Federal Register / Vol. 87, No. 94 / Monday, May 16, 2022 / Rules and Regulations 29675 

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

5. State of New York et al. v. United States 

Environmental Protection Agency, Case 

No. 1:20–cv–10642; (United States 

Southern District of New York, April 12, 

2021). Second Stipulation and Consent 

Order Further Extending Stay and 

Extending Injunction. 

6. State of New York et al. v. United States 

Environmental Protection Agency, Case 

No. 1:20–cv–10642; (United States 

Southern District of New York, June 14, 

2021). Third Stipulation and Consent 

Order Further Extending Stay and 

Extending Injunction. 

7. State of New York et al. v. United States 

Environmental Protection Agency, Case 

No. 1:20–cv–10642; (United States 

Southern District of New York, August 

12, 2021). Fourth Stipulation and 

Consent Order Further Extending Stay 

and Extending Injunction. 

8. State of New York et al. v. United States 

Environmental Protection Agency, Case 

No. 1:20–cv–10642; (United States 

Southern District of New York, October 

12, 2021). Fifth Stipulation and Consent 

Order Further Extending Stay and 

Extending Injunction. 

9. State of New York et al. v. United States 

Environmental Protection Agency, Case 

No. 1:20–cv–10642; (United States 

Southern District of New York, 

December 14, 2021). Sixth Stipulation 

and Consent Order Further Extending 

Stay and Extending Injunction. 

10. State of New York et al. v. United States 

Environmental Protection Agency, Case 

No. 1:20–cv–10642; (United States 

Southern District of New York, February 

15, 2022). Seventh Stipulation and 

Consent Order Further Extending Stay 

and Extending Injunction. 

11. EPA. Pesticides; Agricultural Worker 

Protection Standard Revisions; Final 

Rule. Federal Register. 80 FR 67496, 

November 2, 2015 (FRL–9931–81). 

Authority: 7 U.S.C. 136–136y. 

Dated: May 5, 2022. 

Michal Freedhoff, 

Assistant Administrator, Office of Chemical 

Safety and Pollution Prevention. 

[FR Doc. 2022–10019 Filed 5–13–22; 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–F] 

RIN 0938–AU73 

Medicaid Program; Reassignment of 

Medicaid Provider Claims 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule reinterprets the 

scope of the general requirement that 

State payments for Medicaid services 

under a State plan must generally be 

made directly to the individual 

practitioner or institution providing 

services or to the beneficiary, in the case 

of a class of practitioners for which the 

Medicaid program is the primary source 

of revenue. Specifically, this final rule 

explicitly authorizes States to make 

payments to third parties on behalf of 

individual practitioners, for individual 

practitioners’ health insurance and 

welfare benefits, skills training, and 

other benefits customary for employees, 

if the individual practitioner consents to 

such payments on their behalf. 

DATES: These regulations are effective 

June 15, 2022. 

FOR FURTHER INFORMATION CONTACT: 

Christopher Thompson, (410) 786–4044. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Prohibition on Payment 

Reassignment 

Congress established the Medicaid 

program in 1965 to provide health care 

services for low-income beneficiaries 

and beneficiaries with disabilities. 

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 

generally that ‘‘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 or power 

of attorney or otherwise.’’ This 

prohibition is followed by four 

enumerated exceptions. On September 

29, 1978, we codified these exceptions 

under 42 CFR 447.10, the regulation 

implementing section 1902(a)(32) of the 

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

rule (43 FR 45253) (hereinafter referred 

to as the ‘‘1978 final rule’’). The 1978 

final rule simply reorganized and 

redesignated existing Medicaid 

regulations that previously appeared at 

42 CFR 449.31. Since the 1990s, we 

have mostly understood this provision 

as governing only assignments and other 

similar Medicaid payment 

arrangements. 

Consistent with this understanding, 

from 2012 to 2014, we engaged in 

rulemaking in the ‘‘State Plan Home and 

Community-Based Services, 5-Year 

Period for Waivers Provider Payment 

Reassignment, and Setting 

Requirements for Community First 

Choice’’ proposed rule published in the 

May 3, 2012 Federal Register (77 FR 

26362) (hereinafter referred to as the 

‘‘2012 proposed rule’’) 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) 

(hereinafter referred to as the ‘‘2014 

final rule’’). In that rulemaking, we 

reasoned that the statute permitted this 

policy because the apparent purpose of 

section 1902(a)(32) of the Act was to 

prohibit factoring arrangements, the 

practice by which providers sold their 

claims for a percentage 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. 

We codified this policy 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 

Informational Bulletin, 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


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29676 Federal Register / Vol. 87, No. 94 / Monday, May 16, 2022 / Rules and Regulations 

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

ltssexpenditures2019.pdf. 

3https://www.medicaid.gov/medicaid/long-termservices-supports/downloads/ltss-rebalancingtoolkit.pdf. 

B. Current Medicaid Payment 

Assignment Regulations 

Medicaid regulations at § 447.10 

(‘‘Prohibition against reassignment of 

provider claims’’) implement the 

requirements of section 1902(a)(32) of 

the Act by providing that State plans 

may 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 (the ‘‘provider’’), 

the recipient (the ‘‘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 reassignment under 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 doing so, we interpreted 

the statutory phrase ‘‘or otherwise’’ as 

encompassing any and all Medicaid 

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) (hereinafter referred to as the 

‘‘2018 proposed rule’’) and finalized it 

in the ‘‘Reassignment of Medicaid 

Provider Claims’’ final rule in the May 

6, 2019 Federal Register (84 FR 19718) 

(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 pre-2018 

interpretation and the 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 a case that is 

currently in abeyance and captioned 

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, Congress 

changed the definition of medical 

assistance under section 1905(a) of the 

Act to permit States to offer coverage of 

categories of practitioner services in the 

Medicaid program that are not offered in 

other health insurance programs, such 

as personal care services and other 

HCBS. For these practitioners, who 

often provide services independently, 

rather than as employees of a service 

provider agency, 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 services 

and supports (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 

increased to 58.6 percent in FY 2019.2

HCBS represented a majority of LTSS 

expenditures in 28 States and the 

District of Columbia, and over 75 

percent of expenditures in five States in 

FY 2018. 

Several States have requested that we 

adopt additional exceptions to the direct 

payment policy to permit a State to 

withhold from a payment due to the 

individual practitioner 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. We 

believe that State Medicaid agencies can 

play a key role in influencing the 

stability of this workforce by 

determining payment rates and 

facilitating greater access to benefits that 

support this class of providers.3

II. Provisions of the Proposed 

Regulations 

In the August 3, 2021 Federal 

Register, we published the ‘‘Medicaid 

Program; Reassignment of Medicaid 

Provider Claims’’ proposed rule (86 FR 

41803) (hereinafter referred to as the 

‘‘2021 proposed rule’’). The following is 

a summary of those proposed 

provisions. 

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 account for 

costs related to health and welfare 

benefits, training, and other benefits 

customary for employees. However, 

under our previous interpretation of the 

statutory provision at section 

1902(a)(32) of the Act, as reflected in 

regulations at § 447.10 under the 2019 

final rule, the entire rate was required 

to be paid to the individual practitioner 

who provided the service, unless certain 

exceptions applied. Under the 2019 

final rule, none of the exceptions 

applied to payments for health and 

welfare benefits, training, and other 

benefits customary for employees when 

the practitioner is not in a direct 

employment or contractual relationship 

with a third party that submits claims 

on the practitioner’s behalf. While the 

2019 final rule did not directly prevent 

practitioners from purchasing health 

insurance, enrolling in trainings, or 

paying dues to a union or other 

association, it did create an unnecessary 

administrative burden on practitioners, 

and may have increased costs for those 

practitioners by eliminating access to 

lower group rates. 

Following the district court’s decision 

and analysis in California v. Azar, we 

re-examined the statutory language and 

legislative history, and now conclude 


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4See, for example, Gorman v. Nat’l Transp. 

Safety Bd., 558 F.3d 580, 588 & n.5 (D.C. Cir. 2009) 

(holding that a regulatory heading confirmed the 

reasonableness of an agency’s reading of the rule in 

that case, and observing that as a general matter ‘‘a 

short and simple, if ambiguous, subsection of a 

regulation’’ may be ‘‘clarified by the heading,’’ and 

that headings ‘‘may be of use’’ ‘‘ ‘when they shed 

light on some ambiguous word or phrase.’ ’’) 

(internal citations omitted). 

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). 

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 

under an assignment, power of attorney, 

or other similar arrangement. In other 

words, and consistent with the 

longstanding title of the provision at 

§ 447.10 (‘‘Prohibition against 

reassignment of provider claims’’), a 

title which the regulation has 

consistently had since at least 1978, the 

statutory prohibition is better viewed as 

an anti-reassignment provision that only 

governs assignment-like payment 

arrangements.4 We do not believe this 

provision should be interpreted as a 

broad prohibition on any and all types 

of Medicaid payment arrangements 

beyond payments made directly to 

Medicaid beneficiaries and providers or 

enumerated in the statutory exceptions. 

As such, we proposed to amend 

§ 447.10 to add a new paragraph (i), 

which would incorporate similar 

language from the previous paragraph 

(g)(4), as a new provision clarifying that 

certain types of third-party payments on 

behalf of a particular category of 

practitioners are outside the scope of the 

statutory provision in section 

1902(a)(32) of the Act, rather than 

describing those payments as an 

exception to that prohibition. 

Specifically, § 447.10(i) as proposed 

specified that the payment prohibition 

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

§ 447.10(d) would not apply to 

payments to a third party on behalf of, 

and with the consent 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. 

As discussed in the 2021 proposed 

rule, the text of the statute addresses 

only assignments and related payment 

arrangements wherein a provider’s right 

to claim 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 2021 proposed rule 

included our reasoning that 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 

also proposed to amend § 447.10(a) to 

include the phrase ‘‘under an 

assignment or power of attorney or a 

similar arrangement.’’ We stated that 

this change would align the regulation 

with the applicable statutory language 

and our reading of that language and 

would create a consistent framework for 

the proposed new paragraph (i). 

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 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, to make payments to third 

parties on behalf of the provider. 

