26342 Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 447 

[CMS 2328–P] 

RIN 0938–AQ54 

Medicaid Program; Methods for 

Assuring Access to Covered Medicaid 

Services 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

create a standardized, transparent 

process for States to follow as part of 

their broader efforts 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’’ as required by section 

1902(a)(30)(A) of the Social Security Act 

(the Act). This proposed rule would also 

recognize, as States have requested, 

electronic publication as an optional 

means of communicating State plan 

amendments (SPAs) proposed ratesetting policy changes to the public. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. July 5, 2011. 

ADDRESSES: In commenting, please refer 

to file code CMS–2328–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four 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–2328–P, P.O. Box 8016, Baltimore, 

MD 21244–8016. 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–2328–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 before the close 

of the comment period to either of the 

following addresses: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue, SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey 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.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

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. 

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 following 

the instructions 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: 

Jeremy Silanskis, (410) 786–1592. 

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 Web 

site as soon as possible after they have 

been received: http:// 

www.regulations.gov. Follow the search 

instructions 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 Information 

Title XIX of the Social Security Act 

(the Act) authorizes the Secretary of the 

Department of Health and Human 

Services (the Secretary) to provide 

grants to States to help finance programs 

furnishing medical assistance (State 

Medicaid programs) to specified groups 

of eligible individuals in accordance 

with an approved State plan. ‘‘Medical 

Assistance’’ is defined at section 1905(a) 

of the Act as payment for part or all of 

the cost of a list of specified care and 

services, or the care and services 

themselves, or both. 

Federal law provides a broad 

framework for State Medicaid programs, 

within which States have considerable 

flexibility. Details concerning the scope 

of covered services, the groups of 

eligible individuals, the payment 

methodologies for covered services, and 

all other information necessary to assure 

that the plan can be a basis for Federal 

Medicaid funding must be set forth in 

the approved Medicaid State plan. To be 

approved by the Department of Health 

and Human Services, the Medicaid State 

plan must comply with requirements set 

forth in section 1902(a) of the Act, as 

implemented and interpreted in 

applicable regulations and guidance 

issued by CMS. The Secretary has 

delegated overall authority for the 

Federal Medicaid program, including 

State plan approval, to CMS. 

Medicaid services are jointly funded 

by the Federal and State governments in 

accordance with section 1903(a) of the 

Act. Section 1903(a)(1) of the Act 

provides for payments to States of a 

percentage of expenditures under the 

approved State plan for covered medical 

assistance. For general medical 

assistance, the ‘‘Federal medical 

assistance percentage’’ (FMAP) varies 

among the States based on a formula set 

forth in section 1905(b) of the Act that 

takes into consideration State specific 

information under a formula set forth in 

section 1905(b) of the Act. Beginning in 

2014, the Federal Government will 

assume all or a higher share of costs for 

certain beneficiaries made eligible 

under the Patient Protection and 

Affordable Care Act of 2010, (Pub. L. 


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Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 26343 

111–148, enacted March 23, 2010) (the 

Affordable Care Act). 

The Medicaid statute requires that 

States provide coverage to certain 

groups of individuals, and also requires 

that such coverage include certain 

minimum benefits. In addition, States 

may elect to cover other populations 

and benefits. In order to give meaning 

to coverage requirements and options, 

beneficiaries must have meaningful 

access to the health care items and 

services that are within the scope of the 

covered benefits, as required by section 

1902(a)(30)(A) of the Act. Many factors 

affect whether beneficiaries have access 

to Medicaid services, including but not 

limited to, the beneficiaries’ health care 

needs and characteristics, State or local 

service delivery models, procedures for 

enrolling and reimbursing qualified 

providers, the availability of providers 

in the community, and Medicaid service 

payment rates to providers. 

States have broad flexibility under the 

Act to establish service delivery systems 

for covered health care items and 

services, to design the procedures for 

enrolling providers of such care, and to 

set the methods for establishing 

provider payment rates. For instance, 

many States provide medical assistance 

primarily through capitated managed 

care arrangements, while others use feefor-service payment arrangements (with 

or without primary care case 

management). Increasingly, States are 

developing service delivery models that 

emphasize medical homes, health 

homes, or broader integrated care 

delivery systems to provide and 

coordinate medical services. The 

delivery system design and 

accompanying payment methodologies 

can significantly shape beneficiaries’ 

abilities to access needed care by 

facilitating the availability of such care. 

In addition, the delivery system model 

and payment methodologies can 

improve access to care by making 

available care management teams, 

physician assistants, community care 

coordinators, telemedicine and 

telehealth, nurse help lines, health 

information technology and other 

methods for providing coordinated care 

and services and support in a setting 

and timeframe that meet beneficiary 

needs. 

As State delivery system models have 

evolved, so too have their provider 

payment systems. Many States develop 

rates based on the costs of providing the 

service, a review of the amount paid by 

commercial payers in the private 

market, or as a percentage of rates paid 

under the Medicare program for 

equivalent services. Often, rates are 

updated based on specific trending 

factors such as the Medicare Economic 

Index or a Medicaid trend factor that 

incorporates a State-determined 

inflation adjustment rate. Rates may 

include supplemental or incentive 

payments that encourage providers to 

serve Medicaid populations. For 

instance, some States have authorized 

Medicaid providers to receive 

supplemental payments for care 

coordination and care management, or 

for achieving certain specified quality 

measures. 

The flexibility in designing service 

delivery systems and provider payment 

methodologies, as described above, is 

consistent with the requirement in 

section 1902(a)(30)(A) of the Act that 

State Medicaid plans must ‘‘provide 

such methods and procedures relating 

to the utilization of, and the payment 

for, care and services available under 

the plan * * * as may be necessary to 

safeguard against unnecessary 

utilization of such care and services and 

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 

same extent that such care and services 

are available to the general population 

in the geographic area.’’ 

Consistent with the requirement in 

section 1902(a)(30)(A) of the Act to 

provide payment for care in an effective 

and efficient manner consistent with 

quality of care, States are empowered to 

seek the best value through their ratesetting policies and may tailor their 

access strategies to take into account 

local conditions including geographic 

disparities in the availability of 

providers and demand for particular 

services. Achieving best value has been 

a key strategy for some States that have 

attempted to reduce costs in the 

Medicaid program in these difficult 

fiscal times. We do not intend to impair 

States’ ability to pursue that goal, or 

their ability to explore innovative 

approaches to providing services and 

lowering costs for other reasons. Indeed, 

the Secretary and CMS, including 

through the new Center for Medicare 

and Medicaid Innovation, is actively 

engaged in helping States achieve better 

value and better care while lowering 

per-person costs. 

B. Discussion 

Medicaid payment rate changes are a 

function of the State budget process in 

many States. We recognize that payment 

reductions or other adjustments to 

payment rates are legitimate tools to 

manage Medicaid program costs and 

achieve overall budget objectives. 

However, payment rate changes made 

without consideration of the potential 

impact on access to care for Medicaid 

beneficiaries or without effective 

processes for assuring that the impact 

on access will be monitored, may lead 

to access problems. Payment rate 

changes are not in compliance with the 

Medicaid access requirements if they 

result in a denial of sufficient access to 

covered care and services. 

Budget-driven payment changes have 

led to confusion about the analysis 

required to demonstrate compliance 

with Medicaid access requirements at 

section 1902(a)(30)(A) of the Act. States 

attempting to reduce Medicaid costs 

through payment rate changes have 

increasingly been faced with litigation 

challenging payment rate reductions as 

inconsistent with the access provisions 

of section 1902(a)(30)(A) of the Act. 

Resulting court decisions have not 

offered consistent approaches to 

compliance with the access 

requirement. These decisions have left 

States without clear and consistent 

guidelines and have subjected them to 

considerable uncertainty as they move 

forward in designing service delivery 

systems and payment methodologies. 

For instance, the United States Court 

of Appeals for the Ninth Circuit Court, 

in Orthopedic Hospital v. Belshe, 102 

F.3d 1481, 1496 (1997), cert. denied, 

522 U.S. 1044 (1998) required the State 

agency to set provider payment rates 

that ‘‘bear a reasonable relationship’’ to 

provider costs, based on ‘‘responsible 

cost studies.’’ This ruling was reaffirmed 

by the Ninth Circuit in Independent 

Living v. Maxwell-Jolly, 572 F.3d 644 

(2009). In contrast, the United States 

Court of Appeals for the Seventh 

Circuit, in The Methodist Hospitals, Inc. 

v. Sullivan, 91 F.3d 1026, 1030 (1996) 

did not find any requirement for prior 

cost studies or other procedural 

requirements. While other Federal 

Courts of Appeals have also addressed 

the issue, there is no consensus among 

the circuits. 

Significantly, in 2009, the Congress 

created the Medicaid and CHIP Payment 

and Access Commission (MACPAC) 

(Pub. L. 111–3, section 506) specifically 

to study and make recommendations on 

beneficiary access to care in Medicaid 

and the Children’s Health Insurance 

Program (CHIP). With members 

appointed by the non-partisan U.S. 

Comptroller General, MACPAC 

reviewed 30 years of research and 

consulted extensively with key 

stakeholders to develop a 

recommendation on how to measure 

access to care for Medicaid 

beneficiaries. This recommendation was 

in MACPAC’s first report to the 

Congress, published on March 15, 2011. 


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26344 Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 

The MACPAC report sets out the threepart framework for analyzing access to 

care which, as we discuss below in this 

section of the proposed rule, we propose 

to adopt as part of a State-level review 

strategy. The MACPAC-recommended 

framework considers: (1) Enrollee 

needs; (2) the availability of care and 

providers; and (3) utilization of services. 

In this proposed rule, we recognize 

that States must have some flexibility in 

designing the appropriate measures to 

demonstrate and monitor access to care, 

which reflects unique and evolving 

State service delivery models and 

service rate structures. At this point, a 

singular approach to meeting the 

statutory requirement under section 

1902(a)(30)(A) of the Act could prove to 

be ineffective given current limitations 

on data, local variations in service 

delivery, beneficiary needs, and 

provider practice roles. For these 

reasons, we are proposing Federal 

guidelines to frame alternative 

approaches for States to demonstrate 

consistency with the access requirement 

using a standardized, transparent 

process, rather than setting nationwide 

standards. We are soliciting comments 

on this basic approach. 

It is important to note that, if adopted, 

this proposed rule would not directly 

require States to adjust payment rates, 

nor to take any steps that would not be 

consistent with efficiency, economy, 

and quality of care. We believe that even 

if access issues are discovered as a 

result of the analysis that would be 

required under this rule, States may be 

able to resolve those issues through 

means other than increasing payment 

rates. Rather, these rules proposed to 

clarify that beneficiary access must be 

considered in setting and adjusting 

payment methodologies for Medicaid 

services. If a problem is identified, any 

number of steps might be appropriate, 

such as redesigning service delivery 

strategies, or improving provider 

enrollment and retention efforts. It has 

always been within the regulatory 

authority of CMS to make SPA approval 

decisions based on sufficiency of 

beneficiary service access and this 

proposed rule merely provides a more 

consistent and transparent way to gather 

and analyze the necessary information 

to support such reviews. 

II. Proposed State Level Review 

Strategy for Compliance With Access 

Requirements 

We are not aware of any standardized, 

transparent methodology that is broadly 

accepted to definitively measure access 

to health care and services. Partly as a 

result, there has been no prior Federal 

rulemaking or guidance previously on 

this subject. As a consequence, in 

implementing their programs, States 

lack the guidance that they need to 

understand the types of information that 

they are expected to analyze and 

monitor in determining compliance 

with statutory access requirements. This 

issue has come to light recently, both in 

litigation and in our review of proposed 

Medicaid State plan amendments 

(SPAs) that would reduce provider 

payment rates. Two Governors and 

several State Medicaid directors have 

sought Federal guidance in this area, 

and the Congress, by establishing 

MACPAC, has also expressed its interest 

in promoting more information analysis 

and guidance with respect to these 

important matters. MACPAC’s March 

report is significant in that it offers the 

first Congressionally-authorized expert 

recommendation on standards and 

methodologies for defining access to 

health care and health services. 

We have a responsibility under the 

Act to ensure sufficient beneficiary 

access to covered services and are aware 

of the uncertainties and problems that 

arise for States in the absence of Federal 

guidance on methods and standards for 

States to demonstrate compliance with 

this requirement. At the same time, we 

are mindful that the landscape of health 

care delivery systems and associated 

payment methodologies is undergoing 

significant change, the relevant data are 

not always available, and that MACPAC, 

the entity established by the Congress to 

consider these issues, may adapt its first 

set of recommendations. 

