Federal Register / Vol. 86, No. 146 / Tuesday, August 3, 2021 / Proposed Rules 41803 

Analysis Division, Office of Pollution 

Prevention and Toxics, Environmental 

Protection Agency, 1200 Pennsylvania 

Ave. NW, Washington, DC 20460–0001; 

telephone number: (202) 564–1463; 

email address: griffin.stephanie@

epa.gov. 

For general information contact: The 

TSCA-Hotline, ABVI-Goodwill, 422 

South Clinton Ave., Rochester, NY 

14620; telephone number: (202) 554– 

1404; email address: TSCA-Hotline@

epa.gov. 

SUPPLEMENTARY INFORMATION: This 

document extends the public comment 

period established in the Federal 

Register document of June 28, 2021 (86 

FR 33926) (FRL–10017–78). In that 

document, EPA proposed a one-time 

reporting and recordkeeping rule for 

certain manufacturers (including 

importers) of PFAS in any year since 

January 1, 2011. EPA is hereby 

extending the comment period, which 

was set to end on August 27, 2021, to 

September 27, 2021. 

If you have questions, consult the 

technical person listed under FOR

FURTHER INFORMATION CONTACT. 

List of Subjects in 40 CFR Part 705 

Chemicals, Environmental protection, 

Hazardous Materials, Recordkeeping, 

and Reporting Requirements. 

Dated: July 28, 2021. 

Michal Freedhoff, 

Assistant Administrator, Office of Chemical 

Safety and Pollution Prevention. 

[FR Doc. 2021–16490 Filed 8–2–21; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 447 

[CMS–2444–P] 

RIN 0938–AU73 

Medicaid Program; Reassignment of 

Medicaid Provider Claims 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

reinterpret the scope of the general 

requirement that state payments for 

Medicaid services under a state plan 

must be made directly to the individual 

practitioner providing services, in the 

case of a class of practitioners for which 

the Medicaid program is the primary 

source of revenue. Specifically, this 

proposal, if finalized, would explicitly 

authorize states to make payments to 

third parties to benefit individual 

practitioners by ensuring health and 

welfare benefits, training, and other 

benefits customary for employees, if the 

practitioner consents to such payments 

to third parties on the practitioner’s 

behalf. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, by 

September 28, 2021. 

ADDRESSES: In commenting, please refer 

to file code CMS–2444–P. Comments, 

including mass comment submissions, 

must be submitted in one of the 

following three 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–2444–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–2444–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Christopher Thompson, (410) 786–4044. 

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 

website as soon as possible after they 

have been received: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. CMS will not post on 

Regulations.gov public comments that 

make threats to individuals or 

institutions or suggest that the 

individual will take actions to harm the 

individual. CMS continues to encourage 

individuals not to submit duplicative 

comments. We will post acceptable 

comments from multiple unique 

commenters even if the content is 

identical or nearly identical to other 

comments. 

I. Background 

A. Prohibition on Payment 

Reassignment 

The Medicaid program was 

established by Congress in 1965 to 

provide health care services for lowincome and disabled beneficiaries. 

Section 1902(a)(32) of the Social 

Security Act (the Act) imposes certain 

requirements on how states may make 

payments for services furnished to 

Medicaid beneficiaries. Section 

1902(a)(32) of the Act provides that 

generally no payment under the plan for 

any care or service provided to an 

individual shall be made to anyone 

other than such individual or the person 

or institution providing such care or 

service, under an assignment, power of 

attorney, or otherwise. This prohibition 

is followed by four enumerated 

exceptions. On September 29, 1978, 

CMS codified these exceptions under 42 

CFR 447.10, the regulations 

implementing section 1902(a)(32) of the 

Act, in the ‘‘Payment for Services’’ final 

rule (43 FR 45253). The 1978 final rule 

simply reorganized and redesignated 

existing Medicaid regulations at 

§ 449.31. Since the 1990s, we have 

mostly understood this provision as 

governing only assignments and other 

similar Medicaid reimbursement 

arrangements. 

Consistent with this understanding, 

from 2012 to 2014, we engaged in 

rulemaking to make it explicit that 

section 1902(a)(32) of the Act did not 

apply to certain payments made by the 

state Medicaid program on behalf and 

for the benefit of individual Medicaid 

practitioners whose primary source of 

revenue is the state Medicaid program. 

We finalized this regulation in the 

‘‘State Plan Home and Community 

Based Services, 5-Year for Waivers, 

Provider Payment Reassignment, and 

Home and Community-Based Setting 

Requirements for Community First 

Choice and Home and Community 

Based Services (HCBS) Waivers’’ final 

rule published in the January 16, 2014 

Federal Register (79 FR 2948 through 

2949, 3001 through 3003, and 3039) 

(hereinafter referred to as the ‘‘2014 

final rule’’). In that rulemaking, we 

reasoned that this policy was permitted 

by the statute because the apparent 

purpose of section 1902(a)(32) of the Act 

was to prohibit factoring arrangements, 

the practice by which providers sold 

reimbursement claims for a percentage 


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1https://www.medicaid.gov/federal-policyguidance/downloads/cib080316.pdf. 

