Source: https://www.federalregister.gov/documents/2018/07/12/2018-14786/medicaid-program-reassignment-of-medicaid-provider-claims
Timestamp: 2018-07-21 08:45:08
Document Index: 61653965

Matched Legal Cases: ['§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447', '§\u2009447']

A Proposed Rule by the Centers for Medicare & Medicaid Services on 07/12/2018
This document has a comment period that ends in 23 days. (08/13/2018) Submit a formal comment
83 FR 32252
32252-32255 (4 pages)
CMS-2413-P
https://www.federalregister.gov/d/2018-14786 https://www.federalregister.gov/d/2018-14786
This PDF is the current document as it appeared on Public Inspection on 07/10/2018 at 11:15 am.
This proposed rule would remove the regulatory text that allows a state to make payments to third parties on behalf of an individual provider for benefits such as health insurance, skills training, and other benefits customary for employees. We are concerned that these provisions are overbroad, and insufficiently linked to the exceptions expressly permitted by the statute. As we noted in our prior rulemaking, section 1902(a)(32) of the Act provides for a number of exceptions to the direct payment requirement, but it does not authorize the agency to create new exceptions.
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on August 13, 2018.
In commenting, please refer to file code CMS-2413-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
The Medicaid program was established by the Congress in 1965 to Start Printed Page 32253provide health care services for low-income and disabled beneficiaries. Section 1902(a)(32) of the Social Security Act (the Act) requires direct payment to providers who render services to Medicaid beneficiaries. It states that no payment under the plan for care and services 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.
We codified § 447.10 implementing section 1902(a)(32) of the Act in the “Payment for Services” final rule published on September 29, 1978 (43 FR 45253). The statute provides several specific exceptions to the general principle of requiring that direct payment be made to the individual provider. The regulations implementing section 1902(a)(32) of the Act have generally tracked the plain statutory language and required direct payments absent a statutory exception.
In 2012, we proposed a new regulatory exception in the “Provider Payment Reassignment, and Setting Requirements for Community First Choice” proposed rule published on May 3, 2012 (77 FR 26361, 26406) for “a class of practitioners for which the Medicaid program is the primary source of service revenue” such as home health care providers. We recognized in the preamble to the proposed rule that section 1902(a)(32) of the Act does not authorize additional exceptions to the direct payment requirement (See 77 FR 26382).
We received a total of 7 comments on the proposed regulatory exception, all generally supportive of the proposed rule. This provision was finalized in the “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 on January 16, 2014 (79 FR 2947, 3001) and authorized a state to make payments to third parties on behalf of the individual provider “for benefits such as health insurance, skills training, and other benefits customary for employees.”
We are concerned that § 447.10(g)(4) is overbroad, and insufficiently linked to the exceptions expressly permitted by the statute. As we noted in our prior rulemaking, section 1902(a)(32) of the Act provides for a number of exceptions to the direct payment requirement, but it does not authorize the agency to create new exceptions. Therefore, the regulatory provision grants permissions that Congress has foreclosed, so we are proposing to remove the regulatory exception at § 447.10(g)(4).
This proposal would remove § 447.10(g)(4), but leave in place the other provisions in § 447.10 including the exceptions at § 447.10(e), (f) and (g)(1) through (3). We seek comments regarding how we might provide further clarification on the types of payment arrangements that would be permissible assignments of Medicaid payments, such as arrangements where a state government withholds payments under a valid assignment. Specifically, we invite comments with examples of payment withholding arrangements between states and providers that we should address.
With regard to section 1915(c), 1915(i), 1915(j), and 1915(k) authority, this proposed rule will not impact a state's ability to perform Financial Management Services (FMS) or secure FMS through a vendor arrangement. However, we also request comments on whether and how the proposed removal of § 447.10(g)(4) would impact self-directed service models, where the Medicaid beneficiary takes responsibility for retaining and managing his or her own services, and, in some cases, may be performing payroll and other employer-related duties. We are especially interested in comments that describe the additional flexibilities needed to support beneficiaries opting for self-directed service models, which may ensure stable, high-quality care for those beneficiaries.
We are concerned that § 447.10(g)(4) is overbroad, and insufficiently linked to the exceptions expressly permitted by the statute. Therefore, the regulatory provision grants permissions that Congress has foreclosed. As we noted in our prior rulemaking published on January 16, 2014 (79 FR 2947, 3001), section 1902(a)(32) of the Act provides for a number of exceptions to the direct payment requirement, but the language does not explicitly authorize the agency to create new exceptions. Therefore, we are proposing to remove the regulatory exception at § 447.10(g)(4). To the extent a state increased reimbursement levels to reassign portions of a provider's reimbursement to a third party, implementation of this rule may affect the rates that are set by the state in the future.
Executive Orders 12866 and 13563 directs 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 Start Printed Page 32254inconsistency 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). We estimate that this proposed rule could be “economically significant” as it may have an annual effect on the economy in excess of the $100 million threshold of Executive Order 12866, and hence that this proposed rule is also a major rule under the Congressional Review Act. However there is considerable uncertainty around this estimate and the Department invites public comments to help refine this analysis.
