Opinion ID: 3033871
Heading Depth: 3
Heading Rank: 3

Heading: The State Plan Amendment

Text: Shortly after the 2001 amendments to the UPLs, Alaska submitted state plan amendment 01-009 to the Agency. It provided: Under agreement with a Tribal Health Facility provider the [Alaska] Department [of Health and Social Services] may pay the customary charges of the provider but must not pay more than the prevailing charges in the locality for comparable services under comparable circumstances. Such a payment . . . is subject to the payment limits at 42 CFR 447.325. The text of the proposed amendment thus tracks verbatim the UPL that the 2001 amendments made applicable to the tribal facilities at issue. In response to the Agency’s request for clarification, the State explained that, to receive the additional federal revenue generated by the amendment, the tribal facilities “will be expected” to enter into an IGT with the State, under which the facilities would retain just 10% of the additional federal monies. Finally, the State indicated that, should the proposed amendment take effect, additional federal payments would amount to nearly $50 million a year. The Agency disapproved the proposed amendment as inconsistent with § 30(A), primarily because the “proposed rates would substantially exceed the IHS published rates” on which federal payments have historically been based. It further explained that the IHS rates are “based on an analysis of statewide costs of the Alaska IHS facilities” and that, while it “might consider a request for a higher rate if supported by data showing costs that were not considered by IHS in setting the published rates, Alaska provided no such data to substanti- ALASKA DEP’T OF HEALTH v. CENTERS FOR MEDICARE 13035 ate its proposed rates.” The Agency concluded that, absent such data, the proposed rates “are not consistent with efficiency, economy, and quality of care” under § 30(A). The State petitioned for reconsideration and, after briefing and a formal hearing, the hearing officer recommended that the disapproval of the proposed amendment be affirmed because it was not consistent with either § 30(A) or 42 C.F.R. § 447.325. The Administrator agreed and, in a reasoned opinion, affirmed disapproval of the amendment. In re The Disapproval of the Alaska State Plan Amendment No. 01-009, No. 2003-14 (CMS Administrator June 22, 2004).