As such, the strategy we are now 

proposing is designed to allow for State 

and Federal review of beneficiary access 

to evolve over time and for States to 

implement effective and efficient 

approaches and solutions that are 

appropriate to their local and perhaps 

changing circumstances. The proposed 

strategy would be a consistent and 

ongoing State-level review to 

demonstrate sufficient beneficiary 

access to services covered under the 

Medicaid State plan that is not solely 

focused on provider payment rate 

changes and the State plan process, but 

assesses ongoing performance. 

We note that section 1902(a)(30)(A) of 

the Act, and the requirements of this 

proposed rule, discuss access to care for 

all Medicaid services paid through a 

State plan under fee-for-service and do 

not extend to services provided through 

managed care arrangements. Managed 

care entities are subject to separate 

access review procedures that are set 

forth in 42 CFR part 438 to ensure 

network sufficiency and procedures for 

beneficiaries to obtain needed services. 

We are currently undertaking a review 

of State managed care access standards 

and are considering future proposals to 

address access issues under managed 

care delivery systems. The access 

requirements under section 

1902(a)(30)(A) of the Act, apply equally 

to States that are not changing provider 

payment rates and those that are. The 

proposed State reviews, however, will 

provide an analytic framework to 

consider the impact of any proposed 

Medicaid State plan rate reductions on 

service access. 

More specifically, we propose to 

require States to determine appropriate 

data elements that focus on the 

MACPAC-recommended three-part 

framework, which include information 

on: Enrollee needs, availability of care 

and providers, and utilization of 

services. This and other information 

that the State believes to be relevant, 

will be periodically analyzed by States 

to demonstrate and monitor sufficient 

access to care. The data and analysis 

will be made available to the public and 

furnished to CMS as requested in the 

context of a SPA that reduces provider 

rates or restructures provider payments 

in circumstances that could result in 

access issues, or as part of ongoing 

program reviews. 

The MACPAC-recommended 

framework does not focus on one 

particular data element, such as the 

relationship of provider payment rates 

to provider costs, but recognizes that 

access to covered services is affected by 

multiple factors. Though cost may be 

one consideration affecting access to 

care, there are other factors such as local 

market conditions, variable provider 

costs, administrative burden for 

providers, and demographic differences. 

Depending upon State circumstances, 

cost-based studies may not always be 

informative or necessary. In addition, 

because many State payment rates are 

not specifically calculated based on 

provider cost considerations, it can be 

burdensome and not particularly 

productive to rely solely on that one 

factor as a measure of access. 

The proposed State-level review 

strategy would recognize an ongoing 

responsibility to conduct periodic 

reviews of compliance with access 

requirements for all Medicaid services 

and also a particular responsibility to 

review and monitor sustained service 

access after implementing a change in 

provider payment rates. While we are 

proposing to allow States some 

discretion to determine appropriate 

measures to demonstrate and monitor 

access to care within the three-part 

framework, this proposal provides 

consistent steps for States to follow in 


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Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 26345 

demonstrating and monitoring Medicaid 

access. 

To ensure continuing compliance 

review, we propose that States must 

conduct access reviews for a subset of 

services each calendar year and release 

the results through public records or a 

web site developed and maintained by 

the State, by January 1st of each year. 

We have chosen to base the requirement 

on the calendar year because State fiscal 

years vary. We note that States may 

issue the access reviews prior to, but no 

later than January 1 of each year, with 

the first review completed by no sooner 

than 12 months after the effective date 

of the final rule. States may determine 

the services that they will review each 

year, provided that each service is 

reviewed at least once every 5 years. 

The reviews must include the specific 

measures that the State used to analyze 

access to care by geographic location, 

discuss the measures in the context of 

the MACPAC three-part framework, 

discuss any issues with access that were 

discovered as a result of the review, and 

make a recommendation about the 

consistency with the requirements of 

section 1902(a)(30)(A) of the Act. 

We propose that, prior to submission 

of a SPA to reduce rates or alter the 

structure of provider payment rates in 

circumstances that could result in 

access issues for a covered service, the 

State would need to submit information 

from an access review that had been 

conducted within the year prior to 

submission of the SPA as applicable. 

We are proposing this requirement so 

that CMS and the States will have the 

information necessary to assess 

consistency with section 1902(a)(30)(A) 

of the Act before a rate reduction or 

restructuring proposal is processed. 

Since it may be difficult to predict the 

impact that a provider rate reduction or 

restructuring of provider payments will 

have on access, we are also proposing 

that States develop special procedures 

to monitor access to services after such 

a change has been implemented. These 

procedures would result in a periodic 

review of State-determined indices that 

demonstrate sustained access to care 

that would be made available to CMS 

and the public. 

To address potential issues that 

develop in service access, we are 

proposing that States implement an 

ongoing mechanism that allows 

beneficiary feedback. This feedback 

mechanism could be based on 

beneficiary hotlines or surveys, an 

ombudsman program, or other 

equivalent mechanisms. In addition, we 

are proposing that each State specify a 

process to address any access issues that 

are discovered through the ongoing 

access reviews and monitoring, through 

a corrective action plan that would be 

submitted to CMS and would include 

specific steps and a timeline for State 

action to address such issues. As 

proposed under this proposed rule, 

States would need to submit their action 

plan to CMS within 90 days of 

discovering an access issue. Below, in 

section II.C. of this proposed rule, we 

offer some examples of actions that 

States may take to address access issues. 

A. Data Measures To Demonstrate 

Sufficiency of Access 

We propose to provide States with 

discretion in determining the 

appropriate data measures to 

demonstrate whether access is sufficient 

through access reviews and monitoring 

efforts in the context of the MACPACrecommended framework. We are 

offering specific suggestions on trends 

and factors that States could use to 

measure enrollee needs, the availability 

of care and providers, and utilization, 

but we would allow States to develop 

alternative approaches and improve on 

these suggestions within each of these 

categories of required data. We are 

soliciting public comments on 

additional data measures that may be 

useful in measuring access in the 

context of the proposed framework and 

whether it is appropriate to require 

certain data measures as part of State 

access reviews. 

We note at the outset that the data 

States would review under this rule will 

explicitly address Medicaid beneficiary 

access. However, the required statutory 

test is a comparison between Medicaid 

beneficiary access and access to medical 

services by the general population in the 

geographic area. While it is neither 

desirable nor feasible to require that 

States develop new data sources on 

general access to medical services, the 

data measures for Medicaid beneficiary 

fee-for-service access may, in some 

cases, require that States compare 

information from commercial insurance 

standards or Medicaid managed care. 

We welcome public comment on any 

existing data sources that address 

general access to medical services that 

might be relevant. In general, we are 

confident that the Medicaid data will 

implicitly address general access 

standards in the geographic area. For 

example, data on beneficiary experience 

and satisfaction will take into account 

expectations based on community 

standards, and the percentage of 

community providers enrolled and 

accepting Medicaid patients will 

necessarily indicate the availability of 

such providers in the community. 

We believe the meeting of enrollee 

needs should be the primary driver to 

determine whether access to care is 

sufficient. Measurable data on the 

beneficiaries’ experiences and needs, 

however, may be difficult for States to 

attain. States may need to rely upon 

qualitative information that is received 

through beneficiary surveys or other 

means, such as hotlines or beneficiary 

Ombudsman offices that some States 

may have in place, and may request that 

community-based organizations, 

primary care providers, hospitals, case 

management, and other providers assist 

in soliciting the information from 

beneficiaries. Once a State determines 

the most efficient means to reach 

beneficiaries, it has a number of options 

for data elements that could be 

significant in assessing whether their 

needs are met: 

• Extent of knowledge that a service 

is covered by the Medicaid program; 

• Success in scheduling a service 

appointment with a provider, including 

after hours as necessary; 

• Satisfaction with the availability of 

service providers within a reasonable 

distance from home; 

• Ability to obtain transportation to 

and from a scheduled appointment; 

• Number and reasons for emergency 

room services received in the year; 

• Number and reasons for missed 

appointments and means; 

• Ability to either schedule an 

appointment or receive services in light 

of limited English language proficiency; 

• Turnover in providers such as with 

homecare workers or personal care 

attendants; and 

• Means and ability to seek help in 

scheduling service appointments. 

The connection between the number 

of enrolled providers and the 

availability of services is seemingly 

obvious, but there are many 

qualifications that affect the 

meaningfulness of such data. It may be 

important to know the number of 

enrolled providers in relation to the 

overall number of providers in the 

community. And, in order to contribute 

to beneficiary access, it is significant to 

know whether enrolled providers have 

‘‘open panels’’ which means that they 

are accepting Medicaid patients. 

Data on the availability of care and 

providers is likely more easily 

obtainable by States, measurable and 

able to be monitored on a consistent 

basis. Many of the elements that we 

suggest below are likely available 

through current State information 

systems, while some of the information 

may require a survey of the providers 

within the State. With that in mind, 


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26346 Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 

States could review the following data 

elements: 

• The availability of care and services 

through Medicaid fee-for-service as 

compared to access standards 

established under Medicaid managed 

care; 

• The availability of care and services 

through Medicaid fee-for-service as 

compared to commercial managed care 

or other commercial insurance access 

standards. 

• The number of providers with open 

panels who are accepting new Medicaid 

patients; 

• The extent to which timely followup visits occur after an emergency visit 

or inpatient stay; 

• Provider Medicaid enrollment (with 

open panels) compared to licensed 

providers in the preceding rate year 

applicable to each covered service; 

• Provider Medicaid enrollment 

compared to actual provider Medicaid 

participation (as measured by claims 

submitted) in the preceding rate year 

applicable to each covered service; 

• Provider Medicaid enrollment (with 

open panels) compared to provider 

enrollment in one of the four largest 

commercial insurers in the State in the 

preceding rate year applicable to each 

covered service; 

• Provider loss and retention in the 

preceding rate year applicable to each 

covered service; 

• The average amount of time from 

provider application for enrollment to 

the approval of the provider agreement; 

and 

• The average amount of time from 

provider claim submission to payment 

of the claim by the Medicaid agency. 

Beneficiary service utilization data is 

relevant because changes in beneficiary 

service utilization can indicate access 

problems. In particular, drops in service 

utilization that coincide with payment 

changes may indicate access problems. 

In addition, patterns of beneficiaries 

obtaining access to care through 

hospital emergency rooms may be an 

indication of the access problems for 

certain categories of services. 

Beneficiary utilization data is readily 

available through State information 

claims systems and relatively easy for 

States to review and monitor. For 

purposes of reviewing utilization, States 

could focus on Medicaid utilization of 

applicable covered Medicaid State plan 

services in the preceding rate year on a 

per capita basis and also take into 

account that some services apply to 

subsets of the population (such as 

pediatric services and obstetrics 

services). States could also look at 

avoidable emergency room visits and 

hospital admissions to determine if 

there are issues with preventive hospital 

use that may suggest a corresponding 

access issue. 

Consistent with the performance 

standard measures described under the 

Affordable Care Act, we are actively 

working, with input from State partners 

to develop a coordinated and 

streamlined data solution aimed at 

reducing redundancy, administrative 

burden, and to maximize business 

value. As we propose to have States 

review data to measure Medicaid access 

to care, we are mindful that our broader 

data improvement and streamlining 

efforts that aim to inform program 

performance and compliance may also 

be useful to States in informing access 

to care. As part of this proposed rule, we 

are asking States to consider how 

measures of access to care may align 

with current program oversight and 

review activities so that the access 

reviews build upon existing State data 

collection efforts that are used to 

improve overall program efficiency and 

quality. In addition, through our data 

efforts, we will work to identify and 

highlight data available within CMS and 

States that can inform the State access 

review under this proposed rule and 

monitor access on a national basis. 

We also will offer States technical 

assistance in identifying available data 

resources and facilitate cross-State 

collaboration as they undertake the 

access review procedures proposed 

under this proposed rule. To initiate our 

technical assistance, we have worked 

with our Federal partners to develop a 

matrix of potential Federal and State 

data resources which may be helpful to 

States in developing their access 

reviews. These resources are listed 

below in section IV. of this proposed 

rule. 

