```

[Federal Register Volume 75, Number 43 (Friday, March 5, 2010)]
[Notices]
[Pages 10289-10290]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4671]

-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

Notice of Opportunity for a Hearing on Compliance of Missouri 
State Plan Provisions Concerning Payments for Home Health Services With 
Title XIX (Medicaid) of the Social Security Act

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

ACTION: Notice of Opportunity for a Hearing; Compliance of Missouri 
Medicaid State Plan Home Health Benefit.

-----------------------------------------------------------------------

SUMMARY: This notice announces the opportunity for an administrative 
hearing to be held no later than 60 days following publication in the 
Federal Register at the CMS Kansas City Regional Office, 601 E. 12th 
Street, Kansas City, Missouri 64106, to consider whether Missouri State 
plan provisions concerning payments for home health services comply 
with the requirements of the Social Security Act as discussed in the 
February 26, 2010 letter sent to the State and published herein.
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by April 5, 2010.

FOR FURTHER INFORMATION CONTACT: Benjamin R. Cohen, Presiding Officer, 
CMS, 2520 Lord Baltimore Drive, Suite L, Baltimore, Maryland 21244, 
Telephone: (410) 786-3169.

SUPPLEMENTARY INFORMATION: This notice announces the opportunity for an 
administrative hearing concerning the finding of the Administrator of 
the Centers for Medicare & Medicaid Services (CMS) that the approved 
State plan under title XIX (Medicaid) of the Social Security Act (the 
Act) for the State of Missouri is not in compliance with the provisions 
of sections 1902(a) of the Act and the proposed withholding of Federal 
financial participation for a portion of Missouri's expenditures for 
home health services. In particular, CMS has found that the State plan 
does not provide for home health services for Medicaid beneficiaries 
who are not ``confined to the home.'' As a result of this ``homebound'' 
requirement, certain Medicaid beneficiaries are not receiving the full 
benefit package required under the Act and applicable regulations. 
Consequently, Federal payments for a portion of the Federal funding for 
home health services will be withheld, subject to the opportunity for a 
hearing described below. This notice is being provided pursuant to the 
requirements of section 1904 of the Act, as implemented at 42 CFR 
430.35 and 42 CFR part 430, subpart D.
    Section 1902(a)(10)(D) requires that State plans provide for the 
coverage of home health services for any individual who, under the 
State plan, is entitled to nursing facility services. Nursing facility 
services are a required service for categorically needy populations 
under section 1902(a)(10)(A), as defined in section 1905(a)(4)(A). 
Under CMS regulations, a service included as a covered benefit under a 
State plan must be ``sufficient in amount, duration and scope to 
reasonably achieve its purpose'' (42 CFR 440.230(b)) and, for required 
services, cannot be denied or reduced to an eligible beneficiary 
``solely because of the diagnosis, type of illness, or condition'' (42 
CFR 440.230(c)). It is not consistent with these requirements to deny 
home health services to eligible individuals who need such services on 
the basis that they are not ``homebound.''
    The CMS provided interpretive guidance indicating that these 
statutory requirements preclude denial of home health services to 
eligible individuals because they are not ``homebound.'' On July 25, 
2000, CMS, then the Health Care Financing Administration, issued 
Olmstead Update 3 which clarified that the Medicare rule for 
home health services requiring an individual to be ``homebound'' did 
not apply to the receipt of Medicaid home health services. 
Specifically, Olmstead Update 3 states that the ``homebound'' 
requirement violates Federal regulatory requirements at 42 CFR section 
440.230(c) and section 440.240(b).
    The ``homebound'' requirement in Missouri was raised during the 
review of Missouri State plan amendment (SPA) 05-09. At that time, 
Missouri chose to withdraw the page containing the ``homebound'' 
language but did not reverse the policy. Since that time, there have 
been numerous discussions between CMS and Missouri regarding this 
issue. On October 30, 2009, CMS provided Missouri with notice of the 
preliminary determination that it appeared to be out of compliance with 
Federal Medicaid requirements. In addition, CMS requested that Missouri 
submit a SPA to remove the ``homebound'' requirement.
