[Federal Register Volume 64, Number 193 (Wednesday, October 6, 1999)]
[Proposed Rules]
[Pages 54263-54268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25788]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Part 447
[HCFA-2004-P]
RIN 0938-AI70
Medicaid Program; Flexibility in Payment Methods for Services of
Hospitals, Nursing Facilities, and Intermediate Care Facilities for the
Mentally Retarded
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Proposed rule.
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SUMMARY: This rule proposes to amend the Medicaid regulations that deal
with payment for the services of hospitals and long-term care
facilities. It proposes to remove all references to regulations based
on the Boren Amendment and to add more flexible rules for States
changing rates or payment methodologies for hospitals and long-term
care facilities. These revisions will conform the regulations to the
Social Security Act, as revised by section 4711 of the Balanced Budget
Act of 1997.
DATES: Comments will be considered if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on
December 6, 1999.
ADDRESSES: Department of Health and Human Services, Attention: HCFA-
2004-P, P.O. Box 7517, Baltimore, MD 21207-5187
If you prefer, you may deliver an original and 3 copies of your
written comments to one of the following addresses:
Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, Maryland.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting please refer to
file code HCFA-2004-P. Comments received timely will be available for
inspection as they are received, generally beginning approximately
three weeks after publication of a document, in Room 309-G of the
Department's offices at 200 Independence Avenue, SW., Washington D.C.,
on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(telephone: (202) 690-7890).
FOR FURTHER INFORMATION CONTACT: Marge Lee, (410) 786-4361.
SUPPLEMENTARY INFORMATION: Copies: To order copies of the Federal
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I. Background
A. The Boren Amendment
The Social Security Act (the Act) was amended by section 962 of
Public Law
[[Page 54264]]
96-499 (OBRA '80) and section 2173 of Public Law 97-35 (OBRA '81),
known collectively as the Boren amendment, that became effective on
October 1, 1980 and October 1, 1981, respectively. ``Boren'' required
the State agencies to pay hospitals, nursing facilities (NF), and
intermediate care facilities for the mentally retarded (ICF/MR), with
rates that were ``* * * reasonable and adequate to meet the costs which
must be incurred by efficiently and economically operated facilities in
order to provide care and services in conformity with applicable State
and Federal laws, regulations, and quality and safety standards * *
*''. State agencies were required to find, and make assurances
satisfactory to the Secretary, that their rates met those requirements
and that individuals eligible for medical assistance had reasonable
access to inpatient services of adequate quality.
The Balanced Budget Act of 1997 (BBA) repealed the Boren amendment
effective October 1, 1997. The Boren amendment still applies to
payments for items and services furnished before October 1, 1997;
however, we recognize that the intent in repealing the Boren amendment
was to reduce our role in the rate-setting process for inpatient
hospital and long-term care facility payments and to increase State
flexibility in this area. In light of the less restrictive requirements
now in place, we are committed to working with State agencies to
expedite the resolution of outstanding Boren issues in existing pending
amendments.
B. Effects of the Balanced Budget Act of 1997
The BBA, which became effective on October 1, 1997, repealed
sections 1902(a)(13)(A), (13)(B), and (13)(C) of the Act. Many of the
Federal requirements related to the State plan amendment process for
institutional payment have been eliminated, with the intent of allowing
greater State flexibility in setting payment rates. State agencies no
longer need to make an annual finding that their payment rates are
reasonable and adequate to meet the costs that must be incurred by
efficiently and economically operated providers. In addition, for State
plan amendments involving institutional payment with proposed effective
dates of October 1, 1997 and beyond, State agencies are not required to
submit assurances and related rate information to us.
Although these requirements were based on the Boren amendment and
therefore were eliminated with the Boren amendment repeal, we want to
clarify that certain requirements remain unchanged. All of the
regulations in 42 CFR 447.252, 447.257, 447.271, and 447.280 continue
to apply to payment rates for inpatient hospital and long-term care
services. Other requirements that continue, but are changed due to the
new public process requirements, are discussed in the ``Provisions of
this Proposed Rule'' section below.