2https://www.medicaid.gov/medicaid/long-termservices-supports/downloads/ltss-rebalancingtoolkit.pdf. 

of their value to companies that would 

then submit the claims to the state. The 

purpose was not to preclude a Medicaid 

program that is functioning as the 

practitioner’s primary source of revenue 

from fulfilling the basic employer-like 

responsibilities that are associated with 

that role, a scenario that was not 

contemplated by section 1902(a)(32) of 

the Act and was outside of the intended 

scope of the statutory prohibition. 

This policy was codified as a 

regulatory exception under 

§ 447.10(g)(4) to permit withholding 

from the payment due to the individual 

practitioner for amounts paid by the 

state directly to third parties for health 

and welfare benefits, training costs and 

other benefits customary for employees. 

In an August 3, 2016 Center for 

Medicaid and CHIP Services (CMCS) 

Informational Bulletin (CIB), we 

outlined suggested approaches for 

strengthening and stabilizing the 

Medicaid home care workforce, 

including by supporting home care 

worker training and development. We 

noted that under § 447.10(g)(4), state 

Medicaid agencies could facilitate this 

goal by, with the consent of the 

individual practitioner, making 

payment on behalf of the practitioner to 

a third party that provides benefits to 

the workforce such as health insurance, 

skills training, and other benefits 

customary for employees.1

B. Current Medicaid Payment 

Assignment Regulations 

Medicaid regulations at § 447.10 

implement the requirements of section 

1902(a)(32) of the Act by providing that 

state plans can allow payments to be 

made only to certain individuals or 

entities. Specifically, payment may only 

be made to the individual practitioner 

that provided the service (provider) or 

the recipient (beneficiary), if he or she 

is a non-cash recipient eligible to 

receive payment under § 447.25, or 

under one of the limited exceptions. 

The regulations specifically state that 

payment for any service furnished to a 

recipient by a provider may not be made 

to or through a factor, either directly or 

by power of attorney. 

The exceptions to the general direct 

payment principle at § 447.10 generally 

mirror those enumerated in the statute. 

They include payment in accordance 

with a reassignment to a government 

agency, or pursuant to a court order. 

There are also exceptions permitting 

payments to third parties for services 

furnished by individual practitioners 

where certain employment or 

contractual conditions are met. 

Additionally, there is another exception 

for payment to a business agent, such as 

a billing service or accounting firm, that 

furnishes statements and receives 

payments in the name of the individual 

practitioner, if the business agent’s 

compensation for this service is related 

to the cost of processing the billing, and 

not dependent on the collection of the 

payment. 

In 2018 and 2019, in a departure from 

our prior interpretation of this statute, 

we engaged in rulemaking to interpret 

the statutory prohibition as applying 

more broadly to prohibit any type of 

Medicaid payment to a third party other 

than the four exceptions enumerated in 

the statute. In so doing, we interpreted 

the statutory phrase ‘‘or otherwise’’ as 

encompassing any and all Medicaid 

reimbursement payment arrangements 

involving third parties. We proposed 

this broad interpretation of the statutory 

language in the ‘‘Reassignment of 

Medicaid Provider Claims’’ proposed 

rule in the July 12, 2018 Federal 

Register (83 FR 32252 through 32255) 

and finalized in ‘‘Reassignment of 

Medicaid Provider Claims’’ final rule in 

the May 6, 2019 Federal Register (84 FR 

19718 through 19728) (hereinafter 

referred to as the ‘‘2019 final rule’’). 

This rulemaking eliminated the 

regulatory exception added by the 2014 

final rule. 

C. California v. Azar 

Six states and 11 intervenors 

challenged the 2019 final rule. In 

California v. Azar, 501 F. Supp. 3d 830 

(N.D. Cal. 2020), the district court 

rejected the Department of Health and 

Human Services’ (HHS’) arguments that 

section 1902(a)(32) of the Act expressly 

prohibited the agency’s previous 

interpretation of section 1902(a)(32) and 

states’ related practices, remanded the 

case to HHS for further proceedings, and 

vacated the 2019 final rule. Secretary 

Azar then appealed to the U.S. Court of 

Appeals for the Ninth Circuit in 

California v. Becerra, No. 21–15091 (9th 

Cir.). 

D. Individual Practitioner Workforce 

Stability and Development Concerns 

Since the direct payment principle 

was originally enacted in statute in 1972 

and expanded in 1977, the definition of 

medical assistance under section 

1905(a) of the Act has been changed to 

permit states to offer coverage of 

categories of practitioner services, such 

as personal care services, that may be 

viewed as unique to the Medicaid 

program. For these practitioners, who 

often provide services independently, 

rather than as employees of a service 

provider, the Medicaid program may be 

their primary, or only, source of 

payment. Some states have sought 

methods to improve and stabilize the 

workforce by offering health and welfare 

benefits to such practitioners, and by 

requiring that such practitioners pursue 

periodic training. 

Within Medicaid, long-term support 

services (LTSS) expenditures are 

shifting from institutional care 

(hospitals, nursing facilities, etc.) to 

HCBS. In FY 2013, HCBS LTSS 

expenditures reached 51 percent of total 

Medicaid LTSS expenditures and have 

generally increased to 56.1 percent in 

FY 2018. HCBS represented a majority 

of LTSS expenditures in 29 states, 

including the District of Columbia, and 

over 75 percent of expenditures in five 

states in FY 2018. 