A re-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 payment 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 

enumerated exceptions to the general 

principle of direct payment to 

individual practitioners. As described in 

the proposed rule, these exceptions may 

appear to be largely unrelated; however, 

they all involve payment arrangements 

where third parties are submitting 

claims to the Medicaid agency 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 or 

to receive all payments otherwise due a 

provider for services furnished supports 

our 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 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 payment. 

The legislative history of section 

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

conclusion that the statutory text is best 

read as an anti-assignment prohibition. 

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. 

For 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 enhanced by the 

ability to deduct from Medicaid 

payments at the request or with the 

consent of a provider to make separate 

payment to a third party on behalf of the 

provider. Deductions for these purposes 


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29678 Federal Register / Vol. 87, No. 94 / Monday, May 16, 2022 / Rules and Regulations 

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. 

are an efficient and effective method for 

ensuring that the workforce has 

provisions for basic needs and is 

adequately trained for their functions as 

health care professionals, thus ensuring 

that beneficiaries have access to such 

practitioners and higher quality 

services. Requiring practitioner consent 

for such deductions ensures that 

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 proposed that these 

deduction practices fall outside the 

scope of what the statute prohibits, we 

stated in the 2021 proposed rule that 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, 

we have long sought to ensure 

maximum State flexibility to design 

State-specific payment methodologies 

that help ensure a strong, committed, 

and well-trained workforce. 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. We 

also noted that the proposed rule would 

support our previous efforts to 

strengthen the home care workforce by 

specifying what actions are permitted to 

help foster a stable and high-performing 

workforce.8 As proposed, under the 

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 payment 

to pay third parties for health and 

welfare benefit contributions, training 

costs, and other benefits customary for 

employees. 

For States, the third-party payment 

arrangements authorized by the 

provisions in the proposed rule would 

be optional; States that choose to 

implement them can use existing 

administrative processes to make 

deductions for certain benefits on behalf 

of the individual practitioner and with 

consent of the practitioner, from a 

practitioner’s Medicaid payment. For 

practitioners, we stated that the 

proposed rule would 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 care. 

The Medicaid program, at both the State 

and Federal levels, has a strong interest 

in ensuring the development and 

maintenance of a committed, welltrained 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. HCBS provides critical 

services to millions of individuals 

across the county, including people 

with disabilities and older Americans. 

As the COVID–19 pandemic continues 

to impact health care in the United 

States, it is crucial that Medicaid 

beneficiaries are able to receive the 

home-based care they need in their 

homes and communities. Section 9817 

of the American Rescue Plan Act of 

2021 (Pub. L. 117–2) reinforces 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, 

including those delivered by home care 

providers. As we explained in the 

proposed rule, the flexibility permitted 

under the rule would help protect the 

economic security for home care 

providers as well as protect and 

strengthen the HCBS workforce and 

accelerate LTSS reform and innovation. 

Facilitating access to benefits customary 

for employees for home care providers 

is critically important to improve 

workforce standards. Moreover, because 

the majority of home care workers are 

women and people of color,9 permitting 

this type of payment arrangement will 

directly benefit those populations and 

address inequities. 

Further, as discussed in the proposed 

rule, 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 

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 payment.10

Under the rule as proposed, State 

Medicaid agencies would be authorized 

to make deductions from a practitioner’s 

Medicaid payment, with the consent of 

the individual practitioner, 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 to health insurance and 

necessary trainings, and other 

customary employee benefits. 

States typically have an established 

administrative process for their own 

employees’ deductions for benefits that 

can also be applied to classes of 

practitioners for whom Medicaid is the 

only or primary payer. Additionally, 

State Medicaid agencies often perform 

employer-like responsibilities without a 

formal relationship to a certain class 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 payments, with the consent of 

the individual practitioner, 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, gain or retain benefits 

which help them support themselves 

and their families, and subsequently 

benefit those individuals they care for. 

We noted in the 2021 proposed rule 

that these provisions 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 


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benefit contributions, training, and 

similar benefits customary for 

employees). As explained in 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 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, we noted that the 

rule would have little to no impact on 

Federal Medicaid funding levels as the 

2014 final rule is the status quo in light 

of the district court’s decision in 

California v. Azar. 

As discussed in the 2014 final rule, 

the similar policies proposed in the 

2021 proposed 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. As proposed, 

this rule would simply ensure flexibility 

for States to pay for such costs directly 

on behalf of practitioners and ensure 

access to benefits, such as health 

insurance, skills training, and other 

benefits customary for employees. We 

noted that should the rule be finalized 

as proposed, there may even be cost 

savings resulting from the collective 

purchase of such benefits and greater 

workforce stability. 

We solicited public comments on the 

extent to which the payment 

arrangements that would be permitted 

under the 2021 proposed rule would 

benefit States and practitioners, 

particularly if and how a practitioner’s 

access to benefits would be impacted, as 

well as any adverse impacts that may 

have not been anticipated. Additionally, 

we sought 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. Analysis of and Responses to Public 

Comments 

We received 32 public comments in 

response to 2021 proposed rule. The 

following is a summary of the comments 

we received and our responses. 

A. General 

Comment: Most commenters stated 

support for the 2021 proposed rule. 

Commenters appreciated the flexibility 

provided by this rule, which would be 

optional for States to avail themselves 

of, and view the rule as a beneficial 

policy for States and providers. 

Commenters believe the rule aligns with 

the previous 2014 final rule, and will 

enhance and strengthen HCBS 

programs. One commenter noted that 

the ability of States to process payroll 

and make deductions for taxes and other 

workplace benefits for independent 

provider home care workers provides 

parity between independent providers 

and agency-employed workers for 

whom such deductions are a standard 

practice. Some commenters opposed the 

rule and alleged that there is no or 

insufficient statutory authority to create 

this regulation and raised concerns 

about the inclusion of union dues in 

payments that may be made to third 

parties. 

Response: We appreciate the support 

for the changes in the 2021 proposed 

rule. We wish to clarify an imprecise 

characterization of the rule regarding 

who and what entities the rule affects 

and what the rule authorizes. As 

clarified in a subsequent response, 

individual practitioners affected by this 

rule are individual providers of 

Medicaid services whose primary 

source of revenue is Medicaid. The rule 

does not authorize States to process 

payroll or make tax deductions for 

independent providers. This rule 

provides State Medicaid agencies with 

the authority to make deductions from 

Medicaid payments, with the consent of 

the individual practitioner, to make 

payment to a third party on behalf of the 

individual practitioner for benefits such 

as health insurance, skills training, and 

other benefits customary for employees. 

We address concerns regarding statutory 

authority and unions more specifically 

in subsequent responses. 

Comment: One commenter supported 

the proposed revision to § 447.10(a) as 

the provision aligns with the court’s 

ruling in California v. Azar and the 

interpretation of the statutory 

prohibition as extending only to 

assignments and assignment-like 

arrangements that involve a potential for 

factoring that the statute was intended 

to prevent. 

Response: We agree with the district 

court’s decision and analysis in 

California v. Azar. We appreciate the 

comment that expressed support for the 

proposed revision to § 447.10(a). 

Comment: One commenter requested 

CMS define the term ‘‘individual 

practitioner’’ used in the rule. 

Response: In the context of § 447.10, 

‘‘individual practitioner’’ simply refers 

to an individual as opposed to an entity 

or institution providing Medicaid 

services. Individual practitioners can 

include individuals that have a 

contractual employment relationship 

with the State agency. This rule pertains 

specifically to a class of practitioners 

who are not employees of the State, or 

a service agency that is paid by the 

State, such as a home health agency, but 

whose primary source of revenue is 

Medicaid. To make this determination, 

States may look only at revenue related 

to Medicaid-covered services furnished 

by the practitioner. Medicaid-covered 

service revenue does not include 

revenue related to unallowable facility 

costs, such as room and board or food. 

The proposed regulatory text, which we 

are finalizing, provides the necessary 

latitude for a State to determine whether 

it is acting in an employer-like role for 

a particular class of practitioners. 

Comment: One commenter requested 

CMS modify the regulatory language in 

§ 447.10(i) to explicitly include all 

providers of home and communitybased services. Specifically, the 

commenter proposed using the term 

‘‘providers of Home and Community 

Based Services’’ rather than ‘‘individual 

practitioner’’ in § 447.10(i). 

Response: We are maintaining the 

term ‘‘individual practitioner’’ to 

prevent any unintentional exclusions of 

the types of providers affected by this 

rule. As stated in the 2012 proposed 

rule, we included the payment 

reassignment provisions in the HCBS 

proposed rule because State Medicaid 

programs often operate as the only or 

primary payer for a class of practitioners 

that includes HCBS providers. While 

the final rule does apply to a large 

number of HCBS workers, there are 

other provider types affected as well, 

such as personal care services and home 

health workers. 

Comment: Several commenters 

offered lists of the types of benefits 

offered to practitioners affected by this 

rule: health insurance premiums, life 

insurance premiums, retirement plan 

contributions, union and association 

dues, job training (for example, CPR/ 

first aid, dementia care, stress 

management, fall prevention, nutrition, 

and health) and education trusts. One 

commenter indicated that the health 

insurance premium for individual 

practitioners affected by this final rule 

in the State of Washington was $25, 

deducted monthly. A few commenters 

provided single statistics regarding the 

number of providers affected by this 

final rule in their area or State. One 

commenter indicated there were 26,300 

providers in Alameda County in 

California, while another commenter 

indicated a quarter of a million 

providers in California have elected 

voluntary deductions, and 24 percent of 

Wyoming’s small, independent 


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11See, for example, Wisconsin Dep’t of Health 

and Family Servs. v. Blumer, 534 U.S. 473, 496, n. 

13 (2002) (collecting authorities). 

12See, for example, Wisconsin Dept. of Health 

and Family Servs., 534 U.S. at 496, n. 13. 

13Nat’l Cable & Telecomms. Ass’n v. Brand X 

internet Servs., 545 U.S. 967, 981 (2005) (quoting 

Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 

467 U.S. 837, 863–64 (1984)). 

14NLRB v. Local 103, Int’l Ass’n of Bridge 

Workers, 434 U.S. 335, 351 (1978). 

providers of developmental disabilities 

waiver services offer health insurance to 

their employees. 

