[Federal Register Volume 60, Number 77 (Friday, April 21, 1995)]
[Rules and Regulations]
[Pages 19856-19862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9954]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 440 and 441

[MB-41-F]
RIN 0938-AF12


Medicaid Program; Required Coverage of Nurse Practitioner 
Services

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final rule.

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SUMMARY: This final rule stipulates the requirements for coverage of 
and payment for pediatric and family nurse practitioner services under 
the Medicaid program. The coverage of these additional services under 
the Medicaid program increases the availability and accessibility of 
medical care for specified Medicaid recipients.
    This final rule adds to the Medicaid regulations provisions of 
sections 1902(a)(10)(A) and 1905(a)(21) of the Social Security Act, as 
amended by section 6405 of the Omnibus Budget Reconciliation Act of 
1989.

EFFECTIVE DATE: These regulations are effective May 22, 1995.

FOR FURTHER INFORMATION CONTACT: Robert Wardwell, (410) 966-5659.

SUPPLEMENTARY INFORMATION:

I. General Background

    Title XIX of the Social Security Act (the Act) authorizes States to 
establish Medicaid programs to provide medical assistance to needy 
individuals. Section 1902(a)(10) of the Act describes the two broad 
classifications of most individuals to whom medical assistance may be 
provided: The categorically needy (section 1902(a)(10)(A)) and the 
medically needy (section 1902(a)(10)(C)). Section 1905 of the Act 
defines medical assistance for purposes of the Medicaid program and 
specifies the services that constitute medical assistance.
    Section 6405 of the Omnibus Budget Reconciliation Act of 1989 (OBRA 
'89), Public Law 101-239, enacted on December 19, 1989, redesignated 
section 1905(a)(21) as section 1905(a)(22) and added a new section 
1905(a)(21) to the Act to include services furnished by certified 
pediatric nurse practitioners (CPNPs) and by certified family nurse 
practitioners (CFNPs) in the definition of ``medical assistance.'' 
Section 1905(a)(21) describes the added services as those that a nurse 
practitioner is legally authorized to perform under State law, whether 
or not the nurse practitioner is under the supervision of, or 
associated with, a physician or other health care provider.
    In addition, section 6405 of OBRA '89 amended section 
1902(a)(10)(A) to include the nurse practitioner services listed in 
section 1905(a)(21) of the Act as services that must be made available 
to categorically needy recipients. Nurse practitioner services can be 
provided to medically needy recipients at the option of the State 
Medicaid agency.
    Program instructions to help States implement the provisions of 
section 6405 of OBRA '89 were initially published in the State Medicaid 
Manual, Part 4, Services, in August 1990 (Transmittal Number 48). As a 
result, since July 1, 1990, States have been required to provide for 
direct payment to nurse practitioners for their services if the 
services are not billed by an employing provider (for example, a 
hospital clinic). These instructions included an administratively 
imposed requirement that CPNPs and CFNPs must be certified by national 
accrediting bodies.

II. Notice of Proposed Rulemaking

    On December 23, 1991, we published in the Federal Register (56 FR 
66392) a proposed rule to include in the Medicaid regulations coverage 
of and payment for services furnished by CPNPs and CFNPs, as provided 
by section 6405 of OBRA '89.
    The proposed rule included revisions to 42 CFR parts 440 and 441 to 
define nurse practitioner services for purposes of this benefit, to set 
out the requirements for CPNPs and CFNPs, and to describe the 
permissible methods of payment for services. Under proposed 
Sec. 440.166(a), we defined nurse practitioner services as services 
furnished within the scope of practice authorized by State law or 
regulations, by a practitioner who meets the requirements for a CPNP or 
a CFNP, regardless of whether the nurse practitioner is under the 
supervision of, or associated with, a physician or other health care 
provider.
    In Sec. 440.166(b), we proposed that a CPNP must--
    <bullet> Be a registered professional nurse;
    <bullet> Be currently licensed to practice in the State as a 
registered professional nurse;
    <bullet> Meet the State requirements for qualification of pediatric 
nurse practitioners or nurse practitioners in the State in which he or 
she furnishes the services; and
    <bullet> Be currently engaged in a pediatric nurse practice within 
the scope of applicable State law. [[Page 19857]] 
    We proposed in Sec. 440.166(c) that a CFNP must--
    <bullet> Be a registered professional nurse;
    <bullet> Be currently licensed to practice in the State as a 
registered professional nurse;
    <bullet> Meet the State requirements for qualification of family 
nurse practitioners or nurse practitioners in the State in which he or 
she furnishes the services; and
    <bullet> Be currently engaged in a family nurse practice within the 
scope of applicable State law.
    We did not include in the proposed regulations the national 
certification requirement for CPNPs and CFNPs that we issued in the 
State Medicaid Manual, Part 4, Services, in August 1990. We eliminated 
this requirement to allow States the opportunity to use criteria other 
than national certification to qualify individuals as nurse 
practitioners in specialties.
    In Sec. 440.166(d), we proposed to require State Medicaid agencies 
to pay nurse practitioners directly under an independent provider 
agreement with the State Medicaid agency or, at the option of the nurse 
practitioner, through an employing provider. We proposed a new 
Sec. 441.22(c) to require that State plans provide nurse practitioners 
with these payment options.
    We proposed to revise Sec. 440.210 and to add a new Sec. 441.22(a) 
to require that nurse practitioner services described in Sec. 440.166 
be furnished to categorically needy recipients. We also proposed a new 
Sec. 441.22(b) to require that a State plan specify whether the State 
is electing the option to furnish nurse practitioner services to the 
medically needy.
    We proposed a new Sec. 440.225 to specify that any service not 
required to be provided either to the categorically needy or to the 
medically needy may be furnished under a State plan at the State's 
option.
    We also proposed some technical changes.