The Omnibus Budget Reconciliation Act of 1987 (OBRA '87)
comprehensively revised the statutory authority that applies to nursing
homes participating in Medicaid. This revision, often referred to as
Nursing Home Reform, responded to general concern about the quality of
nursing home care paid for by the Medicaid and Medicare programs, as
well as findings and recommendations of a 1986 Institute of Medicine
report. The repeal of the Boren amendment eliminated the requirement
that States provide an assurance that, effective October 1, 1990, their
rates ``take into account the costs of complying with subsections (b)
[other than paragraph (3)(F) thereof], (c) and (d) of section 1919 of
the Act and provide, in the case of a nursing facility with a waiver
under section 1919(b)(4)(C)(ii) of the Act for an appropriate reduction
to take into account the lower costs (if any) of the facility for
nursing care.'' However, State agencies are still required to comply
with all of the subsections of section 1919 of the Act. The repeal of
the Boren amendment has not relieved States of the responsibility of
promoting quality of care for their beneficiaries served in nursing
homes.
We are concerned about the quality of care in nursing homes and
ICFs/MR and continue to seek ways to ensure high quality of care in
these settings. Towards that end, we are soliciting comments from
consumers and their representatives, providers, and States on including
a discussion of how quality of care will be maintained as part of the
State agency's justification of the new payment rates.
We want to clarify our position on the public notice requirements
in Sec. 447.205. We have reviewed our past position and have concluded
that while these requirements still have continuing validity with
respect to non-institutional providers, they have diminished relevance
to Medicaid institutional payment rates. The public notice requirements
in Sec. 447.205 were applied to Boren amendment payment rates because
section 1902(a)(13) of the Act did not speak to the process by which
State agencies were to adopt payment rates. Since this provision of the
statute was silent on this process, we viewed the public notice
requirements as being applicable to this part of the State agency's
program. However, with the repeal of the Boren amendment, we now have
in section 4711 of the BBA a provision that specifies the process that
State agencies are to employ in establishing rates for inpatient
hospitals and long-term care facilities. Therefore, with respect to
inpatient hospital and long-term care facility payments, the public
notice requirements in Sec. 447.205 have been superseded. Accordingly,
we propose to make a change to the text at Sec. 447.205(a) to clarify
that the requirements in that section no longer apply to institutional
payments.
Because we are now clarifying that Sec. 447.205 has applicability
only to non-institutional services, we want to be certain that the
public realizes that the exceptions that previously would have enabled
States to be excused from providing public notice would no longer
apply. Thus, the provisions, at paragraph (b), that would excuse a
State from compliance with the otherwise applicable public notice
requirements when changes are needed to conform payment rates to
Medicare methods or levels of reimbursement, or when changes are
required by a court order, would have force only with respect to non-
institutional services. Because section 4711 requires that States
engage in a public process that entails the publication of proposed and
final rates, methodologies, and justifications whenever a State wishes
to make payment rate changes, it does not seem to account for the kinds
of exceptions set out in the current rule nor any other type of
exceptions. Accordingly, we are making clear in the rule that the
exceptions to public notice set out in Sec. 447.205(b) only would apply
to non-institutional payment rates.
We want to clarify the circumstances in which a change in payment
rates for inpatient hospital and long-term care facility services would
not be subject to the public process requirements set forth in section
4711 of the BBA. If a State agency has a methodology in its State plan
that allows for rates to change solely due to the application of an
objective indicator such as the CPI, then those rates, that is, the
periodic update, the underlying methodologies, and justifications do
not need to be published. If, however, rates change for any other
reason, including any change in the payment methods and standards, then
those rates, methodologies, and justifications need to be published in
accordance with the State's public process.
[[Page 54265]]
It is our intent to provide substantial flexibility to State
agencies in development of a public process that fulfils the
requirements and purposes of section 4711 of the BBA. The least
burdensome approach to having State agencies assure us that they have
in place an acceptable public process is for State agencies to submit a
preprint page that becomes a part of the State plan and indicates that
the State agency has in place, and uses, a public process which meets
the requirements of section 4711 of the BBA. Alternatively, State
agencies may indicate elsewhere in the State plan that they have in
place, and use, a public process that meets the requirements of section
4711 of the BBA. This information will only need to be submitted to us
once, and once approved, will become part of the State plan. During
implementation of this provision, we weighed carefully the balance
between maximizing State flexibility and maintaining appropriate
oversight of Federal Medicaid expenditures. The repeal of the Boren
based regulatory provisions through this rule, significantly reduces
the burden on State agencies seeking Federal financial participation
for institutional services. Previously, each time a State agency chose
to amend its methods and standards for institutional payments, the
State agency had to include in its amendment, a five page check list
indicating its compliance with over a dozen regulatory provisions, as
well as provide information on the rate in effect as a result of the
amendment. With this regulation, we propose to require State agencies
to submit one page each for their inpatient hospital and long term care
sections of their State plan. These pages do not contain specific rate
information, but rather provide formal assurance to us that the State
agency is in compliance with section 4711. Furthermore, the proposed
options available to the State agencies in complying with he public
process requirements of section 4711 provide State agencies with
additional flexibility. State agencies may choose to implement one of
three suggested public processes, or create a similar public process
that conforms with section 4711.
