Medicaid 

participating provider or other provider 

determined by the State to be qualified 

except the non-governmental broker. 

(3) Except for the non-governmental 

broker, the availability of other 

Medicaid participating providers or 

other providers determined by the State 

to be qualified is insufficient to meet the 

need for transportation. 

(4) The broker is a distinct 

government entity and the individual 

service is provided by the broker, or is 

referred to or subcontracted with 

another government-owned or operated 

transportation provider generally 

available in the community, if the 

following conditions are met: 

(i) The contract with the broker 

provides for payment that does not 

exceed actual costs calculated as a 

distinct unit, excluding personnel or 

other costs shared with or allocated 

from parent or related entities; 

(ii) The broker documents that, with 

respect to the individual’s specific 

transportation needs, the government 

provider is the most appropriate and 

lowest cost alternative; and 

(iii) The broker documents that the 

Medicaid program is paying no more 

than the rate charged to the general 

public. 

(C) Transportation providers may not 

offer or make any payment or other form 

of remuneration, including any 

kickback, rebate, cash, gifts, or service 

in kind to the broker in order to 

influence referrals or subcontracting for 

non-emergency medical transportation 

provided to a Medicaid recipient. 

(D) In referring or subcontracting for 

non-emergency medical transportation 

with transportation providers, a broker 

may not withhold necessary nonemergency medical transportation from 

a Medicaid recipient or provide nonemergency medical transportation that 

is not the most appropriate and a costeffective means of transportation for that 

recipient for the purpose of financial 

gain, or for any other purpose. 

(E) The non-Federal share of all 

Medicaid payments under the 

transportation brokerage program must 

be in compliance with applicable 

Federal requirements in sections 

1902(a)(2) and 1903(w) of the Act, and 

applicable Federal regulations set forth 

at § 433.50 through § 433.74 of this 

chapter. 

* * * * * 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

Dated: August 30, 2006. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: May 10, 2007. 

Michael O. Leavitt, 

Secretary. 

Editorial Note: This document was 

received at the Office of the Federal Register 

on August 13, 2007. 

[FR Doc. E7–16172 Filed 8–23–07; 8:45 am] 

BILLING CODE 4120–01–P 


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