III. Summary of Public Comments on the Proposed Rule and Departmental 
Responses

    We received 28 timely pieces of correspondence that commented on 
the December 23, 1991, proposed rule. The comments came from State 
Medicaid agencies, medical centers, hospitals, consultant groups, nurse 
practitioners and associations of nurse practitioners, nurses, and 
medical directors. A summary of these public comments and our responses 
follow.

A. Requirements for CPNPs and CFNPs

    Comment: Several commenters addressed our omission of the 
requirement that we had included in the State Medicaid Manual 
stipulating that CPNPs or CFNPs be certified by one of two specific 
national accrediting organizations. Two commenters indicated that we 
should have included the requirement in the proposed regulations, 
stating that the omission will result in less consistent quality of 
care and a less credible national standard. Three commenters supported 
our decision to omit the requirement, stressing the importance of 
allowing States flexibility to base qualifications on existing State 
certification mechanisms. These commenters stressed that this 
flexibility will result in additional qualified nurse practitioners.
    Response: We intentionally did not incorporate the requirement 
included in the manual instructions that nurse practitioners be 
certified by national accrediting organizations into the proposed 
regulations. We omitted this requirement to avoid excluding from 
coverage nurse practitioners in several States that have detailed 
requirements for nurse practitioners that do not include use of 
national certification. This exclusion would be contrary to the 
statute's intent to provide maximum access to nurse practitioner 
services. Consequently, we are not making any change to the proposed 
Sec. 440.166 to include the requirement that CPNPs or CFNPs be 
certified by national accrediting organizations. In the final rule, we 
are allowing States to determine their own requirements for pediatric 
and family nurse practitioners. In this way, by State law, a State can 
establish its own standards for these nurse practitioner specialties. 
For example, a State may specify its own requirements for training of 
pediatric or family nurse practitioners or, if it chooses, a State may 
require that nurse practitioners be certified by a national 
certification board.
    Comment: Two commenters requested that we change the provision in 
the proposed rule that CPNPs and CFNPs must ``meet the State 
requirements for qualification of pediatric or family nurse 
practitioners or nurse practitioners'' to CPNPs and CFNPs must ``meet 
the State requirements for nurses in advanced practice or nurse 
practitioners.'' The commenters pointed out that, in many States, State 
laws do not name nurse practitioners according to specialty; that is, 
pediatric or family practice, and instead refer to ``nurses in advanced 
practice.'' In addition, both commenters suggested that we require the 
nurses to be certified by a national certification board in pediatrics 
or family practice. One of these commenters also suggested that we 
define nurses in advanced practice as those who are authorized under 
State law to furnish those services stipulated by the State Board of 
Nursing and that we leave the definition of pediatric and family 
practice up to the State.
    Response: The language used in the proposed rule provides 
parameters for practitioners in States that do not have specific 
requirements for pediatric or family nurse practitioners. In these 
States, the practitioner must have a pediatric nurse practice limited 
to providing primary health care to persons less than 21 years of age, 
or a family nurse practice limited to providing primary health care to 
individuals and families.
    We did not intend to exclude from participation pediatric nurse 
practitioners or family nurse practitioners in any State where State 
law does not specifically name nurse practitioners according to 
specialty. We agree with commenters that those States that do not 
specifically define the specialties may instead define nurses in 
``advanced practice'' or ``nurse practitioners.'' Generally this means 
that the nurse has met advanced practice requirements beyond the 2 to 4 
years of basic nursing education required of all registered nurses. In 
these States, therefore, registered nurses must meet the State 
requirements for nurses in ``advance practice'' or general nurse 
practitioners and must have a pediatric nurse practice limited to 
providing primary health care to persons less than 21 years of age, or 
a family nurse practice limited to providing primary health care to 
individuals and families. We have, therefore, revised Sec. 440.166 
(b)(2) and (c)(2) and included reference to nurses in advanced 
practice. Nurses in advanced practice or general nurse practitioners 
who wish to have their services covered under this benefit must be 
practicing as pediatric or family nurse practitioners within broad 
Federal definitions established in these regulations.
    We encourage States to establish requirements for pediatric and 
family nurse practitioners and to define the scope of their practices. 
A State may require that nurse practitioners be certified by a national 