II. Provisions of This Proposed Rule
The purpose of this proposed rule is to clarify in the Code of
Federal Regulations the increased State flexibility in setting payment
rates for inpatient hospital and long-term care services required
through section 4711 of the BBA.
We propose to amend Sec. 447.250 by removing the requirement that
States ``* * * pay for inpatient hospital and long-term care services
through rates that the State finds, and makes assurances satisfactory
to the Secretary, are reasonable and adequate to meet the costs which
must be incurred by efficiently and economically operated facilities in
order to provide care and services in conformity with applicable State
and Federal laws and regulations, and quality and safety standards.''
We also propose to add to that same section, language that would
require the State agency to develop and use a public process to
determine rates and publish proposed and final rates, the underlying
methodologies, and justification for the rates, and also to give
interested parties a reasonable opportunity for review and comment on
the proposed rates, methodologies, and justifications.
The State agency will comply with this provision if it elects to
use an administrative process similar to the Federal Administrative
Procedures Act, that satisfies the requirements for a public process in
developing and inviting comment. This will allow State agencies the
flexibility to follow current State public procedures. If a State's
public process is not currently being applied to rate setting, or does
not currently include a comment period, then the State agency would
need to modify the process for purposes of meeting the requirements in
this section.
Alternatively, State agencies may elect to use a public process
other than their regular administrative procedures. Examples of what we
consider to be an acceptable public process include the following:
Hold one or more public hearings, at which the proposed rates,
methodologies, and justifications are described and made available to
the public, and time is provided during which comments can be received.
Hold one or more additional public hearings, at which the final rates,
methodologies, and justifications are described and made available to
the public.
Use a commission or similar process, where meetings are open
to members of the public, in the development of proposed and final
rates, methodologies, and justifications.
Include notice of the intent to submit a State plan amendment
in newspapers of general circulation, and provide a mechanism for
members of the public to receive a copy of the proposed and final
rates, methodologies, and justifications underlying the amendment, and
an opportunity, which shall not be less than 30 days prior to the
proposed effective date, to comment on the proposed rates,
methodologies, and justifications.
Include any other similar process for public input that would
afford an interested party a reasonable opportunity to learn about the
proposed and final rates, methodologies, and justifications, and to
comment on the proposed rates, methodologies, and justifications.
State agencies will be required to indicate in the State plan that
they have in place a public process that meets the requirements of
section 1902(a)(13)(A) of the Act. This information need only be
submitted once, and States may use the preprint page that we provide,
which makes this statement, or include the language from the preprint
page in their State plan at an appropriate location. In the case of
hospitals, these rates must take into account the situation of
hospitals that serve a disproportionate number of low income patients
with special needs.
While the intent in repealing the Boren amendment was to permit
States maximum flexibility in the rates they establish for
institutional services, section 4711 of the BBA is intended to assure
that the processes established by the State agency for setting those
rates will be conducted in a public manner, with meaningful
opportunities for public input. Therefore, we are adding to
Sec. 447.251, for purposes of this subpart, a definition of the word
``published.'' We interpret the word ``published'' to mean ``at least,
produced and made available in hard copy and, if possible,
electronically, such that any interested party may readily obtain a
copy of the proposed and final rates, the underlying methodologies, and
justifications.'' We feel that a definition which provides specific
guidance on what we consider acceptable forms of publication of rates,
the methodologies underlying the rates, and the justifications is
fairer and more workable than the course we initially recommended after
the enactment of the BBA. We recognize that this definition of
``published'' differs from the guidance we sent to State agencies in
our letter of December 10, 1997 regarding the repeal of the Boren
amendment. In that letter, we indicated that ``published'' means ``made
public'', without requiring State agencies to issue an actual written
publication to meet the new public process requirements. However, we
specifically want to solicit public comment on this proposed change in
the definition of ``published''.
