04-11268. Notice of Hearing: Reconsideration of Disapproval of Connecticut's Medicaid State Plan Amendment 03-002A

AGENCY:

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

ACTION:

Notice of hearing.

SUMMARY:

This notice announces an administrative hearing to be held on June 8, 2004, at 10 a.m., JFK Federal Building, Room 2325,Boston, Massachusetts 02203-0003, to reconsider CMS' decision to disapprove Connecticut's Medicaid State Plan Amendment (SPA) 03-002A.

DATES:

Closing Date: Requests to participate in the hearing as a party must be received by the presiding officer by June 3, 2004.

FOR FURTHER INFORMATION CONTACT:

Kathleen Scully-Hayes, Presiding Officer CMS,Lord Baltimore Drive,Mail Stop LB-23-20,Baltimore, Maryland 21244,Telephone: [phone].

SUPPLEMENTARY INFORMATION:

This notice announces an administrative hearing to reconsider the CMS' decision to disapprove Connecticut's Medicaid State Plan Amendment (SPA) 03-002A.

Connecticut submitted SPA 03-002A on February 13, 2003, which proposes to establish new pharmacy reimbursement rates for the period January 1, 2003, through February 4, 2003. The CMS reviewed this proposal and for the reasons set forth below, the Agency was unable to approve SPA 03-002A as submitted.

The sole issue is whether the requested effective date is consistent with statutory and regulatory requirements. In a separate action, CMS approved SPA 03-002B, which made the requested changes to pharmacy reimbursement rates for a subsequent period. Under section 1902(a)(30)(A) of the Social Security Act (the Act), states are required to have methods and procedures to ensure that rates are consistent with efficiency, economy, and quality of care. Under that authority, the Secretary has issued regulations prescribing state rate-setting procedures. One of those requirements, set forth at 42 CFR 447.205(d), is issuance of public notice prior to the effective date of a significant change in any methods and standards for setting payment rates for services. While the State indicated that a legislative hearing was held in February 2002, and that other activities occurred in the Connecticut General Assembly, the required public notice was not published in the Connecticut Law Journal until February 4, 2003. The regulations at 42 CFR 447.205(d) are quite specific that in order to meet the public notice requirements, a notice must be published in one of the following publications: (1) A state register similar to the Federal Register; (2) the newspaper of widest circulation in each city with a population of 50,000 or more; or (3) the newspaper of widest circulation in the state, if there is not a city with a population of 50,00 or more. Hearings and activities before a state legislature are not included in the regulation as meeting the requirements of public notice. Therefore, the change in pharmacy reimbursement rates contained in SPA 03-002A could not be effective until February 5, 2003.

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 Connecticut SPA 03-002A.

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. 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.

The notice to Connecticut announcing an administrative hearing to reconsider the disapproval of its SPA reads as follows: Mr. Michael Starkowski, Deputy Commissioner, State of Connecticut, Department of Social Services,25 Sigourney Street,Hartford, CT 06106-5033.

Dear Mr. Starkowski:

I am responding to your request for reconsideration of the decision to disapprove State Plan Amendment (SPA) 03-002A.

Connecticut submitted SPA 03-002A on February 13, 2003, which proposes to establish new pharmacy reimbursement rates for the period January 1, 2003, through February 4, 2003. The Centers for Medicare & Medicaid Services (CMS) reviewed this proposal and for the reasons set forth below, the Agency was unable to approve SPA 03-002A as submitted.

The sole issue is whether the requested effective date is consistent with statutory and regulatory requirements. In a separate action, CMS approved SPA 03-002B, which made the requested changes to pharmacy reimbursement rates for a subsequent period. Under section 1902(a)(30)(A) of the Social Security Act, states are required to have methods and procedures to ensure that rates are consistent with efficiency, economy, and quality of care. Under that authority, the Secretary has issued regulations prescribing state rate-setting procedures. One of those requirements, set forth at 42 CFR 447.205(d), is issuance of public notice prior to the effective date of a significant change in any methods and standards for setting payment rates for services. While the State indicated that a legislative hearing was held in February 2002, and that other activities occurred in the Connecticut General Assembly, the required public notice was not published in the Connecticut Law Journal until February 4, 2003. The regulations at 42 CFR 447.205(d) are quite specific that in order to meet the public notice requirements, a notice must be published in one of the following publications: (1) A state register similar to the Federal Register; (2) the newspaper of widest circulation in each city with a population of 50,000 or more; or (3) the newspaper of widest circulation in the state, if there is not a city with a population of 50,000 or more. Hearings and activities before a state legislature are not included in the regulation as meeting the requirements of public notice. Therefore, the change in pharmacy reimbursement rates contained in SPA 03-002A could not be effective until February 5, 2003.

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 Connecticut SPA 02-003A.

I am scheduling a hearing on your request for reconsideration to be held on June 8, 2004, at 10 a.m., JFK Federal Building, Room 2325, Boston, Massachusetts 02203-0003. 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. Ms. Kathleen Scully-Hayes may be reached at [phone].

  Sincerely,

  Mark B. McClellan, M.D., Ph.D.

Authority: Section 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)

Mark B. McClellan,

Administrator, Centers for Medicare & Medicaid Services.