certification board as a pediatric or family nurse practitioner, or a 
State, itself, may define the scope of services that constitute 
pediatric or family nurse practitioner services. The Federal 
definitions will apply in those States [[Page 19858]] that have not 
established their own definitions.
    Comment: One commenter disagreed with the requirement that CPNPs 
and CFNPs be currently engaged in a pediatric or family nurse practice, 
contending that this requirement could bar access to services; for 
example, by excluding new practitioners.
    Response: We agree that the requirements that all nurse 
practitioners meet the State requirements for pediatric and family 
nurse practitioners and be currently engaged in a pediatric or family 
nurse practice could reduce the provider base of nurse practitioners. 
Consequently, we have revised the final regulations at Sec. 440.166 (b) 
and (c) to require that licensed registered nurses in States that have 
specific requirements for pediatric and family nurse practitioners will 
need only to meet those State requirements. In States that do not have 
specific requirements for pediatric or family nurse practitioners, 
nurses in advanced practice and nurse practitioners may qualify by 
being engaged in a pediatric or family nurse practice within the scope 
of the Federal definitions. Thus, being currently engaged in a 
pediatric or family nurse practice will be one way that an individual 
can qualify as a provider of these services, but it will not be the 
only way an individual can qualify.
    Comment: One commenter requested that we specify that the State 
requirements that CPNPs and CFNPs must meet are State requirements ``as 
specified by the State Board of Nursing'', since, according to this 
commenter, it is the State entity that interprets laws and regulations 
on the scope of practice for nurses. This commenter also suggested that 
the nurses in advanced practice be defined as those who are authorized 
under State law to furnish those services stipulated by the State Board 
of Nursing, and leave the definition of pediatric and family practice 
up to the States.
    Response: While a State Board of Nursing may be the State entity 
legally responsible for defining the scope of practice for nurse 
practitioners in most States, we believe it is not feasible to specify 
the particular State governmental entity in Federal regulations, since 
the requirements in the regulations must apply to all States.
    Comment: A large number of commenters requested that nurse 
practitioners with distinct specialties be included in coverage under 
this regulation. Four commenters supported the inclusion of nurse 
practitioners who specialize in providing family planning, 
gynecological, and prenatal care services, including obstetrics-
gynecology nurse practitioners, reproductive health nurse 
practitioners, and women's health nurse practitioners. Four commenters 
requested the inclusion of adult nurse practitioners-- pointing out 
that these practitioners often provide access to care for adolescents 
and economically disadvantaged adults. Three commenters recommended 
covering the services of geriatric nurse practitioners. Four commenters 
noted that the inclusion of psychiatric clinical nurse specialists 
would provide important services for the mentally ill, reduce 
inappropriate care, and be unlikely to increase costs. One commenter 
asked for a clarification on whether other groups of nurse 
practitioners are included.
    Response: Under the final regulations (Sec. 440.166 (b)(1) and 
(c)(1)), States will be able to define the scope of pediatric and 
family nurse practitioner services. The final rule specifies only that 
in States that have not established requirements for pediatric or 
family nurse practitioners or defined the scope of their practice, (1) 
pediatric nurse practitioners have a practice limited to providing 
primary health care to persons less than 21 years of age, and (2) 
family nurse practitioners have a practice limited to providing primary 
health care to individuals and families. These Federal definitions will 
apply only in States that have not established their own requirements 
or definitions. In these States, the State will decide if the 
practitioner's specialty fits within the broad Federal definitions and 
apply the regulations accordingly. The services performed by many of 
the specific nurse practitioners cited by the commenters may be covered 
under the nurse practitioner benefit if they fall under the broad 
Federal definition. Many of these specific nurse practitioner services 
could also be covered, at a State's option, under the Medicaid benefit 
of medical or other remedial care provided by licensed practitioners as 
specified in Sec. 440.60.
    Comment: One commenter requested that the requirements for family 
nurse practitioners who provide services to nursing facility residents 
include geriatric and drug therapy training.
    Response: While we do not challenge the value of such training for 
CFNPs, we believe it is inappropriate for these regulations to specify 
requirements at this level of detail. A State may choose to address the 
need for this specific training in the requirements it establishes for 
certification of CFNPs.