[[Page 54266]]
We are removing Secs. 447.253 and 447.255 from the text. The
requirements contained in these sections are no longer applicable to
the setting of institutional rates.
We are adding a new Sec. 447.254 to address the new public process
that the State agencies must have in place to satisfy the requirements
of the BBA. In Sec. 447.254(a) we describe the steps in the public
process, indicating that proposed rates, methodologies underlying the
establishment of such rates and the justifications for the rates must
be published prior to the proposed effective date, giving a reasonable
opportunity for review and comment. State agencies may elect to apply
the notice periods specified in their State general administrative
procedures acts. The final rates and the associated methodologies and
justifications must also be published, but may be published following
the effective date.
In Sec. 447.254(b) we explain that State agencies must indicate to
us that they have in place a public process that meets the requirements
of Sec. 447.254(a). This language is to be submitted to us only one
time for approval. Once approved, the language will become a part of
the State plan.
In Sec. 447.256, we have removed the reference to repealed
Sec. 447.253 and replaced it with a reference to the new Sec. 447.254.
In Sec. 447.272, we have removed the reference to repealed
Sec. 447.253(B)(1)(ii)(A) and replaced it with a reference to section
1902(a)(13)(A)(iv) of the Act.
III. Response to Comments
Because of the large number of items of correspondence we normally
receive in response to Federal Register documents published for
comment, we are not able to acknowledge or respond to them
individually. We will consider all comments we receive by the date and
time specified in the ``COMMENT DATE'' section of this preamble, and,
when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness in
carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection burden
on the affected public, including automated collection techniques.
Therefore, we are soliciting public comment on each information
collection requirement discussed below.
Section 447. 252 State Plan Requirements
Section 447. 252(b) states that the State plan must specify
comprehensively the methods and standards used by the State agency to
set payment rates in a manner consistent with Sec. 430.10. This section
requires State agencies to maintain in their State plan a current
description of their payment methods and standards for institutional
services. State agencies generally amend their State plans between one
and five times during the fiscal year through State plan amendments
submitted to us for review and approval.
Section 447.254 Public Process Requirements
Section 447.254(b) requires that the State agency report to us that
it has in place a public process for determination of payment rates
under the plan for hospital services and long-term care facility
services.
This information is submitted by State agencies on a one-time basis
for the hospital payment section of the Medicaid State plan and a one-
time basis for the long-term care payment section of the Medicaid State
plan. It requires the submission of a single sentence in each instance.
State agencies have the option of signing a preprinted statement or
they may copy the statement into their plan and initialize the page
with the statement. Once approved, this statement will become part of
the State plan. Our best estimate is that it will take \1/4\ hour or
less for a State agency to submit each statement. At two per State (one
each for the hospital payment and long-term care payment sections of
the Medicaid State plan), that would result in \1/2\ hour for each of
54 States, or approximately 27 hours total.
We have submitted a copy of this proposed rule to OMB for its
review of the information collection requirement described above. This
requirement is not effective until it has been approved by OMB.
If you comment on this information collection, please mail copies
directly to the following:
Health Care Financing Administration, Office of Information Services,
Security and Standards Group, Division of HCFA Enterprise Standards
Room N2-14-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Attention:: Julie Brown, HCFA-2004-P, and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office building, Washington, DC 20503
Attn: Allison Eydt, HCFA Desk Officer.
V. Regulatory Impact Statement
We have examined the impacts of this proposed rule as required by
Executive Order 12866 and the Regulatory Flexibility Act (RFA) (Public
Law 96-354). Executive Order 12866 directs agencies to assess all costs
and benefits of available regulatory alternatives and, when regulation
is necessary, to select regulatory approaches that maximize net
benefits (including potential economic, environmental, public health
and safety effects, distributive impacts, and equity). The RFA requires
agencies to analyze options for regulatory relief of small businesses.
For purposes of the RFA, small entities include small businesses, non-
profit organizations, and government agencies. Most hospitals and most
other providers and suppliers are small entities, either by non-profit
status or by having revenues of $5 million or less annually. For
purposes of the RFA, all hospitals and long-term care facilities are
considered to be small entities. Individuals and States are not
included in the definition of a small entity.