Response: In the 2021 proposed rule, 

we sought public comments and data on 

the type and amount of benefit 

deductions broken down by benefit that 

may be included under § 447.10(i). We 

appreciate the commenter’s submission 

of State-specific information about the 

types and amounts of benefits available 

to providers. Based on the public 

comments and data received, none of 

the information suggested a need to 

further revise § 447.10(i). 

B. Statutory Authority 

Comment: Several commenters agreed 

with the district court’s decision in 

California v. Azar, which rejected 

HHS’s arguments in that case that 

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

and unambiguously prohibited the 

agency’s pre-2018 interpretation, an 

interpretation which had been set forth 

in the 2014 final rule, and States’ related 

practices. Several commenters also 

agreed with CMS’ analysis that the 

statutory prohibition is better viewed as 

an anti-reassignment provision that only 

governs assignment-like payment 

arrangements. Commenters commended 

CMS’ quick action to issue a proposed 

rule to amend the relevant regulations 

under the new statutory interpretation 

described in the 2021 proposed rule. 

Response: We also agree with the 

district court’s decision and analysis in 

California v. Azar. We appreciate the 

commenters’ support of our statutory 

analysis described in the 2021 proposed 

rule and recognition of the agency’s 

swift action in response to the district 

court’s decision. 

Comment: Nearly every commenter 

opposed to the rule cited a lack of CMS 

authority to add the § 447.10(i) language 

to the regulatory text under part 447. 

Those commenters stated that the 

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

Act both prohibited these types of 

deductions from Medicaid payments, 

and did not have ambiguity to allow us 

to interpret the statute differently than 

the way we interpreted it in the 2019 

final rule. Most asserted that the 

principle of direct payments that begins 

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

leave room for interpretations that 

permit payment deductions outside of 

the subsequent enumerated exceptions. 

Some commenters stated that the 2021 

proposed rule contradicted some of the 

agency’s own prior interpretations of the 

statute, with one citing correspondence 

with a State seeking to formally permit 

such practices. 

Response: Federal administrative 

agencies generally have authority from 

Congress to regulate certain activities. 

An agency’s authority often derives 

from specific statutory directives, which 

the agency is charged with interpreting. 

The Supreme Court has long noted 

Congress’s delegation of ‘‘extremely 

broad regulatory authority to the 

Secretary in the Medicaid area.’’ 11 Here, 

we are relying on our interpretation that 

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

prohibit payments made by the State 

Medicaid program for certain benefits 

on behalf of individual Medicaid 

practitioners whose primary source of 

revenue is the State Medicaid program, 

which we discuss in subsequent 

responses. From there, we are utilizing 

our general rulemaking authority at 

section 1102 of the Act, which 

authorizes the agency to publish 

regulations as necessary for the efficient 

function of, in relevant part, the 

Medicaid program. Ensuring that 

individual practitioners whose primary 

source of revenue is the State Medicaid 

program have the training and benefits 

necessary to remain in the workforce 

and to continue furnishing quality 

services, particularly to some of 

Medicaid’s most vulnerable 

beneficiaries, is necessary for the 

Medicaid program’s efficient operation, 

especially as more and more needy 

beneficiaries choose to receive care in 

their homes.12

Agencies are not bound by their prior 

interpretations of a statutory provision 

and may change their minds. Indeed, 

the Supreme Court has indicated that 

‘‘an initial agency interpretation is not 

instantly carved in stone. On the 

contrary, the agency . . . must consider 

varying interpretations and the wisdom 

of its policy on a continuing basis,’’ 13

and ‘‘an administrative agency is not 

disqualified from changing its mind.’’ 14

In the 2021 proposed rule, and in 

adherence to the order of the district 

court in California v. Azar to revisit the 

statutory question, we reviewed the 

statute anew, focusing on the language 

of the statute itself and the issues 

Congress sought to address as indicated 

by the legislative history. From this 

analysis, we determined that the 

payments to third parties addressed in 

this rulemaking fall outside of what is 

covered by the statute. Notably, when 

we first enacted this policy as an 

exception in 2014, some States were 

already making the types of deductions 

and payments expressly authorized 

under that 2014 exception, based on a 

belief that it was permitted under the 

statute. While we did initially raise 

concerns with a State about whether 

deductions it was making from 

practitioner payments were in line with 

the statute, it was not until the 2012 

proposed and 2014 final rules that we 

chose to use rulemaking to address 

these payment deductions under the 

statute. We concluded that the statute 

did not seek to limit administrative 

efficiency for a class of practitioners for 

which the Medicaid program is the 

primary source of revenue. In the 

present rule, we merely proposed, and 

are now finalizing, a different approach 

to the foundational principle we 

discerned from the intent of the statute, 

and from which our only deviation was 

in the 2019 final rule. 

Comment: Some commenters 

suggested that this rulemaking is not the 

result of new evidence, but rather 

political motivations, citing the change 

in administration since CMS finalized 

the 2019 final rule. 

Response: The cause of the change 

was our thorough statutory analysis 

conducted in compliance with a court 

order, and not the result of political 

interests. In California v. Azar, the court 

vacated the 2019 final rule and 

remanded to HHS for further 

consideration of the appropriate 

interpretation of the statute. Upon our 

re-examination of the statute, as well as 

consideration of the court’s analysis that 

resulted in the remand, we determined 

that a wholly new statutory 

interpretation was appropriate and 

correct. 

Comment: Many commenters agreed 

with CMS’ conclusion that the purpose 

of section 1902(a)(32) of the Act was to 

prohibit factoring and that it extends 

only to assignments and assignment-like 

arrangements that involve a potential for 

the type of abuse that the statute was 

intended to prevent. One commenter 

stated that section 1902(a)(32) of the Act 

is not an unbounded prohibition on all 

third-party payments. Another 

commenter indicated that a provision of 

a statute should be understood in the 

context of the whole statute, and not 

read in isolation, citing King v. St. 

Vincent’s Hosp., 502 U.S. 215, 221 

(1991) (referencing ‘‘the cardinal rule 

that a statute is to be read as a whole, 

since the meaning of statutory language, 

plain or not, depends on context’’). The 

commenter stated that, in reading the 

statute in its entirety, the prohibition of 

‘‘payments’’ prohibits assignments of 


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15See Samantar v. Yousuf, 560 U.S. 305, 316 n.9, 

130 S.Ct. 2278, 176 L.Ed.2d 1047 (2010). 

16Sutherland Statutory Construction section 

47:17 (1991); Circuit City Stores, Inc. v. Adams, 532 

U.S. 105 (2001). 17See, 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). 

18See, 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). 

the right to payment and the words ‘‘or 

otherwise’’ refers to assignments in 

which claims for payment from 

individuals other than providers or 

agencies would occur. A third 

commenter stated that statutory 

interpretation canons of noscitur a 

sociis (that is, ‘‘a word is known by the 

company it keeps’’) and ejusdem generis 

(which limits general terms that follow 

specific ones to matters similar to those 

specified) supported CMS’ conclusions; 

therefore, payment deductions, 

including partial deductions, are not 

exceptions to the anti-assignment 

provision and fall outside of the scope 

of what the statute prohibits. 

Response: We agree that section 

1902(a)(32) of the Act was intended by 

Congress to prohibit factoring-type 

arrangements. For the reasons explained 

in the 2021 proposed rule and in our 

response to the next set of comments 

about the ‘‘or otherwise’’ language, we 

agree that the provision is not an 

unbounded prohibition on all thirdparty payments, but instead a 

prohibition that only extends to 

assignments and assignment-like 

arrangements that involve a potential for 

the type of abuse that the statute was 

intended to prevent. We also agree that 

both looking at the statute as a whole 

and applying the ejusdem generis canon 

of statutory construction support our 

conclusion that section 1902(a)(32) of 

the Act does not unambiguously 

prohibit all third-party payment 

arrangements that are not explicitly 

excepted by the statute, and that the 

canon noscitur a sociis may apply as 

well. 

Comment: Some opposing 

commenters stated the statute was 

clearly drafted in a way to end all 

payments to third parties, other than in 

the specific exceptions, with one 

pointing to the comma before ‘‘under an 

assignment or power of attorney or 

otherwise,’’ as evidence that those terms 

are non-essential rather than limiting. 

Two commenters closely scrutinized 

CMS’ assessment of the meaning of ‘‘or 

otherwise’’ in the Act, disagreeing with 

our conclusion and the associated 

change to § 447.10(a). Both stated the 

phrase is broadly inclusive, as 

supported by some cited case law, and 

therefore CMS’ more narrow 

interpretation was incorrect. One 

commenter noted CMS’ use of the 

principle of ejusdem generis did not 

apply because of the broad meaning of 

the phrase in question. One commenter 

stated if a court were to review our 

interpretation, the court would not find 

in our favor. 

Response: We do not agree with these 

commenters. The Medicaid statute at 

section 1902(a)(32) contains no clear 

prohibition on all non-excepted thirdparty payments as some commenters 

suggest. Viewing these commenters’ 

statements in the most favorable light, 

the statutory language is, at best, 

ambiguous about whether such 

payments are authorized. When 

considering the language of the statute 

as a whole, along with its legislative 

history and programmatic purpose, we 

have concluded that the best 

interpretation of the statute is that it 

does not bar payments to third parties 

for health and welfare benefits, training, 

and other benefits customary for 

employees for certain categories of 

individual practitioners who consent to 

such payments on their behalf. We 

believe the best reading of the antiassignment statutory text suggests that 

the States’ payment arrangements with 

home care workers at issue in this 

rulemaking are authorized. While 

consideration of the legislative history is 

not strictly necessary to reach our 

conclusion, the legislative history 

further supports our narrow reading of 

the anti-reassignment provision.15 More 

specifically, 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 and provides important 

context to show that that the opposing 

comments misunderstand the scope of 

section 1902(a)(32) of the Act. The 

legislative history shows that Congress 

acted specifically to address a 

problematic circumstance, factoring, 

and then to close a loophole it had 

missed when first enacting section 

1902(a)(32). 