B. Classification of Nurse Practitioner Services

    Comment: One commenter opposed any provision of services in nursing 
facilities that are not under the direction of a physician, and raised 
concerns about nurse practitioners practicing independently in those 
settings. Another commenter asked for clarification on whether direct 
payment to nurse practitioners can be offered in any setting.
    Response: These concerns raise some very complex Medicaid coverage 
issues. To help clarify the payment process for nurse practitioners, we 
are starting this response with some general information on how all 
Medicaid services are paid. We are following this with some more 
specific information on nurse practitioner services.
    Generally, Medicaid services are classified by categories. Each 
separate category may have specific Federal requirements relating to 
supervision or location of services. Some services, such as inpatient 
hospital, nursing facility, and clinic services, are described in terms 
of their setting. Other services, such as rehabilitation or physical 
therapy, are described by the type of service being furnished. Finally, 
some services, such as nurse practitioner and physician services, are 
described in terms of the individual providing services. Each category 
is separate and has a distinct set of requirements.
    While we view each category of services as separate, some services, 
including nurse practitioner services, can be classified in more than 
one category. However, the specific circumstances under which a service 
is provided will determine which category the provider should use when 
submitting a claim. It is possible that a specific claim could meet the 
requirements under one category and not another even though, as a 
general rule, the service could be submitted under either category.
    When a provider submits a claim for payment, the provider must 
identify the service by using a procedure code. The claim is reviewed 
to assure that it meets the requirements for payment. This review is 
based on the information provided on the claim submission. Therefore, 
any service that is submitted for Medicaid payment must meet the 
requirements of the procedure code that the provider designates on a 
claim for payment. Consequently, the provider must use care when 
submitting a claim to avoid having the claim rejected because it does 
not meet the requirements of the designated category. The claim must 
meet those [[Page 19859]] requirements to be eligible for payment; 
otherwise, it will be rejected. (A rejected claim could be resubmitted 
under the proper category.)
    The category of nurse practitioner services has certain 
similarities to physician services that should help clarify how nurse 
practitioner services are classified under Medicaid.
    First, like physician services, nurse practitioner services are 
limited in scope only through State licensure or scope of practice 
laws.
    Second, at the Federal level, there are no restrictions on where 
either physician or nurse practitioner services are furnished.
    Third, the Medicaid statute does not dictate that a physician who 
practices in a hospital or clinic must receive payment through the 
hospital or clinic. This same type of flexibility extends to nurse 
practitioners.
    Fourth, while services provided by physicians or nurse 
practitioners can each be classified in its distinct category, both 
services can also be billed in other categories such as outpatient 
hospital and clinic services.
    As an example of how the billing category governs the 
classification of nurse practitioner services, we can compare two 
methods of billing for nurse practitioner services performed in a 
clinic setting. If the clinic bills the program for the nurse 
practitioner services, the services will be considered to be clinic 
services and all Federal requirements relating to clinics must be met. 
That is, the service provided by a nurse practitioner in the clinic 
setting must be provided under the overall direction of a physician. 
If, instead, a nurse practitioner bills for the services as nurse 
practitioner services (which happen to be furnished in a clinic 
setting), supervision is irrelevant.
    Generally, to be acceptable for direct payment, billing for nurse 
practitioner services provided in any setting must be submitted under 
the category of nurse practitioner services. A nurse practitioner 
furnishing services in a hospital or clinic should not bill Medicaid 
for direct payment under the categories of hospital or clinic services 
because the nurse practitioner would not be able to meet the criteria 
for payment under these categories, for example, the conditions of 
participation applicable to hospitals.
    The issue of the setting of the services also has an impact on both 
the supervision of services and the billing for services. If a nurse 
practitioner furnishes services in a hospital or a clinic and bills 
Medicaid independently under the Medicaid service category of nurse 
practitioner services, the issue of supervision is generally irrelevant 
for purposes of Medicaid coverage. The issue of supervision is more 
complex for nurse practitioner services performed in nursing facilities 
and rural health clinics. However, for reasons discussed below, we will 
also allow direct billing for nurse practitioner services performed in 
these latter settings.
    As mentioned by a commenter, section 1919(b)(6) of the Act requires 
that the health care of every resident of a nursing facility be 
provided under the supervision of a physician (or at State option, 
under the supervision of an nurse practitioner who is not an employee 
of the facility but is working in collaboration with a physician). When 
providing services in a nursing facility, a nurse practitioner must 
either be under the supervision of, or have an association with, a 
physician.
    Services furnished in rural health clinics, as defined at section 
1905(1) of the Act (which refers to section 1861(aa) of the Act), 
similarly require supervision of a nurse practitioner by a physician.
    Because supervision is required under sections 1919(b)(6) and 
1905(1), these sections appear to prohibit any nurse practitioner that 
works in a nursing facility or rural health clinic from directly 
billing Medicaid for services. We believe it would be contrary to the 
Congressional intent of section 1905(a)(2) of the Act to prohibit a 
nurse practitioner working in either of these settings from billing for 
direct payment for nurse practitioner services. Consequently, we are 
allowing a nurse practitioner to bill directly for nurse practitioner 
services furnished in a nursing facility or rural health clinic even 
though the services must be furnished under the supervision of, or in 
association with, a physician.
    Because nurse practitioner services can now be billed either 
directly or indirectly, we recognize that there is some potential for 
duplicate billing. However, we anticipate that nurse practitioners will 
enter into billing agreements with other health care providers, for 
example, clinics. We expect that these agreements will specify which 
entity will bill the Medicaid program for the services and how a nurse 
practitioner will be paid--either directly by the Medicaid program or 
indirectly through the other health care provider. In addition, the 
respective provider agreements with a State Medicaid agency may also 
include provisions which ensure that duplicate payments are not made. 
The State, however, may not require a nurse practitioner to be 
associated with or bill through another health care provider.