Several states have requested that 

CMS adopt additional exceptions to the 

direct payment policy to permit a state 

to withhold from a payment due to the 

individual practitioner for amounts that 

the practitioner is obligated to pay for 

health and welfare benefits, training 

costs, and other benefits customary for 

employees. These amounts would not 

be retained by the state, but would be 

paid to third parties on behalf of the 

practitioner for the stated purpose. We 

recognize that HCBS workforce issues, 

such as workforce shortages and staff 

turnover, have a direct and immediate 

impact on the quality of and access to 

services available to beneficiaries, and 

believe that state Medicaid agencies 

play a key role in influencing the 

stability of the workforce by 

determining wages and benefits, and 

provider reimbursement.2

II. Provisions of the Proposed Rule 

A. Prohibition Against Reassignment of 

Provider Claims (§ 447.10) 

Under title XIX of the Act, state 

Medicaid programs generally pay for 

Medicaid-covered practitioner services 

through direct payments to the treating 

practitioners. States may develop state 

plan payment rates that include 

considerations for costs related to health 

and welfare benefits, training, and other 

benefits customary for employees. 

However, consistent with our previous 

interpretation of the statutory provision 

at section 1902(a)(32) of the Act, and 

reflected in regulations at § 447.10 

under the 2019 final rule, the entire rate 

must be paid to the individual 

practitioner who provided the service, 

unless certain exceptions apply. 


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3We note that, to the extent state agencies utilize 

this option to deduct union dues, union dues may 

only be deducted from Medicaid payments with the 

affirmative consent of the practitioner; to do 

otherwise would be in violation of the First 

Amendment. See Janus v. Am. Fed’n of State, Cty., 

and Mun. Emps., Council 31, 138 S.Ct. 2448, 2486 

(2018) (‘‘Neither an agency fee nor any other 

payment to the union may be deducted from a 

nonmember’s wages, nor may any other attempt be 

made to collect such a payment, unless the 

employee affirmatively consents to pay.’’). 

4See Black’s Law Dictionary (11th ed. 2019); see 

also Merriam Webster, available at https://

www.merriam-webster.com/dictionary/assignment 

(defining the term ‘‘assignment’’ in the ‘‘law’’ as 

‘‘the transfer of property’’); Merriam Webster, 

available at https://www.merriam-webster.com/ 

dictionary/power%20of%20attorney (defining the 

term ‘‘power of attorney’’ as ‘‘a legal instrument 

authorizing one to act as the attorney or agent of 

the grantor’’). 

Following the district court’s decision 

in California v. Azar, we examined the 

statutory language and legislative 

history, and now conclude that the 

prohibition in section 1902(a)(32) of the 

Act is better read to be limited in its 

applicability to Medicaid payments to a 

third party pursuant to an assignment, 

power of attorney, or other similar 

arrangement. In other words, the 

statutory prohibition is better viewed as 

an anti-reassignment provision that only 

governs assignment-like payment 

arrangements. We do not believe this 

provision should be interpreted as a 

broad prohibition on any and all types 

of Medicaid payment arrangements 

beyond those provided directly to 

Medicaid beneficiaries and providers or 

enumerated in the statutory exceptions. 

As such, we propose to amend § 447.10 

to add a new paragraph (i), which 

would incorporate similar language 

from paragraph (g)(4) as a new provision 

describing who may receive payment, 

rather than as an exception to the 

statutory prohibition in section 

1902(a)(32) of the Act. 

Specifically, § 447.10(i) would specify 

that the payment prohibition in section 

1902(a)(32) of the Act and § 447.10(d) 

does not apply to payments to a third 

party on behalf of an individual 

practitioner for benefits such as health 

insurance, skills training, and other 

benefits customary for employees, in the 

case of a class of practitioners for which 

the Medicaid program is the primary 

source of revenue.3

The text of the statute addresses only 

assignments and related payment 

arrangements wherein a provider’s right 

to claim and/or receive full payment for 

services furnished to Medicaid 

beneficiaries is transferred to a third 

party. The statute includes examples of 

the types of payment arrangements 

intended to be prohibited, ‘‘under an 

assignment or power of attorney or 

otherwise.’’ The general term ‘‘or 

otherwise’’ is listed following two 

specific and related phases. Statutory 

interpretation principles suggest that 

when general words follow specific 

words in a statutory enumeration, ‘‘the 

general words are construed to embrace 

only objects similar in nature to those 

objects enumerated by the preceding 

specific words.’’ Sutherland Statutory 

Construction § 47:17; Circuit City Stores, 

Inc. v. Adams, 532 U.S. 105 (2001). 

Accordingly, the language ‘‘or 

otherwise’’ is best read as referencing 

payments made under arrangements 

that are similar to an ‘‘assignment’’ and 

a ‘‘power of attorney’’ such that the 

reach of the prohibition under section 

1902(a)(32) of the Act does not extend 

to payment arrangements that are 

wholly distinct from such types of 

arrangements. Consistent with this 

interpretation, we are also proposing to 

amend § 447.10(a) to include the phrase 

‘‘under an assignment or power of 

attorney or a similar arrangement.’’ This 

change aligns the regulation with the 

applicable statutory language and our 

reading of that language, and creates a 

consistent framework for proposed new 

paragraph (i). 