The resources presented in section IV. 

do not address each data element 

identified in this proposed rule and 

much of the data will need to be 

obtained from existing or developed 

State sources. We are soliciting public 

comments and suggestions on these and 

other existing sources of data that may 

help States inform their rate-setting 

policies and their efforts to ensure 

service access. We will also develop a 

standardized template for States to 

report and make publically available the 

data analysis identified under this 

proposed rule. The template will be 

designed to focus on the data elements 

that a State has reviewed to measure 

access to care within the MACPAC 

recommended framework, any issues 

that the State has identified as a result 

of the review, and the State agency’s 

recommendation on the sufficiency of 

access to care based on the review. We 

are soliciting public comments on the 

content of the access template and 

specifically, the important areas that 

States should address in their reviews. 

We believe the reviews should address, 

minimally, the data elements reviewed 

under the MACPAC recommended 

framework, including the information 

gathered on beneficiary experience, and 

the Medicaid payment rate comparison. 

However, we are interested in exploring 

additional topics that should be 

standardized through the template. 

B. Public Process To Involve 

Stakeholders 

In addition to the access rate review, 

we propose to require a public process 

that States would conduct prior to 

submitting State plan amendments that 

propose Medicaid provider payment 

rate reductions or changes in the 

provider payment structure. We are not 

prescribing a specific form for that 

public process, but we would require 

that the State describe the process that 

they have developed in their State plan. 

We are soliciting public comments on 

whether specific elements regarding that 

process should be required. We also 

encourage States to conduct the public 

process in any instance when the State 

data collection and monitoring process 

uncovers an access issue. The purpose 

of the public process would be to 

provide a meaningful opportunity for 

beneficiaries, providers, and other 

interested parties to provide input and 

feedback on the impact that the 

proposed rate reductions will have on 

efficiency, economy, and access to care, 

offer ideas to enhance service delivery 

models and other innovative solutions 

to address access issues, discuss 

strategies to encourage continued 

provider participation, and develop the 

procedures that States will use to 

monitor access to care after 

implementation of the proposed rate 

reductions. 

We are proposing to require this 

public process in part because we have 

found that States that worked with 

affected stakeholders prior to 

implementing rate reductions often 

maintained a commitment from 

providers to continue to serve Medicaid 

beneficiaries. States have frequently 

held these discussions with the affected 

provider community. We are proposing 

that States also discuss the impact of 

proposed rate reductions with 

beneficiaries and other interested 

parties. As stated earlier in section II.A. 

of this proposed rule, we believe that 

beneficiaries’ experiences in receiving 

services are a primary driver in 

determining the sufficiency of service 

access and it is important that their 


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views concerning changes that could 

directly affect their care be solicited. 

Moreover, it is also important to have 

a public process that obtains feedback 

from all affected stakeholders because 

each may have unique approaches to 

mediating Medicaid service access 

issues, promoting provider participation 

in the program, and assuring the 

program operates in an efficient and 

economical way. As proposed, the 

public process requirements will solicit 

feedback from stakeholders in 

determining the monitoring and 

oversight procedures that a State will 

implement to ensure access is sustained 

after the implementation of a rate 

reduction. 

C. Monitoring Access and Corrective 

Action To Address Access 

As States review their service access 

data and monitor access after 

implementing rate reductions, it is 

important to have a process in place to 

address access issues that are uncovered 

through the new process. While we, 

through official compliance procedures, 

may address issues by requiring the 

State to develop a corrective action plan 

detailing action steps and timelines to 

address access issues, we are also 

proposing to allow States to identify 

access issues and submit a corrective 

action plan within 90 days of 

discovering the problem. When a State 

develops a corrective action plan on its 

own, we would not treat it as a finding 

of non-compliance, but as evidence of a 

good faith effort by the State to remain 

in compliance. Action plans may also be 

developed to improve the State’s 

information base going forward, 

regardless of whether a particular access 

problem is identified. 

While a corrective action plan may 

have longer term action steps, it should 

set a target for compliance with access 

requirements that is no longer than one 

year from the submittal of the plan to 

CMS. We are also encouraging States to 

work with stakeholders through the 

public process to develop monitoring 

indices to ensure sustained access to 

care and remediation plans that address 

known access issues. Stakeholders can 

provide valuable input and assistance in 

the identification and implementation 

of measurable efforts that could increase 

access as appropriate for their local 

health delivery infrastructure, service 

delivery system, and other factors. 

The precise nature of needed 

corrective action depends on individual 

State circumstances. For instance, a 

State could submit action steps and a 

timeline to reduce administrative 

burdens on providers or to implement 

and oversee a program through which 

beneficiaries receive assistance in 

finding a service appointment. We 

understand that some States have 

‘‘ombudsman’’ programs to aid 

beneficiaries in finding service 

appointments as part of their managed 

care systems and we offer that these 

programs could serve as one step in 

alleviating fee-for-service access issues 

or could help pinpoint the access issues 

with great precision. Alternatively, or 

perhaps in addition, a State might seek 

to incentivize the development or 

expansion of clinics in underserved 

areas where access is of particular 

concern. States could also structure 

their service reimbursement rates to 

address particular geographic disparities 

in service access or to offer incentives 

for available evening and weekend 

appointments to working individuals 

who may not have flexible schedules to 

accommodate regular work hour 

appointments. A State could also 

review, modify or implement 

transportation, telemedicine or 

integrated models of care (such as 

health homes or primary care case 

management) policies that serve to make 

care available in efficient and effective 

ways. 

In proposing to address access to care 

issues through any of these approaches, 

it would be important for States to 

describe their process for monitoring 

program effectiveness in improving or 

maintaining service access through use 

of these action steps so that the State 

will ultimately comply with the 

requirements at section 1902(a)(30)(A)of 

the Act. 

D. Clarification and Electronic 

Publication of State Public Notice 

In addition to establishing a 

framework for documenting access to 

covered Medicaid services, this 

proposed rule would update the public 

notice requirement in § 447.205 by 

recognizing electronic publication as a 

means to notify the public of payment 

policy changes. We are proposing this 

change at the request of States to relieve 

State burden. The current regulatory 

language, which requires publication in 

a State register similar to the Federal 

Register, the newspaper of widest 

circulation in each city with a 

population of 50,000 or more, or the 

newspaper of widest circulation in the 

State, if there is no city with a 

population of 50,000 or more, was 

drafted prior to widespread accessibility 

of the web and development of State 

government web sites and we are 

updating the regulation to consider 

electronic methods of publication. 

We are also soliciting public comment 

on the use of the term ‘‘significant’’ in 

§ 447.205(a). The current public notice 

regulation calls for notice of 

‘‘significant’’ changes in methods and 

standards, which has resulted in some 

confusion among States in determining 

when it is appropriate to publish notice. 

Because the term ‘‘significant’’ is not 

defined, and because the impact of 

payment changes is not always 

objectively clear, States are not always 

clear on when it is appropriate to notify 

the public of changes to rate-setting 

methods and standards. 

Longstanding CMS policy has been to 

require public notice for any change in 

payment methods and standards 

because there is no definable threshold 

for a ‘‘significant’’ change that can apply 

across services, service providers, 

beneficiaries and other stakeholders. A 

change that may be significant for one 

individual or group of stakeholders may 

not be significant to another. Therefore, 

the historic interpretation has been 

applied because it is important for 

providers, beneficiaries and 

stakeholders to be aware of all changes 

in State rate policies and evaluate how 

those changes impact the delivery of 

Medicaid services. In addition, given 

that the process for amending the 

approved State plan to change provider 

payment rates is somewhat complex, we 

do not believe that States go through 

that process for changes that are not 

significant. 

We are soliciting public comments to 

determine if it is appropriate to clarify 

the public notice requirement at this 

time. One option to clarify the 

requirement is to remove the reference 

to significance and clarify that any 

changes in rates, methods and standards 

require public notice as has been 

consistent with CMS policy. We could 

also establish a threshold for 

significance. 

III. Specific Proposed Regulatory 

Changes 

A. Existing Authorities 

Section 1902(a)(30)(A) of the Act 

requires that, in order to receive Federal 

Financial Participation (FFP), States 

must set Medicaid service payment rates 

that are consistent with efficiency, 

economy, and quality of care and are 

sufficient to enlist enough providers so 

that services are available to Medicaid 

eligible individuals to the extent that 

they are available to the general 

population in the geographic area. The 

regulations located at 42 CFR part 447 

subpart B (Payment Methods: General 

Provisions) sets forth the 

implementation requirements that 

States must follow when establishing 

Medicaid payment rates. 


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Regulations at § 447.203 establish 

certain documentation requirements 

that the State Medicaid agency must 

maintain and make available to the 

Department of Health and Human 

Services upon request. Specifically, for 

any increase in payment rates, the State 

Medicaid agency is required to record 

an estimate of the percentile of the range 

of customary charges to which the 

revised payment structure applies, a 

description of the methods used to make 

the estimate and an estimate of the 

composite average percentage increase 

of the revised payment rates of the 

preceding rates. This information is 

recorded in State manuals or other 

official files and applies to individual 

practitioner services. 

As currently described, § 447.203 

requires that States document a 

comparison of increased payment rates 

to customary charges and preceding 

rates at the time that the increase occurs 

and only for practitioner service rates. 

The documentation requirement does 

not contemplate rate decreases or 

include a process or timeframe for 

States to update the methodology and 

make a rate comparison using 

contemporary data. Further, the 

documentation process does not 

account for all Medicaid provider 

payments and could be interpreted to 

exclude payment increases for hospital, 

clinic, long-term care facilities, hospice, 

home health care, durable medical 

equipment, and other Medicaid service 

rates that encompass costs beyond 

practitioner services. Clearly, the 

regulation was intended to document 

potential overpayments for a subset of 

Medicaid service rates and is 

insufficient, in its current scope, to 

ensure the collection of information on 

efficiency, economy, and adequacy of 

current payment rates across all services 

and to measure service access. 

Regulations at § 447.204 implement, 

in part, section 1902(a)(30)(A) of the Act 

by adopting into the CFR the statutory 

requirement for comparable general 

population service availability. The 

regulation replicates the statute, stating 

that payments must be sufficient to 

enlist enough providers to ensure that 

services under the plan are available to 

recipients at least to the extent that 

those services are available to the 

general public. However, the regulation 

does not provide additional guidance to 

States on standards to demonstrate 

sufficient access to Medicaid services. 

Without specific guidance, States have 

attempted to comply with this 

regulation through a variety of methods. 

As discussed in more detail in section 

III.A. of this proposed rule, these 

methods include: stated assurances, 

public processes, and/or data reviews, 

each of which may not fully 

demonstrate that rates are sufficient to 

provide for Medicaid service access 

equivalent to service access available to 

the general public consistent with the 

statute. 

Regulations at § 447.205 require, with 

certain exceptions, that the State agency 

provide public notice of any significant 

proposed change in methods and 

standards for setting Medicaid payment 

rates. Prior to the effective date of a 

change in methodology, which must be 

submitted to CMS for review through a 

Medicaid SPA, States are required to 

notify the public of the proposed change 

through publication of a public notice 

that is published in: a State register 

similar to the Federal Register, or the 

newspaper of widest circulation in each 

city with a population of 50,000 or 

more. If there is no city with a 

population of 50,000 or more within the 

State, the publication must be made in 

the newspaper of widest circulation 

within the State. The regulation 

specifies that the content of the public 

notice describe the proposed change in 

methods and standards, explain the 

reason for the change, identify the local 

agencies where the changes are 

available for public review, provide an 

address where comments may be sent 

and reviewed by the public, and give 

the location, date and time for any 

public hearings on the change. The 

public notice requirement is meant to 

notify stakeholders of rate-setting policy 

changes that have already been 

determined and does not require that 

States examine and provide the public 

with any information on the resulting 

impact on service access that the 

proposed changes may have once such 

changes have taken effect. 

B. State Plan Review Process Changes 

Since 2008, as more States sought to 

amend Medicaid State plan payment 

methodologies by instituting significant 

provider rate changes, we have 

requested that States provide 

information to help the agency 

determine that the changes to rates 

resulting from State plan amendments 

will continue to provide for access to 

care consistent with the Act and the 

implementing regulations. As part of the 

SPA review process, we requested this 

information either informally or through 

a formal request for additional 

information. Though we did not 

develop a standard set of questions for 

all SPA information requests, similar 

concerns over adherence to the 

provisions of § 447.204 were raised in 

many of the rate reduction SPA reviews. 

Without clear standards or processes for 

determining sufficient rates that will 

maintain access and encourage provider 

participation, States were offered a 

variety of means to satisfy the statutory 

requirement. 