C. Physician Referral and Supervision Issues

    Comment: One commenter requested that HCFA amend the regulation 
regarding long-term care facilities (Sec. 483.40) to allow a physician 
to delegate tasks to a nurse practitioner only if the nurse 
practitioner is not an employee of the facility.
    Response: This suggested revision has already been published under 
Sec. 483.40 (56 FR 48875, September 26, 1991) effective April 1, 1992.
    Comment: One commenter requested that we amend the regulation at 
Sec. 440.110 that requires that physical therapy and occupational 
therapy be prescribed by a physician, and that speech, hearing, and 
language services be referred by a physician. The commenter pointed out 
that the proposed rule defines nurse practitioner services as services 
that the CPNP or CFNP is legally authorized to perform under State law, 
and that, in the commenter's State, nurse practitioners are legally 
authorized to order these therapy services for recipients. The 
commenter stated that an amendment that allowed nurse practitioners to 
prescribe or refer patients for these therapy services would further 
the statutory intent of ensuring that Medicaid payment is available for 
these services. The commenter noted that Federal regulations for a 
number of other services allow the services to be recommended by a 
physician or other licensed practitioner.
    Response: We agree that the regulation, as written, requiring 
physician prescription or referral for the therapy services creates a 
barrier to allowing nurse practitioners to provide services that they 
are authorized to provide under State law in some States. This was not 
our intent. Consequently, we are expanding Sec. 440.110 to permit a 
licensed practitioner of the healing arts, within the scope of his or 
her practice under State law, to prescribe or refer these therapy 
services for recipients. This revision enables nurse practitioners to 
refer recipients to physical therapy, occupational therapy, speech 
services and language services when allowed under State law.

