60104 Federal Register / Vol. 65, No. 196 / Tuesday, October 10, 2000 / Rules and Regulations 

* * * * * 

[FR Doc. 00–25599 Filed 10–6–00; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Health Care Financing Administration 

42 CFR Part 413 

[HCFA–1883–F2] 

RIN 0938–AI80 

Medicare Program; Revision of the 

Procedures for Requesting Exceptions 

to Cost Limits for Skilled Nursing 

Facilities and Elimination of 

Reclassifications; Correction 

AGENCY: Health Care Financing 

Administration (HCFA) HHS. 

ACTION: Technical corrections. 

SUMMARY: In the August 5, 1999 issue of 

the Federal Register (64 FR 42610), we 

published a final rule addressing the 

procedures for granting exceptions to 

the Medicare skilled nursing facility 

(SNF) routine service cost limits, and 

we removed the provision allowing for 

reclassification for SNFs and home 

health agencies. This document amends 

the regulations text to make technical 

corrections to those parts of the 

regulation unrelated to the SNF 

exception procedures that were 

inadvertently changed. 

EFFECTIVE DATE: September 7, 1999. 

FOR FURTHER INFORMATION CONTACT: Julie 

Stankivic, (410) 786–5725. 

SUPPLEMENTARY INFORMATION: 

Background 

In the August 5, 1999 final rule (64 FR 

42610), we amended the regulations to 

allow the fiscal intermediaries to make 

final determinations on requests by 

skilled nursing facilities (SNFs) for 

exceptions to the Medicare routine 

service cost limits under 42 CFR 

§ 413.30(f). In the preamble to both the 

proposed and final rules (63 FR 42797 

and 64 FR 42610, respectively), we 

specifically stated that the changes are 

limited to our procedures regarding SNF 

exceptions. We did not intend to change 

the new provider exemption under 

§ 413.30(e) or any other provision 

relating to home health agencies 

(HHAs). The changes in § 413.30 as set 

forth in the final rule, however, have 

raised questions as to whether policy 

changes had been made in these 

unrelated areas. 

The New Provider Exemption 

The preamble to the proposed and 

final rules (63 FR 42797 and 64 FR 

42610, respectively) discussed the three 

types of relief available to SNFs that 

exceed the SNF routine service cost 

limits found in § 413.30. In the 

preamble concerning § 413.30(c), we 

indicated that a provider may seek relief 

from the effects of applying the cost 

limits, either by requesting an 

exemption from its limits as a new 

provider of inpatient services, by 

requesting a reclassification of its 

provider status, or by requesting an 

exception to the cost limit. Of these 

three types of relief, the proposed and 

final rules focused solely on the 

exception process and our proposal to 

revise the approval process for granting 

exceptions to the cost limits for SNFs 

and to remove the provision for 

obtaining a reclassification for a SNF or 

an HHA. We did not make changes to 

the exemption requirements for a new 

provider. However, the recently 

promulgated changes to § 413.30(c)(2), 

with regard to the processing of SNF 

exception requests, may have created 

confusion with regard to the processing 

of new provider exemption requests. In 

addition, editorial changes to 

§ 413.30(d), meant to clarify which 

provisions applied to which provider 

type may have created an impression 

that a policy change has occurred; no 

policy changes were intended. The only 

two provider types subject to the 

regulations found in § 413.30 at present 

are SNFs and HHAs. We did not 

propose any changes to our existing 

policies with regard to the new provider 

exemption provision or the processing 

of new provider exemption requests. 

The intermediary makes a 

recommendation to HCFA, and HCFA 

makes the final determination on 

requests by SNFs for a new provider 

exemption under § 413.30(d) as 

redesignated. 

Home Health Agencies 

In the preamble to the proposed and 

final rules (63 FR 42797, 64 FR 42610), 

we clearly stated that we are retaining 

the current procedures for HHA 

exception requests and that these 

provisions would remain unchanged. 

We modified § 413.30 (in its entirety), in 

an attempt to clarify which provisions 

applied to which provider type. The 

only two provider types subject to 

§ 413.30 at present are SNFs and HHAs. 

HHAs, however, have never been 

eligible to receive an exception for 

‘‘areas with fluctuating populations,’’ an 

impression that may have been created 

by these editorial changes. 

Provisions of the Rule 

For the reasons discussed above, we 

are making the necessary technical 

corrections to restore the regulations to 

conform with our longstanding and 

unchanged policies for both the new 

provider exemption for SNFs, and the 

procedures for exceptions to the cost 

limits for HHAs. 