As discussed above, in the “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 on January 16, 2014 (79 FR 2947, 3001), we authorized a state to make payments to third parties on behalf of the individual provider “for benefits such as health insurance, skills training, and other benefits customary for employees.” We lack information with which to quantify the potential impacts of this policy on these types of payments as the Department does not formally track the amount of reimbursement that is being reassigned to third parties by states. To offer one example, one such potential impact of the proposed rulemaking would be that states stop reassigning homecare workers' dues to unions. We estimate that unions may currently collect as much as $71 million from such assignments.[1] While we have not similarly quantified the amount of other authorized reassignments, such as health insurance, skills training, or other benefits, we believe that the amount of payments made to third parties on behalf of individual providers for the variety of benefits within the scope of this rulemaking is likely in excess of $100 million. We seek comment on this estimate, and particularly on the type and amount of payments currently being reassigned under the exceptions in § 447.10(g).
The potential direct financial impact to providers of this policy change could be affected by many factors, such as the nature and amounts of the types of payments currently being reassigned and decisions made by homecare providers after a final policy takes effect about whether or not to resume payments to third parties for these types of benefits. The Department is unable to quantify these direct financial impacts in the absence of specific information about the types and amount of payments being reassigned. Even where it may be possible to derive such estimates, such as with the example of union dues, the Department lacks information to reliably estimate the proportion of homecare providers likely to stop making payments versus those likely to continue making payments through alternative means. We request comments on the factors that might influence the direct financial impacts to providers and recipients of reassignments of this policy change for the varied types and amount of payments currently being reassigned under the exceptions in § 447.10(g).
Although states will no longer be able to withhold portions of a provider's payment, states may elect to maintain the same level of payment, thus affording the provider the opportunity to purchase the items that were previously funded through the reassignment of reimbursement. Conversely, states may elect to decrease payment levels because rescission of § 447.10(g)(4) will limit their ability to reassign payment to third parties. In other words, states may have previously factored their ability to reassign provider payments into their payment rates and might choose to revise their rates in response to this regulatory change. We request comments, particularly from states, on potential state behavior under the proposed policy.
While it is difficult for us to conduct a detailed quantitative analysis given this considerable uncertainty and lack of data, we believe that without this proposed rulemaking, states may apply the exceptions at § 447.10(g) in ways that do not comport with section 1902(a)(32) of the Act and we welcome comment with regard to the quantitative impact of the elimination of states' ability to reassign Medicaid payment for items such as health insurance, skills training and other benefits customary for employees. We also seek comments identifying impacts to states and the federal government as a result of this proposed rule, including on the assumption that the time, effort and financial resources necessary to comply with the proposed requirement would be incurred by states during the normal course of their activities and, therefore, does not impose incremental costs.
In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment Start Printed Page 32255regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary proposes to certify, that this proposed rule would not have a significant impact on the operations of a substantial number of small rural hospitals.
We considered issuing guidance to require states to formally document consent to reassign portions of a provider's payment. We also considered limiting the items for which provider reassignment could be made. However, we are concerned that § 447.10(g)(4)) is overbroad, and insufficiently linked to the exceptions expressly permitted by the statute. Therefore, we believe removing the regulatory exception is the best course of action.
As required by OMB Circular A-4 under Executive Order 12866 (available at https://www.whitehouse.gov/​sites/​whitehouse.gov/​files/​omb/​circulars/​A4/​a-4.pdf) 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.
Executive Order 13771, entitled “Reducing Regulation and Controlling Regulatory Costs,” was issued on January 30, 2017 and requires that the costs associated with significant new regulations “shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.” This proposed rule is not expected to be subject to the requirements of E.O. 13771 because this proposed rule is expected to result in no more than de minimis costs.
1. Dues payments potentially associated with policies of the type being proposed for revision have been reported to be $8 million in Pennsylvania and $10 million in Illinois (https://www.fairnesscenter.org/​cases/​detail/​protecting-the-vulnerable and https://www.washingtonexaminer.com/​illinois-politicians-forced-home-care-workers-into-union-that-donates-heavily-to-them/​article/​2547368). The total population is approximately 26 million in these two states and 102 million across the states that have been reported by the State Policy Network to have relevant third-party payment policies (California, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, Oregon, Vermont and Washington) (https://www2.census.gov/​programs-surveys/​popest/​tables/​2010-2017/​state/​totals/​nst-est2017-01.xlsx and https://spn.org/​dues-skimming-faqs/​). Factoring the $18 million (= $8 million + $10 million) proportionately by population yields a nationwide total of approximately $71 million in union dues payments potentially affected by this proposed rule. This transfer estimate could be over- or understated if other states pay home care workers different average wages than Pennsylvania and Illinois, if dues payments are collected at different rates, or if participation in Medicaid home care programs is not proportionate to total population.