D. Payment Options for Nurse Practitioner Services

    Comment: One State agency disagreed with the proposed rule that 
requires States to permit nurse practitioners to be paid through 
employing providers. This State pays nurse practitioners directly 
through independent provider agreements. The commenter contended that 
this method allows the State to [[Page 19860]] avoid duplicate billing 
and verify licensing requirements. The commenter asserted that the 
change will create claims, reporting, and systems problems.
    Response: The intent of the statute clearly is to provide maximum 
access to certain nurse practitioner services by providing alternative 
modes of payment. Payment for such services may be made either directly 
to a nurse practitioner or indirectly through an employing provider. 
Direct payment may be made to a nurse practitioner who is a 
participating Medicaid provider without regard to whether he or she 
practices independently or works under the supervision of, or in 
association with, health care providers. Indirect payment may be made 
when a nurse practitioner is paid through an employing provider and 
does not bill Medicaid. For example, if the nurse practitioner is an 
employee of a hospital or a clinic, the hospital or clinic may pay the 
nurse practitioner and bill Medicaid for hospital or clinic services. 
The State will need to establish administrative arrangements to avoid 
duplicate payments. While we realize that this places some 
administrative burden on States, we believe it is clearly the intent of 
the statute to allow nurse practitioners to participate in the Medicaid 
program and bill for services when appropriate (that is, if the 
services are not paid by an employing provider such as a hospital or 
clinic).
    Comment: In one State, according to a commenter, nurse 
practitioners are limited by State law to providing routine nursing 
care. The commenter opposed the direct payment to a nurse practitioner 
for these services, and questioned whether the regulation intends to 
mandate direct payment to a nurse practitioner who provides this 
limited scope of services. The commenter indicated a willingness to 
propose a change in State law to allow nurse practitioners to provide 
advanced services, but must first determine the services that the nurse 
practitioners could perform that would qualify for payment.
    Response: The statute states that the nurse practitioner services 
that are to be covered are those which a nurse practitioner is legally 
authorized to perform under State law. We believe the statute does not 
give us authority to override State nurse practice rules. Hence, any 
service that a nurse practitioner is authorized to perform under State 
law, such as the routine nursing care the commenter described, must be 
covered as nurse practitioner services. As the commenter pointed out, 
States can choose to expand or restrict the services that nurse 
practitioners are legally authorized to perform in the State by 
changing State laws or regulations defining nurse practitioner 
services.
    Comment: Two commenters recommended changes that would clarify that 
States are required to allow a nurse practitioner to be paid either 
through an employing provider or through an independent provider 
agreement, whether or not the nurse practitioner is under the 
supervision of, or associated with, a physician or other health care 
provider. One commenter asked that we clarify the language in 
Sec. 440.166(d) that the Medicaid agency ``may pay'' for nurse 
practitioner services, and the other commenter suggested that we 
clarify the wording in Sec. 441.22(c).
    Response: The intent of the regulations on payment is to emphasize 
that States are required to allow a nurse practitioner the option of 
being paid either through an independent provider agreement as a 
Medicaid participating provider or through an employing provider when 
the employing provider bills Medicaid. We have clarified Sec. 441.22(c) 
to explain a nurse practitioner may be paid through either method 
whether he or she is under the supervision of, or associated with, a 
physician or other health care provider.

E. Other Issues

    Comment: One commenter disagrees with the decision to make nurse 
practitioner services optional for the medically needy. The commenter 
pointed out that nurse midwife services are mandated for the medically 
needy under the section of the regulations that describes the required 
services for the medically needy (Sec. 440.220), and stated that the 
Congress intended to include nurse practitioner services in this 
section.
    Response: We do not agree that the Congress intended to mandate 
nurse practitioner services for the medically needy. Moreover, 
Sec. 440.220 simply reiterates the options in the statute and does not 
mandate nurse midwife services for the medically needy. Under section 
1902(a)(10)(C) (iii) and (iv) of the Act, if a State chooses to provide 
services to any medically needy group in institutions for mental 
diseases or intermediate care facilities for the mentally retarded, or 
both, the State must include for all medically needy groups at least 
the services listed in section 1905(a) (1) through (5) and (17) (nurse 
midwife services) or any seven services under section 1905(a) (1) 
through (21). A State may choose to not cover nurse midwife services 
for the medically needy by choosing seven other services. We have 
retained the proposed Sec. 440.225 to clarify that any service that is 
not mandated for the categorically needy or medically needy may be 
furnished under a State plan at the State's option.

IV. Provisions of the Final Rule

    We are adopting the proposed regulations as final regulations with 
the following revisions:
    <bullet> We have revised Sec. 440.110 to include provisions that 
allow a licensed practitioner of the healing arts, within the scope of 
his or her practice under State law, to prescribe physical and 
occupational therapy services for recipients and to refer recipients 
for other therapy services.
    <bullet> We have revised the proposed Sec. 440.166(a) to describe 
nurse practitioner services as services that are furnished by a 
registered professional nurse who meets a State's advanced educational 
and clinical practice requirements, if any, beyond the 2 to 4 years of 
basic nursing education required of all registered nurses.
    <bullet> We have revised the proposed Sec. 440.166 (b) and (c) to 
include the requirements that nurses in advanced practice must meet to 
qualify as CFNPs and CPNPs. Licensed registered nurses in States that 
have specific requirements for pediatric and family nurse practitioners 
will need only to meet those State requirements. In States that do not 
have specific requirements for pediatric or family nurse practitioners, 
nurses in advanced practice and general nurse practitioners may qualify 
by being engaged in a pediatric or family nurse practice within the 
scope of the State's definitions or within Federal definitions.
    <bullet> We have revised the proposed Sec. 441.22(c) to clarify 
that a nurse practitioner has the option of being paid either through 
an independent provider agreement or through an employing provider 
regardless of whether he or she is under the supervision of, or 
associated with, a physician or other health care provider.

