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###### Department of Health and Human Services

###### Centers for Medicare & Medicaid Services 

# AGENCY:

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

# ACTION:

Notice of hearing.

# SUMMARY:

This notice announces an administrative hearing on November 19, 2004, at 10 a.m., JFK Federal Building, Room E275A, Boston, Massachusetts 02203-0003, to reconsider the decision to disapprove New Hampshire State Plan Amendment (SPA) 04-001A. 

# DATES:

Requests to participate in the hearing as a party must be received by the presiding officer by October 21, 2004. 

# FOR FURTHER INFORMATION CONTACT:

Kathleen Scully-Hayes, Presiding Officer, CMS, LB-23-20, Lord Baltimore Drive, Baltimore, Maryland 21244, telephone: (410) 786-2055. 

# SUPPLEMENTARY INFORMATION:

This notice announces an administrative hearing to reconsider the decision to disapprove New Hampshire State Plan Amendment (SPA) 04-001A, which New Hampshire submitted on March 31, 2004. SPA 04-001A sought to reduce the Estimated Acquisition Cost (EAC) for prescription drugs from Average Wholesale Price (AWP) minus 12 percent to AWP minus 16 percent and the dispensing fee from $2.50 to $1.75 per prescription, effective for the period from January 12, 2004, to March 11, 2004. The CMS reviewed this proposal and for the reasons set forth below, was unable to approve SPA 04-001A as submitted.

At issue is whether the requested effective date of January 12, 2004, is consistent with statutory and regulatory requirements. In a separate action, CMS approved SPA 04-001B, which made the same changes in the EAC and dispensing fee calculations, effective March 12, 2004. Section 1902(a)(30) of the Social Security Act (the Act) requires a state's Medicaid state plan to provide such methods and procedures as may be necessary to ensure that payments are consistent with efficiency, economy, and quality of care. Under that authority, the Secretary has issued regulations prescribing state rate-setting procedures. Federal regulations at 42 CFR 447.205(d) require public notice to be issued prior to the effective date of a significant change in any methods and standards for setting payment rates for services. The state did not issue a public notice for the proposed changes in payment methodology until March 11, 2004. Therefore, the earliest that such changes could be effective is March 12, 2004. 

Based on the above, and after consultation with the Secretary as required under 42 CFR 430.15(c)(2), CMS disapproved New Hampshire SPA 04-001A. 

Section 1116 of the Act and 42 CFR part 430 establish Departmental procedures that provide an administrative hearing for reconsideration of a disapproval of a State plan or plan amendment. The CMS is required to publish a copy of the notice to a state Medicaid agency that informs the agency of the time and place of the hearing and the issues to be considered. If we subsequently notify the agency of additional issues that will be considered at the hearing, we also will publish that notice. 

                    Any interested individual or group that wants to participate in the hearing as a party must petition the presiding officer within 15 days after publication of this notice, in accordance with the requirements contained at 42 CFR 430.76(b)(2). Any person or organization that wants to participate as                     *amicus                               ( print page 59931)                            curiae*                     must petition the presiding officer before the hearing begins in accordance with the requirements contained at 42 CFR 430.76(c). If the hearing is later rescheduled, the presiding officer will notify all participants.                 

The notice to New Hampshire announcing an administrative hearing to reconsider the disapproval of its SPA reads as follows: Mr. John A. Stephen, Commissioner, Department of Health and Human Services, 129 Pleasant Street, Concord, NH 03301-3857 

Dear Mr. Stephen: I am responding to your request for reconsideration of the decision to disapprove New Hampshire State Plan Amendment (SPA) 04-001A, which the State submitted on March 31, 2004. The SPA 04-001A sought to reduce the Estimated Acquisition Cost (EAC) for prescription drugs from Average Wholesale Price (AWP) minus 12 percent to AWP minus 16 percent and the dispensing fee from $2.50 to $1.75 per prescription, effective for the period from January 12, 2004, to March 11, 2004. The Centers for Medicare & Medicaid Services (CMS) reviewed this proposal, and for the reasons set forth below, was unable to approve SPA 04-001A as submitted. 

At issue is whether the requested effective date of January 12, 2004, is consistent with statutory and regulatory requirements. In a separate action, CMS approved SPA 04-001B, which made the same changes in the EAC and dispensing fee calculations, effective March 12, 2004. Section 1902(a)(30) of the Social Security Act (the Act) requires a state's Medicaid state plan to provide such methods and procedures as may be necessary to ensure that payments are consistent with efficiency, economy, and quality of care. Under that authority, the Secretary has issued regulations prescribing state rate-setting procedures. Federal regulations at 42 CFR 447.205(d) require public notice to be issued prior to the effective date of a significant change in any methods and standards for setting payment rates for services. The State did not issue a public notice for the proposed changes in payment methodology until March 11, 2004. Therefore, the earliest that such changes could be effective is March 12, 2004. Based on the above, and after consultation with the Secretary as required under 42 CFR 430.15(c)(2), CMS disapproved New Hampshire SPA 04-001A. 

I am scheduling a hearing for November 19, 2004, at 10 a.m., JFK Federal Building, Room E275A, Boston, Massachusetts 02203-0003, to reconsider the decision to disapprove SPA 04-001A. If this date is not acceptable, we would be glad to set another date that is mutually agreeable to the parties. The hearing will be governed by the procedures prescribed at 42 CFR part 430. I am designating Ms. Kathleen Scully-Hayes as the presiding officer. If these arrangements present any problems, please contact the presiding officer. In order to facilitate any communication that may be necessary between the parties to the hearing, please notify the presiding officer to indicate acceptability of the hearing date that has been scheduled and provide names of the individuals who will represent the State at the hearing. The presiding officer may be reached at (410) 786-2055. 

  Sincerely, 

  Mark B. McClellan, M.D., PhD.

Authority:Section 1116 of the Social Security Act (42 U.S.C. 1316); 42 CFR 430.18. 

(Catalog of Federal Domestic Assistance Program No. 13.714, Medicaid Assistance Program) 

Dated: September 27, 2004. 

Mark B. McClellan, 

Administrator, Centers for Medicare & Medicaid Services. 

[FR Doc. 04-22419 Filed 10-5-04; 8:45 am] 

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