The commenters’ statement that ‘‘or 

otherwise’’ is broadly inclusive would 

mean Congress had intended their 

statutory restriction to apply almost 

unbounded, a position not supported by 

the legislative history of the original 

statutory provision nor the reasons for 

the expansion of the statutory language 

to include ‘‘an assignment or power of 

attorney or otherwise.’’ Because ‘‘or 

otherwise’’ is non-specific, it is by its 

very nature ambiguous. Where statutory 

language is ambiguous, we must arrive 

at a reasonable interpretation of the 

statute by applying general canons of 

statutory construction and examining 

the legislative history of the provision. 

Under the canon of ejusdem generis, 

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.’’ 16 We believe that 

approach is appropriately applied to the 

list structure of this statutory language. 

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. To interpret ‘‘or 

otherwise’’ as an all-encompassing term 

would make meaningless the illustrative 

examples Congress listed before it. 

This interpretation is further 

supported by the legislative history of 

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

previously in this response. As we 

explained in the 2021 proposed rule, 

when Congress adopted the original 

version of this provision in 1972, it was 

focused on the practice of factoring, 

based on concerns that the factoring 

industry was a breeding ground for 

Medicaid fraud.17 Then in 1977, when 

Congress amended the antireassignment provision, it did so 

specifically to close what it perceived to 

be a loophole that factoring companies 

were exploiting.18 The legislative 

history demonstrates that the statutory 

language was tailored to address certain 

issues, rather than the phrase ‘‘under an 

assignment or power of attorney or 

otherwise’’ being added as a 

nonessential descriptor. To interpret the 

scope of the statute as extending beyond 

that goal is to make it overburdensome 

on the very providers whose payments 

Congress sought to protect. 

Finally, we note that our 

interpretation is largely consistent with 

the court’s analysis in California v. 

Azar. No court has held otherwise. 

Comment: One commenter, citing a 

desire for environments where 

practitioners can thrive, agreed with 

CMS’ reinterpretation of the scope of 

section 1902(a)(32) of the Act as long as 

a practitioner voluntarily consented to 

such payments to third parties on the 

practitioner’s behalf, as described in the 

2021 proposed rule under § 447.10. 


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19See Restatement (Second) of Contracts section 

324 (1981) (‘‘It is essential to an assignment of a 

right that the obligee manifest an intention to 

transfer the right to another person without further 

action or manifestation of intention by the 

obligee.’’). 

20See, for example, California v. Azar, 501 F. 

Supp. 3d 830, 840 n.8 (N.D. Cal. 2020) (the 

argument ‘‘that authorizing deductions for union 

dues is an ‘assignment’ (or something very close to 

an assignment) because of the way union dues are 

described in other contexts—is barely worth 

mentioning. Unlike the types of assignments 

involved in factoring and the statute’s exceptions, 

unions cannot step into the shoes of the worker and 

pursue independent claims against the State for 

Medicaid reimbursement based on the worker’s 

decision to authorize deductions for union dues. 

The fact that union dues are sometimes referred to 

as ‘assignments’ in a few judicial opinions and 

Federal statutes in distinct contexts does not mean 

that they are ‘assignments’ within the meaning of 

the anti-reassignment provision and in the context 

of assigning the right to submit a claim for 

reimbursement of health services.’’); see also, for 

example, United Broth. of Carpenters and Joiners of 

Am. v. Ohio Carpenters Health and Welfare Fund, 

926 F.2d 550, 553, 557 (6th Cir. 1991) (finding that 

a form that had ‘‘‘authorized and directed [their 

employers] to pay and remit to [a union]’ dues 

deducted from the payroll’’ when ‘‘properly 

construed, is the employee’s consent to the 

employer’s role as agent for the union in the 

collection of dues,’’ but ‘‘is not a true common law 

assignment, since it creates no rights in any 

assignee.’’); Dialysis Newco, Inc. v. Cmty. Health 

Sys. Group Plan, 938 F.3d 246, 253–255 (5th Cir. 

2019) (explaining that ‘‘a direct-payment 

authorization and a prohibition against the 

assignment of benefits are distinct concepts’’); 

Brown v. Blue Cross Blue Shield of Tenn., Inc., No. 

No. 1:14–CV–00223, 2015 WL 3622338, at *3–*7 

(E.D. Tenn. June 9, 2015) (collecting cases and 

noting that ‘‘[t]here is no consensus among the 

Federal courts regarding whether language 

providing for direct payment of benefits constitutes 

an assignment for purposes of ERISA,’’ but 

explaining that ‘‘[t]he cases holding that forms 

providing for direct payment do not constitute an 

assignment have the better end of the argument.’’) 

Response: We acknowledge the 

importance of practitioner consent in 

§ 447.10(i), which we are finalizing as 

proposed. 

Comment: Several opposed 

commenters referred to the new 

language in § 447.10(i) as an additional 

exception to the direct payment 

provision in the Act and its specific 

enumerated exceptions. They pointed to 

those specific exceptions as evidence 

that there was not room or authority to 

make an additional exception, a 

principle with which CMS agreed in our 

2019 final rule. One commenter 

acknowledged that the new provision is 

not an exception, but functionally is the 

same. 

Response: The final rule does not 

create a new exception under section 

1902(a)(32) of the Act. In the 2021 

proposed rule, we reinterpreted the 

scope of the statute and concluded that 

these deductions from Medicaid 

payments as authorized by the 

individual practitioner fell outside of 

that scope. As discussed in Section 

II.A., the intent of the statutory 

provision was to prohibit factoring 

arrangements. 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. The statute refers to 

assignments of claims and the 

exceptions describe permissible 

assignments of claims. The payment 

arrangements authorized under this rule 

do not involve an assignment of a claim 

to a third party, and are neither covered 

by the statute nor are they sufficiently 

similar to the enumerated exceptions as 

to be considered one as well. 

Comment: A few of the commenters 

who disagreed with the 2021 proposed 

rule cited various court decisions to 

support the assertion that the 

authorization by the provider to make 

third party payment deductions is 

necessarily a form of assignment and 

therefore covered by the anti-assignment 

language of the Act. 

Response: It is true that some case law 

exists indicating some payment 

deduction scenarios may constitute 

legal assignment. However, the case law 

is varied and suggests that the wording 

and intent of contracts is pertinent to 

the question of whether the 

‘‘assignment’’ has transferred a right, the 

form of assignment relevant here.19 We 

have found numerous decisions that 

make clear that, in many circumstances, 

a person may consent to have an 

amount deducted from their pay 

without conferring a right through an 

assignment.20 Furthermore, the statute 

specifically makes impermissible the 

assignment of claims (and through such 

assignment, the right to collect on those 

claims). Even if the deduction of benefit 

payments could, in certain 

circumstances, be labeled an 

‘‘assignment’’ under some case law 

definitions, such an assignment would 

not confer the right to the claim and 

therefore is outside the statute’s scope. 

Our interpretation does not create a new 

type of assignment or exception, but 

instead creates an avenue for the same 

type of payment arrangements enjoyed 

by other practitioners, but for those 

without a formal employment 

relationship. When re-examining the 

statute and the problems Congress 

sought to address when expanding the 

language of its direct payment 

provision, it is clear that the focus was 

on instances where providers assigned 

claims or created workarounds to do so. 

Assigning the right to collect on a claim 

is not the same as granting an 

authorization to deduct for benefits, and 

the statute was not intended to preclude 

State agencies from providing their nonemployee providers benefits of their 

employment-like relationships. 

Therefore, it is reasonable to conclude 

that in this context, assignment refers to 

the assignment of a claim for a whole 

Medicaid payment. 

Comment: Several commenters 

opposed to the rule pointed out the 

distinction CMS drew between an 

assignment of a full payment claim and 

a partial payment deduction. They 

indicated the distinction was irrelevant, 

and a couple of commenters indicated 

that such a distinction could give rise to 

scenarios in which Medicaid providers 

would see their payments reduced by 

any amount regardless of surrounding 

circumstances so long as it was a 

portion of the payment. 

Response: As previously discussed, 

we concluded that the intent of the 

statute is to address scenarios of claim 

assignment that had given rise to fraud, 

particularly through factoring, and 

therefore the distinction between partial 

payment deductions and assignment of 

the right to the full payment is relevant. 

However, we clarify that the true test is 

not whether the payment to the third 

party is partial or full, but instead 

whether the arrangement is the transfer 

of the rights to a claim versus the 

redirection of monies due to the 

practitioner to directly cover costs that 

would otherwise be paid by the 

practitioner, with the practitioner’s 

consent. We also note that this rule very 

narrowly applies only to individual 

practitioners for whom the Medicaid 

program is the primary source of 

revenue and have provided consent for 

such deductions. In developing this 

rule, we sought to both describe and 

address a specific arrangement that we 

are confident was not intended to be 

curtailed by the language of the Act. We 

reiterate that this rule would simply 

ensure flexibility for States to pay for 

such costs directly on behalf of 

practitioners and ensure access to 

benefits, such as health insurance, skills 

training, and other benefits customary 

for employees. 

C. Consent Requirement 

Comment: Several commenters 

opposed to the 2021 proposed rule did 

not agree that the consent requirement 

included in the rule, which the prior 

similar regulation did not make explicit, 

would be sufficient to overcome the 

perceived risks of allowing for 

deductions for benefits directly from a 

provider’s payment. The risks cited by 


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commenters centered mainly around 

examples of unions that had engaged in 

fraudulent or questionable practices, 

such as high-pressure enrollment 

meetings, when obtaining or using dues. 

One commenter cited a concern that an 

individual practitioner might not know 

what he or she is consenting to, for 

example if English was not the 

practitioner’s first language. One 

commenter requested that the voluntary 

consent requirement include a 

requirement that the consent be 

communicated directly to the State 

agency. 

Response: We make every effort to 

ensure we do not create avenues for 

fraud, and to protect against instances 

where those might occur. In the time 

between our 2014 final rule, which 

permitted these types of payment 

deductions as an exception to the Act, 

and the 2021 proposed rule, there have 

been two noteworthy cases regarding 

payment deductions, specifically in the 

context of union dues. The First 

Amendment principles regarding 

consent for the deduction of union dues 

outlined by the Supreme Court in Harris 

v. Quinn, 573 U.S. 616 (2014), and Janus 

v. Am. Fed’n of State, Cnty., & Mun. 