    In its response dated December 31, 2009, Missouri indicated that it 
was operating under its approved State plan and that the requirements 
of Missouri's home health program are the same as those of the Federal 
Medicare program. The State did not submit a SPA. CMS believes that 
Missouri has had numerous opportunities to come into compliance with 
Federal requirements.
    The notice to Missouri, dated February 26, 2010, containing the 
details concerning the compliance issue, the proposed withhold, and the 
opportunity for an administrative hearing reads as follows:

CERTIFIED MAIL--RETURN RECEIPT REQUESTED

Mr. Ronald J. Levy, Director, Department of Social Services, Broadway 
State Office Building, Jefferson City, MO 65102.

    Dear Mr. Levy: This letter provides notice that the Centers for 
Medicare & Medicaid Services (CMS) has found that Missouri is not 
providing all Medicaid beneficiaries with home health benefits that are 
required under title XIX of the Social Security Act (the Act) and that 
until this deficiency is corrected (by making home health services 
available to all beneficiaries entitled to such services), a portion of 
the Federal funding for home health services will be withheld, subject 
to the opportunity for a hearing. The details of the finding, proposed 
withholding, and opportunity for a hearing are described in detail 
below.
    Specifically, CMS has found that the approved Missouri State plan 
under title XIX (Medicaid) of the Act is not in compliance with the 
provisions of section 1902(a) of the Act with respect to the home 
health benefit. In particular, CMS has found that the State plan does 
not provide for home health services for Medicaid beneficiaries who are 
not ``confined to the home.'' As a result of this ``homebound'' 
requirement, certain Medicaid beneficiaries are not receiving the full 
benefit package required under section 1902(a)(10) of the Act, which in 
subparagraph (D) provides for the inclusion of home health services in 
the standard Medicaid benefit package.

[[Page 10290]]

Moreover, the ``homebound'' requirement does not comply with section 
1902(a)(10)(B) of the Act, which requires that State plans provide a 
comparable amount, duration, and scope of benefits to all individuals 
eligible for the standard Medicaid benefit package, and within each 
optional group of individuals eligible for benefits based on medical 
need.
    The basic framework of Medicaid coverage of home health services is 
set forth in the Federal statute and regulations. Section 
1902(a)(10)(D) of the Act requires that State plans provide for the 
coverage of the home health services benefit, set forth in section 
1905(a)(7) of the Act, for any individual who, under the State plan, is 
entitled to nursing facility services. Pursuant to section 1902(a)(10) 
of the Act, the nursing facility service benefit described at section 
1905(a)(4)(A) of the Act is a required benefit that must be included in 
the standard Medicaid benefit package for categorically needy 
populations described in section 1902(a)(10)(A) of the Act. Section 
1902(a)(10)(B) of the Act sets forth the benefit comparability 
principle, that the amount, duration, and scope of medical assistance 
benefits for all categorically needy individuals described in section 
1902(a)(10)(A) of the Act must be equal.
    Under CMS regulations implementing the benefit package requirements 
at sections 1902(a)(10) and 1905(a) of the Act that are described 
above, home health services are included as a mandatory benefit for the 
categorically needy under 42 CFR 440.210(a)(1). Moreover, a service 
included as a covered benefit under a State plan must be ``sufficient 
in amount, duration, and scope to reasonably achieve its purpose'' (42 
CFR 440.230(b)) and, for required services, cannot be denied or reduced 
to an eligible beneficiary ``solely because of the diagnosis, type of 
illness, or condition'' (42 CFR 440.230(c)). It is not consistent with 
these requirements to deny home health services to eligible individuals 
who need such services based on a ``homebound'' requirement.