Black’s Law Dictionary defines 

‘‘assignment’’ in relevant part as ‘‘[t]he 

transfer of rights or property,’’ and 

‘‘power of attorney’’ as ‘‘[a]n instrument 

granting someone authority to act as 

agent or attorney-in-fact for the 

grantor.’’ 4 Thus, the inclusion of these 

examples of the types of arrangements 

intended to be prohibited under section 

1902(a)(32) of the Act supports the 

conclusion that the statute was intended 

to address scenarios where the right to 

a provider’s Medicaid receivables or the 

right to submit claims on behalf of the 

provider are transferred to a third party. 

Moreover, the introductory language 

in section 1902(a)(32) of the Act 

specifies that no payment under the 

plan for any care or service furnished to 

an individual shall be made to anyone 

other than such individual or the person 

or institution providing such care or 

service. This prohibition applies only to 

payments ‘‘for any care or service,’’ 

which we interpret to prohibit full 

diversion of the right to claim and/or 

receive such payments to third parties 

absent an exception, but not to apply to 

partial deductions from payments at the 

request or with the consent of the 

provider, in order to make payments to 

third parties on behalf of the provider. 

An examination of the statutory 

exceptions to the general prohibition 

also supports the conclusion that the 

prohibition under section 1902(a)(32) of 

the Act does not extend to payment 

arrangements that are outside the 

category of payments with assignments 

or assignment-like arrangements. The 

excepted arrangements or transactions 

are all similar to assignments in that 

they involve third parties submitting 

claims directly to the state Medicaid 

agency for reimbursement or having the 

right to receive the full amount of all 

payments due to the provider for 

services furnished to Medicaid 

beneficiaries. More specifically, section 

1902(a)(32) of the Act contains several 

specific exceptions to the general 

principle of direct payment to 

individual practitioners. There are 

exceptions for payments for practitioner 

services where payment is made to the 

employer of the practitioner, and the 

practitioner is required as a condition of 

employment to turn over fees to the 

employer; payments for practitioner 

services furnished in a facility when 

there is a contractual arrangement under 

which the facility bills on behalf of the 

practitioner; reassignments to a 

governmental agency, through a court 

order, or to a billing agent; payments to 

a practitioner whose patients were 

temporarily served by another identified 

practitioner; and payments for a 

childhood vaccine administered before 

October 1, 1994. While these exceptions 

may appear to be largely unrelated, they 

all involve payment arrangements 

where third parties are submitting 

claims to the Medicaid agency and/or 

where the right to receive all of the 

payments due to a provider for services 

furnished to Medicaid beneficiaries is 

transferred to a third party. 

The fact that the only types of 

transactions that are explicitly excepted 

by the statute are assignment-like 

transactions that involve the transfer to 

a third party of either a provider’s right 

to submit claims directly to the state 

and/or to receive all payments 

otherwise due a provider for services 

furnished supports our proposed 

interpretation that the scope of the 

statutory prohibition extends only to 

payments to a third party that involve 

similar types of arrangements. By 

contrast, partial deductions from 

Medicaid payments requested by a 

provider in order to make separate 

payment to a third party on behalf of the 

provider for benefits customary for 

employees does not involve third 

parties receiving direct payment from 

the state for care or services provided to 

Medicaid beneficiaries. Nor does this 

arrangement allow such third parties to 

pursue independent claims against the 

state for Medicaid reimbursement. 

The legislative history of section 

1902(a)(32) of the Act supports our 

conclusion that the statutory text is best 

read as an anti-assignment prohibition. 


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5See, for example, H.R. REP. NO. 92–231, at 104 

(1972), reprinted in 1972 U.S.C.C.A.N. 4989, 5090; 

H.R. REP. NO. 92–231, at 205, reprinted in 1972 

U.S.C.C.A.N. at 5090; S. REP. NO. 92–1230, at 204 

S. REP. NO. 92–1230, at 204 (1972); Professional 

Factoring Service Association v. Mathews, 422 F. 

Supp. 250, 251–52 (S.D.N.Y. 1976). 

6See, for example, H. REP. NO. 95–393(II), at 43, 

reprinted in 1977 U.S.C.C.A.N. at 3045; H. REP. NO. 

95–393(II), at 46, reprinted in 1977 U.S.C.C.A.N. at 

3048; H. REP. NO. 95–393(II), at 48–49 (1977), 

reprinted in 1977 U.S.C.C.A.N. 3039, 3051; S. REP. 

NO. 95–453, at 6–8 (1977). 

7 Kim J. (2020). Occupational Credentials and Job 

Qualities of Direct Care Workers: Implications for 

Labor Shortages. Journal of labor research, 1–18. 

Advance online publication. https://doi.org/ 

10.1007/s12122-020-09312-5. 

8https://www.medicaid.gov/federal-policyguidance/downloads/cib080316.pdf. 

9https://www.kff.org/coronavirus-covid-19/event/ 

march-30-web-event-unsung-heroes-the-crucialrole-and-tenuous-circumstances-of-home-healthaides-during-the-pandemic/. 

10https://www.medicaid.gov/medicaid/long-termservices-supports/downloads/ltss-rebalancingtoolkit.pdf. 