V. Regulatory Impact Statement

    We generally prepare a regulatory impact analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612), unless the Secretary certifies that a final regulation 
will not have a significant economic impact on a substantial number of 
small entities. For purposes of RFA, physicians and all nurse 
practitioners who work on a consulting basis or who are self-employed 
are considered to be small entities. [[Page 19861]] 
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis if a final rule may have an impact on the 
operations of a substantial number of small rural hospitals. Such an 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we consider a small rural 
hospital as a hospital that is located outside a Metropolitan 
Statistical Area and that has fewer than 50 beds.
    This final rule adopts the December 23, 1991, proposed rule with 
modifications, based on comments submitted by the public. A summary of 
the public comments and the departmental responses are included in part 
II above. In the proposal, we included an impact analysis (57 FR 66394) 
that indicated that the impact was negligible. None of the responses to 
our request for public comment addressed our proposed impact analysis. 
In addition, we believe that none of the changes incorporated into the 
final rule require any revision to our statement in the proposal that 
the impact was negligible. Consequently, we continue to believe that 
the impact of this final rule is negligible. We are, therefore, not 
preparing a regulatory impact analysis for this final rule.
    We have determined, and the Secretary certifies, that these final 
regulations will not have significant economic impact on a substantial 
number of small entities and will not have a significant impact on the 
operations of a substantial number of small rural hospitals. Therefore, 
we have not prepared a regulatory flexibility analysis or an analysis 
of effects on small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
final regulation was reviewed by the Office of Management and Budget.

VI. Paperwork Burden

    Section 441.22 of this final rule contains information collection 
requirements that are subject to Office of Management and Budget (OMB) 
approval under the Paperwork Reduction Act of 1980 (44 U.S.C. Chapter 
35). Under these final regulations, a State will be required to specify 
in its State Medicaid plan that it provides nurse practitioner services 
to the categorically needy. A State must also specify whether or not it 
furnishes nurse practitioner services to the medically needy. In 
addition, a State must provide that services furnished by a nurse 
practitioner, regardless of whether the nurse practitioner is under the 
supervision of, or associated with, a physician or other health care 
provider, may be paid by the State Medicaid agency through an 
independent provider agreement between the State and the nurse 
practitioner; or be paid through the employing provider. The public 
reporting burden for this collection of information is estimated to be 
a half hour per response. A notice will be published in the Federal 
Register when OMB approval is received.

List of Subjects

42 CFR Part 440

    Grant programs--health, Medicaid.

42 CFR Part 441

    Family planning, Grant programs--health, Infants and children, 
Medicaid, Penalties, Prescription drugs, Reporting and recordkeeping 
requirements.

    42 CFR Chapter IV is amended as follows:

PART 440--SERVICES: GENERAL PROVISIONS

    A. Part 440 is amended as follows:
    1. The authority citation for part 440 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

    2. In Sec. 440.110, paragraphs (a)(1), (b)(1), and (c)(1), are 
revised to read as follows:


Sec. 440.110  Physical therapy, occupational therapy, and services for 
individuals with speech, hearing, and language disorders.

    (a) Physical therapy. (1) Physical therapy means services 
prescribed by a physician or other licensed practitioner of the healing 
arts within the scope of his or her practice under State law and 
provided to a recipient by or under the direction of a qualified 
physical therapist. It includes any necessary supplies and equipment.
* * * * *
    (b) Occupational therapy. (1) Occupational therapy means services 
prescribed by a physician or other licensed practitioner of the healing 
arts within the scope of his or her practice under State law and 
provided to a recipient by or under the direction of a qualified 
occupational therapist. It includes any necessary supplies and 
equipment.
* * * * *
    (c) Services for individuals with speech, hearing, and language 
disorders. (1) Services for individuals with speech, hearing, and 
language disorders means diagnostic, screening, preventive, or 
corrective services provided by or under the direction of a speech 
pathologist or audiologist, for which a patient is referred by a 
physician or other licensed practitioner of the healing arts within the 
scope of his or her practice under State law. It includes any necessary 
supplies and equipment.
* * * * *
    3. A new Sec. 440.166 is added to read as follows:


Sec. 440.166  Nurse practitioner services.