Section 1102(b) of the Act, requires us to prepare a regulatory
impact analysis if a rule may have a significant impact on the
operations of a substantial number of small rural hospitals. Such an
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 and has fewer than 50 beds.
We estimate that the following savings are attributable to the
repeal of the Boren amendment.
[[Page 54267]]
[Amounts in Millions]
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FY1999 FY2000 FY2001 FY2002 FY2003
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Federal.................................................. 35 75 115 160 205
State.................................................... 30 55 90 120 155
------------------------------------------------------
Total................................................ 65 130 205 280 360
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These savings have been included in the Medicaid baseline spending
projections for the President's FY 1999 budget.
The repeal of the Borden Amendment, by the Balanced Budget Act of
1997, is the reason for the estimated savings. The only regulatory
requirement imposed on the States, by this rule, deals with the public
notice process, which is unlikely to have any impact.
Nevertheless, although the savings described above are directly
attributed to the statutory change, and not to any rule placed on
states in conjunction with the statute, this proposed regulation is
economically significant and will have an impact of more than $100
million starting in FY 2000.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
VI. Anticipated Effects
In December of 1997, we issued written guidance to State agencies
informing them of the options available to them in complying with the
new statute. We provided a model preprint page that State agencies may
use in order to indicate to us that they have in place, and use a
public process which complies with the new statute. Over 80% of the
State agencies have voluntarily complied with our guidance, having
implemented rates established under the State's new public process.
We have reviewed this proposed rule under the threshold criteria of
Executive order 13132, Federalism. We have determined that it
significantly affects the rights, roles and responsibilities of States.
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.
42 CFR chapter IV would be amended as follows:
PART 447--PAYMENTS FOR SERVICES
1. The authority citation for part 447 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302), unless otherwise noted.
2. In Sec. 447.205 B, the section heading and paragraph (a) are
revised to read as follows:
Sec. 447.205 Public notice of changes in Statewide methods and
standards for setting payment rates for non-institutional services.
(a) When notice is required. Except as specified in paragraph (b)
of this section, the agency must provide public notice of any
significant proposed change in its methods and standards for setting
payment rates for non-institutional services.
30. Section Sec. 447.250 is revised to read as follows:
Sec. 447.250 Basis and purpose.
(a) This subpart implements section 1902(a)(13)(A) of the Act,
which requires States to use a public process for determining rates;
publish proposed and final rates, the methodologies underlying the
rates, and the justifications for the rates; and give interested
parties a reasonable opportunity for review and comment on the proposed
rates, methodologies, and justifications. In the case of hospitals,
such rates must take into account the situation of hospitals that serve
a disproportionate number of low-income patients with special needs.
(b) Section 447.272(a)(2) implements section 1902(a)(30) of the
Act, which requires that payments be consistent with efficiency,
economy, and quality of care.
(c) Section 447.271 implements section 1903(i)(3) of the Act, which
requires that payments for inpatient hospital services not exceed the
hospital's customary charges.
(d) Section 447.280 implements section 1913(b) of the Act, which
concerns payment for long-term care services furnished by swing-bed
hospitals.
4. Section Sec. 447.251 is revised to read as follows:
Sec. 447.251 Definitions.
For the purposes of this subpart--
Long-term care facility services means intermediate care facility
services for the mentally retarded (ICF/MR) and nursing facility (NF)
services.
Provider means an institution that furnishes inpatient hospital
services or an institution that furnishes long-term care facility
services.
Published means, at least, produced and made available in hard copy
and, if possible, electronically, such that any interested party may
readily obtain a copy of the proposed and final rates, the underlying
methodologies, and justifications.
5. Section 447.252 is republished to read as follows:
Sec. 447.252 State plan requirements.
(a) The plan must provide that the requirements of this subpart are
met.
(b) The plan must specify comprehensively the methods and standards
used by the agency to set payment rates in a manner consistent with
Sec. 430.10 of this chapter.
(c) If the agency chooses to apply the cost limits established
under Medicare (see Sec. 413.30 of this chapter) on an individual
provider basis, the plan must specify this requirement.
Sec. 447.253 [Removed and Reserved]
6. Section 447.253 is removed and reserved.
7. Section 447. 254 is added to read as follows:
Sec. 447.254 Public process requirements.