    The State has had clear notice that a ``homebound'' requirement is 
inconsistent with the Medicaid statute. In response to the June 22, 
1999, Supreme Court decision in the case of Olmstead v. L.C. & E.W., 
which reinforced the Americans with Disabilities Act by affirming the 
right of individuals with disabilities to live in their communities, 
CMS, then the Health Care Financing Administration (HCFA), issued a 
series of State Medicaid Director letters to clarify Medicaid policy on 
issues impacted by the Olmstead decision. On July 25, 2000, HCFA issued 
Olmstead Update 3 which clarified that the Medicare rule for 
home health services requiring an individual to be ``homebound'' did 
not apply to the receipt of Medicaid home health services. Olmstead 
Update 3 specifically stated that the ``homebound'' 
requirement violates Federal regulatory requirements at 42 CFR section 
440.230(c) and section 440.240(b).
    The CMS notified the State in a request for additional information 
on proposed State plan amendment (SPA) 05-09 that the State needed to 
change its ``homebound'' requirement to comply with Federal 
requirements. At that time, Missouri withdrew the SPA page that raised 
this issue but did not reverse its policy in order to comply with 
Federal requirements. Subsequently, CMS has raised the issue with the 
State in numerous conversations and again in a letter dated October 30, 
2009. Your letter of December 31, 2009, indicated that the State did 
not intend to make the required changes.
    For all of these reasons, and in light of the need to protect 
beneficiaries by ensuring that they receive all the services to which 
they are required, I am taking this compliance action to withhold a 
portion of the Federal financial participation in State expenditures 
for home health services, subject to the opportunity for a hearing 
described below, until such time as I am satisfied that the State is 
complying with the Federal requirements discussed above. The 
withholding will initially be 10 percent of the Federal share of the 
State's quarterly claim for home health services as reported on Line 12 
of your Form CMS-64. The withholding percentage will then increase 5 
percentage points each quarter (i.e., 15%, 20%, etc.) that the State 
remains out of compliance, up to a maximum withholding percentage of 
100 percent. The withholding will end when a SPA bringing the State 
into compliance is approved by CMS.
    The State has 30 days from the date of this letter either to submit 
a plan for how the State will come into compliance or to request a 
hearing. As specified in the accompanying Federal Register notice we 
are providing an opportunity for an administrative hearing to ensure 
that you have an opportunity for a hearing prior to this determination 
becoming final. However, it is up to the State as to whether you choose 
to go forward with this hearing. If you choose to proceed with a 
hearing, you must submit a request within 30 days of the date of this 
letter. If a request for a hearing is timely submitted, the hearing 
will be convened by the Hearing Officer designated below on [no later 
than 60 days after the date of the Federal Register notice], or a later 
date by agreement of the parties and the Hearing Officer, at the CMS 
Regional Office in Kansas City, Missouri in accordance with the 
procedures set forth in Federal regulations at 42 CFR Part 430, Subpart 
D. The overall issue in any such appeal will be whether the Missouri 
homebound requirement is consistent with Federal requirements. Any 
request for such a hearing should be sent to the designated hearing 
officer. The Hearing Officer also should be notified if you request a 
hearing but cannot meet the timeframe expressed in this notice. Your 
Hearing Officer is: Benjamin R. Cohen, Hearing Officer, Centers for 
Medicare & Medicaid Services, 2520 Lord Baltimore Drive, Suite L, 
Baltimore, MD 21244.
    If you choose not to request a hearing, and plan to come into 
compliance, please submit within 30 days of the date of this letter an 
explanation of how you plan to come into compliance with Federal 
requirements and the timeframe for doing so. We are available to 
provide further information or assistance on the steps necessary to 
bring the State into compliance.
    Should you not come into compliance and not request a hearing 
within 30 days, a notice of withholding will be sent to you and the 
withholding of Federal funds will begin as described above.
    If you have any questions or wish to discuss this determination 
further, please contact: Mr. James G. Scott, Associate Regional 
Administrator, Division of Medicaid and Children's Health Operations, 
CMS Kansas City Regional Office, 601 E. 12th Street, Kansas City, MO 
64106.

Sincerely,

Charlene Frizzera,
Acting Administrator.

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

    Dated: February 26, 2010.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2010-4671 Filed 3-4-10; 8:45 am]
BILLING CODE 4120-01-P
```