When Congress adopted the original 

version of this statute in 1972, it was 

focused on the practice of factoring—a 

practice which often led to the 

submission of inflated or false claims, 

raising concerns that the factoring 

industry was a breeding ground for 

Medicaid fraud.5 When Congress 

amended this provision in 1977, it 

reiterated that it understood the 

provision simply as a response to and 

an attempt to prevent factoring. Indeed, 

in 1977, Congress amended the antireassignment provision to close what it 

perceived to be a loophole that factoring 

companies were exploiting.6 This 

legislative history supports our 

proposed interpretation of the statutory 

prohibition as extending only to 

assignments and assignment-like 

arrangements that involve a potential for 

the type of abuse that the statute was 

intended to prevent. 

With respect to classes of 

practitioners for whom the state’s 

Medicaid program is the only or 

primary payer, the ability of the state to 

ensure a stable and qualified workforce 

may be adversely affected by the 

inability to deduct from Medicaid 

payments at the request or with the 

consent of a provider in order to make 

separate payment to a third party on 

behalf of the provider. Deductions for 

these purposes are an efficient and 

effective method for ensuring that the 

workforce has provisions for basic needs 

and is adequately trained for their 

functions, thus ensuring that 

beneficiaries have greater access to such 

practitioners and higher quality 

services. Requiring practitioner consent 

for such deductions ensures Medicaid 

provider payments are treated 

appropriately, and in a manner 

consistent with the wishes of the 

practitioner, for purposes of receiving 

benefits such as health insurance, skills 

training, and other benefits customary 

for employees. 

Although we propose that these 

deduction practices fall outside the 

scope of what the statute prohibits, we 

consider it important to document the 

flexibility in regulation to ensure 

confidence in the provider community, 

particularly for front line workers 

during the Coronavirus Disease 2019 

(COVID–19) pandemic. Within broad 

federal Medicaid law and regulation, 

CMS has long sought to ensure 

maximum state flexibility to design 

state-specific payment methodologies 

that help ensure a strong, committed, 

and well-trained work force. Currently, 

certain categories of Medicaid covered 

services, for which Medicaid is a 

primary payer, such as home and 

personal care services, suffer from 

especially high rates of turnover and 

low levels of participation in Medicaid 

which negatively impact access to and 

quality of providers available to 

Medicaid beneficiaries.7 These issues 

often result in higher rates of 

institutional stays for beneficiaries. This 

proposed rule would support previous 

CMS efforts to strengthen the home care 

workforce by specifying what actions 

are permitted, to help foster a stable and 

high-performing workforce.8 Under our 

proposed amendment to § 447.10, state 

Medicaid programs would be permitted, 

as authorized under state law and with 

the consent of the individual 

practitioner, to deduct from the 

practitioner’s reimbursement in order to 

pay third parties for health and welfare 

benefit contributions, training costs, and 

other benefits customary for employees. 

In late 2017, we requested input from 

states indicating whether they had 

implemented the types of payment 

arrangements permitted under 

§ 447.10(g)(4) after publication of the 

2014 final rule. Of the states that 

voluntarily responded to CMS, we 

found that some states had entered into 

third party payment arrangements on 

behalf of individual practitioners, while 

others had not. This input is the most 

current state stakeholder feedback we 

have; therefore, we anticipate the 

impact of such payment arrangements to 

be positive for both states and 

practitioners. For states, the third-party 

payment arrangements authorized by 

this proposed rule would be optional 

and if a state chooses to implement 

them, then states can use existing 

administrative processes to make 

deductions, with consent of the 

individual practitioner, from a 

practitioner’s Medicaid reimbursement 

for benefits. For practitioners, this 

proposed rule will enhance the ability 

of the practitioners, regardless of their 

employment arrangement, to perform 

their functions as health care 

professionals, and thus, support 

beneficiary access to quality home 

health care. The Medicaid program, at 

both the state and federal levels, has a 

strong interest in ensuring the 

development and maintenance of a 

committed, well-trained workforce. 

With the majority of LTSS 

expenditures spent on HCBS, rather 

than institutional services, the 

importance of a strong home care 

workforce in Medicaid cannot be 

understated. Under section 9817 of the 

American Rescue Plan, we continue to 

reinforce the importance of HCBS in 

Medicaid and during the COVID–19 

pandemic by providing a temporary 10 

percentage point increase to the federal 

medical assistance percentage for 

certain HCBS delivered by home care 

providers, as these services are crucial 

to some of the most vulnerable 

individuals in our country. The 

proposed rule would help protect the 

economic security for home care 

providers. The ability of home care 

providers to choose how deductions are 

made is critically important to 

improvements in workforce standards. 

Moreover, since the majority of home 

health care workers are women and 

people of color,9 permitting this type of 

payment arrangement will directly 

benefit those populations and address 

inequities. 

Further, the increasing shortage of 

home care providers due to high 

turnover, low participation in Medicaid, 

low wages, and lack of benefits and 

training has significantly reduced access 

to home health care services for older 

adults and people with disabilities. 

State Medicaid agencies can play a key 

role in increasing such access by 

improving workforce stability of these 

practitioners by addressing training, 

wages and benefits, and provider 

reimbursement.10 Under this proposed 

rule, state Medicaid agencies would be 

authorized to deduct from a 

practitioner’s Medicaid payment, with 

the consent of the individual 

practitioner, in order to pay a third 

party on behalf of the individual 

practitioner for benefits that provide the 

workforce with freedom to advocate for 

higher wages and career advancement, 

access necessary trainings, and options 

for other customary employee benefits. 