Emps., Council 31, 138 S. Ct. 2448 

(2018), are binding on States regardless 

of any rules we may issue, and we are 

mindful of the fact that these rules must 

be consistent with those decisions. 

Furthermore, for clarity, and because 

this rule applies to deductions for a 

variety of benefits, not simply union 

dues, we believed it was important to 

include an explicit voluntary consent 

requirement in the regulatory text (and 

not limited to the context of union dues) 

to ensure that Medicaid payments are 

handled in accordance with the wishes 

of the provider to which the Medicaid 

payments are owed, both for public 

policy reasons and to address any 

possible First Amendment concerns 

which may arise both within and 

outside of the union dues context. The 

existence of bad actors governed under 

other laws and regulated by other 

agencies should not preclude the 

creation of our policy intended to 

benefit providers. Many workplaces 

allow employees to deduct union dues 

from their paychecks, and the union 

practices cited by some commenters do 

not justify distinguishing this aspect of 

an employment-like relationship from 

any other benefits deduction. In 

addition, while we appreciate the desire 

to guard against erroneous or 

involuntary deductions, we determined 

it is appropriate to defer to States 

regarding which methods of obtaining 

and documenting consent are sufficient 

or suitable, and to rely on States to 

ensure third parties are not furnishing 

fraudulent practitioner consent for 

deductions. States and third parties are 

expected to adhere to the applicable 

laws regarding contractual capacity to 

ensure practitioners with limited 

English proficiency are providing 

informed, voluntary consent. 

Comment: Many commenters advised 

CMS against requiring 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 and 

could be unduly burdensome on State 

programs and workers within those 

programs. One commenter urged CMS 

not to be too prescriptive about the 

format of consent to avoid conflicting 

with existing laws and employment 

contracts. Another commenter 

explained that some State laws and 

policies regarding consent for 

deductions require a ministerial form 

while other States include consent as a 

component to a contractual agreement 

among other methods used to collect 

consent: Electronic, online, voicerecorded assent, or traditional penned 

signatures. Commenters recommended 

that CMS defer to State Medicaid 

agencies’ determination on how to 

obtain consent from providers affected 

by this rule. One commenter supported 

also deferring to State Medicaid 

agencies’ determinations on how to 

implement provider payment 

deductions consistent with State law 

and regulations for State employee 

benefit deductions, as indicated in the 

2021 proposed rule. A few commenters 

opposed to the rule overall requested 

that, should CMS nevertheless proceed 

with its policy, the consent requirement 

include a written requirement and also 

include CMS authorization. 

Response: Based on some of the 

concerns raised by commenters as well 

as our original concerns that codifying 

a requirement for written consent could 

unintentionally result in a conflict with 

State law, we have decided to not 

impose a Federal regulatory requirement 

for explicit written provider consent for 

deductions or to insist that States 

submit their proposed consent forms to 

us for review. While we appreciate the 

desire of some commenters to have 

more rigorous safeguards, we are 

confident the inclusion of a consent 

requirement, while allowing States 

flexibility for compliance with that 

requirement, creates the right balance 

between addressing problematic 

situations and respecting the rights of 

State agencies to administer their State 

Medicaid plans. 

Comment: Two commenters advised 

CMS against requiring 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. The commenters indicated this 

additional requirement is unnecessary 

and already addressed by State law or 

employee contracts. 

Response: Based on the concerns 

raised by commenters, as well as our 

original concerns that rulemaking may 

not accurately capture all of the 

employee benefits practitioners believe 

should require consent, and our interest 

in ensuring that Medicaid payments are 

handled in accordance with the wishes 

of the provider to whom such payments 

are owed, we have decided not to limit 

the practitioner consent requirement to 

only specific types of deductions. Thus, 

we are finalizing the rule as proposed, 

to require consent for all deductions for 

benefits that may be deducted and paid 

to a third party under § 447.10(i). 

D. Impact to Stakeholders 

Comment: The commenters opposed 

to the rule largely disagreed with CMS 

about the benefits this rule would have 

for individual practitioners. A couple of 

commenters cited the lack of availability 

of varied trainings or benefits for which 

an individual practitioner may wish to 

enroll. Some referenced the 2019 final 

rule which stated that the lack of this 

flexibility did not preclude a 

practitioner from being able to 

participate in such benefits, and instead 

just changed the process. One 

commenter noted that the rule does not 

prescribe any sort of standard for the 

benefits for which payment deductions 

may be made. A few commenters also 

cited a lack of meaningful evidence that 

providers in fact benefit from such 

practices. 

Response: We reaffirm our belief that 

this final rule will enhance the ability 

of the affected practitioners, regardless 

of their employment arrangements, to 

perform their functions as health care 

professionals and thus support 

beneficiary access to quality home care. 

While the types and availability of 

trainings and benefits varies across 

States, we want to encourage access to 

benefits for individuals effectively 

acting as employees, such as health 

insurance, skills training, and other 

benefits customary for employees. It is 

true that this policy applies to a narrow 

class of providers for one specific 

procedural step of enrolling in benefits. 

However, it addresses a situation where 

individuals with an employment-like 

relationship with the State agency 

cannot currently benefit from that 


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relationship in the same manner an 

actual employee can. While this policy 

has evolved over time, the consistent 

theme remains that there are States that 

wish to offer individual practitioners 

this type of flexibility, enough to initiate 

litigation in the aforementioned 

California v. Azar case in response to 

the rescission of the policy in 2019. 

Furthermore, some States had already 

implemented payment deduction 

arrangements before we issued the 2014 

final rule. With the appropriate 

safeguards in place, despite 

commenters’ assertions of only a 

minimal benefit, the policy nevertheless 

responds to a known demand. 

Comment: Some commenters 

expressed concern that this policy 

would in fact harm individual 

practitioners. They stated that the 

benefits paid by the State on behalf of 

the practitioner would result in a 

reduced payment to that practitioner, 

and concluded this could take money 

away from providing services to the 

needy. They also cited concerns about 

Medicaid monies being taken from 

providers inappropriately. 

Response: We want to ensure that 

providers receive the monies they are 

owed for the provision of Medicaid 

services to beneficiaries. That is why we 

proposed, and are now finalizing, a 

voluntary consent requirement, as we 

wanted to ensure that individual 

practitioners’ payments are handled in 

accordance with their wishes. As such, 

under this rule, the only deductions that 

may be made from Medicaid payments 

due an individual practitioner are those 

that are specifically authorized by that 

practitioner to pay for certain benefits 

on their behalf. Furthermore, permitting 

State Medicaid agencies to deduct from 

the practitioner’s payment, at the 

direction of that practitioner, does not 

impact the services provided to a 

beneficiary any more than if the 

practitioner was paying these thirdparty costs on their own. We note that 

State Medicaid agencies have the option 

to develop State plan payment rates that 

account for costs related to benefits 

customary for employees. Moreover, we 

believe that this policy may in fact 

benefit beneficiaries receiving services 

from practitioners by improving and 

stabilizing the workforce. 

Comment: Several commenters 

advised CMS against including a 

defined list of allowable benefits or 

excluded benefits within the regulatory 

text. Commenters indicated that 

providers have access to a wide variety 

of benefits, depending on the State the 

provider works in. Commenters also 

indicated that benefits continue to 

expand and regulatory text that codifies 

the list of benefits could possibly 

conflict with available benefits and 

interfere with the efficiency of State 

Medicaid programs by creating barriers 

for States and providers. One 

commenter indicated that a final rule 

could provide examples of certain 

purposes and benefits for which payroll 

deductions may be utilized, but such a 

list should be illustrative and neither 

definitive nor limiting. 

Response: We share the concerns 

raised by commenters that such a list 

may not accurately reflect all employee 

benefits available to practitioners and 

would need frequent updates through 

the rulemaking process to remain 

relevant. Thus, we have decided not to 

include a defined list of allowable 

benefits or excluded benefits within the 

regulatory text or for illustrative 

purposes in the final rule, and States 

that choose to make deductions under 

this regulation will have flexibility to 

determine the types of benefits that are 

eligible for payment via such 

deductions. 

E. Impact to States 

Comment: Many commenters 

indicated that States and local 

governments have been making third 

party payments for benefits (that is, 

health, dental, and vision insurance, 

training, union dues) on behalf of 

individual practitioners for decades. 

Many commenters stated that California 

first began this process in the 1990s, 

Washington in 2002, Illinois in 2003, 

and Oregon in 2011. Many commenters 

emphasized that the scope and form of 

third-party payments on behalf of 

individual practitioners is a matter of 

State law or employee contracts and 

advised CMS not to regulate this area in 

the final rule to avoid conflicting with 

existing laws and contracts. 

Response: We reiterate that this rule 

would simply reassure States of the 

flexibility to pay for certain benefits 

directly on behalf of certain 

practitioners, as our interpretation of the 

statute is that these payment 

arrangements are outside the scope of 

the statutory prohibition. 

Comment: Two commenters raised 

concerns about a State’s administrative 

burden and additional administrative 

costs for implementing the 2021 

proposed rule. Specifically, one 

commenter urged CMS to reconsider the 

existing requirements and 

administrative burden faced by State 

Medicaid Agencies because CMS stated 

in the 2021 proposed rule that the time, 

effort, and financial resources necessary 

for States to exercise this optional 

flexibility would be incurred by the 

State during the normal course of their 

activities. Another commenter indicated 

the 2021 proposed rule may have 

unintended consequences by not 

allowing States to claim additional 

administrative costs to implement this 

optional rule, such as reducing payment 

rates to cover new State costs of 

implementation for the singular subset 

of direct care workers. 

Response: We wish to clarify our 

intent regarding State program 

administrative costs incurred by the 

State when implementing the 2021 

proposed rule. To expend Federal, State, 

and local resources in the most costeffective manner possible, States may 

not claim expenditures for the costs of 

allowable administrative activities that 

should have been reimbursed as direct 

medical services, as this would result in 

duplicative claiming. States that wish to 

account for the cost of benefits, skills 

training, and other benefits customary 

for employees in their expenditures 

need to include these costs as part of the 

rate paid for the service to be eligible for 

Federal financial participation. 