Based on our current review methods, 

all States that propose to implement rate 

reductions through a SPA submittal, or 

change payment rate structures during 

the rate year, respond with a statement 

assuring that access would not be 

affected by the changes in the 

amendment. When asked for additional 

detail on the methodology that States 

used to determine compliance with the 

access requirement, only a few States 

indicated that they relied upon actual 

data to make the determination. Of the 

States that relied upon data, most 

focused on historical levels of provider 

enrollment and their belief that 

providers would not disenroll based on 

a reduction in payments. A few States 

also looked at rates as compared to cost, 

Medicare rates, or payment rates in 

surrounding States to determine the 

impact of the reductions. Some States 

noted that historic reductions had no 

discernible impact on provider 

participation and so they did not 

anticipate access issues as a result of 

additional reductions. 

Nearly every State held a public 

meeting that invited some or all of the 

providers to discuss the proposed 

changes or at least held informal 

discussions with providers and policymakers. Approximately half of the 

States also included consumer groups 

and other affected stakeholders as part 

of the rate proposal hearings or 

discussions. Many of these public 

hearings, however, seemed focused on 

awareness of the coming rate changes, 

rather than a discussion on the potential 

impact to service access. 

Finally, when asked how they 

intended to monitor the impact of the 

rate changes on access, a few States 

indicated that they would review data 

submitted to their Medicaid 

Management Information Systems to 

determine if services utilization or 

provider participation levels dropped 

after the changes were implemented. 

Some States have hotlines or other 

mechanisms to record consumer 

complaints, although it is not clear how 

widely known these mechanisms are 

among beneficiaries or how the 

complaints are considered or evaluated 

over time. The majority of States did not 

offer any plan to monitor the impact of 

the rate reduction on an on-going basis 

or to make rate adjustments or other 

changes based on the monitoring 

activities. 

Absent data on the sufficiency of State 

efforts, including State plan rates, to 


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achieve access consistent with 

efficiency, economy, and quality and 

without a defined process for involving 

stakeholders in rate setting 

determinations, we have generally 

relied upon State assurances and these 

disparate State approaches to make 

decisions on proposed rate reduction 

SPAs. It should be noted that in one 

instance, we informed a State that based 

upon the persistent, widespread 

negative reaction by providers in 

response to a proposed significant rate 

reduction of an already low rate (by 

comparison to commercial rates and 

other State Medicaid rates for the same 

service), that we could not approve a 

reduction amendment as submitted 

because of concerns that Medicaid 

eligible individuals would no longer 

have adequate access to care. In a 

similar situation, where a State also 

failed to provide any information or 

analysis on whether the rate proposal 

would negatively impact access after the 

implementation of proposed reductions, 

we have denied the relevant SPAs. 

We agree with MACPAC that it is 

more consistent with the statute to make 

such decisions in the context of a 

consistent framework for evaluating 

access, informative data and a 

transparent process that assures 

stakeholder involvement. Therefore, we 

are proposing clear guidelines on data 

collection efforts and public processes 

that all States must implement in order 

to demonstrate that rate-setting is 

informed by sustained access to services 

consistent with the requirements of 

section 1902(a)(30)(A) of the Act. 

We are also proposing to require that 

States should submit to CMS, in support 

of State plan amendments that reduce 

payment rates or restructure provider 

payments in circumstance when the 

resulting changes could create access 

issues, an analysis based on access data 

collected during the prior year. The data 

itself would be available to CMS for 

review upon request. 

C. Standards for CMS Review of 

Compliance With Access Requirements 

and State Plan Amendments Affecting 

Access 

As discussed above, we are proposing 

a State-level ongoing access review 

process that will generate analysis and 

data concerning access issues, and will 

provide a framework for ongoing 

monitoring and corrective action. We 

would consider State compliance with 

these procedural requirements, 

including both the access review 

process and the need for identification 

of access issues and corrective action 

plans, to be essential to a demonstration 

of compliance when we review 

proposed State plan amendments that 

affect access to services, such as 

provider payment reductions or 

restructuring. When a State has not 

complied with the access review 

requirements, we would not approve 

such a State plan amendment. 

We have considered and declined to 

propose setting a single uniform Federal 

standard for reviewing substantive 

compliance with access requirements 

because we believe that determination 

of such compliance is very fact-specific 

and data-specific, taking into 

consideration local circumstances. 

In our review of compliance with 

access requirements, we intend to focus 

on working with States to improve 

beneficiary access mindful of legitimate 

efforts to ensure that State policies are 

consistent with efficiency and economy, 

as well as to the potential advantages of 

innovative methods of service delivery, 

provider payment, and case 

management. However, we will have a 

perspective in reviewing State-level 

access reviews and underlying data that 

States themselves will not have. This is 

because we will have the advantage of 

having seen similar access reviews from 

other States and will recognize best 

practices and analytic methodologies 

based on that experience. 

Federal review will be based on the 

statutory standard that the State must 

have methods and procedures ‘‘to assure 

that payments are consistent with 

efficiency, economy, and quality of care, 

and sufficient to enlist enough providers 

so that care and services under the plan 

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 

application of this standard requires a 

review and analysis of data in light of 

local circumstances. Determinations of 

compliance will necessarily involve 

judgments as to how to weigh the data 

States develop on access measures, and 

at least without more experience and 

analysis we do not believe those 

judgments can be readily reduced to 

procedural or substantive formulas. We 

invite comment on possible national or 

State-specific access threshold tests, 

particularly given that the statutory 

requirement to measure access to care in 

relation to the availability of care and 

services to ‘‘the general population in 

the geographic area’’ suggests a Statespecific CMS review. 

In Federal oversight of State-level 

reviews to determine ongoing 

compliance with the statutory access 

requirement, we do not intend to 

develop independent analyses of 

beneficiary access to services, but 

instead will review State analyses to 

ensure that the State-level review 

process operated to reasonably 

demonstrate substantive compliance 

with the access requirements. Our 

review will generally be limited to the 

issues of whether the State collected 

relevant data on each of the required 

elements, and reasonably analyzed that 

data to find substantive compliance 

with access requirements. While we 

intend to conduct a case-by-case review 

of these State-level reviews, we may 

also issue guidance on State-level 

review practices and may integrate such 

guidance into our Federal oversight 

review. 

Such guidance may direct the State 

with respect to the analysis of the 

required data, and we may consider a 

State analysis to be deficient if those 

practices are not applied. For example, 

such guidance might inform States 

about how to appropriately weigh 

different types of data to ensure that the 

resulting analysis reflects overall access. 

If we conclude that a State-level review 

and analysis is deficient and therefore 

does not reasonably demonstrate 

compliance with the statutory access 

requirements, we intend to initiate a 

compliance process (which could 

involve requiring a corrective action 

plan pursuant to these regulations) or, 

for a pending SPA, we would 

disapprove the SPA. In that latter 

instance, we note that the State would 

have an opportunity during the 

reconsideration process to correct 

deficiencies in the State-level review 

and access analysis. 

We note that Federal oversight of 

State reviews will likely be more 

stringent when the State proposes 

changes in provider payment of 

significant magnitude, or when we have 

other evidence, either through data or 

other sources, of an access problem. 

While we are not proposing any single 

Federal standard for reviewing access 

issues, we are inviting public comment 

on whether there should be particular 

indicators that we would regard as an 

irreducible minimum standard. We have 

not proposed such a minimum standard 

for several reasons. First, it is not clear 

whether any particular indicator is 

going to be determinative of access 

issues in every circumstance. The access 

reviews will examine a number of 

indicators, and we believe they are best 

examined in the aggregate. In most 

cases, we believe that the different 

indicators that a State examines will 

confirm each other, but in some cases 

there may actually be a reason for a 

variation in the results that is based on 

a State-specific characteristic. In any 

case, we believe that the overall access 

review process should make serious 


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access problems obvious and easily 

addressed in a case-by-case review. We 

also invite comment from States and 

others on whether a single or small set 

of Federally determined indicators is 

preferable administratively to a broader 

set of State determined indictors. 

IV. State Use of National Data 

Resources To Fulfill Proposed Data 

Requirements 

As discussed previously in this 

proposed rule, we have worked closely 

with our partners within the Federal 

Government, the MACPAC, and a 

number of experts in an attempt to 

identify potential sources of data that 

States may use to fulfill their 

responsibilities under the proposal. We 

recognize that much of the information 

necessary to evaluate access may require 

States to use existing State data or 

develop or implement new resources, 

such as a beneficiary survey. We also 

recognize that data from different 

sources have distinct definitions, 

timeframes for collection, and therefore, 

challenge and limitations exist to 

trending data reliably. We are soliciting 

public comments on existing sources of 

data that States may use to ensure that 

they are fulfilling their responsibility to 

assure access to care and, if States are 

already analyzing data to measure 

access to care, that they share their 

sources and methods of data collection 

with other States either through public 

comment to this proposed rule or 

through MACPAC. 

At the Federal level, the Health 

Resources and Services Administration 

(HRSA) publishes the Uniform Data 

System, which includes patient count, 

diagnosis and expense data at the 

grantee, State and national levels for 

HRSA’s Federally Qualified Health 

Center grantees, which are funded 

under section 330 of the Public Health 

Service Act. This information is 

available at http://www.hrsa.gov/datastatistics/health-center-data/ 

index.html#what. The HRSA also 

publishes State data on shortages in 

primary care, dental and mental health 

providers on the Health Areas Shortage 

Designation web site (http:// 

hpsafind.hrsa.gov/HPSASearch.aspx). 

This information may be of particular 

use to States in targeting specific State 

locations where access problems are a 

known issue in that geographic area, 

without regard to payer. The Agency for 

Healthcare Research and Quality 

(AHRQ) has developed a Medical 

Expenditures Panel Survey, available at 

http://www.meps.ahrq.gov/mepsweb/ 

data_stats/onsite_datacenter.jsp, which 

offers surveys of families and 

individuals, medical providers, and 

employers to document cost and use of 

health care and health insurance 

coverage. The Centers for Disease 

Control and Prevention (CDC), produces 

the National Ambulatory Medical Care 

Survey, which describes data on 

utilization and the provision of 

ambulatory care services in hospital 

emergency and outpatient departments, 

(http://www.cdc.gov/nchs/ahcd.htm), 

and the National Health Interview 

Survey, which tracks health status and 

health care access: (http://www.cdc.gov/ 

nchs/nhis.htm). 

We publish a number of Medicare and 

Medicaid data measures through a 

contractor, the Research Data Assistance 

Center (RESDAC), (http:// 

www.resdac.org/). In addition, we have 

developed the Medicare Current 

Beneficiary Survey, which States may 

find of use in developing surveys that 

track beneficiary experience (https:// 

www.cms.gov/). States may also find the 

U.S. Census Bureau’s Current 

Population Survey of use for developing 

beneficiary questionnaires, http:// 

www.census.gov/. 

For external resources, the State 

Health Access Data Assistance Center 

(SHADAC) Web site, http:// 

www.shadac.org/, which includes 

access data measures for each State. 

Finally, as part of MACPAC’s three part 

approach to measuring access to care, 

the Commission offers a number of 

useful survey resources that States may 

find helpful in their first published 

report to the Congress, which was 

issued on March 15, 2011, (http:// 

www.macpac.gov/reports). 

We are working to improve upon 

Medicaid data collection and analyses 

more generally and will be soon 

reaching out to States to help us identify 

the data and measures that are most 

important to guide State and Federal 

administration of the Medicaid program. 

We believe these broader data and 

performance measures will ultimately 

provide new resources for States to use 

as they carry out their important 

responsibilities to assure access to care 

consistent with the principles of 

efficiency, economy, and quality of care. 

V. Provisions of the Proposed 

Regulations 

The provisions of this proposed rule 

aim to create a consistent national 

approach to analyze and document 

Medicaid service access that allows 

States to formulate their own processes, 

metrics, and approaches in light of the 

range of local factors and circumstances 

that influence access in their State. In 

addition, the provisions seek to clarify 

and modernize the public notice 

regulation. As discussed previously in 

this proposed rule, we are proposing to 

address State processes for setting 

payment rates by amending existing 

regulations at § 447.203, § 447.204, and 

§ 447.205. Together, these changes 

better inform States and CMS on 

beneficiary access as States develop 

their service delivery and payment 

policies and potentially implement 

initiatives to address access issues. 

