[Federal Register Volume 59, Number 186 (Tuesday, September 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23960]
[[Page Unknown]]
[Federal Register: September 27, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
Health Care Financing Administration
Administration for Children and Families
[ORD-069-N]
Medicaid Program; Demonstration Proposals Pursuant to Section
1115(a) of the Social Security Act; Policies and Procedures
AGENCIES: Office of the Secretary, Health Care Financing Administration
(HCFA), and Administration for Children and Families (ACF), HHS.
ACTION: Public Notice.
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SUMMARY: This public notice informs interested parties of (1) the
principles the Department of Health and Human Services ordinarily will
consider when deciding whether to exercise its discretion to approve or
disapprove demonstration projects under the authority in Section
1115(a) of the Social Security Act, 42 U.S.C. Sec. 1315(a); (2) the
kinds of procedures the Department would expect States to employ in
involving the public in the development of proposed demonstration
projects under Section 1115; and (3) the procedures the Department
ordinarily will follow in reviewing demonstration proposals. The
principles and procedures described in this public notice are being
provided for the information of interested parties, and are not legally
binding on the Department of Health and Human Services. This notice
does not create any right or benefit, substantive or procedural,
enforceable at law or equity, by any person or entity, against the
United States, its agencies or instrumentalities, the States, or any
other person.
FOR FURTHER INFORMATION CONTACT: Howard Rolston, Administration for
Children and Families, Department of Health and Human Services, at
(202) 401-9220.
Thomas Kickham, Health Care Financing Administration, Department of
Health and Human Services, at (410) 966-6503.
SUPPLEMENTARY INFORMATION:
I. Introduction
Demonstration Proposals Pursuant to Section 1115 of the Social Security
Act--General Policies and Procedures
Under Section 1115, the Department of Health and Human Services is
given latitude, subject to the requirements of the Social Security Act,
to consider and approve research and demonstration proposals with a
broad range of policy objectives. The Department desires to facilitate
the testing of new policy approaches to social problems. Such
demonstrations can provide valuable knowledge that will help lead to
improvements in achieving the purposes of the Act. The Department also
is committed to both a thorough and an expeditious review of State
requests to conduct such demonstrations.
In exercising her discretionary authority, the Secretary has
developed a number of policies and procedures for reviewing proposals.
In order to ensure a sound, expeditious and open decision-making
process, the Department will be guided by the policies and procedures
described in this statement in accepting and reviewing proposals
submitted pursuant to section 1115.
II. General Considerations
To facilitate the testing of new policy approaches to social
problems the Department will--
Work with States to develop research and demonstrations in
areas consistent with the Department's policy goals;
Consider proposals that test alternatives that diverge
from that policy direction; and
Consider, as a criterion for approval, a State's ability
to implement the research or demonstration project.
While the Department expects to review and accept a range of
proposals, it may disapprove or limit proposals on policy grounds or
because the proposal creates potential constitutional problems or
violations of civil rights laws or equal protection requirements. The
Department seeks proposals which preserve and enhance beneficiary
access to quality services. Within this overall policy framework, the
Department is prepared to--
Grant waivers to test the same or related policy
innovations in multiple States, (replication is a valid mechanism by
which the effectiveness of policy changes can be assessed);
Approve demonstration projects ranging in scale from
reasonably small to state-wide or multi-state, and
Consider joint Medicare-Medicaid demonstrations, such as
those granted in the Program for All-Inclusive Care for the Elderly
(PACE) and Social Health Maintenance Organization (SHMO)
demonstrations, and Aid to Families with Dependent Children (AFDC)-
Medicaid waivers.
III. Duration
The complex range of policy issues, design methodologies, and
unanticipated events inherent in any research or demonstration makes it
very difficult to establish a single Department policy on the duration
of 1115 waivers. However, the Department is committed, through
negotiations with State applicants, to--
Approve waivers of at least sufficient duration to give
new policy approaches a fair test. The duration of waiver approval
should be congruent with the magnitude and complexity of the project
(for example, large-scale statewide reform programs will typically
require waivers of five years);
Provide reasonable time for the preparation of meaningful
evaluation results prior to the conclusion of the demonstration; and
Recognize that new approaches often involve considerable
start-up time and allowance for implementation delays.
