E8-17273. Notice of Opportunity for a Hearing on Compliance of Texas State Plan Provisions Concerning Payments for Birthing Center Facility Services With Title XIX (Medicaid) of the Social Security Act

AGENCY:

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

ACTION:

Notice of Opportunity for a Hearing.

SUMMARY:

This notice announces the opportunity for an administrative hearing to be held on September 26, 2008 at the CMS Dallas Regional Office, 1301 Young Street, Room 1196, Dallas, Texas 75202, to consider whether Texas State plan provisions concerning payments for birthing center facility services comply with the requirements of the Social Security Act as discussed in the July 28, 2008 letter sent to the State and published herein.

CLOSING DATE:

Requests to participate in the hearing as a party must be received by the presiding officer by August 27, 2008.

FOR FURTHER INFORMATION CONTACT:

Benjamin R. Cohen, Presiding Officer, CMS, 2520 Lord Baltimore Drive, Suite L, Baltimore, Maryland 21244, Telephone: [phone].

SUPPLEMENTARY INFORMATION:

This notice announces the opportunity for an administrative hearing concerning the finding of the Administrator of the Centers for Medicare & Medicaid Services (CMS) that the approved State plan under title XIX (Medicaid) of the Social Security Act (the Act) is not in compliance with the provisions of section 1902(a) of the Act. In particular, CMS has found that the State plan provides for separate payment for “birthing center facility services.” Birthing centers are not among the recognized provider types, nor are birthing center facility services a type of service within the scope of “medical assistance” under the framework for State Medicaid programs established in Federal law. Further, Federal financial participation is not available in expenditures for payments for birthing center facility services provided on or after September 1, 2008, subject to the opportunity for a hearing described below. This notice is being provided pursuant to the requirements of section 1904 of the Act, as implemented in part by Federal regulations at 42 CFR 430.35 and 42 CFR Part 430, Subpart D.

Birthing centers are not a recognized provider of services within the scope of “medical assistance” under section 1905(a) of the Act. In section 1905(a), Congress specified certain covered facility services, such as those provided by hospitals, clinics, or nursing facilities, but did not specify the services of birthing centers. Birthing centers are not any of those identified types of covered facilities (specifically, they do not meet the requirements to be considered “clinics”). Thus, payment to birthing centers is not payment for “medical assistance” consistent with section 1905(a), and such payment therefore is not contemplated by the references to medical assistance at section 1902(a)(10) of the Act.

Moreover, section 1902(a)(32) requires that State plans make payment directly to the provider of the service, unless there is an assignment or contractual arrangement under which the provider turns over fees to an employer or permits a facility to bill on his/her behalf. Neither of these circumstances apply under the Texas State plan, which accords birthing center facilities payment independent of the nurse midwife practitioners whose services are covered under section 1905(a)(17) of the Act. While the Act would permit higher payments to nurse midwives practicing at birthing centers in order to recognize the higher costs that may be incurred by such nurse midwives, there is no statutory authority to provide for direct payment to birthing centers for facility services.

While CMS has approved State plan amendments to provide separate payment for birthing center facility services in the past, on further review of the above-referenced provisions, we do not believe that the statute allows for these payments. CMS has previously notified the State of this position through prior deferral action and disapproval of three Medicaid State plan amendments (SPAs 04-033(b), 06-004, and 07-011). The first two SPAs were disapproved on June 29, 2006, and the third on December 23, 2007. CMS has deferred claims for the Federal share totaling $43,507 for three quarters starting with the period ending June 30, 2006.

The notice to Texas announcing the opportunity for an administrative hearing on the issue of the compliance of the specified State plan provisions reads as follows:

Via Certified Mail—Return Receipt Requested

Mr. Chris Traylor, Associate Commissioner for Medicaid and Children's Health Insurance Program, Texas Health and Human Services Commission, P.O. Box 13247, Austin, TX 78711

Dear Mr. Traylor: This letter provides notice of our finding that the approved State plan under title XIX (Medicaid) of the Social Security Act (the Act) is not in compliance with the provisions of section 1902(a) of the Act. In particular, the Centers for Medicare & Medicaid Services (CMS) has found that the State plan provides for separate payment for “birthing center facility services.” Birthing centers are not among the recognized provider types, nor are birthing center facility services a type of service within the scope of “medical assistance” under the framework for State Medicaid programs established in Federal law. Further, Federal financial participation is not available in expenditures for payments for birthing center facility services provided on or after September 1, 2008, subject to the opportunity for a hearing described below. This notice is being provided pursuant to the requirements of section 1904 of the Act as implemented by Federal regulations at 42 CFR 430.35 and 42 CFR Part 430, Subpart D.

Birthing centers are not a recognized provider of services within the scope of “medical assistance” under section 1905(a) of the Act. In section 1905(a), Congress specified certain covered facility services, such as hospitals, clinics, or nursing facilities, but did not specify the services of birthing centers. Birthing centers are not any of those identified types of covered facilities (specifically, they do not meet the requirements to be considered “clinics”). Thus, payment to birthing centers is not payment for medical assistance consistent with section 1905(a), and such payment, therefore, is not contemplated by the references to medical assistance at section 1902(a)(10) of the Act.

Moreover, section 1902(a)(32) requires that State plans make payment directly to the provider of the service, unless there is an assignment or contractual arrangement under which the provider turns over fees to an employer or permits a facility to bill on his/her behalf. Neither of these circumstances apply under the Texas State plan, which accords birthing center facilities payment independent of the nurse midwife practitioner whose services are covered under section 1905(a)(17) of the Act. While the Act would permit higher payments to nurse midwives practicing at birthing centers in order to recognize the higher costs that may be incurred by such nurse midwives, there is no statutory authority to provide for direct payment to birthing centers for facility services.

While CMS has approved State plan amendments to provide separate payment for birthing center facility services in the past, on further review of the above-referenced provisions, we do not believe that the statute allows for these payments. CMS has previously notified the State of this position through a deferral action and disapproval of three Medicaid State plan amendments (SPAs 04-033(b), 06-004, and 07-011). The first two SPAs were disapproved on June 29, 2006, and the third on December 23, 2007. CMS has deferred claims for the Federal share totaling $43,507 for three quarters starting with the period ending June 30, 2006.

For all of these reasons, and after consulting with the Secretary as required by 42 CFR 430.15(c)(2), I am taking compliance action on the State's birthing center facility payment.

If you are dissatisfied with this determination, you will have an opportunity for a hearing on [60 days after date of publication], in accordance with the procedure set forth in Federal regulations at 42 CFR Part 430, Subpart D. Your request for such a hearing may be sent to the designated hearing officer, Mr. Benjamin R. Cohen, Centers for Medicare & Medicaid Services, 2520 Lord Baltimore Drive, Suite L, Baltimore, Maryland 21244. If you have any questions or wish to discuss this determination further, please contact Mr. Bill Brooks, Associate Regional Administrator, Centers for Medicare & Medicaid Services, Region VI, Division of Medicaid and Children's Health, Department of Health and Human Services, 1301 Young Street, Room 827, Dallas, TX 75202.

  Sincerely,

Kerry Weems,

Acting Administrator.

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

Dated: July 23, 2008.

Kerry Weems,

Acting Administrator, Centers for Medicare & Medicaid Services.