A. Documentation of Access to Care and 

Service Payment Rates 

The proposed revisions at 

§ 447.203(b) would require State 

Medicaid agencies to demonstrate 

access to care by considering: Enrollee 

needs, the availability of care and 

providers, and the utilization of 

services. We believe that the 

experiences of beneficiaries should be a 

primary determinant of whether access 

is sufficient and we are soliciting public 

comments that will serve to help States 

narrow the focus of the data review to 

core elements that will demonstrate 

sufficient access to care. If beneficiaries 

are able to gain access to care (as 

required by the Act as equivalent to the 

general population in a geographic 

area), then clearly the standards of the 

Act have been met regardless of other 

factors, including payment levels. 

However, if beneficiaries experience 

difficulty in scheduling service 

appointments or otherwise accessing 

needed care, then data on rates of 

provider participation and retention, 

analyses of care delivery systems, as 

well as other relevant factors, including 

levels of payment are important for 

States to review and potentially adjust. 

We have structured this proposed rule 

to require that States collect information 

on each of three parts of the MACPACrecommended framework, leaving States 

the discretion to determine which 

particular metrics they can and should 

examine. However, we are soliciting 

public comments as to whether the data 

review should be required on an 

ongoing basis if the beneficiary data 

demonstrates adequate access to care. In 

part, this may depend on how accurate 

the beneficiary data may be, and we are 

particularly interested in public 

comments on the most reliable ways to 

gather beneficiary input across diverse 

groups of people, some with significant 

physical and mental health problems, 

language and other barriers. 

As proposed, States would be 

required to review these data elements 

on an ongoing basis and specifically 

with respect to an affected service prior 

to submitting a Medicaid SPA that 

proposes service payment rate 

reductions. In terms of the ongoing 

review, we are proposing that States 


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would develop a schedule for reviewing 

each covered service at least once every 

5 years, looking at a subset of services 

each calendar year. We considered a 

mandatory schedule for all States to 

follow to promote cross State 

collaborations and so that comparative 

data would be available. For example, 

all States would examine access to 

physician services in year one, and 

hospital services in year two. However, 

in this proposed rule, we are allowing 

States the discretion to determine the 

timeline and the organization of the 

review in recognition of unique State 

delivery systems and to allow States to 

prioritize their reviews based on their 

own sense of urgency, potential issues, 

or anticipated rate modifications. 

Further, this proposed rule proposes 

that all States have some process in 

place to hear from beneficiaries on 

access issues, for example, beneficiary 

survey, a hotline, or an ombudsman that 

is either internal to the agency or a 

contracted community partner. In 

addition, in this proposed rule, we are 

proposing that States set procedures for 

their review that will be informed by a 

public process, to monitor sustained 

access to care after a rate reduction is 

implemented and submit a corrective 

action plan to CMS to address access 

issues within 90 days of their discovery. 

The data collection requirements are 

discussed in the proposed regulation 

text at § 447.203(b)(1)(i) through (iii). 

These provisions would require States 

to review and make publically available, 

data trends and factors that measure: 

Enrollee needs, availability of care and 

providers, and utilization of services. 

Consistent with the statutory 

requirement, we have proposed that 

States review this data by State 

designated geographic location. 

The proposed changes to the 

regulation text at § 447.203(b)(1)(iii)(B) 

would require that the review must 

include: (1) An estimate of the 

percentile which Medicaid payment 

represents of the estimate average 

customary provider charges; (2) an 

estimate of the percentile which 

Medicaid payment represents of one, or 

more, of the following: Medicare 

payment rates, the average commercial 

payment rates, or the applicable 

Medicaid allowable cost of the services, 

and (3) an estimate of the composite 

average percentage increase or decrease 

resulting from any proposed revision in 

payment rates. We have developed this 

list of comparable payment structures 

based on our experience in how States 

set rates and the availability of the data 

in the interest of easing the 

administrative burden associated with 

the data collection effort. In our 

experience, most States set Medicaid 

rates based on one of the three abovenoted structures to which we are 

requiring a comparison and the 

comparable data should be easily 

obtained. We believe that the payment 

comparisons are consistent with the 

MACPAC-recommended framework and 

particularly may be informative of the 

availability of providers, though as 

discussed, may not be the primary 

indicator or provider participation. We 

are soliciting public comments on these 

measures. 

We have further clarified the 

regulation text, at 

§ 447.203(b)(1)(iii)(B)(3), to state that the 

Medicaid payment rates must include 

both base and supplemental payments 

for Medicaid services. It is important to 

include supplemental payments because 

the supplements are tied to the 

provision of a Medicaid service and will 

more accurately reflect total provider 

reimbursement. Should States target a 

subset of providers with supplemental 

payments, this should be noted and the 

targeted amounts recorded in the 

methodology required at 

§ 447.203(b)(1)(iii)(B). Since States often 

reimburse service providers according 

to different payment schedules based on 

governmental status, we have included 

a provision at § 447.203(b)(1)(iii)(C) that 

has States stratify the access review data 

by State government owned or operated, 

non-State government owned or 

operated and private providers. 

Presenting the data in this manner 

should inform States as to whether 

payments are consistent with efficiency, 

economy, and quality and sufficient to 

enlist providers consistent with the 

availability of care and services in the 

geographic area. 

In the proposed regulation text at 

§ 447.203(b)(1)(iii)(D), we have 

described the minimum content that 

must be included in the rate review. 

Specifically, we require that States 

describe the measures that were used to 

conduct the review and their 

relationship to enrollee needs, the 

availability of care and providers, 

service utilization and Medicaid 

payment rates as compared to other 

payment structures. We also require that 

States discuss any access issues that 

were discovered as a result of the review 

and the State agency’s recommendation 

on the sufficiency of access to care 

based on the data review. 

The proposed regulation text at 

§ 447.203(b)(2) describe the timeframe 

for States to conduct the data review 

and make the information available to 

the public through accessible public 

records or web sites on an on-going 

basis for all covered services. We 

propose such annual reviews begin no 

later than 2013, so that States would 

have the discretion to determine a 

timeframe to review each covered 

Medicaid service, as long as the State 

reviews a subset of services each year 

and each covered service is reviewed at 

least once every 5 years. We provided 

States this 5-year cycle to reduce the 

burden while accommodating the need 

for review to assure compliance with 

section 1902(a)(30)(A) of the Act. 

Because of the need to demonstrate 

service access in the context of a 

payment rate reduction, we describe at 

§ 447.203(b)(3)(i) that States will need to 

conduct its review relevant to the 

affected service prior to submission of a 

State plan amendment implementing a 

reduction. We believe this is 

appropriate so that States consider the 

impact that such proposals may have on 

access to care and demonstrate 

compliance with section 1902(a)(30)(A) 

of the Act. If the State has already 

reviewed access relating to the types of 

services that are subject to the rate 

reduction within 12 months prior to the 

proposed rate reduction, and maintains 

an ongoing monitoring mechanism with 

respect to beneficiary complaints, its 

review relative to the rate reduction can 

reference the previous review. 

In order to ensure sustained access to 

care, we have included provisions at 

§ 447.203(b)(3)(ii) that require States to 

develop ongoing monitoring procedures 

through which they periodically review 

indices to measure sustained access to 

care. The periodic reviews helps a State 

to fulfill its ongoing responsibility to 

assure access to covered services 

consistent with the Act and forms a 

solid, informed basis by which a State 

and CMS can consider how any 

proposed changes might impact access. 

Along with monitoring the review data, 

it is important for States to continue to 

engage beneficiaries to understand their 

concerns and access issues on an 

ongoing basis. We have proposed to 

require States to have a mechanism for 

beneficiary input on access to care, such 

as hotlines, surveys, ombudsman or 

other equivalent mechanisms, at 

§ 447.203(b)(4). Additionally, proposed 

regulation text at § 447.203(b)(5) would 

institute a corrective action procedure 

requiring States to submit a remediation 

plan should access issues be discovered 

through the access review or monitoring 

processes. These requirements intend to 

ensure that States will oversee and 

address any future access concerns. 

After careful consideration, we 

developed the data elements discussed 

in this provision based on coordination 

with our Federal partners, in light of the 

MACPAC-recommended three-part 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2
26352 Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 

approach, and in an effort to minimize 

the administrative burden associated 

with the requirement. Though we 

recognize that no methodology to gauge 

access to care is flawless, we believe 

that these measures are appropriate to 

inform whether the Medicaid access 

requirements are met and that the 

MACPAC-recommended framework has 

been developed after study and based 

on public and expert input. We are 

soliciting public comments and 

alternatives to the framework and data 

elements that we have proposed in this 

proposed rule, the timeline for the data 

review and the process for monitoring 

and remediating access issues. 

We note that the data analysis 

activities are claimable as 

administrative claiming activities, and 

reimbursable at the general 50 percent 

FFP rate for administrative 

expenditures, insofar as they are 

necessary for the proper and efficient 

administration of the Medicaid State 

plan, as described at section 1903(a)(7) 

of the Act. More specifically, utilization 

review is identified as an allowable 

Medicaid administrative activity in 

guidance that we issued in a State 

Medicaid Director Letter dated 

December 20, 1994. We also believe that 

States may be collecting some of this 

information as part of current review 

efforts for various purposes, including 

program administration and oversight, 

quality activities, integrity and payment, 

and are likely to be collecting such 

information by 2014 as part of other 

performance standards and measures 

required under the Affordable Care Act. 

B. Medicaid Provider Participation and 

Public Process To Inform Access to Care 

Regulations at § 447.204 implement 

the statutory requirement that Medicaid 

rates must be consistent with efficiency, 

economy, and quality and sufficient to 

enlist enough providers so that services 

under the plan are available to 

beneficiaries at least to the extent that 

those services are available to the 

general population. As discussed, the 

sufficiency requirement has been 

difficult to measure due to lack of 

consistent data, variables in delivery 

systems, and inconsistent State 

approaches to involving stakeholders in 

the rate development process. 

To address these issues, we are 

proposing to amend the regulation text 

at § 447.204(a)(1) through (a)(2) to 

require that States consider, when 

proposing to reduce or restructure 

Medicaid payment rates, the data 

collected through the proposed 

requirement at § 447.203 and undertake 

a public process that solicits input on 

the potential impact of the proposed 

reduction of Medicaid service payment 

rates on beneficiary access to care. We 

have also clarified, at § 447.204(b) that 

we may disapprove a proposed rate 

reduction or restructuring SPA that does 

not include or consider the data review 

and a public process. As an alternative, 

we may take a compliance action, in 

accordance with regulation text at 42 

CFR 430.35 in these instances. 

C. Public Notice of Changes in 

Statewide Methods and Standards for 

Setting Payment Rates 

We are also taking this opportunity to 

propose clarifying and modernizing 

changes the public notice requirement 

at § 447.205. The substance of the notice 

is not affected by this action. However, 

a few States have expressed confusion 

in the past as to when a notice is 

required insofar as the current 

regulation calls for notice of 

‘‘significant’’ changes in payment 

methods and standards. At this time we 

are soliciting public comments on 

whether it is advisable to delete the 

term ‘‘significant’’ from the paragraph at 

§ 447.205(a) and explicitly state that 

notice is required for any change in 

rates. Alternatively, we are soliciting 

comments on whether to adopt a 

threshold for significance and what that 

threshold might be. 

Further, we are proposing to 

recognize electronic publication as an 

optional means of publishing payment 

notice. To do so, we are adding 

§ 447.205(d)(iv), which would allow 

notice to be published on a web site 

developed and maintained by the single 

State Medicaid Agency or other 

responsible State agency that is 

accessible to the general public on the 

Internet. 

Given the dynamic nature of 

electronic media, we are proposing the 

following requirements for Internet 

notices: The notices are published on a 

regular and known basis; the issued 

notice includes the date that it was 

released to the public on the web site, 

and that the content of the notice is not 

altered after the initial publication. 

Based on discussions with States, we 

believe this will reduce State costs and 

allow for a more efficient means to 

notify the public of changes to Medicaid 

payment methods and standards. 

VI. 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 

(ICRs): 

A. ICRs Regarding Documentation of 

Access to Care and Service Payment 

Rates (§ 447.203(b)) 

Section 447.203(b) would require that 

States review and make public 

information that demonstrates sufficient 

Medicaid access to care, through a 

review of: Enrollee needs, the 

availability of care and providers, 

utilization of services and service 

payment rates. States would also be 

required under this provision to monitor 

data and beneficiary input on an 

ongoing basis and address known access 

issues through corrective action. 