The Department is also committed, when successful demonstrations
provide an appropriate basis, to working with State governments to seek
permanent statutory changes incorporating those results. In such cases,
consideration will be given to a reasonable extension of existing
waivers.
IV. Evaluation
As with the duration of waivers, the complex range of policy
issues, design methodologies, and unanticipated events also makes it
very difficult to establish a single Department policy on evaluation.
This Department is committed to a policy of meaningful evaluations
using a broad range of appropriate evaluation strategies (including
true experimental, quasi- experimental, and qualitative designs) and
will be flexible and project-specific in the application of evaluation
techniques. This policy will be most evident with health care waivers.
Within-site randomized design is the preferred approach for most AFDC
waivers. The Department will consider alternative evaluation designs
when such designs are methodologically comparable. The Department is
also eager to ensure that the evaluation process be as unintrusive as
possible to the beneficiaries in terms of implementing and operating
the policy approach to be demonstrated, while ensuring that critical
lessons are learned from the demonstration.
V. Cost Neutrality
The Department's fiduciary obligations in a period of extreme
budgetary stringency require maintenance of the principle of cost
neutrality, but the Department believes it should be possible to apply
that principle flexibly.
The Department will assess cost neutrality over the life
of a demonstration project, not on a year-by-year basis, since many
demonstrations involve making ``up-front'' investments in order to
achieve out-year savings.
The Department recognizes the difficulty of making
appropriate baseline projections of Medicaid expenditures, and is open
to development of a new methodology in that regard.
In assessing budget neutrality, the Department will not
rule out consideration of other cost neutral arrangements proposed by
States.
States may be required to conform, within a reasonable
period of time, relevant aspects of their demonstrations to the terms
of national health care reform legislation, including global budgeting
requirements, and to the terms of national welfare reform legislation.
VI. Timeliness and Administrative Complexity
The Department is committed to minimizing the administrative burden
on the States and to reducing the processing time for waiver requests.
In order to accomplish this the Department has adopted a number of
procedures, including--
Expanding pre-application consultation with States;
Setting, and sharing with applicants, a well-defined
schedule for each application, with established target dates for
processing and reaching a decision on the application;
Maintaining, to the extent feasible, a policy of one
consolidated request for further information;
Sharing proposed terms and conditions with applicants
before making final decisions;
Establishing concurrent, rather than sequential, review of
waivers by all relevant units of the Department and with other relevant
Departments and the Office of Management and Budget;
Expanding technical assistance activities to the States;
and
Developing multi-state waiver solicitations in areas of
priority concern, including integrated long-term care system
development, services for adolescents, and services in rural areas.
The Department will continue to follow and develop procedures, and
commit internal resources to reviewing demonstration proposals,
necessary for a sound and expeditious review process.
VII. State Notice Procedures
The Department recognizes that people who may be affected by a
demonstration project have a legitimate interest in learning about
proposed projects and having input into the decision-making process
prior to the time a proposal is submitted to the Department. A process
that facilitates public involvement and input promotes sound decision-
making.
There are many ways that States can provide for such input. In
order to allow for public input into the proposals, the Department
expects States to ordinarily follow one (or more if the State desires)
of the processes described in this section.
1. At any time prior to submitting a section 1115 demonstration
proposal to the Department of Health and Human Services, a State may
provide to the Department a written description of the process the
State will use for receipt of public input into the proposal prior to
its submission to the Department.
Within 15 days of receipt of such description, the Department will
notify the State whether the described process provides adequate
opportunity for public input. The Department will accept any process
that--
Includes the holding of one or more public hearings, at
which the most recent working proposal is described and made available
to the public, and time is provided during which comments can be
received; or
Uses a commission or other similar process, where meetings
are open to members of the public, in the development of the proposal;
or
Results from enactment of a proposal by the State
legislature prior to submission of the demonstration proposal, where
the outline of such proposal is contained in the legislative enactment;
or
Provides for formal notice and comment in accordance with
the State's administrative procedure act; provided that such notice
must be given at least 30 days prior to submission; or
Includes notice of the intent to submit a demonstration
proposal in newspapers of general circulation, and provides a mechanism
for receiving a copy of the working proposal and an opportunity, which
shall not be less than 30 days, to comment on the proposal; or,
Includes any other similar process for public input that
would afford an interested party the opportunity to learn about the
contents of the proposal, and to comment on its contents.
