[Federal Register Volume 72, Number 65 (Thursday, April 5, 2007)]
[Notices]
[Pages 16793-16794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-6312]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Minnesota 
State Plan Amendment 05-10

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing to be held on 
May 30, 2007, at 233 N. Michigan Avenue, Suite 600, the Indiana Room, 
Chicago, IL 60601, to reconsider CMS' decision to disapprove Minnesota 
State plan amendment 05-10.

Closing Date: Requests to participate in the hearing as a party must be 
received by the presiding officer by (15 days after publication).

FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding 
Officer, CMS, Lord Baltimore Drive, Mail Stop LB-23-20, Baltimore, 
Maryland 21244. Telephone: (410) 786-2055.

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider CMS' decision to disapprove Minnesota State plan 
amendment (SPA) 05-10 which was submitted on September 21, 2005. This 
SPA was disapproved on December 29, 2006.
    Under this SPA, the State proposed to revise coverage and 
reimbursement methodology for Early and Periodic Screening, Diagnosis, 
and Treatment services related to children's mental health 
rehabilitative services and rehabilitative services pursuant to an 
Individualized Education Plan or Individual Family Service Plan.
    The amendment was disapproved because CMS found that the amendment 
violated the statute for reasons set forth in the disapproval letter.
    The issues to be decided at the hearing are:
    <bullet> Whether the per diem (bundled) payment methodologies for 
mental health rehabilitative services described in Minnesota's SPA 05-
10 accurately reflect true costs or reasonable fees for the services 
included in the bundles;
    <bullet> Whether the amount or scope of services reimbursed through 
the bundled rate is sufficiently constant so that the proposed 
methodologies would be an economic and efficient method of payment;
    <bullet> Whether all of the component parts of the service are 
delivered as recommended within the scope of practice of the physician 
or licensed practitioner of the healing arts;
    <bullet> Whether the actual practitioners who will be furnishing 
services can be readily identified; and
    <bullet> Whether the bundled rates provide for direct payment to 
the actual practitioners who provide the service.
    Section 1116 of the Social Security Act and Federal regulations at 
42 CFR part 430, establish Department procedures that provide an 
administrative hearing for reconsideration of a disapproval of a State 
plan or plan amendment. CMS is required to publish a copy of the notice 
to a State Medicaid agency that informs the agency of the time and 
place of the hearing, and the issues to be considered. If we 
subsequently notify the agency of additional issues that will be 
considered at the hearing, we will also publish that notice.
    Any individual or group that wants to participate in the hearing as 
a party must petition the presiding officer within 15 days after 
publication of this notice, in accordance with the requirements 
contained at 42 CFR 430.76(b)(2). Any interested person or organization 
that wants to participate as amicus curiae must petition the presiding 
officer before the hearing begins in accordance with the requirements 
contained at 42 CFR 430.76(c). If the hearing is later rescheduled, the 
presiding officer will notify all participants.

The Notice to Minnesota Announcing an Administrative Hearing To 
Reconsider the Disapproval of Its SPA Reads as Follows

Ms. Christine Bronson,
Medicaid Director,
Minnesota Department of Human Services,
P.O. Box 64998,
St. Paul, MN 55164-0998