Through this proposed rule, we would 

provide States with the discretion to 

determine appropriate data sources that 

will be used to conduct the review. We 

believe that most of the data that will be 

used to inform access is available to 

States and may already be collected by 

States as part of Medicaid program 

reviews and payment rate-setting 

procedures. We also note that States 

would have flexibility to compare 

Medicaid rates to one or more of 

Medicare rates, commercial rates, or 

Medicaid cost, as may be appropriate to 

the service under review. The burden 

associated with these requirements 

would be time and effort associated 

with analyzing this information, making 

it available to the public, and 

periodically updating the information 

relative to activities States are already 

undertaking. We have attempted to 

mitigate any new burden associated 

with this section by identifying data that 

States are likely to currently possess, by 

identifying other data sources that might 

be informative to State access reviews, 

and by phasing in the broader service 

review over 5-year intervals. 


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1. Access to Care Review Timeline 

Section 1902(a)(30)(A) of the Act 

requires that States ensure that access to 

care is available to Medicaid 

beneficiaries equivalent to care 

provided to the general population in a 

geographic area. Since this obligation is 

ongoing and service access may change 

over time, § 447.203(b)(2) requires that 

States conduct their reviews for a subset 

of services each calendar year and 

review all covered Medicaid services at 

least once every 5 years. States would 

have the discretion to determine the 

appropriate services to review each year 

over the 5-year period in order to 

manage their review priorities and 

resources. As an exception to the 5-year 

timeline, § 447.203(b)(3)(i) would 

require States to conduct the access 

review in the context of a SPA to reduce 

payment rates or restructure provider 

payments in circumstance when the 

resulting changes could create access 

issues prior to the submission of a SPA 

that implements the changes. In this 

way, States would consider the impact 

that such proposals may have on access 

to care and demonstrate compliance 

with section 1902(a)(30)(A) of the Act. 

States may complete this review within 

the prior 12 months of the SPA 

submission. 

2. Access to Care Review Framework 

The data analysis activities described 

under the proposal are claimable as 

administrative claiming activities, and 

reimbursable at the general 50 percent 

FFP rate for administrative 

expenditures, insofar as they are 

necessary for the proper and efficient 

administration of the Medicaid State 

plan, as described at section 1903(a)(7) 

of the Act. More specifically, utilization 

review is identified as an allowable 

Medicaid administrative activity in 

guidance that we issued in a State 

Medicaid Director Letter dated 

December 20, 1994. We also believe that 

States may be collecting some of this 

information as part of current review 

efforts for various purposes, including 

program administration and oversight, 

quality activities, integrity and payment, 

and are likely to be collecting such 

information by 2014 as part of other 

performance standards and measures 

required under the Affordable Care Act. 

The provisions at § 447.203(b)(1) 

through (3) would require States to 

review and make publically available, 

data trends and factors that measure: 

Enrollee needs, availability of care and 

providers, utilization of services, and 

service payment information. Consistent 

with the statutory requirement, we have 

proposed that States review this data by 

State designated geographic location. 

After careful consideration, we 

developed the review framework based 

on coordination with our Federal 

partners, in light of the MACPACrecommended three-part approach, and 

in an effort to minimize the 

administrative burden associated with 

the requirement. Though we recognize 

that no methodology to gauge access to 

care is flawless, we believe that the 

framework, as supported by State data 

sources, are appropriate to inform 

whether the Medicaid access 

requirements are met. 

Section 447.203(b)(1)(iii)(B) would 

require that the review include: (1) An 

estimate of the percentile which 

Medicaid payment represents of the 

estimate average customary provider 

charges; (2) an estimate of the percentile 

which Medicaid payment represents of 

one, or more, of the following: Medicare 

payment rates, the average commercial 

payment rates, or the applicable 

Medicaid allowable cost of the services; 

and (3) an estimate of the composite 

average percentage increase or decrease 

resulting from any proposed revision in 

payment rates. We have developed this 

list of comparable payment structures 

based on our experience in how States 

set rates and the availability of the data 

in the interest of easing the 

administrative burden associated with 

the data collection effort. In our 

experience, most States set Medicaid 

rates based on one of the three abovenoted structures and the comparable 

data should be easily obtained. We 

believe that the payment comparisons 

are consistent with the MACPACrecommended framework and 

particularly may be informative of the 

availability of providers, though as 

discussed, may not be the primary 

indicator or provider participation. 

In § 447.203(b)(1)(iii)(B)(3), we 

clarified that both base and 

supplemental payments for Medicaid 

services must include supplemental 

payments because the supplements are 

tied to the provision of a Medicaid 

service and will more accurately reflect 

total provider reimbursement. Should 

States target a subset of providers with 

supplemental payments, this should be 

noted and the targeted amounts 

recorded in the methodology required at 

§ 447.203(b)(1)(iii)(B). 

Since States often reimburse service 

providers according to different 

payment schedules based on 

governmental status, we have included 

a provision at § 447.203(b)(1)(iii)(C) that 

has States stratify the access review data 

by State government owned or operated, 

non-State government owned or 

operated and private providers. 

Presenting the data in this manner 

should inform States as to whether 

payments are consistent with efficiency, 

economy, and quality and sufficient to 

enlist providers consistent with the 

availability of care and services in the 

geographic area. 

In § 447.203(b)(1)(iii)(D), we describe 

the minimum content that must be in 

included in the rate review. 

Specifically, we require that States 

describe the measures that were used to 

conduct the review and their 

relationship to enrollee needs, the 

availability of care and providers, 

service utilization and Medicaid 

payment rates as compared to other 

payment structures. We also require that 

States discuss any access issues that 

were discovered as a result of the review 

and the State agency’s recommendation 

on the sufficiency of access to care 

based on the data review. 

Section 447.203(b)(2) describes the 

timeframe for States to conduct the data 

review and make the information 

available to the public through 

accessible public records or web sites on 

an on-going basis for all covered 

services. We propose such annual 

reviews begin no later than 2013, so that 

States would have the discretion to 

determine a timeframe to review each 

covered Medicaid service, as long as the 

State reviews a subset of services each 

year and each covered service is 

reviewed at least once every 5 years. We 

provided States this 5-year cycle to 

reduce the burden while 

accommodating the need for review to 

assure compliance with section 

1902(a)(30)(A) of the Act. 

We estimate that the requirements to 

review and make publically available, 

data trends and factors that measure: 

Enrollee needs, availability of care and 

providers, utilization of services, and 

Medicaid rate comparisons under 

§ 447.203(b)(1) through (3) would affect 

all States. We have allowed States the 

flexibility to choose the services that 

they review annually based on available 

resources and State priorities. As such, 

we assume that States will conduct 

reviews in the context of rate reductions 

or restructuring payment rates as part of 

their annual ongoing reviews and we 

consider the burden associated with rate 

reduction reviews as part of the ongoing 

estimate burden. 

An employee equivalent to the 

Federal Salary Classification of GS 13 

Step 1 could be responsible for 

gathering review data and developing 

and publishing the content of the data 

review. An employee equivalent to the 

Federal Salary Classification of a GS 15 

Step 1 would be responsible for 

overseeing and approving the data 


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review. We have taken these employee 

assumptions and utilized the 

corresponding employee hourly rates for 

the locality pay area of Washington, DC 

as published by the U.S. Office of 

Personnel Management, to calculate our 

cost estimates. We have also calculated 

the cost by assuming that a State 

expends 36 percent of an employee’s 

hourly wages on benefits for the 

employee. We have concluded that a 36 

percent expenditure on benefits is an 

appropriate estimate because it is the 

routine percentage used by HHS for 

contract cost estimates. Our calculations 

are expressed in Tables 1 and 2. 

TABLE 1—ACCESS DATA REVIEW: BURDEN PER STATE

[Annual] 

Proposed requirement Employee equivalent Burden hours 

Employee 

hourly wage 

rate 

Cost of 

employee 

benefits per 

hour 

Cost per data 

review 

Gathering Review Data ............................................ GS 13 Step 1 ............ 160 $42.66 $15.35 $9,281.60 

Developing Content of Review ................................ GS 13 Step 1 ............ 100 42.66 15.35 5,801.00 

Publishing Content of Review .................................. GS 13 Step 1 ............ 40 42.66 15.35 2,320.40 

Reviewing and Approving Review ........................... GS 15 Step 1 ............ 10 59.30 21.35 806.50 

Total Burden per State ..................................... .................................... 310 ........................ ........................ 18,209.50 

TABLE 2—ACCESS DATA REVIEW: TOTAL BURDEN

[Annual] 

Anticipated number of State reviews Total hours Cost of review 

per State 

Total cost 

estimate ($) 

50 ..................................................................................................................................... 15,500 $18,209.50 $910,475.00 

B. ICRs Regarding Monitoring Access 

(§ 447.203(b)(3)(ii)) 

Section 447.203(b)(3)(ii) would 

require States to develop ongoing 

monitoring procedures after reducing or 

restructuring payments through which 

they periodically review measures of 

sustained access to care for the affected 

service(s). The periodic reviews are 

intended to help a State fulfill its 

ongoing responsibility to assure access 

to covered services consistent with the 

Act and form a solid, informed basis by 

which a State and CMS can consider 

how any proposed changes might affect 

access. Along with monitoring the 

review data, it is important for States to 

continue to engage beneficiaries to 

understand their concerns and access 

issues on an ongoing basis. 

We estimate that the requirement 

under § 447.203(b)(3)(ii) would affect all 

States that implement a rate reduction 

or restructure payment rates. We are 

estimating that approximately 22 States 

will implement these rate changes based 

on the number of States that proposed 

such reductions in FY 2010. An 

employee equivalent to the Federal 

Salary Classification of a GS 13 Step 1 

could develop the monitoring 

procedures and periodically review the 

monitoring results. An employee 

equivalent to the Federal Salary 

Classification of a GS 15 Step 1 would 

be responsible for overseeing and 

approve the monitoring process. We 

have taken these employee assumptions 

and utilized the corresponding 

employee hourly rates for the locality 

pay area of Washington, DC as 

published by the U.S. Office of 

Personnel Management, to calculate our 

cost estimates. We have also calculated 

the cost by assuming that a State 

expends 36 percent of an employee’s 

hourly wages on benefits for the 

employee. We have concluded that a 36 

percent expenditure on benefits is an 

appropriate estimate because it is the 

routine percentage used by HHS for 

contract cost estimates. Our calculations 

are expressed in Tables 3 and 4. 

TABLE 3—ACCESS MONITORING PROCEDURES: BURDEN PER STATE

[Annual] 

Proposed requirement Employee equivalent Burden 

hours 

Employee 

hourly wage 

rate 

Cost of 

employee 

benefits per 

hour 

Cost per data 

review 

Develop Monitoring Procedures .............................. GS 13 Step 1 ............ 40 $42.66 $15.35 $2,320.40 

Periodically Review Monitoring Results ................... GS 13 Step 1 ............ 24 42.66 15.35 1,392.24 

Approve Monitoring Procedures .............................. GS 15 Step 1 ............ 3 59.30 21.35 241.95 

Total Burden per State ..................................... .................................... 67 ........................ ........................ 3,954.59 


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TABLE 4—ACCESS MONITORING PROCEDURES: TOTAL BURDEN

[Annual] 

Anticipated number of State reviews Total hours Cost of review 

per State 

Total cost 

estimate ($) 

22 ..................................................................................................................................... 1,474 $3,954.59 $87,000.98 

C. ICRs Regarding Beneficiary Feedback 

(§ 447.203(b)(4)) 

Section 447.203(b)(4) would require 

States to have a mechanism for 

obtaining beneficiary feedback on access 

to care, such as hotlines, surveys, 

ombudsman or other equivalent 

mechanisms. 

We estimate that the requirement 

under § 447.203(b)(4) would affect all 

States that do not currently have a 

means of beneficiary feedback. Since we 

currently do not know which States 

have implemented these mechanisms, 

we are assuming in our estimate that all 

States will need to develop new 

mechanisms. An employee equivalent to 

the Federal Salary Classification of a GS 

9 Step 1 could develop and oversee the 

feedback effort. An employee equivalent 

to the Federal Salary Classification of a 

GS 15 Step 1 would be responsible for 

approving the feedback effort. We have 

taken these employee assumptions and 

utilized the corresponding employee 

hourly rates for the locality pay area of 

Washington, DC as published by the 

U.S. Office of Personnel Management, to 

calculate our cost estimates. We have 

also calculated the cost by assuming 

that a State expends 36 percent of an 

employee’s hourly wages on benefits for 

the employee. We have concluded that 

a 36 percent expenditure on benefits is 

an appropriate estimate because it is the 

routine percentage used by HHS for 

contract cost estimates. Our calculations 

are expressed in Tables 5 and 6. 