States typically have an established 

administrative process for their own 

employees’ deductions for benefits that 


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can also be applied to classes of 

practitioners for whom Medicaid is the 

only or primary payer. Additionally, 

state Medicaid agencies often act as 

employers without a formal relationship 

to classes of practitioners for whom 

Medicaid is the only or primary payer, 

such as home care providers or personal 

care assistants. Using the state’s 

established administrative processes to 

deduct funds to pay third parties on 

behalf of the practitioner, with the 

consent of the individual practitioner, 

may simplify administrative functions 

and program operations for the state and 

provide advantages to practitioners. For 

example, a practitioner could receive 

continuous health care coverage because 

the state automatically deducts funds 

for health insurance premiums on 

behalf of the practitioner. Providing 

state Medicaid agencies with the 

authority to make deductions from 

Medicaid reimbursements, with the 

consent of the individual practitioner, 

in order to make payments to a third 

party on behalf of the individual 

practitioner for benefits such as health 

insurance, skills training and other 

benefits customary for employees will 

ensure many of the country’s most 

vulnerable workers, who care for the 

country’s most vulnerable individuals, 

retain benefits which help them support 

themselves and their families. 

We note that this proposed rule 

would not authorize a state to claim as 

a separate expenditure under its 

approved Medicaid state plan, amounts 

that are deducted from payments to 

individual practitioners (that is, health 

and welfare benefit contributions, 

training, and similar benefits customary 

for employees). Under the proposed 

rule, should a state wish to recognize 

such costs, they would need to be 

included as part of the rate paid for the 

service in order to be eligible for federal 

financial participation. No federal 

financial participation would be 

available for such amounts apart from 

the federal match available for a rate 

paid by the state for the medical 

assistance service. These costs also 

could not be claimed by the Medicaid 

agency separately as an administrative 

expense. As a result, this proposed rule 

would have little to no impact on 

federal Medicaid funding levels. 

As discussed in the January 16, 2014 

final rule (79 FR 2947, 3039), the 

policies proposed within this rule 

would not require any change in state 

funding to the extent that practitioner 

rates have already factored in the cost of 

benefits, skills training, and other 

benefits customary for employees. This 

rule would simply ensure flexibility for 

states to pay for such costs directly on 

behalf of practitioners and ensure 

uniform access to benefits, such as 

health insurance, skills training and 

other benefits customary for employees. 

Indeed, should this proposed rule be 

finalized, there may be cost savings 

resulting from the collective purchase of 

such benefits and greater workforce 

stability. 

We are specifically soliciting public 

comments on the extent to which the 

proposed payment arrangements would 

benefit states and practitioners, 

particularly if and how practitioner’s 

access to benefits would be impacted, as 

well as any adverse impacts that may 

have not been anticipated. Additionally, 

we are seeking comments on other 

permissible actions based on our 

proposed statutory interpretation that 

might similarly simplify and streamline 

states’ operations of their Medicaid state 

plans and payment processes. 

III. Collection of Information 

Requirements 

To the extent a state changes its 

payment as a result of finalizing this 

proposed rule, the state would be 

required to obtain practitioner consent 

and update its payment system. We 

believe the associated burden is exempt 

from the Paperwork Reduction Act 

(PRA) in accordance with 5 CFR 

1320.3(b)(2). We believe that the time, 

effort, and financial resources necessary 

to exercise this flexibility would be 

incurred by the state during the normal 

course of their activities, and therefore 

should be considered usual and 

customary business practices. 

IV. 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 would 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 would 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact Analysis 

A. Statement of Need 

In California v. Azar, the district court 

vacated the 2019 rule and remanded to 

HHS for further proceedings. 

Accordingly, we examined the statute 

anew, and determined that the 

prohibition in section 1902(a)(32) of the 

Act is better read to be limited in its 

applicability to Medicaid payments to a 

third party pursuant to an assignment, 

power of attorney, or other similar 

arrangement. Although the court 

vacated the 2019 rule, our current 

statutory interpretation requires this 

rulemaking in order to reclassify the 

exception in § 447.10(g)(4) as instead 

describing arrangements that are beyond 

the scope of prohibition in section 

1902(a)(32) of the Act. Furthermore, 

while we now believe these 

arrangements are beyond the scope of 

the statute, we nevertheless consider it 

important to document and ensure 

clarity and flexibility for individual 

practitioners. Finally, this rule provides 

us an opportunity to reinforce the 

important caveat that such deductions 

may only be made with the consent of 

the individual practitioner. 

B. Overall Impact 

We have examined the impacts of this 

proposed 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 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 Orders 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). Section 3(f) of Executive Order 

12866 defines a ‘‘significant regulatory 

action’’ as an action that is likely to 

result in a rule that may: (1) Have an 

annual effect on the economy of $100 

million or more in any 1 year, or 

adversely and materially affecting a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or state, local or 

tribal governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) create a serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially alter the 

budgetary impacts of entitlement grants, 

user fees, or loan programs or the rights 

and obligations of recipients thereof; or 

(4) raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive Order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 


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million or more in any 1 year). We 

estimate that this proposed rule will be 

budget neutral or have a minimal 

economic impact that is unlikely to 

have an annual effect on the economy 

in excess of the $100 million threshold 

of Executive Order 12866. Based on our 

estimates, the Office of Management and 

Budget’s Office of Information and 

Regulatory Affairs has determined that 

this rulemaking is ‘‘significant’’ and 

‘‘not major’’ under Subtitle E of the 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (also known as the 

Congressional Review Act). 