(a) Steps in the process. The Agency must have in place, and use, a
public process for determination of rates of payment under the plan for
hospital services and long-term care facility services under which
proposed and final rates, the methodologies underlying the
establishment of such rates, and justifications for the rates are
published. The public process must give providers, beneficiaries and
their representatives, and other concerned State residents a reasonable
opportunity for review and comment on the proposed rates,
methodologies, and justifications prior to the proposed effective date.
The final rates, methodologies and justifications may be published
after the proposed effective date of the rates. Further, in the case of
hospitals, such rates must take into account (in a manner consistent
with section 1923 of the Act) the situation of hospitals that serve a
disproportionate
[[Page 54268]]
number of low-income patients with special needs.
(b) Report to HCFA. The State agency must indicate to HCFA that it
has in place a public process that meets the requirements of paragraph
(a) of this section. This language is to be submitted to HCFA only one
time for approval. Once approved, the language will become a part of
the State plan.
Sec. 447.255 [Removed and Reserved]
8. Section 447.255 is removed and reserved.
9. Section 447.256 is revised to read as follows:
Sec. 447.256 Procedures for HCFA action on State plan amendments.
(a) Criteria for approval. (1) HCFA approval action on State plans
and State plan amendments is taken in accordance with subpart B of part
430 of this chapter and sections 1116, 1902(b) and 1915(f) of the Act.
(2) In the case of State plan and plan amendment changes in payment
methods and standards, HCFA bases its approval on the Medicaid agency's
satisfaction of the requirements of Sec. 447.254 as well as the other
requirements of this subpart.
(b) Time limit. HCFA sends a notice to the agency of its
determination as to whether the State plan amendment is acceptable
within 90 days of the date HCFA receives the State plan amendment. If
HCFA does not send a notice to the agency of its determination within
this time limit and the provisions in paragraph (a) of this section are
met, the State plan amendment will be deemed accepted and approved.
(c) Effective date. A State plan amendment that is approved becomes
effective not earlier than the first day of the calendar quarter in
which an approvable amendment is submitted in accordance with
Sec. 430.20 of this chapter.
10. Section 447.257 is republished to read as follows:
Sec. 447.257 FFP: Conditions relating to institutional reimbursement.
FFP is not available for a State's expenditures for hospital
inpatient or long-term care facility services that are in excess of the
amounts allowable under this subpart.
11. Section 447.271 is republished to read as follows:
Sec. 447.271 Upper limits based on customary charges.
(a) Except as provided in paragraph (b) of this section, the agency
may not pay a provider more for inpatient hospital services under
Medicaid than the provider's customary charges to the general public
for the services.
(b) The agency may pay a public provider that provides services
free or at a nominal charge at the same rate that would be used if the
provider's charges were equal to or greater than its costs.
12. In Sec. 447.272, paragraph (c) is revised to read as follows:
Sec. 447.272 Application of upper payment limits.
* * * * *
(c) Disproportionate share. The upper payment limitation
established under paragraphs (a) and (b) of this section does not apply
to payment adjustments made under a State plan to hospitals found to
serve a disproportionate number of low-income patients with special
needs as provided in section 1902(a)(13)(A)(iv) of the Act.
Disproportionate share hospital payments shall be subject to the
following limits:
(1) The aggregate DSH limit using the Federal share of the
disproportionate share hospital limits under section 1923(f) of the
Act;
(2) The hospital-specific DSH limits in section 1923(g) of the Act;
and
(3) The aggregate DSH limit for institutions for mental disease
(IMDs) under section 1923(h) of the Act.
13. Section 447.280 is republished to read as follows:
Sec. 447.280 Hospital providers of NF services (swing-bed hospitals).
(a) General rule. If the State plan provides for NF services
furnished by a swing-bed hospital, as specified in Secs. 440.40(a) and
440.150(f) of this chapter, the methods and standards used to determine
payment rates for routine NF services must--
(1) Provide for payment at the average rate per patient day paid to
NFs, as applicable for routine services furnished during the previous
calendar year: or
(2) Meet the State plan and payment requirements described in this
subpart, as applicable.
(b) Application of the rule. The payment methodology used by a
State to set payment rates for routine NF services must apply to all
swing-bed hospitals in the State.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
Dated: April 1, 1999.
Nancy Ann Min DeParle,
Administrator, Health Care Financing Administration.
Approved: May 25, 1999.
Donna E. Shalala,
Secretary.
[FR Doc. 99-25788 Filed 10-5-99; 8:45 am]
BILLING CODE 4120-01-P