TABLE 5—BENEFICIARY FEEDBACK MECHANISM: BURDEN PER STATE

[Annual] 

Proposed requirement Employee equivalent Burden hours 

Employee 

hourly wage 

rate 

Cost of 

employee 

benefits per 

hour 

Cost per data 

review 

Developing Feedback Effort .................................... GS 9 Step 1 .............. 100 $24.74 $8.90 $3,364.00 

Monitoring Feedback Results .................................. GS 9 Step 1 .............. 24 24.74 8.90 807.36 

Approve Feedback Effort ......................................... GS 15 Step 1 ............ 5 59.30 21.35 403.25 

Total Burden per State ..................................... .................................... 129 ........................ ........................ 4,574.61 

TABLE 6—BENEFICIARY FEEDBACK MECHANISM: TOTAL BURDEN

[Annual] 

Anticipated number of State reviews Total hours Cost of review 

per State 

Total cost 

estimate ($) 

50 ..................................................................................................................................... 6,450 $4,574.61 $228,730.50 

D. ICRs Regarding Corrective Action 

Plan (§ 447.203(b)(5)) 

Section 447.203(b)(5) would institute 

a corrective action procedure that 

requires States to submit to CMS a 

remediation plan should access issues 

be discovered through the access review 

or monitoring processes. The 

requirement is intended to ensure that 

States will oversee and address any 

future access concerns. 

We estimate that the requirement 

under § 447.203(b)(5) would affect all 

States that identify access issues. We are 

estimating that approximately 10 States 

will identify access issues and submit 

corrective action plans to CMS. This is 

a new requirement and we have no basis 

to determine how many States will 

identify access issues as they conduct 

the data reviews and monitoring 

activities. We assume that many States 

currently have mechanisms in place to 

monitor access to care and identify 

issues. However, we are careful not to 

under-estimate the burden associated 

with this provision and we believe that 

a maximum of 10 States may identify 

access issues per year. An employee 

equivalent to the Federal Salary 

Classification of a GS 13 Step 1 could 

identify issues that require corrective 

action and develop the plan to submit 

to CMS. An employee equivalent to the 

Federal Salary Classification of a GS 15 

Step 1 would be responsible for review 

and approving the plan. We have taken 

these employee assumptions and 

utilized the corresponding employee 

hourly rates for the locality pay area of 

Washington, DC as published by the 

U.S. Office of Personnel Management, to 

calculate our cost estimates. We have 

also calculated the cost by assuming 

that a State expends 36 percent of an 

employee’s hourly wages on benefits for 

the employee. We have concluded that 

a 36 percent expenditure on benefits is 

an appropriate estimate because it is the 

routine percentage used by HHS for 

contract cost estimates. Our calculations 

are expressed in Tables 7 and 8. 


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TABLE 7—CORRECTIVE ACTION PLAN: BURDEN PER STATE

[Annual] 

Proposed requirement Employee equivalent Burden hours 

Employee 

hourly wage 

rate 

Cost of 

employee 

benefits per 

hour 

Cost per data 

review 

Identifying Issues for Action ..................................... GS 13 Step 1 ............ 20 $42.66 $15.35 $1,160.20 

Developing the Corrective Plan ............................... GS 13 Step 1 ............ 40 42.66 15.35 2,320.40 

Approve Corrective Plan .......................................... GS 15 Step 1 ............ 3 59.30 21.35 241.95 

Total Burden Per State ..................................... .................................... 63 ........................ ........................ $3,722.55 

TABLE 8—CORRECTIVE ACTION PLAN: TOTAL BURDEN

[Annual] 

Anticipated number of state reviews Total hours Cost of review 

per state 

Total cost 

estimate ($) 

10 ..................................................................................................................................... 630 $3,722.55 $37,225.50 

E. ICRs Regarding Public Process to 

Engage Stakeholders (§ 447.204) 

Section 447.204 implements the 

statutory requirement specifying that 

Medicaid rates must be consistent with 

efficiency, economy, and quality and 

must also be sufficient to enlist enough 

providers so that services under the 

plan are available to beneficiaries at 

least to the extent that those services are 

available to the general population. As 

discussed in section I. of this proposed 

rule, the sufficiency requirement has 

been difficult to measure due to lack of 

consistent data, variables in delivery 

systems, and inconsistent State 

approaches to involving stakeholders in 

the rate development process. 

To address these issues, 

§ 447.204(a)(1) and (a)(2) would require 

that States consider (when proposing to 

reduce Medicaid payment rates) the 

data collected through § 447.203 and 

undertake a public process that solicits 

input on the potential impact of the 

proposed reduction or restructuring of 

Medicaid service payment rates on 

beneficiary access to care. We have also 

clarified, at § 447.204(b) that we may 

disapprove a proposed rate reduction or 

restructuring SPA that does not include 

or consider the data review and a public 

process. As an alternative, we may take 

a compliance action, in accordance with 

regulation text at § 430.35 in these 

instances. 

We are estimating that approximately 

22 States will implement these rate 

changes that would require a public 

process based on the number of States 

that proposed such reductions in FY 

2010. An employee equivalent to the 

Federal Salary Classification of a GS 9 

Step 1 could develop and oversee the 

public process effort. An employee 

equivalent to the Federal Salary 

Classification of a GS 15 Step 1 would 

be responsible for approving the public 

process effort. We have taken these 

employee assumptions and utilized the 

corresponding employee hourly rates for 

the locality pay area of Washington, DC 

as published by the U.S. Office of 

Personnel Management, to calculate our 

cost estimates. We have also calculated 

the cost by assuming that a State 

expends 36 percent of an employee’s 

hourly wages on benefits for the 

employee. We have concluded that a 36 

percent expenditure on benefits is an 

appropriate estimate because it is the 

routine percentage used by HHS for 

contract cost estimates. Our calculations 

are expressed in Tables 9 and 10. 

TABLE 9—PUBLIC PROCESS: BURDEN PER STATE

Proposed requirement Employee equivalent Burden hours 

Employee 

hourly wage 

rate 

Cost of 

employee 

benefits per 

hour 

Cost per data 

review 

Develop the Public Process ..................................... GS 9 Step 1 .............. 20 $24.74 $8.90 $672.80 

Oversee the Public Process .................................... GS 9 Step 1 .............. 40 24.74 8.90 1345.60 

Approve Public Process ........................................... GS 15 Step 1 ............ 3 59.30 21.35 241.95 

Total Burden Per State ..................................... .................................... 63 ........................ ........................ 2,260.35 

TABLE 10—PUBLIC PROCESS: TOTAL BURDEN

[Annual] 

Anticipated number of state reviews Total hours Cost of review 

per state 

Total cost estimate ($) 

22 ..................................................................................................................................... 1,386 $2,260.35 $49,727.70 


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F. ICRs Regarding Public Notice of 

Changes in Statewide Methods and 

Standards for Setting Payment Rates 

(§ 447.205) 

The proposed provisions at § 447.205 

would clarify when States must issue 

public notice to providers and would 

allow for the electronic publication of 

those notices. Section 

447.205(d)(2)(iv)(A) through (C) would 

allow those notices to be published on 

the single State Medicaid Agency or 

other State developed and maintained 

web site that is accessible to the general 

public via the Internet. 

The burden associated with 

developing and issuing public notice at 

§ 447.205 is not affected by this 

proposed action since the revision 

would simply allow for an additional 

(in this case, electronic) means of 

notification. Consequently, we do not 

include the electronic notice activity in 

our burden analysis. 


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If you comment on these information 

collection and recordkeeping 

requirements, please do either of the 

following: 

1. Submit your comments 

electronically as specified in the 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2EP06MY11.000</GPH>
Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 26359 

ADDRESSES section of this proposed rule; 

or 

2. Submit your comments to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Attention: CMS Desk Officer, 

CMS–2328–P Fax: (202) 395–6974; or 

Email: OIRA_submission@omb.eop.gov 

VII. 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. 

VIII. Regulatory Impact Statement 

A. Statement of Need 

This proposed rule would revise 

regulatory provisions in § 447.203 and 

§ 447.204 to create a standardized, 

transparent process for States to follow 

as part of their broader efforts 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 to the general population in 

the geographic area, as required by 

section 1902(a)(30)(A) of the Act. This 

proposed rule would also clarify and 

amend the regulations at § 447.205, 

which require States to issue public 

notice to their providers when changing 

Medicaid payment methods and 

standards. The proposed changes to the 

public notice requirement intend to 

alleviate confusion on when States must 

issue notice to providers and recognize 

electronic media as a means to issue the 

notices. 

B. Overall Impact 

We have examined the impacts of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 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 Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999), and the Congressional 

Review Act (5 U.S.C. 804(2)). 

Executive Order 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). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any 1 year). We 

do not believe that there is potential for 

this provision to surpass the threshold 

for economic significance because the 

proposed data analysis effort is 

generally consistent with current State 

oversight and review activities and 

States have flexibility within the 

reviews to use their existing data or 

build upon that data when reviewing 

access to care. 

In fact, the guidance provided under 

the proposal intends to focus disparate 

State efforts in monitoring and 

overseeing data and beneficiary 

concerns, which offers a clear 

framework to comply with section 

1902(a)(30)(A) of the Act. In the absence 

of Federal guidance, States have likely 

misspent resources in efforts to interpret 

and comply with section 1902(a)(30)(A) 

of the Act. We will also make every 

effort, in collaboration with State and 

Federal partners, to identify resources 

and tools that States may use to review 

and monitor access to care within their 

State Medicaid programs. In this 

proposed rule, we are soliciting public 

comments to begin identifying data 

sources and will continue to provide 

assistance as States develop their 

reviews and monitoring procedures. 

We estimate that even if these data 

collection efforts were, in fact, totally 

new to a State and each State were to 

either bid a contract to gather and 

publish the data collection effort and 

public process required under this 

proposed rule or conduct the collection 

and public process with State agency 

resources, the economic effects would 

not surpass $100 million or more in any 

1 year. 

Further, we are not requiring that 

States directly adjust payment rates as a 

result of the provisions of this proposed 

rule, nor to take any steps that would 

not be consistent with efficiency, 

economy, and quality of care. Rather, 

these rules propose to make clear that 

beneficiary access must be considered 

in setting and adjusting payment 

methodology for Medicaid services. If a 

problem is identified, any number of 

steps might be appropriate, such as 

redesigning service delivery strategies, 

or improving provider enrollment and 

retention efforts. It has always been 

within the regulatory authority of the 

CMS to make SPA approval decisions 

based on sufficiency of beneficiary 

service access and this proposed rule 

merely provides a more consistent and 

transparent way to gather and analyze 

the necessary information to support 

such reviews. 

The RFA requires agencies to analyze 

options for regulatory relief for small 

entities, if a rule has a significant impact 

on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

government jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $7.0 million to $34.5 million in any 

1 year. For details, see the Small 

Business Administration’s Web site at 

http://ecfr.gpoaccess.gov/cgi/t/text/textidx?c=ecfr&sid=2465b064ba

6965cc1fbd2eae60854b11&rgn=

div8&view=text&node=13:1.0.1.1.

16.1.266.9&idno=13. Individuals and 

States are not included in the definition 

of a small entity. We are not preparing 

an analysis for the RFA because we and 

the Secretary have determined that this 

proposed 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 for 

Medicare payment regulations and has 

fewer than 100 beds. We are not 

preparing an analysis for section 1102(b) 

of the Act because we and the Secretary 

have determined that this proposed 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. 

In 2011, that threshold is approximately 

$136 million. 

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 does not impose 

costs above $135 million or more on 


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26360 Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Proposed Rules 

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. 

C. Regulatory Alternatives Considered 

This section provides an overview of 

regulatory alternatives that CMS 

considered for this proposed rule. In 

determining the appropriate approach to 

guide States in their efforts to meet the 

requirements of section 1902(a)(30)(A) 

of the Act and demonstrate sufficient 

access to Medicaid services, we 

consulted with State Medicaid directors, 

Federal agency policy officials and the 

MACPAC. Based, in part, on these 

discussions we arrived at the provisions 

proposed in this proposed rule, which 

seek to balance State obligations to meet 

the statutory requirement of section 

1902(a)(30)(A) of the Act and potential 

new burden associated with the 

proposal. To achieve this balance, we 

have set forth a process that provides a 

framework for States to demonstrate 

access to Medicaid services using 

available data resources and in 

consideration of unique and evolving 

health care delivery systems. We have 

also emphasized the importance of 

considering beneficiary input in 

determining and monitoring access to 

Medicaid services throughout the 

process as discussed in this proposed 

rule. 