States that wish to account for any 

additional State program administrative 

costs incurred by the State when 

implementing the 2021 proposed rule, 

such as the cost of payment system 

updates, must claim such administrative 

costs in accordance with Federal 

requirements. In accordance with 

section 1903(a)(7) of the Act and 

implementing regulations at §§ 430.1 

and 431.15, activities must be found 

necessary by the Secretary for the 

proper and efficient administration of 

the plan. Administrative costs must also 

be reasonable, allowable, and allocable 

in compliance with 2 CFR part 200 and 

45 CFR 75.402 through 75.411. States 

are also required to maintain a Public 

Assistance Cost Allocation Plan, as 

required by § 433.34 and subpart E of 45 

CFR part 95. 

Comment: One commenter requested 

CMS revise the rule to provide clarity 

about a Financial Management Services 

(FMS) entity’s authority to make 

mandatory deductions from wages that 

are required by law to be made by an 

employer, such as deductions for 

Federal and State taxes, without 

requiring the provider’s consent. 

Response: This rule does not impact 

a State’s ability to perform FMS or 

secure FMS through a vendor 

arrangement provided under sections 

1915(c), 1915(i), 1915(j), 1915(k), and 

1115 of the Act. Rather, this rule 

pertains to payments for State plan 

services under section 1905(a) of the 

Act. Section 447.10(i), as finalized, 

explicitly authorizes States to make 

payments to third parties to benefit 

individual practitioners by ensuring 


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21Paulsen v. Daniels, 413 F.3d 999, 1008 (9th Cir. 

2005) (citing Action on Smoking & Health v. Civil 

Aeronautics Bd., 713 F.2d 795, 797 (D.C. Cir. 1983) 

(per curiam)). As the district court noted in 

California v. Azar, ‘‘vacating the agency’s action 

simply preserves a status quo that has existed since 

at least the early 1990[ ]s while the agency takes the 

time it needs to give proper consideration to the 

matter.’’ 501 F. Supp. 3d at 843. 

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. These payment 

deductions are distinct from mandatory 

payments under State and Federal law, 

which are outside the scope of this 

rulemaking. 

Comment: Two commenters requested 

CMS issue guidance on offering 

employee benefits in participant 

direction programs that do not have a 

union or other third party that offers 

benefits. Specifically, the commenters 

requested Federal guidance about how 

the cost of employee benefits should be 

built into an individual budget when a 

beneficiary opts to self-direct their care 

under HCBS. 

Response: To reiterate, this rule does 

not impact a State’s ability to perform 

FMS or secure FMS through a vendor 

arrangement provided under sections 

1915(c), 1915(i), 1915(j), 1915(k), and 

1115 of the Act. The question of how 

the cost of employee benefits should be 

built into an individual budget when a 

beneficiary opts to self-direct their care 

under HCBS is outside the scope of this 

rulemaking. 

Comment: One commenter indicated 

that the 2021 proposed rule will not 

support the stability of HCBS without 

significant investment in the entire 

direct care workforce and necessary 

protections and oversight to ensure 

there are no further funding shortfalls. 

Response: This rulemaking is 

narrowly tailored to respond to recent 

litigation and interest from States in the 

flexibility to enter into the types of 

payment arrangements discussed in this 

rule. Stabilizing HCBS with a significant 

investment in the entire direct care 

workforce and providing necessary 

protections and oversight to ensure 

there are no further funding shortfalls is 

outside the scope of this rulemaking. 

We will evaluate the commenter’s 

concerns and continue to partner with 

States, consumers and advocates, 

providers, and other stakeholders to 

create a sustainable, person-driven longterm support system in which people 

with disabilities and chronic conditions 

have choice, control, and access to a full 

array of quality services that assure 

optimal outcomes, such as 

independence, health, and quality of 

life. We expect that this final rule will 

contribute some stabilization of HCBS 

by offering States the opportunity to pay 

for such costs directly on behalf of 

practitioners and ensure access to 

benefits, such as health insurance, skills 

training, and other benefits customary 

for employees. 

Comment: One commenter requested 

CMS clarify the oversight process it 

intends to implement after finalization 

of the 2021 proposed rule. Specifically, 

the commenter sought clarification 

about if and how CMS will request data 

from States about the individual 

practitioners affected by this rule and 

the type and amount of third-party 

payments made on behalf of individual 

practitioners, if third party payments 

will be subject to Federal audit, and 

what documentation about these thirdparty payments that States need to 

maintain. The commenter also 

questioned if CMS consulted with the 

Internal Revenue Service regarding how 

deductions should be reported on an 

individual practitioner’s income or 

earnings form. Lastly, the commenter 

questioned CMS about States’ ability to 

incorporate costs related to health and 

welfare benefits, training, and other 

benefits customary for employees or 

other costs which are not otherwise 

eligible for Federal financial 

participation. 

Response: We expect States to comply 

with applicable Federal requirements. 

States are expected to maintain 

supporting documentation for Medicaid 

expenditures reported on the quarterly 

Form CMS–64 to claim Federal financial 

participation. In instances where the 

State is making payments to a third 

party on behalf of an individual 

practitioner, States are expected to 

maintain relevant documentation of 

these transactions, including 

documentation demonstrating the 

deductions are voluntary. We may 

conduct quarterly reviews of Medicaid 

expenditures claimed on the Form 

CMS–64 and associated State 

documentation to ensure State 

compliance with this final rule. While 

the Form CMS–64 itself would not 

reflect changes as a result of this rule, 

we may request documentation from a 

State to support its Form CMS–64 

claims, including evidence that the 

consent requirement is met and the 

individual practitioner funds are being 

handled appropriately. Additionally, we 

may initiate additional oversight 

activities to ensure State compliance 

with the requirements in this final rule. 

Requirements regarding how a 

practitioner should report deductions 

on income and earnings forms relating 

to Federal and State tax requirements 

are outside the scope of this rulemaking. 

We would like to reiterate that should 

a State wish to recognize such costs, 

they would need to be included as part 

of the rate paid for the service 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. 

Comment: One commenter disagreed 

that this 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. The 

commenter went on to cite various 

figures regarding the collection of union 

dues in some States that have exercised 

the ability to make third party payment 

deductions, and stated that the benefits 

to individual practitioners we cited in 

the 2021 proposed rule contradict the 

budget neutral assessment. 

Response: The commenter’s 

assessments assume that the 2019 rule 

remains in effect, the 2014 rule is not in 

effect, or both. With this premise, the 

commenter seems to suggest that the 

baseline for determining the impact of 

this rulemaking should not reflect the 

2014 final rule (that is, the existence of 

the authority previously codified at 

§ 447.10(g)(4)). This reasoning is 

incorrect. In our current circumstance, 

the court’s vacatur of the 2019 rule, 

which the commenter did not 

acknowledge, means that the 2014 rule 

is now back in effect by operation of 

law, with no new round of rulemaking 

necessary to bring about this result. It is 

a well settled principle that ‘‘[t]he effect 

of invalidating an agency rule is to 

reinstate the rule previously in force.’’ 21

Therefore, relative to this analytic 

baseline, the present rule, which closely 

mirrors the prior regulatory language 

under the 2014 final rule, but under a 

more appropriate statutory analysis, 

creates very little difference from the 

scenario where § 447.10(g)(4) is in 

effect. The unique feature of the present 

rule is the consent requirement, which 

as discussed previously, is already a 

requirement for the deduction of union 

dues under the First Amendment. As 

such, our proposed rule reflected our 

assessment that the effect, when 

compared against the present regulatory 

and legal landscape, is budget neutral. 

However, we acknowledge that the 

appeal related to California v. Azar is 

still outstanding, and as such, our 

present circumstance is not guaranteed. 

Therefore, we have now included data 

in the Regulatory Impact Analysis 

section examining the impact of this 


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policy against a potential alternate 

scenario where the 2019 final rule is 

once again in effect. 

F. Union Dues 

Comment: Nearly all the commenters 

who were opposed to the rule raised the 

fact that union dues are included among 

the benefits for which payments may be 

deducted. Many commenters pointed to 

and expressed concern about the 

potential for ‘‘dues skimming,’’ wherein 

a State automatically deducts union 

dues from payments, a concern which 

was raised in the 2019 final rule. They 

pointed to the cases of Harris v. Quinn 

and Janus v. AFSCME as examples of 

the impermissibility and First 

Amendment implications of the 

practice. In addition, some commenters 

provided examples of questionable or 

improper actions taken by unions in 

various States. Commenters indicated 

finalizing this rule would roll back 

protections and permit States to divert 

Medicaid money to unions and political 

campaigns. Some commenters identified 

coercive practices that they claim 

unions use despite consent 

requirements, such as ‘‘captive 

audience’’ pitches and a limited ability 

to disenroll. 

Response: We proposed and are 

finalizing this policy with its consent 

requirement to align with relevant case 

law surrounding union dues and 

consent, and to address related concerns 

cited in the 2019 final rule. Even though 

this protection is already founded in the 

cited case law, we believed it was 

important to include it as a regulatory 

requirement as well to provide an 

additional layer of protection for 

providers specifically. We also note that 

regardless of whether a State is able to 

make third party payment deductions, a 

number of the commenters’ concerns 

could still exist. For example, ‘‘captive 

audience’’ union pitches and limited 

disenrollment periods are outside the 

scope of this rulemaking, and HHS is 

not the agency that would address how 

unions use their dues once received. 

Facilitating a transfer between 

consenting providers and third parties 

does not affect, either positively or 

negatively, the practices of unions, and 

therefore those concerns do not warrant 

a change in this policy. This rule allows 

States to make deductions to pay for 

benefits such as health insurance, skills 

training, and other benefits customary 

for employees from an individual 

practitioner’s payment, with their 

consent. We reiterate that we want to 

ensure providers receive the monies 

they are owed for the provision of 

Medicaid services to beneficiaries by 

finalizing a voluntary consent 

requirement. None of the concerns cited 

demonstrated a sufficient reason or 

evidence as to why the practitioners 

impacted by this rule should have more 

limited access to union dues deductions 

than those in formal employment 

relationships. 

