[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Notices]
[Pages 8629-8630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5001]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES-
Health Care Financing Administration
Notice of Hearing: Reconsideration of Disapproval of Pennsylvania
State Plan Amendment (SPA)
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice of hearing.
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SUMMARY: This notice announces an administrative hearing on April 10,
1996; 10:00 a.m. in Room 5020; 3535 Market Street, Philadelphia,
Pennsylvania to reconsider our decision to disapprove Pennsylvania SPA
94-17.
CLOSING DATE: Requests to participate in the hearing as a party must be
received by the presiding officer by March 20, 1996.
FOR FURTHER INFORMATION CONTACT: Stan Katz, Presiding Officer, HCFA,
C1-04-27, 7500 Security Boulevard, Baltimore, Maryland 21224-1850,
Telephone: (410) 786-2661.
SUPPLEMENTARY INFORMATION: This notice announces an administrative
hearing to reconsider our decision to disapprove Pennsylvania State
plan amendment (SPA) number 94-17.
Section 1116 of the Social Security Act (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 Health Care Financing Administration (HCFA) 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.
Pennsylvania submitted SPA 94-17 for approval on December 29, 1995.
The issues involved in this reconsideration are as follows: (1) The
revised supplement submitted with SPA 94-17 provides for DSH payments
to county nursing facilities prior to the proposed effective date of
the plan amendment in violation of federal law at 42 CFR 447.256(c);
(2) federal appropriations law, as interpreted by HCFA prohibit the
``retroactive payment adjustments'' which would be authorized under SPA
94-17; (3) the Department failed to publish adequate public notice in
advance of the alleged change in its payment methods in accordance with
the requirements at 42 CFR 447.205(c); and (4) the Department did not
submit adequate information in support of its Medicare upper limit
assurance at 42 CFR 447.272 and 447.253(b)(2).
In this plan amendment, the State of Pennsylvania revises
significantly the State's nursing facility payment plan methodology to
provide the formula for calculating a ``disproportionate share''
payment to county nursing facilities for State fiscal years (SFYs)
1993, 1994, and 1995.
These ``disproportionate share'' payments to county nursing
facilities began in SFY 1991 and were continued in SFY 1992 under an
approved State plan amendment. The State has revised significantly its
nursing facility payment methodology three times since then (SFYs 1993,
1994 and 1995), but did not amend the State plan concerning these
payments before the payments were made. Since Pennsylvania sought
approval of a payment adjustment that was earlier than permissible
under long-standing regulatory provisions governing effective dates for
plan amendments, HCFA disapproved the amendment.
Issue Regarding Effective Date of Payment Adjustments
Federal regulations at 42 CFR 447.256 specify that an approved
state plan amendment becomes effective not earlier than the first day
of the calendar quarter in which an approvable amendment is submitted.
This amendment was submitted on December 29, 1994. Consequently, the
earliest date for which Federal financial participation would be
available for ``disproportionate share'' payments made under this
amendment, if approved, was October 1, 1994. Even though this is the
proposed effective date for SPA 94-17 requested by the State, this
amendment could not be approved, as it would provide for retroactive
``disproportionate share'' payments for periods prior to the proposed
effective date.
Pennsylvania's retroactive payment adjustments are also prohibited
by the Department's appropriations law. The appropriations law provides
that Medicaid payments may be made for any quarter with respect to
state plan amendments which are in effect in that quarter, and which
were submitted in, or prior to, that quarter and approved in that, or
any later quarter. HCFA has interpreted this to mean that there can be
no retroactive payments for any plan amendment which could result in an
increase in Medicaid payments. If approved, this amendment would have
increased Medicaid payments in quarters prior to the quarter in which
the amendment was submitted; therefore, HCFA had no choice but to
disapprove this SPA.
Issue Regarding Public Notice
Federal regulations provide that public notice of any significant
proposed change in methods or standards for setting payment rates must
be published before the proposed effective date of the change.
Pennsylvania requested an effective date of October 1, 1994. However,
the notice published on July 31, 1993, and relied on by the State to
support the revised ``disproportionate share'' payments for SFY 1995,
was defective. Even though the July 31, 1993, notice appears to be
adequate for the SFY 1994 revised payment methodology, it is not
sufficient for the SFY 1995 payment methodology because it did not
contain an estimate of the expected increases in annual expenditures
for SFY 1995, as required by Federal rules. Pennsylvania did not submit
a plan amendment for
[[Page 8630]]
SFY 1995 payments in accordance with the effective date rules of 42 CFR
447.256(c). Therefore, the State's retroactive payment adjustments are
not eligible for Federal financial participation.