1. Access Data Review 

The process for documenting access 

to care and service payment rates 

described at § 447.203 would require 

States to publish access data reviews 

that discuss, as recommended by 

MACPAC, the extent to which enrollee 

needs are met, the availability of care 

and providers, and changes in 

beneficiary utilization of covered 

services. The review would also include 

a comparison of Medicaid payment rates 

to customary charges and Medicare, 

commercial payments, or provider cost. 

The reviews are to be conducted over 5- 

year periods for all services covered in 

a State’s Medicaid State plan or, in the 

context of a State plan amendment 

proposal to reduce provider rates or 

restructure provider rates in 

circumstance that may negatively 

impact access to care, within 12 months 

of implementing the State plan 

amendment. 

As an alternative to the MACPACrecommended framework for reviewing 

access to care, we considered requiring 

States to report standard data measures 

to demonstrate sufficient access to care 

and section 1902(a)(30)(A) of the Act. 

We also considered setting national 

access thresholds or requiring States to 

establish and demonstrate access 

thresholds. As we have highlighted 

throughout this proposed rule, there are 

no standardized, transparent 

methodologies for demonstrating access 

to care that would be appropriate to 

adopt at this time. A singular approach 

to demonstrating access may not 

consider differences in Medicaid 

benefits and State or local delivery 

models. For instance, the appropriate 

data to measure access to Medicaid 

long-term care services provided 

through personal care providers could 

be very different from data used to 

measure access to acute care services 

delivered in a hospital facility that 

offers outpatient care. 

Rather than prescribe data measures 

that may not align with all services or 

set threshold standards, we have 

adopted the MACPAC-recommended 

framework, which sets forth a three-part 

review that applies across services and 

delivery systems and will allow States 

the flexibility to determine, through 

current or new data sources, appropriate 

measures of access to care. As States 

analyze their existing data sources and 

those that we identify through work 

with MACPAC and our Federal 

partners, we believe that States may 

arrive at best practices for determining 

sufficient Medicaid access to care which 

could be replicated across State delivery 

systems and will evolve with new 

approaches to delivering health care to 

Medicaid beneficiaries. 

2. Access Review Timeframe and 

Monitoring Procedures 

In this proposed rule, we are 

proposing that access data reviews be 

conducted over 5-year periods for all 

services covered in a State’s Medicaid 

State plan or, in the context of a 

provider rate reduction or restructuring 

of provider rates that may negatively 

affect access to care, within 12 months 

of implementing the State plan 

amendment. We have arrived at the 5- 

year ongoing review to allow States to 

determine the best use of available State 

resources in conducting the access 

review and to prioritize the review in 

light of program changes or particular 

access concerns. 

We considered requiring the review 

on an annual basis or a review period 

that is more frequent than 5 years. 

However, the burden associated with an 

annual review would likely be high and 

may not demonstrate any changes in 

access to care if the payment rates and 

service delivery systems remain stable. 

We believe that, absent rate reductions 

or restructuring of payments, the 5-year 

review periods, combined with ongoing 

solicitation of information about access 

from beneficiaries, are sufficient to 

identify access issues that may occur 

over time, while also allowing the States 

the flexibility to prioritize the reviews. 

We also considered prescribing the 

services that States would be required to 

review each year so that there is 

national consistency in the access 

reviews. However, since the objective of 

this proposed rule is to provide States 

with a framework to demonstrate access 

to care consistent with section 

1902(a)(30)(A) of the Act rather than to 

conduct a national study of access, we 

determined it appropriate to allow 

States the flexibility to choose which 

services to review each year based on 

their priorities. 

This proposed rule would require that 

States develop monitoring procedures 

after implementing provider rate 

reductions or restructuring rates in ways 

that may negatively impact access to 

care. We require these monitoring 

procedures because the impact of rate 

changes on access to care may not be 

apparent at the time the changes are 

adopted. We considered not requiring 

States to monitor access after 

implementing the changes and to 

continue to rely on the 5-year reviews 

to ensure that access is maintained. 

However, we believe that it is important 

for States to identify and address access 

issues that arise from specific SPA 

actions, such as reimbursement rate 

reductions. 

3. Beneficiary Input on Access to Care 

The proposed changes to § 447.203 

and § 447.204 emphasize the 

importance of involving beneficiaries in 

determining access issues and the 

impact that State rate changes will have 

on access to care. Specifically, we 

require that States implement an 

ongoing mechanism for beneficiary 

input on access to care (through 

hotlines, surveys, ombudsman, or 

another equivalent mechanism) and 

receive input from beneficiaries (and 

affected stakeholders) on the impact that 

proposed rates changes will have 

through a public process. We believe 

that beneficiaries’ experiences in 

accessing Medicaid services is the most 

important indicator of whether access is 

sufficient and beneficiary input will be 

particularly informative in identifying 

access issues. 

We also considered a requirement that 

States consult with beneficiaries when 

developing their corrective action plans 

in instances when the access data 

reviews or monitoring procedures 

identify access issues. While we 


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encourage States to solicit beneficiary 

input on corrective action plans, we did 

not make this a specific regulatory 

requirement and we leave this to the 

States’ discretion to develop the 

corrective action plans as part of their 

current policy development methods. 

List of Subjects in 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 would amend 42 CFR 

chapter IV as set forth below: 

PART 447—PAYMENTS FOR 

SERVICES 

1. The authority citation for part 447 

continues to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act (42 U.S.C. 1302). 

Subpart B—Payment Methods: General 

Provisions 

2. Section 447.203 is amended by— 

A. Revising the section heading. 

B. Revising paragraph (b). 

The revisions read as follows: 

§ 447.203 Documentation of access to care 

and service payment rates. 

* * * * * 

(b) The agency must record and 

update, medical assistance access 

reviews for each covered benefit, in 

accordance with timeline describe in 

paragraph (c) of this section. Such 

reviews must be published or promptly 

made available upon request to the 

public and furnished, upon request, to 

CMS. The access reviews must include 

the items specified in this section, as 

well as trends and factors, which may 

vary by geographic location within the 

State, which will be used to inform 

State policies affecting access to 

Medicaid services, such as provider 

payment rates. 

(1) Access review data requirements. 

States must document in their access 

review, using data trends and factors, an 

analysis that demonstrates sufficient 

access to care, considering, at a 

minimum: 

(i) The extent to which enrollee needs 

are met; 

(ii) The availability of care and 

providers; and 

(iii) Changes in beneficiary utilization 

of covered services. The access review 

must also include the following 

information: 

(A) Beneficiary information. Relevant 

beneficiary information as described in 

paragraph (b)(4) of this section. 

(B) Access review medicaid payment 

data. The review must include all of the 

following: 

(1) An estimate of the percentile, 

which Medicaid payment represents of 

the estimated average customary 

provider charges. 

(2) An estimate of the percentile, 

which Medicaid payment represents of 

one, or more, of the following: Medicare 

payment rates, the average commercial 

payment rates, or the applicable 

Medicaid allowable cost of the services. 

(3) An estimate of the composite 

average percentage increase or decrease 

resulting from any proposed revision in 

payment rates. The review must also 

include a description of the methods 

used to make the estimates described 

above. The data on Medicaid payment 

rates must include all base and 

supplemental payments to providers 

described under the Medicaid State 

plan. 

(C) Stratification requirement. Data on 

provider payment rates in the access 

review must be stratified to the extent 

that payments vary by the following 

categories of providers: State 

government-owned or operated, nonState government owned or operated, 

privately owned or operated. 

(D) Content of the review. The review 

must, at a minimum, describe: the 

specific measures that the State uses to 

analyze access to care, how the 

measures relate to the framework 

described in paragraph (b)(1) of this 

section, any issues with access that are 

discovered as a result of the review, and 

the State agency’s recommendations on 

the sufficiency of access to care based 

on the review. 

(2) Access review timeframe. 

Beginning January 1 of the year 

beginning no sooner than 12 months 

after the effective date of the final rule, 

for all covered services, the State agency 

must complete the access review on a 

State-determined timeframe, provided 

that: 

(i) The State completes its reviews a 

subset of services each calendar year by 

January 1 of each year; 

(ii) All covered services undergo a full 

review at least once every 5 years; and 

(iii) The results of the review are 

made available to the public (which 

could include a web site developed and 

maintained by the single State agency or 

other responsible State agency), and to 

CMS upon request through public 

records. 

(3) Special provisions for proposed 

provider rate reductions or 

restructuring—(i) Compliance with 

access requirements. To demonstrate 

compliance with the access 

requirements at section 1902(a)(30)(A) 

of the Act, the State must submit with 

any State plan amendment that would 

reduce provider payment rates or 

restructure provider payments in 

circumstance when the changes could 

result in access issues, an access review 

described under paragraph (b)(1) of this 

section completed within the prior 12 

months. That access review must 

demonstrate sufficient access for any 

service for which the State agency 

proposes to reduce payment rates or 

restructure provider payments in 

circumstance when the changes could 

result in access issues. 

(ii) Monitoring procedures. A State 

must develop procedures to monitor 

continued access to care after 

implementation of State plan service 

rate reduction or payment restructuring. 

The procedures must define a periodic 

review of State determined indices that 

will serve to demonstrate sustained 

service access, consistent with 

efficiency, economy, and quality of care. 

(4) Mechanisms for ongoing input. 

States must have ongoing mechanisms 

for beneficiary input on access to care 

(through hotlines, surveys, ombudsman 

or another equivalent mechanism), 

consistent with the access requirements 

and public process described in 

§ 447.204 of this subpart. States must 

maintain a record of the volume and 

nature of the response to such input. 

(5) Addressing access questions and 

remediation of access issues. If a State’s 

access review or monitoring procedures 

determine access issues, regardless of 

whether the issue would indicate noncompliance with the statutory standard, 

the State agency is responsible for 

submitting a corrective action plan to 

CMS with specific steps and timelines 

to address the issue within 90 days of 

discovery. While the corrective action 

plan may include longer-term measures, 

the goal for remediation of the access 

deficiency should be no longer than 12 

months. 

3. Section 447.204 is revised to read 

as follows: 

§ 447.204 Medicaid provider participation 

and public process to inform access to 

care. 

(a) The agency’s payments must be 

consistent with efficiency, economy, 

and quality of care and sufficient to 

enlist enough providers so that services 

under the plan are available to 

recipients at least to the extent that 

those services are available to the 

general population. In reviewing 

payment sufficiency, States are required 

to consider, prior to the submission of 


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any State plan amendment that 

proposes to reduce or restructure 

Medicaid service payment rates: 

(1) The data collected through the 

process described in § 447.203 of this 

subpart. 

(2) Input from beneficiaries and 

affected stakeholders in determining the 

extent of beneficiary access to the 

affected services and the impact that the 

proposed rate change will have, if any, 

on continued service access. The State 

should maintain a record of the volume 

and nature of the response to such 

input. 

(b) The State must submit to CMS 

with any such proposed State plan 

amendment, an analysis reflecting 

consideration of the information and 

procedure described in paragraph (a) of 

this section. If CMS determines that 

service rates are modified without such 

an analysis, the agency may disapprove 

a proposed State plan amendment using 

the authority and procedures described 

at part 430 Subpart B of this title or may 

take a compliance action using the 

authority and procedures described at 

§ 430.35 of this title. 

4. Section 447.205 is amended by 

adding paragraph (d)(2)(iv) to read as 

follows: 

§ 447.205 Public notice of changes in 

Statewide methods and standards for 

setting payment rates. 

* * * * * 

(d) * * * 

(2) * * * 

(iv) A web site developed and 

maintained by the single State agency or 

other responsible State agency that is 

accessible to the general public, 

provided that: 

(A) The site is updated for bulletins 

on a regular and known basis (for 

example, the first day of each month); 

(B) The issued notice includes the 

actual date it was released to the public 

on the web site; or 

(C) The content of the issued notice is 

not modified after the initial 

publication. 

Authority: (Catalog of Federal Domestic 

Assistance Program No. 93.778, Medical 

Assistance Program). 

Dated: April 13, 2011. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: April 27, 2011. 

Kathleen Sebelius, 

Secretary, Health and Human Services. 

[FR Doc. 2011–10681 Filed 4–29–11; 4:15 pm] 

BILLING CODE 4120–01–P 


jlentini on DSKJ8SOYB1PROD with PROPOSALS2