Comment: One opposed commenter 

made several suggestions for how to 

address union dues should CMS choose 

to proceed with finalizing this policy. 

The suggestion included an opt-in 

requirement, multifactor authorization, 

additional notice regarding the 

individual’s rights, an expiration of 

authorization for deductions, and open 

disenrollment. 

Response: The suggestions are outside 

the scope of this rulemaking or outside 

the authority of what HHS can regulate. 

To the extent we can address the 

concerns raised by commenters, our 

regulatory consent requirement 

appropriately balances the case law 

around the First Amendment and union 

dues, the concerns about bad actors, and 

the ability of States to exercise 

flexibility in their State Medicaid 

programs. In section VI.D., we detail the 

alternatives we considered, but did not 

adopt based on the feedback of 

commenters and our assessment of the 

most effective approach. 

IV. Provisions of the Final Regulation 

After consideration of the public 

comments, we are finalizing as 

proposed our additional language in 

§ 447.10(a) and the new paragraph at 

§ 447.10(i). 

V. Collection of Information 

Requirements 

Our August 3, 2021 (86 FR 41803) 

proposed rule solicited public comment 

on, among other things, the rule’s 

‘‘collection of information’’ 

assumptions. For the purpose of this 

section of the preamble, collection of 

information is defined under 5 CFR 

1320.3(c) of OMB’s implementing 

regulations. We received one comment 

addressing this section, urging CMS to 

reconsider the exempt classification 

should CMS find the amount of 

necessary State effort to be understated. 

We stated in the 2021 proposed rule that 

the time, effort, and financial resources 

necessary for States to exercise this 

optional flexibility are exempt from the 

requirements of the Paperwork 

Reduction Act of 1995 (PRA) (44 U.S.C. 

3501 et seq.) as they would be incurred 

by the State during the normal course of 

their activities, and therefore should be 

deemed as a usual and customary 

business practice under 5 CFR 

1320.3(b)(2). That assessment remains 

unchanged. This rule codifies a policy 

option that exists regardless of this rule, 

both through our interpretation that this 

policy is beyond the scope of the 

statute, and due to the California v. Azar 

decision vacating the 2019 final rule. 

The consent requirement is new to the 

present rule, but as we are not 

establishing a specific method to obtain 

consent, and because consent is already 

required for union dues deductions 

under the First Amendment, our 

determination is that the consent 

requirement will likely be met through 

usual and customary business practices, 

and does not produce a measurable 

impact. 

We also believe that the proposed and 

finalized requirements have no impact 

on our currently approved State plan 

amendment (SPA) requirements and 

burden estimates. While CMS–64 (OMB 

control number: 0938–1265) is 

mentioned elsewhere in this final rule, 

this rule has no impact on the form’s 

currently approved requirements and 

burden estimates. Any effort to request 

documentation from a State to support 

its CMS–64 claims, including evidence 

that the consent requirement is met and 

the individual practitioner funds are 

being handled appropriately, would be 

on a case-by-case basis using nonstandardized questions that are exempt 

from the PRA under 5 CFR 1320.3(h). 

Consequently, this rule does not have 

any collection of information 

implications that are subject to the PRA. 

VI. Regulatory Impact Analysis 

A. Statement of Need 

In California v. Azar, the district court 

vacated the 2019 final rule and 

remanded to HHS for further 

proceedings. Although this remand left 

broad discretion for next steps, we 

chose to examine the relevant 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 under an assignment, power 

of attorney, or other similar 

arrangement. Although the court 

vacated the 2019 final rule, our current 

statutory interpretation requires this 

rulemaking to reclassify the policy 

previously codified as an exception at 

§ 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 certain 

individual practitioners. Finally, this 

rule provides us an opportunity to 

reinforce the important caveat that such 


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22See https://www.whitehouse.gov/wp-content/ 

uploads/legacy_drupal_files/omb/circulars/A4/a4.pdf. (Circular A–4 (2003) at 15 (‘‘When more than 

one baseline is reasonable and the choice of 

baseline will significantly affect estimated benefits 

and costs, you should consider measuring benefits 

and costs against alternative baselines.). 

23California v. Azar, 501 F. Supp. 3d at 843 (N.D. 

Cal. 2020). 

deductions may only be made with the 

consent of the individual practitioner. 

B. Overall Impact 

We have examined the impacts of this 

final 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 

million or more in any 1 year). In the 

2021 proposed rule, we estimated that 

this final rule would be budget neutral, 

but could have broader economic 

impact that is unlikely to have an 

annual effect on the economy more than 

the $100 million threshold of Executive 

Order 12866. We maintain that position 

for the final rule, under the current 

regulatory landscape at the time of 

finalization. However, we acknowledge 

that an appeal of the district court 

decision that gave rise to this 

rulemaking is currently pending. As 

such, it may be appropriate to provide 

an analysis for each of the possible 

baseline scenarios: One where 

§ 447.10(g)(4) is in effect, and one where 

the 2019 final rule is in effect.22 We will 

examine each baseline analysis in turn. 

Presently, as a result of the district 

court decision, the 2019 final rule is 

nullified and the 2014 final rule 

implementing § 447.10(g)(4) represents 

current policy. When the district court 

vacated the 2019 final rule and 

remanded the case to HHS for further 

proceedings, we had broad discretion as 

to how to address the remand. Because 

the vacatur reestablished the policy 

from the 2014 rule, we could have 

simply published a final rule in the 

Federal Register waiving notice of 

proposed rulemaking and public 

comment and informing the public that 

§ 447.10(g)(4) was in effect due to the 

district court’s decision, and instructing 

the Office of the Federal Register to 

republish § 447.10(g)(4), had we 

determined that was the best approach. 

Our other potential options, which were 

not mutually exclusive, included the 

option to appeal the court’s decision, to 

issue sub-regulatory guidance, or engage 

in rulemaking to either reinstate the 

2019 final rule relying on a legal basis 

different from that rejected by the court, 

or to implement the same or similar 

policy as in the previously codified 

§ 447.10(g)(4) pursuant to a different 

legal analysis. As stated by the district 

court, ‘‘vacating the agency’s action 

simply preserves a status quo that has 

existed since at least the early 1990’s 

while the agency takes the time it needs 

to give proper consideration to the 

matter.’’ 23 We initially appealed, then 

chose to review the statute anew, 

eventually determining that the 

payments to third parties addressed in 

this rulemaking fall outside the scope of 

the statute. 

For the economic analysis in the 2021 

proposed rule, we believed that this rule 

offered State Medicaid programs 

additional operational flexibilities to 

ensure a strong provider workforce, 

which resulted in a proposed rule that 

was preliminarily designated as not 

economically significant. 

With regard to the impact on State 

operations, we believe State budgets 

will not likely be significantly affected 

because the operational flexibilities in 

this final rule only facilitate the transfer 

of funds between participating entities, 

rather than the addition or subtraction 

of new funds. As noted by multiple 

commenters, some States had 

implemented this flexibility decades 

before the 2014 final rule which is 

currently the status quo. To the extent 

that those States may have continued or 

resumed exercising such flexibility 

following the district court’s decision, 

those States will experience no change 

to their operations under this current 

rule. States that have not already 

implemented this policy option are not 

required to implement it under the 

current rule and their operations will 

remain unchanged, unless the State 

takes specific actions to implement this 

policy option. Therefore, using the 

established baseline assumption of the 

2019 final rule not occurring and 

defaulting to the 2014 final rule, we 

anticipate the minimal impact on State 

budget and operations. 

We believe the current rule may have 

an annual effect on the economy in 

excess of the $100 million threshold of 

Executive Order 12866. While the effect 

may be similar in magnitude to the 

impact analysis in the 2019 final rule, 

we believe the effect will be opposite in 

sign where States are allowed to deduct 

payments from a provider’s payment 

with their consent under certain 

circumstances described in the 2021 

proposed rule, thereby shifting portions 

of Medicaid payments from home care 

workers to third parties. Since the 2014 

and 2019 final rules, we are not aware 

of any SPAs submitted by State 

Medicaid agencies that intended to 

modify provider payments rates in 

response to these previous regulatory 

changes. In addition, we do not track 

the payment amounts that State 

Medicaid agencies pay to third parties 

as affected by this regulatory provision, 

although we could obtain such 

information through review of a State’s 

Medicaid expenditures claimed on the 

Form CMS–64. 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. 

In the current rulemaking, we again 

sought comments 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). We did not receive 

comments with compelling data specific 

to the economic impact of this policy, 

and we did not receive comprehensive 

data about the types and amounts of 

deductions broken down by benefit. 


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24Named plaintiff States included California, 

Connecticut, Oregon, Massachusetts, Washington, 

and Illinois. 

25Heath insurance premium amount was sourced 

from Public Comment CMS–2021–0130–0013 

located at https://www.regulations.gov/comment/ 

CMS-2021-0130-0013. 

26The number of individual practitioners in a 

single State who has already adopted this policy 

option was sourced from Public Comment CMS– 

2021–0130–0013 located at https://

www.regulations.gov/comment/CMS-2021-0130- 

0015. This number was used to extrapolate an 

estimate for the six States who has already adopted 

this policy option. 

27https://www.bls.gov/news.release/pdf/ebs2.pdf. 

28https://www.nelp.org/publication/surveyingthe-home-care-workforce/#_ednref2; see also, for 

example, https://www.kff.org/medicaid/pressrelease/combined-federal-and-state-spending-onmedicaid-home-and-community-based-serviceshcbs-totaled-116-billion-in-fy-2020-serving-millionsof-elderly-adults-and-people-with-disabilities/; 

https://www.kff.org/medicaid/issue-brief/statepolicy-choices-about-medicaid-home-andcommunity-based-services-amid-the-pandemic/. 

Alternatively, due to the outstanding 

appeal of the district court decision, it 

may be appropriate to consider a 

scenario in which the 2019 final rule is 

still in effect, as the district court 

decision may not be the final outcome 

of California v. Azar. If the 2019 final 

rule were in effect, then this current 

rulemaking would mark a significant 

policy shift, with a measurable impact. 