List of Subjects in 42 CFR Part 413 

Health facilities, Kidney diseases, 

Medicare, Puerto Rico, Reporting and 

recordkeeping requirements. 

Accordingly, 42 CFR part 413 is 

corrected by making the following 

correcting amendments: 

PART 413—PRINCIPLES OF 

REASONABLE COST 

REIMBURSEMENT; PAYMENT FOR 

END-STAGE RENAL DISEASE 

SERVICES; PROSPECTIVELY 

DETERMINED PAYMENT RATES FOR 

SKILLED NURSING FACILITIES 

1. The authority citation for part 413 

continues to read as follows: 

Authority: Secs. 1102, 1812(d), 1814(b), 

1815, 1833(a), (i), and (n), 1871, 1881, 1883, 

and 1886 of the Social Security Act (42 

U.S.C. 1302, 1395f(b), 1395g, 13951, 

13951(a), (i), and (n), 1395x(v), 1395hh, 

1395rr, 1395tt, and 1395ww). 

2. In § 413.30, the following changes 

are made: 

§ 413.30 [Corrected] 

A. In paragraph (a) introductory text, 

at the end of the second sentence after 

the word ‘‘situations’’, the phrase ‘‘of 

particular providers’’ is added. 

B. In paragraph (a)(2), at the beginning 

of the first sentence, the words ‘‘Payable 

SNF and HHA’’ are removed, and the 

words ‘‘Reimbursable provider’’ are 

added in their place. 

C. In paragraph (c) introductory text, 

in the last sentence, the words 

‘‘intermediary’s notice of program pay’’ 

are removed, and the words 

‘‘intermediary’s notice of program 

reimbursement’’ are added in their 

place. 

D. In paragraph (c)(2), the heading is 

corrected to read ‘‘Skilled nursing 

facility exception’’; and in the first 

sentence, the word ‘‘exception’’ is 

added between the words ‘‘SNFs’’ and 

‘‘request’’. 

E. In paragraph (d), add the sentence 

‘‘The intermediary makes a 

recommendation on the provider’s 

request to HCFA, which makes the 

decision.’’ after the first sentence; and 

remove the words ‘‘the type of’’ from the 

first sentence and add the word ‘‘a’’ in 

their place. 


rmajette on DSK29S0YB1PROD with RULES
Federal Register / Vol. 65, No. 196 / Tuesday, October 10, 2000 / Rules and Regulations 60105 

F. In paragraph (e)(3) introductory 

text, the words ‘‘or HHA’’ are removed; 

and in paragraph (e)(3)(ii), the word 

‘‘similar’’ is added before each 

occurrence of the word ‘‘services’’, and 

the words ‘‘or HHA’’ are removed. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773 Medicare—Hospital 

Insurance) 

Dated: September 21, 2000. 

Brian P. Burns, 

Deputy Assistant Secretary for Information 

Resources Management. 

[FR Doc. 00–25497 Filed 10–6–00; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Health Care Financing Administration 

42 CFR Parts 440 and 441 

[HCFA–2010–FC] 

RIN 0938–AI67 

Medicaid Program; Home and 

Community-Based Services 

AGENCY: Health Care Financing 

Administration (HCFA), HHS. 

ACTION: Final rule with comment period. 

SUMMARY: This final rule with comment 

period expands State flexibility in 

providing prevocational, educational, 

and supported employment services 

under the Medicaid home and 

community-based services waiver 

provisions currently found in section 

1915(c) of the Social Security Act (the 

Act); and incorporates the selfimplementing provisions of section 

4743 of the Balanced Budget Act of 1997 

that amends section 1915(c)(5) of the 

Act to delete the requirement that an 

individual have prior 

institutionalization in a nursing facility 

or intermediate care facility for the 

mentally retarded before becoming 

eligible for the expanded habilitation 

services. In addition, we are making a 

number of technical changes to update 

or correct the regulations. 

DATES: Effective date: October 1, 1997. 

We will consider written comments if 

we receive them at the appropriate 

address, as provided below, no later 

than 5 p.m. on or before December 11, 

2000. 

ADDRESSES: Mail written comments (one 

original and three copies) to the 

following address: Health Care 

Financing Administration, U.S. 

Department of Health and Human 

Services, P.O. Box 9010, Attention: 

HCFA–2010–FC, 7500 Security 

Boulevard, Baltimore, MD 21244–9010. 

