01-28220. Notice of Hearing: Reconsideration of Disapproval of Louisiana State Plan Amendment (SPA) 01-03

AGENCY:

Centers for Medicare & Medicaid Services, HHS.

ACTION:

Notice of hearing.

SUMMARY:

This notice announces an administrative hearing to reconsider our decision to disapprove Louisiana SPA 01-03 on December 19, 2001, at 10 a.m.; at 1301 Young Street; Conference Room 1113; Dallas, Texas 75202.

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, 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 Louisiana SPA 01-03.

Section 1116 of the Social Security Act (the Act) and 42 CFR part 430 establish HHS procedures that provide an administrative hearing for reconsideration of a disapproval of a State plan or plan amendment. The Centers for Medicare & Medicaid Services (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.

At issue is whether Louisiana may include in the calculation of disproportionate share hospital (DSH) payments the uncompensated costs of providing certain health care services that were not within the regulatory definition of hospital services and are not treated as hospital services for any other purpose. This amendment proposed including rural health clinic uncompensated care costs in a hospital's DSH payment calculation.

Section 1923(g)(1) of the Act sets forth a hospital-specific limit on DSH payments and permits only the costs of “hospital services” furnished by a hospital to be included in calculating this limit. Medicaid outpatient hospital services are defined in Federal regulations at 42 CFR 440.20(a). This regulation requires the services to be provided by an institution that is licensed or formally approved as a hospital by an officially designated authority for state standard setting. The institution also must meet the conditions of participation in the Medicaid program. This means that a state may not include costs or revenues in the DSH calculation which are attributable to services rendered in a separately licensed/certified entity, even if that entity is owned by the same institution. Such health services are not “hospital services.”

Louisiana SPA 01-03 is not consistent with either section 1923(g)(1) of the Act or 42 CFR 440.20, because it would include as hospital services (for purposes of the DSH calculations) health services that were not within the regulatory definition of hospital services or otherwise characterized as hospital services. Therefore, the CMS Administrator, after consulting with the Secretary as required by 42 CFR 430.15, informed Louisiana that Louisiana SPA 01-03 was disapproved.

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

Mr. David W. Hood,

Secretary, Louisiana Department of Health and Hospitals, 1201 Capitol Access Road, P.O. Box 91030, Baton Rouge, LA 70821-9030

Dear Mr. Hood: I am responding to your request for reconsideration of the decision to disapprove Louisiana State Plan Amendment (SPA) 01-03.

At issue is whether Louisiana may include in the calculation of disproportionate share hospital (DSH) payments the uncompensated costs of providing certain health care services that were not within the regulatory definition of hospital services and are not treated as hospital services for any other purpose. This amendment proposed including rural health clinic uncompensated care costs in a hospital's DSH payment calculation.

Section 1923(g)(1) of the Social Security Act (the Act) sets forth a hospital-specific limit on DSH payments and permits only the costs of “hospital services” furnished by a hospital to be included in calculating this limit. Medicaid outpatient hospital services are defined in Federal regulations at 42 CFR 440.20(a). This regulation requires the services to be provided by an institution that is licensed or formally approved as a hospital by an officially designated authority for state standard setting. The institution also must meet the conditions of participation in the Medicaid program. This means that a state may not include costs or revenues in the DSH calculation which are attributable to services rendered in a separately licensed/certified entity, even if that entity is owned by the same institution. Such health services are not “hospital services.”

Louisiana SPA 01-03 is not consistent with either section 1923(g)(1) of the Act or 42 CFR 440.20 because it would include as hospital services (for purposes of the disproportionate share calculations) health services that were not within the regulatory definition of hospital services or otherwise characterized as hospital services. Therefore, the Centers for Medicare & Medicaid Services' Administrator, after consulting with the Secretary as required by 42 CFR 430.15, informed Louisiana that Louisiana SPA 01-03 was disapproved.

I am scheduling a hearing on your request for reconsideration to be held on December 19, 2001, at 10 a.m.; 1301 Young Street; Conference Room 1113; Dallas, Texas 75202.

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,

Administrator.

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

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

Dated: November 5, 2001.

Thomas A. Scully,

Administrator, Centers for Medicare & Medicaid Services.