    Dear Ms. Bronson: I am responding to your request for 
reconsideration of the decision to disapprove the Minnesota State 
plan amendment (SPA) 05-10, which was submitted on September 21, 
2005, and disapproved on December 29, 2006.
    Under this SPA, the State proposed to revise coverage and 
reimbursement methodology for Early and Periodic Screening, 
Diagnosis, and Treatment services related to children's mental 
health rehabilitative services and rehabilitative services pursuant 
to an Individualized Education Plan or Individual Family Service 
Plan. The Centers for Medicare & Medicaid Services (CMS) disapproved 
the SPA because the State did not document that its proposed 
reimbursement methodology meets the conditions specified in sections 
1902(a)(10), 1902(a)(30), and 1902(a)(32) of the Social Security Act 
(the Act).
    At issue in this reconsideration is whether Minnesota has 
demonstrated that the bundled rate methodology proposed in SPA 05-10 
is consistent with the requirements of section 1902(a)(30)(A) of the 
Act, which requires that States have methods and procedures to 
assure that payments to providers are consistent with efficiency, 
economy, and quality of care. A second issue is whether the State 
has shown that the payment methodology is for care and services that 
are within the scope, and meet the requirements, of section 
1902(a)(10)(A) to make available ``medical assistance,'' which is 
defined at section 1905(a) and implementing requirements. Also at 
issue is whether the proposed payment methodology complies with the 
direct payment requirements of section 1902(a)(32) of the Act, which 
precludes payment to anyone other than the individual, person, or 
institution providing the care and service (with specified 
exceptions). We discuss each of these issues in more detail below in 
relation to SPA 05-10.
    Section 1902(a)(30)(A) of the Act requires that States have 
methods and procedures to assure that payments to providers are 
consistent with efficiency, economy, and quality of care. The per 
diem payment methodologies for mental health rehabilitative services 
described in SPA 05-10 represent bundled payment methodologies under 
which the State pays a single rate for one or more of a group of 
different services furnished to an eligible individual during a 
fixed period of time. The State has failed to demonstrate that its 
methodologies are in compliance with section 1902(a)(30)(A), in that 
it has not shown: that these methodologies accurately reflect true 
costs or reasonable fees for the services included in the bundles; 
and that the amount or scope of services reimbursed through the 
bundled rate is sufficiently constant so that the proposed 
methodologies would be an economic and efficient method of payment.
    Section 1902(a)(10)(A) requires that State plans make available 
medical assistance, which is defined at section 1905(a) and in 
implementing regulations. For a number of categories of medical 
assistance, there are provider standards applicable to different 
types of care and services, and for rehabilitative services there is 
a requirement that rehabilitative services must be recommended by a 
physician or other licensed practitioner of the healing arts. 
Minnesota did not provide evidence of a method to identify that 
providers of the component parts of the care and services would meet 
all applicable provider requirements. Nor did Minnesota demonstrate 
a method to ensure that all of the component parts of the care and 
services furnished under the bundled payment methodology proposed in 
SPA 05-10, would

[[Page 16794]]

be delivered as recommended within the scope of practice of the 
physician or licensed practitioner of the healing arts.
    Furthermore, the information provided by the State did not 
demonstrate compliance with section 1902(a)(32) of the Act, 
requiring direct payment to the provider of care or services. Under 
the State's bundled payment methodology, the entities which would 
receive the proposed bundled rates for mental health rehabilitation 
services are not themselves providers of the service; they are not 
billing agents for such providers; nor are they recognized types of 
health care providers under Federal law. The underlying services 
represent different types of individual services that are furnished 
by individual practitioners. The State has failed to show that the 
proposed payment methodology is within one of the statutory 
exceptions as implemented by Federal regulations at 42 CFR 447.10. 
Indeed, the State has not shown that, under its proposed payment 
methodology, the actual practitioners furnishing services can even 
be readily identified. Thus, the State has not demonstrated that the 
use of bundled rates will comply with the requirement for direct 
payment to the actual practitioners who provide care or service.
    I am scheduling a hearing on your request for reconsideration to 
be held on May 30, 2007, at 233 N. Michigan Avenue, Suite 600, the 
Indiana Room, 5th Floor, Chicago, IL, 60601, to reconsider the 
decision to disapprove SPA 05-10. If this date is not acceptable, we 
would be glad to set another date that is mutually agreeable to the 
parties. The hearing will be governed by the procedures prescribed 
by Federal regulations at 42 CFR Part 430.
    I am designating Ms. Kathleen Scully-Hayes as the presiding 
officer. If these arrangements present any problems, please contact 
the presiding officer at (410) 786-2055. In order to facilitate any 
communication which may be necessary between the parties to the 
hearing, please notify the presiding officer to indicate 
acceptability of the hearing date that has been scheduled and 
provide names of the individuals who will represent the State at the 
hearing.
 Sincerely,

Leslie V. Norwalk, Esq.,

Acting Administrator.

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

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

    Dated: March 30, 2007.
Leslie V. Norwalk,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E7-6312 Filed 4-4-07; 8:45 am]
BILLING CODE 4120-01-P