If you prefer, you may deliver your 

written comments (one original and 

three copies) to one of the following 

addresses: 

Room 443–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201, or 

Room C5–09–26, 7500 Security 

Boulevard, Baltimore, MD 21244– 

1850. 

Because of staffing and resource 

limitations, we cannot accept audio, 

visual, or facsimile (FAX) copies of 

comments. In commenting, please refer 

to file code HCFA–2010–FC. Comments 

received timely will be available for 

public inspection as they are received, 

generally beginning approximately 3 

weeks after publication of a document, 

in room 443–G of the Department’s 

offices at 200 Independence Avenue, 

SW., Washington, DC, on Monday 

through Friday of each week from 8:30 

a.m. to 5 p.m. (phone: (202) 690–7890). 

FOR FURTHER INFORMATION CONTACT: 

Mary Jean Duckett, (410) 786–3294. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Medicaid program is a Federally 

supported, State-administered program 

that provides medical assistance to 

individuals that meet eligibility criteria. 

It was established in 1965 as title XIX 

of the Social Security Act (the Act). 

Section 1915(c) was added to title XIX 

of the Act by the Omnibus Budget 

Reconciliation Act of 1981 (OBRA 1981) 

(Public Law 97–35) to encourage the 

provision of cost-effective services to 

Medicaid recipients in noninstitutional 

settings. Before the enactment of OBRA 

1981, the Medicaid program provided 

limited coverage for long-term care 

services in noninstitutional settings. 

Section 1915(c) of the Act authorizes 

the Secretary to waive certain Medicaid 

statutory requirements to enable a State 

to cover a broad array of home and 

community-based services that are not 

otherwise available under a State’s 

Medicaid program. These services must 

be furnished in accordance with an 

individually written plan of care that is 

subject to approval by the State 

Medicaid agency, and may be furnished 

only to persons who, but for the 

provision of the services, would 

otherwise require the level of care 

provided in a hospital, nursing facility 

(NF), or intermediate care facility for the 

mentally retarded (ICF/MR). Coverage of 

these services enables elderly, disabled, 

and chronically ill persons, who would 

otherwise be institutionalized, to live in 

the community. 

Under section 1915(c) of the Act, a 

State could receive Federal financial 

participation (FFP) for the following 

services as home and community-based 

services: case management services, 

homemaker and home health aide 

services, personal care services, adult 

day health services, habilitation 

services, respite care, and ‘‘other’’ 

services as requested by the State and 

approved by HCFA. Section 9502(a) of 

the Consolidated Omnibus Budget 

Reconciliation Act of 1985 (Public Law 

99–272) revised section 1915(c) of the 

Act to explicitly include certain 

prevocational, educational, and 

supported employment services as 

expanded habilitation services under 

home and community-based services for 

those individuals who receive waiver 

services after discharge from an NF or 

ICF/MR. Section 1915(c)(4) of the Act 

authorizes the provision of habilitation 

services, and section 1915(c)(5) of the 

Act defines habilitation services as 

services to assist individuals in 

acquiring, retaining, and improving the 

self-help, socialization, and adaptive 

skills necessary to reside successfully in 

home and community-based settings. 

Section 1915(c)(5) of the Act was 

further amended by section 4743(a) of 

the Balanced Budget Act of 1997 (BBA) 

(Public Law 105–33), which deleted the 

requirement that an individual have 

prior institutionalization in either an NF 

or ICF/MR before becoming eligible for 

habilitation services. The regulations at 

§ 440.180(c)(1) applied this prior 

institutionalization requirement to 

expanded habilitation services. Thus, 

effective October 1, 1997, if a State 

chooses to provide these expanded 

habilitation services under its home and 

community-based waiver, it may 

provide these services to all individuals 

eligible for these services without regard 

to whether the individuals had a prior 

institutional stay in an NF or ICF/MR. 

II. Provisions of the Final Rule With 

Comment Period 

Before the enactment of the BBA, 

section 1915(c)(5) of the Act specified 

that the term ‘‘habilitation services’’ 

applies to individuals who receive 

services after discharge from an NF or 

ICF/MR. Section 4743 of the BBA 

amended section 1915(c)(5) of the Act, 

effective October 1, 1997, to remove the 

requirement that an individual be 

institutionalized before receiving 

habilitation services. 

To implement the provisions of 

section 4743 of the BBA, we are revising 

parts 440 and 441. We are also making 

a number of technical changes to update 

or correct the regulations. 


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