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###### Department of Health and Human Services

###### Centers for Medicare & Medicaid Services

# AGENCY:

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

# ACTION:

Notice of Hearing.

      ( print page 29704)    

# SUMMARY:

This notice announces an administrative hearing to be held on August 4, 2009, at the CMS Seattle Regional Office, 2201 Sixth Avenue, MS/RX-43, Seattle, Washington 98121, to reconsider CMS' decision to disapprove Washington SPA 08-019.

# Closing Date:

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

# FOR FURTHER INFORMATION CONTACT:

                        Benjamin Cohen, Presiding Officer, CMS, 2520 Lord Baltimore Drive, Suite L, Baltimore, Maryland 21244,                         *Telephone:*                         (410) 786-3169.                    

# SUPPLEMENTARY INFORMATION:

This notice announces an administrative hearing to reconsider CMS' decision to disapprove Washington SPA 08-019 which was received by CMS on September 23, 2008, and disapproved on March 6, 2009. The SPA proposed to increase dispensing fees for pharmacies from $4.20 to $4.24 for high-volume pharmacies, $4.51 to $4.56 for mid-volume pharmacies, $5.20 to $5.25 for low-volume pharmacies, and $5.20 to $5.25 for unit dose systems.

As submitted, SPA 08-019 has raised concerns regarding compliance with section 1902(a)(30) of the Social Security Act (the Act) and implementing regulatory requirements. Section 1902(a)(30)(A) of the Act requires that States have methods and procedures in place to assure that payments are consistent with efficiency, economy, and quality of care.

Under that authority, the Secretary has issued regulations prescribing State rate-setting procedures and requirements. Longstanding requirements (presently codified at 42 CFR 447.512 and 447.514, and previously codified at 42 CFR 447.331 and 447.332) provide that the State is responsible for demonstrating that the dispensing fees are reasonable. The State has not provided that demonstration. In addition, Federal regulations at 42 CFR 447.205 require that a State provide public notice of any significant proposed change in its methods and standards for setting payment rates for services. In support of this amendment, the State believes that issuing a memorandum to providers online meets the public requirements. We believe that this does not meet the Federal standard. We believe public notice promotes transparency and openness in this process and allows the public to be fully aware of the State's actions.

Based on the above, and after consultation with the Secretary of the Department of Health and Human Services as required under Federal regulations at 42 CFR 430.15(c)(2), Washington SPA 08-019 was disapproved.

*The following issues will be considered at the hearing:*
    - Whether Washington provided adequate public notice for setting payment rates for services as required at 42 CFR 447.205 .
    - Whether Washington met the longstanding requirement (presently codified at 42 CFR 447.512  and  447.514 , and previously codified in  42 CFR 447.331  and  447.332 ) that the State is responsible for demonstrating that the proposed increased dispensing fees are reasonable.

Section 1116 of the Act and Federal regulations at 42 CFR Part 430, establish Department procedures that provide an administrative hearing for reconsideration of a disapproval of a State plan or plan amendment. CMS is required to publish a copy of the notice to a State Medicaid agency that informs the agency of the time and place of the hearing, and the issues to be considered. If CMS subsequently notifies the agency of additional issues that will be considered at the hearing, we will also publish that notice.

Any individual or group that wants to participate in the hearing as a party must petition the presiding officer within 15 days after publication of this notice, in accordance with the requirements contained at 42 CFR 430.76(b)(2). Any interested person or organization that wants to participate as amicus curiae must petition the presiding officer before the hearing begins in accordance with the requirements contained at 42 CFR 430.76(c). If the hearing is later rescheduled, the presiding officer will notify all participants.

*The notice to the State of Washington announcing an administrative hearing to reconsider the disapproval of its SPA reads as follows:*

Ms. Susan Dreyfus

Secretary

Department of Social and Health Services

P.O. Box 45010

Olympia, WA 98504-5010

Dear Ms. Dreyfus:

I am responding to your request for reconsideration of the decision to disapprove the Washington State plan amendment (SPA) 08-019, which was received by the Centers for Medicare & Medicaid Services on September 23, 2008, and disapproved on March 6, 2009. The SPA proposed to increase dispensing fees for pharmacies from $4.20 to $4.24 for high-volume pharmacies, $4.51 to $4.56 for mid-volume pharmacies, $5.20 to $5.25 for low-volume pharmacies, and $5.20 to $5.25 for unit dose systems.

*The following issues will be considered at the hearing:*
    - Whether Washington provided adequate public notice for setting payment rates for services as required at 42 CFR 447.205 .
    - Whether Washington met the longstanding requirement (presently codified at 42 CFR 447.512  and  447.514 , and previously codified in  42 CFR 447.331  and  447.332 ) that the State is responsible for demonstrating that the proposed increased dispensing fees are reasonable.

I am scheduling a hearing on your request for reconsideration to be held on August 4, 2009, at the Centers for Medicare & Medicaid Services' Seattle Regional Office, 2201 Sixth Avenue, MS/RX-43, Seattle, Washington 98121, in order to reconsider the decision to disapprove SPA 08-019. If this date is not acceptable, we would be glad to set another date that is mutually agreeable to the parties. The hearing will be governed by the procedures prescribed by Federal regulations at 42 CFR Part 430.

I am designating Mr. Benjamin Cohen as the presiding officer. If these arrangements present any problems, please contact the presiding officer at (410) 786-3169. In order to facilitate any communication which may be necessary among the parties to the hearing, please notify the presiding officer to indicate acceptability of the hearing date that has been scheduled and provide names of the individuals who will represent the State at the hearing.

Sincerely,

Charlene Frizzera

Acting Administrator

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

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

Dated: June 16, 2009.

Charlene Frizzera,

Acting Administrator, Centers for Medicare & Medicaid Services.

[FR Doc. E9-14776 Filed 6-22-09; 8:45 am]

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