While the State did publish notice of the SFY 1993 and 1994
adjustments, the State had indicated that public notice is not required
because this amendment did not represent a significant change in the
methods and standards for setting payment rates. HCFA disagreed. Since
the State's currently approved plan provides for a nursing facility
payment methodology for ``disproportionate share'' payments for SFYs
1991 and 1992 only, the State does not have methods or standards to
presently authorize making such payments. Accordingly, the submission
of this amendment, that established a new methodology in that a
different percentage of medical assistance cost is used to determine
the ``disproportionate share'' payments to county nursing facilities
for SFYs 1993, 1994, and 1995, is a significant change for setting
payment rates that must comply with the public notice requirements of
42 CFR 447.205(c).
Issue Regarding the Upper Limit
The State has not provided sufficient documentation in support of
its assurance that the Medicare upper limit will not be exceeded
because it did not incorporate the ``disproportionate share'' payments
in the upper limit calculation. Pennsylvania was correct in stating
that Federal law does not prohibit these payments; however, the State
must establish that its payment rates, including these additional
payments, meet the requirements of 42 CFR 447.253(b)(2) and 447.272.
These two references state that aggregate Medicaid payments, to nursing
facilities, will not exceed the amount that can reasonably be estimated
to have been paid for those services under the Medicare payment
principles.
Issue Regarding ``Deemed Approval''
The State contends TN 94-17 was deemed approved by operation of law
because it did not receive HCFA's request for additional information
within 90 days of HCFA's receipt of the State's amendment. The
applicable regulations at 42 CFR 447.256(b) state that if HCFA does not
send notice to the State of its determination as to whether the
assurances regarding a State plan amendment are acceptable within 90
days of the date HCFA receives the amendment, the assurances and the
amendment will be deemed approved. In this case, the assurances and
related rate information were received by HCFA on January 3, 1995,
making the 90th day April 3, 1995. As HCFA requested additional
information regarding the proposed amendment by letter dated March 31,
1995, the 90-day requirement was met. The State's response, dated
August 23, 1995, indicated that HCFA's request for additional
information was postmarked April 5, 1995, and received on April 7,
1995. By letter dated September 19, 1995, the Philadelphia Regional
Office notified the State that the 90-day requirement does not require
that the State receive HCFA's response within 90 days. Because the
Regional Office sent the response on March 31, 1995, it informed the
State that the 90-day requirement had been met and that the amendment
was not deemed approved.
The deficiencies described above allowed HCFA no choice but to
recommend disapproval of Pennsylvania 94-17.
The notice to Pennsylvania announcing an administrative hearing to
reconsider the disapproval of its SPA reads as follows:
Ms. Feather O. Houstoun,
Secretary, Department of Public Welfare, Health and Welfare
Building, P.O. Box 2675, Harrisburg, Pennsylvania 17120
Dear Ms. Houstoun: I am responding to your request for
reconsideration of the decision to disapprove Pennsylvania State
Plan Amendment (SPA) 94-17.
Pennsylvania submitted SPA 94-17 for approval on December 29,
1994. The issues involved in this reconsideration are as follows:
(1) the revised supplement submitted with SPA 94-17 provides for DSH
payments to county nursing facilities prior to the proposed
effective date of the plan amendment in violation of federal law at
42 CFR 447.256(c); (2) Federal appropriations law, as interpreted by
HCFA prohibit the ``retroactive payment adjustments'' which would be
authorized under SPA 94-17; (3) the State failed to publish adequate
public notice in advance of the alleged change in its payment
methods in accordance with the requirements at 42 CFR 447.205(c);
and (4) the State did not submit adequate information in support of
its Medicare upper limit assurance at 42 CFR 447.272 and
447.253(b)(2).
I am scheduling a hearing on your request for reconsideration to
be held on April 10, 1996, on the Fifth Floor; Room 5020; 3535
Market Street; Philadelphia, Pennsylvania. 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 Mr. Stanley Katz 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 (410) 786-2661.
Sincerely,
Bruce C. Vladeck,
Administrator.
(Section 1116 of the Social Security Act (42 U.S.C. section 1316);
42 CFR section 430.18)
(Catalog of Federal Domestic Assistance Program No. 13.714, Medicaid
Assistance Program)
Dated: February 23, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 96-5001 Filed 3-4-96; 8:45 am]
BILLING CODE 4120-01-P