The State shall include in the demonstration proposal it submits to
the Department a statement (a narrative of several sentences) briefly
describing the process that it followed in implementing the process
previously presented to the Department. The Department may find a
proposal incomplete if the process has not been followed.
2. A State that has not followed the procedures described in
paragraph 1. must submit a description of the process that was used in
the State to obtain public input, at the time it submits its
demonstration proposal. The Department will notify the State if the
process was adequate within 15 days after the application is submitted,
applying the same criteria as in paragraph 1. If the process was not
adequate, the State can cure the inadequacy by--
Posting a notice in the newspaper of widest circulation in each
city with a population of 100,000 or more, or in the newspaper of
widest circulation in the State if there is no city with a population
of 100,000, indicating that a demonstration proposal has been
submitted. Such notice shall describe the major elements of the
proposed demonstration and any changes in benefits, payments,
eligibility, responsibilities, or provider selection requested in the
proposal. The notice shall indicate how interested persons can obtain
copies of the proposal and shall specify that written comments will be
accepted by the State for a period of thirty days. If a State follows
such a procedure, the State should respond to requests for copies of
the proposal within seven days. The State should maintain a record of
all comments received through this process.
All HHS commitments with respect to times for responding to
demonstration proposals shall be tolled until this process is
completed.
VIII. Federal Notice
The Department of Health and Human Services intends to publish a
monthly notice in the Federal Register of all new and pending proposals
submitted pursuant to section 1115. The notice will indicate that the
Department accepts written comments regarding all demonstration project
proposals.
The Department will maintain a list of organizations that have
requested notice that a demonstration proposal has been received and
will notify such organizations when a proposal is received.
IX. Comments
The Department will not approve or disapprove a proposal for at
least 30 days after the proposal has been received, in order to receive
and consider comments. The Department will attempt, if feasible, to
acknowledge receipt of all comments, but the Department will not
provide written responses to comments.
X. Findings
The Department will prepare a decision memorandum at the time a
demonstration proposal is granted or denied, discussing why the
Department granted or denied the proposal and how an approved
demonstration meets the criteria established by statute.
XI. Administrative Record
The Department will maintain an administrative record which will
generally consist of: the formal demonstration application from the
State; issue papers sent to the State and State responses; public and
Congressional comments sent to the Department and any Department
responses; the Department's decision memorandum regarding the granting
or denial of a proposal; and the final terms and conditions, and
waivers, sent to the State and the State acceptance of them.
XII. Sub-state Demonstrations
When a demonstration is to be implemented in only part of a State,
the State will be required to provide information on the likely
demographic composition of populations subject to and not subject to
the demonstration in the State. When relevant, the Department will
require that the evaluation component of a project address the impact
of the project on particular subgroups of the population.
XIII. Implementation Reviews
As part of the terms and conditions of any demonstration proposal
that is granted, the Department may require periodic evaluations of how
the project is being implemented. The Department will review, and when
appropriate investigate, documented complaints that a State is failing
to comply with requirements specified in the terms and conditions and
implementing waivers of any approved demonstration.
XIV. Legal Effect
This notice is intended to inform the public and the States
regarding procedures the Department ordinarily will follow in
exercising the Secretary's discretionary authority with respect to
State demonstration proposals under section 1115. This notice does not
create any right or benefit, substantive or procedural, enforceable at
law or equity, by any person or entity, against the United States, its
agencies or instrumentalities, the States, or any other person.
(Catalog of Federal Domestic Assistance Program, No. 93.779; Health
Financing Research, Demonstrations and Experiments.)
Dated: September 16, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: September 16, 1994.
Mary Jo Bane,
Assistant Secretary for Children and Families.
Dated: September 19, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 94-23960 Filed 9-26-94; 8:45 am]
BILLING CODE 4120-01-P