We have added a discussion of this 

alternate baseline in our regulatory 

impact analysis comment response, and 

included estimates in Table 1 of section 

VI.E. of this final rule. 

Based on our estimates, OMB’s OIRA 

has determined that this rulemaking is 

‘‘economically significant’’ under 

Executive Order 12866 and ‘‘major’’ 

under Subtitle E of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (also known as the Congressional 

Review Act). 

Comment: One commenter disagreed 

with our assessment in the proposed 

rule that a regulatory impact analysis 

was unnecessary. That commenter 

pointed to our language in the 2021 

proposed rule that included positive 

benefits associated with stabilizing the 

home care workforce. The commenter 

also noted the fact the deductions are 

already occurring should have no 

bearing on the estimated economic 

impact of this rule. The commenter 

cited figures from a report that solely 

focused on quantifying the amount of 

third-party payments made to unions to 

demonstrate the economic significance. 

Response: As stated in section III.E. of 

this final rule, the effect of the vacatur 

in California v. Azar is that the 2014 

final rule is our current policy, and the 

commenter failed to acknowledge the 

effect of the court decision. However, 

we acknowledge litigation is still 

pending, and furthermore there is value 

in understanding the effect of this 

policy under a possible alternate 

trajectory where the 2019 final rule is in 

effect. We lack direct information with 

which to quantify those impacts, as the 

Department does not track the amount 

of Medicaid payments that are being 

assigned to third parties. However, we 

can surmise from the California v. Azar 

case that at least six States 24 are 

currently utilizing this policy. We also 

believe it is reasonable to conclude 

some additional States have already or 

in the future may adopt these practices 

to provide individual practitioners 

administrative convenience, but as we 

do not have a means to assess that 

amount, we have not included them in 

this exercise. As States are the Medicaid 

program operators, enroll providers in 

their programs, and determine economic 

and efficient payment rates for 

providers, we believe States are better 

situated to quantify the amount of 

Medicaid payments that may be 

transferred to third parties under the 

policy discussed in this rule. 

We utilized example data provided in 

comments to the 2021 proposed rule to 

extrapolate an approximate estimate for 

health insurance transfers within the six 

plaintiff States. We estimate that 

individual practitioners may be offered 

a $25 monthly premium for health 

insurance 25 and there may be 

approximately 270,000 individual 

practitioners affected by this rule within 

those six States.26 We then estimated 88 

percent,27 or 237,600 of eligible 

individual practitioners will enroll in an 

offered health insurance plan; therefore, 

we expect transfers of $71,280,000 

annually from the 6 States who already 

adopted this policy option to one or 

more third party health insurance plans 

on behalf of individual practitioners. 

This estimate assumes all six States 

have the same number of providers and 

offer health insurance plans with the 

same monthly premium. We also 

acknowledge that a large portion of 

home care workers obtain their health 

insurance through publicly funded 

programs, such as Medicaid,28 and may 

or may not have a health insurance 

premium, depending on the State’s 

program, which adds an additional 

caveat to this estimate. While we have 

not similarly quantified the amount of 

other authorized deductions, such as for 

skills training or other benefits, we 

estimate that the amount of payments 

made to third parties on behalf of 

individual providers for the variety of 

benefits addressed in this rulemaking 

could potentially be in excess of $100 

million. We have included some 

financial impact estimates from the 

policy generally in Table 1 in section 

VI.E. of this regulatory impact analysis. 

The potential direct financial impact 

on the individual practitioners is 

similarly difficult to quantify due to the 

absence of specific information about 

the types and amount of payments being 

reassigned. The 2019 final rule 

acknowledged potential, but minor 

negative financial impacts on 

practitioners related to mailing 

payments, and we can conclude this 

policy, where available, avoids those 

potential costs. 

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 certifies 

that this final 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 604 

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 

certifies, that this final 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 2022, that threshold is approximately 

$165 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 issues a proposed 


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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 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, 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 final 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). Based on 

additional analysis and commenter 

feedback, we are not amending any 

proposals to reflect these variations. 

We also considered but did not 

propose or finalize requiring 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. We 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 

requested public comments 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 sought comments on 

what constitutes appropriate consent 

(that is, letter, email, form), descriptions 

of State law that require consent, and 

how we 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 provided in the 2021 proposed 

rule that a provider must voluntarily 

consent to payments to third parties on 

the provider’s behalf, but decided to 

defer to each State to determine the best 

means of confirming the provider’s 

consent in each case. 

We also considered but did not 

propose or finalize codifying a defined 

list of allowable benefits or excluded 

benefits within the regulatory text based 

on concerns that such a list may not 

accurately reflect all employee benefits 

available to practitioners and would 

need frequent updates through the 

rulemaking process to remain relevant. 

We discussed in the 2021 proposed rule 

that the available benefits may vary 

between States and we would, again, 

defer to specific State laws and 

regulations as the basis for 

implementing the provisions of the 2021 

proposed rule. We solicited 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 also solicited 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 sought 

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 requested that commenters 

further explain why the benefits they 

provide as examples within their 

comments are permissible or 

impermissible as we proposed at 

§ 447.10(i). 

We considered but did not propose or 

finalize a consent requirement 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 to remain relevant. 

We solicited 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 also 

solicited 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. Accounting Statement 

As discussed previously, the 

outstanding appeal related to California 

v. Azar means it may be appropriate to 

examine the impact of the policy 

described in this final rule against two, 

alternate baselines. The first baseline 

considers this final rule to reclassify a 

current policy using a new statutory 

interpretation, due to the vacatur of the 

2019 final rule. In this case, we would 

not be required to prepare an accounting 

statement as would otherwise be 

required by OMB Circular A–4 under 

Executive Order 12866 (available at 

https://www.whitehouse.gov/wpcontent/uploads/legacy_drupal_files/ 

omb/circulars/A4/a-4.pdf). 

However, the second baseline 

considers an alternative scenario where 

the 2019 final rule, or its relative 

impact, is in effect. Therefore, we 

prepared an analysis of the impact of 

the policy described in this final rule, to 

the extent we can estimate based on 

contributions sourced from public 

commenters on the 2021 proposed rule 

and reasonable estimates of policy 

adoption, in the absence of actual data. 

Those impacts are discussed in a 

comment response in section VI.B. of 

this final rule. In Table 1, we have 

prepared an accounting statement 

showing the classification of transfers 

associated with the provisions in this 

proposed rule. The accounting 

statement is based on estimates 

provided in this regulatory impact 

analysis and omits categories of impacts 

for which partial quantification has not 

been possible. 


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TABLE 1—ACCOUNTING STATEMENT

Transfers 

Category Low 

estimate 

High 

estimate 

Units 

Year 

dollars 

Discount 

rate 

(%) 

Period 

covered 

Annualized monetized $ millions/year ................................. 0 $71.3 2021 3 2022 

0 71.3 2021 7 2022 

From whom to whom? ......................................................... From States to third parties on behalf of individual practitioners. 

F. Conclusion 

In accordance with the provisions of 

Executive Order 12866, this final 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 March 16, 

2022. 

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 amends 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 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) 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: May 5, 2022. 

Andrea Palm, 

Deputy Secretary, Department of Health and 

Human Services. 

[FR Doc. 2022–10225 Filed 5–12–22; 11:15 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 660 

[Docket No. 220510–0113] 

RIN 0648–BK78 

Fisheries Off West Coast States; West 

Coast Salmon Fisheries; 2022 

Specifications and Management 

Measures 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Final rule. 

SUMMARY: Through this final rule, NMFS 

establishes fishery management 

measures for the 2022 ocean salmon 

fisheries off Washington, Oregon, and 

California, and the 2023 salmon seasons 

opening earlier than May 16, 2023, 

under the authority of the MagnusonStevens Fishery Conservation and 

Management Act (MSA). The fishery 

management measures vary by fishery 

and by area and establish fishing areas, 

seasons, quotas, legal gear, recreational 

fishing days and catch limits, 

possession and landing restrictions, and 

minimum lengths for salmon taken in 

the U.S. Exclusive Economic Zone (EEZ) 

(3–200 nautical miles (nmi)) (5.6–370.4 

kilometers (km)) off Washington, 

Oregon, and California. The 

management measures are intended to 

prevent overfishing and to apportion the 

ocean harvest equitably among treaty 

Indian, non-Indian commercial, and 

recreational fisheries. The measures are 

also intended to allow a portion of the 

salmon runs to escape the ocean 

fisheries in order to provide for 

spawning escapement, comply with 

applicable law, and to provide fishing 

opportunity for inside fisheries 

(fisheries occurring in state waters). 

DATES: This final rule is effective from 

0001 hours Pacific Daylight Time, May 

16, 2022, until the effective date of the 

2023 management measures, as 

published in the Federal Register. 

ADDRESSES: The documents cited in this 

document are available on the Pacific 

Fishery Management Council’s 

(Council’s) website (www.pcouncil.org). 

FOR FURTHER INFORMATION CONTACT: 

Shannon Penna at 562–676–2148. 

SUPPLEMENTARY INFORMATION: 

Background 

The ocean salmon fisheries in the EEZ 

off the coasts of Washington, Oregon, 

and California are managed under a 

framework fishery management plan 

(FMP). Regulations at 50 CFR part 660, 

subpart H, provide the mechanism for 

making preseason and inseason 

adjustments to the management 

measures, within limits set by the FMP, 

by notification in the Federal Register. 

Regulations at 50 CFR 660.408 govern 

the establishment of annual 

management measures. 

The management measures for the 

2022 and early 2023 ocean salmon 

fisheries that are implemented in this 

final rule were recommended by the 

Council at its April 6 to 13, 2022, 

meeting. 

Process Used To Establish 2022 

Management Measures 

The Council announced its annual 

preseason management process for the 

2022 ocean salmon fisheries on the 

Council’s website at www.pcouncil.org 

(December 3, 2021), and in the Federal 

Register on December 9, 2021 (86 FR 

70114). NMFS published an additional 

notice of opportunity to submit public 

comments on the 2022 ocean salmon 


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