Although we are establishing a new 

regulatory provision, the change is 

merely in the statutory approach, while 

the effect is largely the same as under 

§ 447.10(g)(4). As such, as discussed in 

the January 16, 2014 final rule (79 FR 

2947, 3039) that initially established the 

authority for these arrangements, we 

believe that this proposed rule ensures 

Medicaid funding additional 

operational flexibilities for states to 

ensure a strong provider workforce. 

There is also no impact on individual 

practitioners, even though the proposed 

rule would allow states to deduct 

payments from provider’s payment with 

their consent under the specific 

circumstances described in the 

proposed rule. State budgets will not 

likely be significantly affected because 

the operational flexibilities in the 

proposed rule would only facilitate the 

transfer of funds between participating 

entities, rather than the addition or 

subtraction of new funds. 

Since the 2014 and 2019 final rules, 

we are not aware of any state plan 

amendments submitted by state 

Medicaid agencies that intended to 

modify provider payments rates in 

response to these previous regulatory 

changes. In addition, we do not formally 

track the payment amounts that state 

Medicaid agencies pay to third parties 

as affected by the proposed regulatory 

provision. As such, the Department 

invited public comments to help refine 

this analysis in the 2018 proposed rule, 

but no substantive analysis of the 

economic impact of this rule was 

provided as noted in the 2019 final rule. 

Again, we are seeking comment on this 

estimate, and particularly on types and 

amounts deducted from individual 

providers for payment to third parties, 

broken down by benefit that may be 

included under § 447.10(i). 

C. Anticipated Effects 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $8.0 million to $41.5 

million in any 1 year. Individuals and 

states are not included in the definition 

of a small entity. We are not preparing 

an analysis for the RFA because we have 

determined, and the Secretary proposes 

to certify, 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 an RIA 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 have determined, and the Secretary 

proposes to certify, 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 2021, that threshold is approximately 

$158 million. This rule will have no 

consequential effect on state, local, or 

tribal governments or on the private 

sector. 

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 

any costs on state or local governments, 

the requirements of Executive Order 

13132 are not applicable. 

D. Alternatives Considered 

We considered incorporating 

additional regulatory text under 

§ 447.10(i) requiring explicit written 

consent from a practitioner before state 

Medicaid agencies may make a payment 

on behalf of the practitioner to a third 

party that provides benefits to the 

workforce such as health insurance, 

skills training, and other benefits 

customary for employees. We also 

considered identifying specific 

employee benefits for which payments 

may be deducted and paid to a third 

party in the regulatory text under 

§ 447.10(i), such as federal income 

taxes, Federal Insurance Contributions 

Act (FICA) taxes, state and local taxes, 

retirement benefits (for example, 401k, 

profit-sharing), health insurance, dental 

insurance, vision insurance, long-term 

care insurance, disability insurance, life 

insurance, gym memberships, health 

savings accounts (HSA), job-related 

expenses (for example, union dues with 

affirmative consent, uniforms, tools, 

meals, and mileage), and charitable 

contributions. Rather than listing the 

universe of benefits for which payments 

may be deducted and paid by state 

Medicaid agencies to third parties with 

consent of the provider, we also 

considered whether to exclude certain 

benefit deductions from the scope of 

this proposed rule. Finally, we 

considered requiring practitioner 

consent only for specific types of 

deductions, rather than all types of 

benefits, for which Medicaid payment 

amounts may be deducted and paid to 

a third party in the regulatory text under 

§ 447.10(i). 

We considered but did not propose to 

require explicit written provider 

consent for deductions out of concern 

that codifying a requirement for written 

consent could unintentionally result in 

a conflict with state law. As proposed, 

we would defer to state Medicaid 

agencies to ensure consent is obtained 

and for further implementation of 

provider payment deductions consistent 

with state law and regulation for state 

employee benefit deductions. We are 

requesting public comment on whether 

to include a CMS requirement for 

written provider consent or to remain 

silent on the form such consent must 

take and to defer to existing state law 

and regulation. Specifically, we are 

seeking comments on what constitutes 

appropriate consent (that is, letter, 

email, form), descriptions of state law 

that require consent, and how CMS 

could minimize burden on state 

Medicaid agencies and prevent conflict 

with state laws and regulations if 

specific consent requirements were 

finalized within the regulatory text. 

Thus, we are providing in this proposed 

rule that a provider must voluntarily 

consent to payments to third parties on 

the provider’s behalf, but propose to 

leave to each state to determine the best 

means of confirming the provider’s 

consent in each case. 

