02-28469. Notice of Hearing: Reconsideration of Disapproval of Maryland State Plan Amendment 02-05

AGENCY:

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

ACTION:

Notice of hearing.

SUMMARY:

This notice announces an administrative hearing to be held on December 19, 2002, Suite 216, The Public Ledger Building, 150 S. Independence Mall West, Philadelphia, Pennsylvania 19106, at 10 a.m., to reconsider our decision to disapprove Maryland State Plan Amendment 02-05.

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:

Kathleen Scully-Hayes, Presiding Officer, Office of Hearings, Centers for Medicare & Medicaid Services, Suite L, 2520 Lord Baltimore Drive, Baltimore, Maryland 21244-2670, Telephone: [phone].

SUPPLEMENTARY INFORMATION:

This notice announces an administrative hearing to reconsider our decision to disapprove Maryland State Plan Amendment (SPA) 02-05. This SPA was disapproved on August 26, 2002.

In this amendment, Maryland proposes to cover targeted case management services for abused and neglected children under foster care. At issue is whether the Centers for Medicare & Medicaid Services properly concluded as a basis for disapproving the amendment that: (1) The State had not demonstrated that the proposed services were within the statutory definition of case management services found in section 1915(g)(2) of the Social Security Act (the Act); (2) the proposed services are available without charge to the user and thus payment under the amendment is not reasonable and necessary and would duplicate payment under other program authorities; and (3) the amendment would restrict beneficiary freedom of choice by limiting providers to employees of public welfare agencies.

Medicaid coverage of targeted case management is authorized by section 1915(g) of the Act, which defines case management as services that assist beneficiaries in gaining access to needed services and does not include the direct provision of those services. Because the services proposed as Medicaid targeted case management are segments of child welfare services related to the foster care program, CMS is of the belief that they are integral components of the direct services and administrative functions of child welfare services.

During conversations between CMS and the State of Maryland, the State cited section 8435 of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647. In this section Congress clarified that the Secretary may not deny approval of either a SPA or a claim on the basis that the state is required to provide such services under state law, or is, or was otherwise paying for the services using non-Federal funds. However, section 8435 also expressly stated that this was not to be construed to require the Secretary to make payment for case management services that are provided without charge to the users of such services. Approval of SPA 02-05 would be contrary to this express statutory provision, since this SPA seeks payment from Medicaid program for services that are available without charge to the users.

In addition, while states are free to set qualifications for providers, a state must comply with Medicaid law and regulations concerning freedom of choice at section 1902(a)(23) of the Act and the implementing regulation at 42 CFR 431.51. These provisions require that a state plan permit beneficiaries to obtain services from any qualified provider that undertakes to provide the services. Section 1915(g)(1) of the Act states “The provision of case management services under this subsection shall not restrict the choice of the individual to receive assistance in violation of section 1902(a)(23).”

Section 1116 of the Act and 42 CFR, part 430 establish Department procedures that provide an administrative hearing for reconsideration of a disapproval of a state plan or plan amendment. The 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 we subsequently notify 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. Therefore, based on the reasoning set forth above, and after consultation with the Secretary as required under 42 CFR 430.15(c)(2), CMS disapproved Maryland SPA (02-05).

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

Georges C. Benjamin, M.D.

Secretary, Department of Health and Mental Hygiene, 201 West Preston Street, Baltimore, MD 21201.

Dear Dr. Benjamin: I am responding to your request for reconsideration of the decision to disapprove Maryland State Plan Amendment (SPA) 02-05. This SPA was disapproved on August 26, 2002.

In this amendment, Maryland proposes to cover targeted case management services for abused and neglected children under foster care. At issue is whether the Centers for Medicare & Medicaid Services (CMS) properly concluded as a basis for disapproving the amendment that: (1) The State had not demonstrated that the proposed services were within the statutory definition of case management services found in section 1915(g)(2) of the Social Security Act (the Act); (2) the proposed services are available without charge to the user and thus payment under the amendment is not reasonable and necessary and would duplicate payment under other program authorities; and (3) the amendment would restrict beneficiary freedom of choice by limiting providers to employees of public welfare agencies.

Medicaid coverage of targeted case management is authorized by section 1915(g) of the Act, which defines case management as services that assist beneficiaries in gaining access to needed services and does not include the direct provision of those services. Because the services proposed as Medicaid targeted case management are segments of child welfare services related to the foster care program, CMS is of the belief that they are integral components of the direct services and administrative functions of child welfare services.

During conversations between CMS and the State of Maryland, the State cited section 8435 of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647. In this section Congress clarified that the Secretary may not deny approval of either an SPA or a claim on the basis that the state is required to provide such services under state law, or is, or was otherwise paying for the services using non-Federal funds. However, section 8435 also expressly stated that this was not to be construed to require the Secretary to make payment for case management services that are provided without charge to the users of such services. Approval of SPA 02-05 would be contrary to this express statutory provision, since this SPA seeks payment from the Medicaid program for services that are available without charge to the users.

In addition, while states are free to set qualifications for providers, a state must comply with Medicaid law and regulations concerning freedom of choice at section 1902(a)(23) of the Act and the implementing regulations at 42 CFR 431.51. These provisions require that a state plan permit beneficiaries to obtain services from any qualified provider that undertakes to provide the services. Section 1915(g)(1) of the Act states “The provision of case management services under this subsection shall not restrict the choice of the individual to receive assistance in violation of section 1902(a)(23).” Therefore, based on the reasoning set forth above, and after consultation with the Secretary as required under 42 CFR 430.15(c)(2), CMS disapproved Maryland SPA 02-05.

I am scheduling a hearing on your request for reconsideration to be held on December 19, 2002, Suite 216, The Public Ledger Building, 150 S. Independence Mall West, Philadelphia, Pennsylvania 19106, at 10 a.m. to reconsider our decision to disapprove Maryland SPA 02-05.

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 at 42 CFR, part 430.

I am designating Ms. Kathleen Scully-Hayes as the presiding officer. If these arrangements present any problems, please contact the presiding officer. In order to facilitate any communication which may be necessary between 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. The presiding officer may be reached at [phone].

Sincerely,

Thomas A. Scully.

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

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

Dated: November 4, 2002.

Thomas A. Scully,

Administrator, Centers for Medicare & Medicaid Services.