    (a) Definition of nurse practitioner services. Nurse practitioner 
services means services that are furnished by a registered professional 
nurse who meets a State's advanced educational and clinical practice 
requirements, if any, beyond the 2 to 4 years of basic nursing 
education required of all registered nurses.
    (b) Requirements for certified pediatric nurse practitioner. The 
practitioner must be a registered professional nurse who meets the 
requirements specified in either paragraphs (b)(1) or (b)(2) of this 
section.
    (1) If the State specifies qualifications for pediatric nurse 
practitioners, the practitioner must--
    (i) Be currently licensed to practice in the State as a registered 
professional nurse; and
    (ii) Meet the State requirements for qualification of pediatric 
nurse practitioners in the State in which he or she furnishes the 
services.
    (2) If the State does not specify, by specialty, qualifications for 
pediatric nurse practitioners, but the State does define qualifications 
for nurses in advanced practice or general nurse practitioners, the 
practitioner must--
    (i) Meet qualifications for nurses in advanced practice or general 
nurse practitioners as defined by the State; and
    (ii) Have a pediatric nurse practice limited to providing primary 
health care to persons less than 21 years of age.
    (c) Requirements for certified family nurse practitioner. The 
practitioner must be a registered professional nurse who meets the 
requirements specified in either paragraph (c)(1) or (c)(2) of this 
section.
    (1) If the State specifies qualifications for family nurse 
practitioners, the practitioner must--
    (i) Be currently licensed to practice in the State as a registered 
professional nurse; and
    (ii) Meet the State requirements for qualification of family nurse 
practitioners in the State in which he or she furnishes the services.
    (2) If the State does not specify, by specialty, qualifications for 
family nurse [[Page 19862]] practitioners, but the State does define 
qualifications for nurses in advanced practice or general nurse 
practitioners, the practitioner must--
    (i) Meet qualifications for nurses in advanced practice or general 
nurse practitioners as defined by the State; and
    (ii) Have a family nurse practice limited to providing primary 
health care to individuals and families.
    (d) Payment for nurse practitioner services. The Medicaid agency 
must reimburse nurse practitioners for their services in accordance 
with Sec. 441.22(c) of this subchapter.
    4. In Sec. 440.210, the introductory text of paragraph (a) and 
paragraph (a)(1) are revised to read as follows:


Sec. 440.210  Required services for the categorically needy.

    (a) A State plan must specify that, at a minimum, categorically 
needy recipients are furnished the following services:
    (1) The services defined in Secs. 440.10 through 440.50, 440.70, 
and (to the extent nurse-midwives and nurse practitioners are 
authorized to practice under State law or regulation) the services 
defined in Secs. 440.165 and 440.166, respectively.
* * * * *
    5. A new Sec. 440.225 is added to read as follows:


Sec. 440.225  Optional services.

    Any of the services defined in subpart A of this part that are not 
required under Secs. 440.210 and 440.220 may be furnished under the 
State plan at the State's option.
    B. Part 441 is amended as follows:

PART 441--SERVICES: REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC 
SERVICES

    1. The authority citation for part 441 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

    2. Section 441.10 is revised to read as follows:


Sec. 441.10  Basis.

    This subpart is based on the following sections of the Act which 
state requirements and limits on the services specified or provide 
Secretarial authority to prescribe regulations relating to services:
    (a) Section 1102 for end-stage renal disease (Sec. 441.40).
    (b) Section 1138(b) for organ procurement organization services 
(Sec. 441.13(c)).
    (c) Sections 1902(a)(10)(A) and 1905(a)(21) for nurse practitioner 
services (Sec. 441.22).
    (d) Sections 1902(a)(10)(D) and 1905(a)(7) for home health services 
(Sec. 441.15).
    (e) Section 1903(i)(1) for organ transplant procedures 
(Sec. 441.35).
    (f) Section 1903(i)(5) for certain prescribed drugs (Sec. 441.25).
    (g) Section 1903(i)(6) for prohibition (except in emergency 
situations) of FFP in expenditures for inpatient hospital tests that 
are not ordered by the attending physician or other licensed 
practitioner (Sec. 441.12).
    (h) Section 1905(a)(4)(C) for family planning (Sec. 441.20).
    (i) Sections 1905 (a)(12) and (e) for optometric services 
(Sec. 441.30).
    (j) Section 1905(a)(17) for nurse-midwife services (Sec. 441.21).
    (k) Section 1905(a) (following (a)(24)) for prohibition of FFP in 
expenditures for certain services (Sec. 441.13).
    3. A new Sec. 441.22 is added to read as follows:


Sec. 441.22  Nurse practitioner services.

    With respect to nurse practitioner services that meet the 
definition of Sec. 440.166(a) and the requirements of either 
Sec. 440.166(b) or Sec. 440.166(c), the State plan must meet the 
following requirements:
    (a) Provide that nurse practitioner services are furnished to the 
categorically needy.
    (b) Specify whether those services are furnished to the medically 
needy.
    (c) Provide that services furnished by a nurse practitioner, 
regardless of whether the nurse practitioner is under the supervision 
of, or associated with, a physician or other health care provider, 
may--
    (1) Be reimbursed by the State Medicaid agency through an 
independent provider agreement between the State and the nurse 
practitioner; or
    (2) Be paid through the employing provider.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)

    Dated: August 30, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.

    Dated: January 24, 1995.
Donna E. Shalala,
Secretary.
[FR Doc. 95-9954 Filed 4-20-95; 8:45 am]
BILLING CODE 4120-01-P