We also considered but did not 

propose to codify a defined list of 

allowable benefits or excluded benefits 

within the regulatory text based on 


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concerns that such a list may not 

accurately reflect all employee benefits 

available to practitioners and would 

need frequent updates through the 

rulemaking process in order to remain 

relevant. The available benefits may 

vary between states and we would, 

again, defer to specific state laws and 

regulations as the basis for 

implementing the proposed rule. We are 

soliciting public comments on whether 

to codify a defined list of benefits that 

may be deducted from a provider’s 

payment and, on behalf of the provider, 

be made to third parties. We are also 

soliciting public comments on whether 

there are additional types of benefits 

that state Medicaid agencies make to 

third parties on behalf of a provider 

receiving benefits that were not 

contemplated in the examples described 

in this section. In particular, we are 

seeking comments on whether the 

described list of benefits is generally 

permissible and consistent with 

deductions or payments made by states 

on behalf of state employees, as well as 

examples of potential impermissible 

arrangements we may exclude from the 

final rule. Finally, we are requesting 

that commenters further explain why 

the benefits they provide as examples 

within their comments are permissible 

or impermissible under the proposed 

§ 447.10(i). As noted in the Overall 

Impact section, we are also seeking 

public comments, as well as data on the 

type and amount of benefit deductions 

broken down by benefit that may be 

included under § 447.10(i). 

We considered but did not propose to 

require consent only for specific types 

of deductions, rather than all types of 

benefits, for which Medicaid payment 

amounts may be deducted and paid to 

a third party in the regulatory text based 

on the concern that we may not 

accurately capture all of the employee 

benefits practitioners believe should 

require consent. Additionally, 

identifying certain types of employee 

benefits for which payments may be 

deducted and paid to a third party in 

the regulatory text would also need 

frequent updates through the 

rulemaking process in order to remain 

relevant. We are soliciting public 

comments on whether to codify that 

consent is only required for deductions 

for certain types of employee benefits, 

which benefits, and why those benefits 

should require consent from the 

practitioner. We are also soliciting 

public comments on whether requiring 

consent for certain types of employee 

benefits is advantageous or 

disadvantageous for the state and 

practitioner rather than requiring 

consent for all types of employee 

benefits. 

E. Conclusion 

In accordance with the provisions of 

Executive Order 12866, this proposed 

rule was reviewed by the Office of 

Management and Budget. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on July 21, 

2021. 

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, Rural 

areas. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to 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: 42 U.S.C. 1302 and 1396r–8. 

■ 2. Amend § 447.10 by revising 

paragraph (a) and adding new paragraph 

(i) to read as follows: 

§ 447.10 Prohibition against reassignment 

of provider claims. 

(a) Basis and purpose. This section 

implements section 1902(a)(32) of the 

Act which prohibits State payments for 

Medicaid services to anyone other than 

a provider or beneficiary, under an 

assignment, power of attorney, or 

similar arrangement, except in specified 

circumstances. 

* * * * * 

(i) Payment prohibition. The payment 

prohibition in section 1902(a)(32) of the 

Act and paragraph (d) of this section 

does not apply to payments to a third 

party on behalf of an individual 

practitioner for benefits such as health 

insurance, skills training, and other 

benefits customary for employees, in the 

case of a class of practitioners for which 

the Medicaid program is the primary 

source of revenue, if the practitioner 

voluntarily consents to such payments 

to third parties on the practitioner’s 

behalf. 

Dated: July 28, 2021. 

Andrea Palm, 

Deputy Secretary, Department of Health and 

Human Services. 

[FR Doc. 2021–16430 Filed 7–30–21; 4:15 pm] 

BILLING CODE 4120–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 174 and 180 

[EPA–HQ–OPP–2021–0088; FRL–8792–01– 

OCSPP] 

Receipt of Pesticide Petitions Filed for 

Residues of Pesticide Chemicals in or 

on Various Commodities (July 2021) 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notices of filing of petitions and 

request for comment. 

SUMMARY: This document announces the 

Agency’s receipt of initial filings of 

pesticide petitions requesting the 

establishment or modification of 

regulations for residues of pesticide 

chemicals in or on various commodities. 

DATES: Comments must be received on 

or before September 2, 2021. 

ADDRESSES: Submit your comments, 

identified by docket identification (ID) 

number and the pesticide petition (PP) 

of interest as shown in the body of this 

document, online at http://

www.regulations.gov. Follow the online 

instructions for submitting comments. 

Do not submit electronically any 

information you consider to be 

Confidential Business Information (CBI) 

or other information whose disclosure is 

restricted by statute. Additional 

instructions on commenting or visiting 

the docket, along with more information 

about dockets generally, is available at 

http://www.epa.gov/dockets. 

Due to the public health concerns 

related to COVID–19, the EPA/DC and 

Reading Room is closed to visitors with 

limited exceptions. The staff continues 

to provide remote customer service via 

email, phone, and webform. For the 

latest status information on the EPA/DC 

and docket access, visit https://

www.epa.gov/dockets. 

FOR FURTHER INFORMATION CONTACT: 

Marietta Echeverria, Registration 

Division (7505P), main telephone 

number: (703) 305–7090, email address: 

RDFRNotices@epa.gov. The mailing 

address for each contact person is: 

Office of Pesticide Programs, 

Environmental Protection Agency, 1200 

Pennsylvania Ave. NW, Washington, DC 

20460–0001. As part of the mailing 

address, include the contact person’s 

name, division, and mail code. The 

division to contact is listed at the end 

of each pesticide petition summary. 

SUPPLEMENTARY INFORMATION: 


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