[Federal Register Volume 65, Number 249 (Wednesday, December 27, 2000)]
[Notices]
[Pages 81877-81878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32922]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
Notice of Hearing: Reconsideration of Disapproval of Rhode Island
State Plan Amendment (SPA) 00-003
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice of hearing.
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SUMMARY: This notice announces an administrative hearing on January 25,
2001; 10:00 a.m.; Twenty-second Floor; Room 2255; JFK Federal Building;
Boston, Massachusetts 02203-0003, to reconsider our decision to
disapprove Rhode Island (SPA) 00-003.
DATES: Closing Date: Requests to participate in the hearing as a party
must be received by the presiding officer by January 10, 2001.
FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding
Officer, HCFA, C1-09-13, 7500 Security Boulevard, Baltimore, Maryland
21244, Telephone: (410) 786-2055.
SUPPLEMENTARY INFORMATION: This notice announces an administrative
hearing to reconsider our decision to disapprove Rhode Island's State
Plan Amendment (SPA) 00-003. Rhode Island submitted SPA 00-003 on March
29, 2000. This amendment proposed to include under the State plan
disproportionate share (DSH) payments to non-government hospitals to
cover the costs of providing inpatient hospital services to inmates in
the custody of the Department of Corrections (DOC) or the Department of
Children, Youth and Families (DCYF). As explained below, HCFA could not
approve Rhode Island's SPA 00-003.
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.
The issue in Rhode Island SPA 00-003 is whether the payments at
issue are consistent with the statutory requirements for DSH payments
at section 1923 of the Act. The payments are for specific services
furnished to individuals not eligible for Medicaid, and are not
generally available for the costs to ``serve a disproportionate share
[[Page 81878]]
of low income patients with special needs.'' Moreover, since inmates in
the custody of the DOC or the DCYF, have a source of third party
coverage, because of the legal obligation of those entities to furnish
food, housing and medical care to wards of the State, DSH payments for
those services would be contrary to the applicable hospital-specific
limits. HCFA contends that these inmates are neither eligible for
Medicaid nor are they uninsured.
Section 1923 of the Act establishes Federal requirements for DSH
payments to qualifying hospitals. DSH payments may be reasonably
related to the costs, volume or proportion of services provided to
patients eligible for medical assistance under a State plan or to low-
income patients. Unlike other Medicaid payments, DSH payments are not
payments for specific services, but are made to recognize that DSH
facilities ``serve a disproportionate share of low income patients with
special needs.'' The payments described in this State plan are payments
for specific services to specified inmates in the custody of the DOC or
DCYF, rather than payments available for the overall costs of serving a
disproportionate share of low-income patients. It is important to note
that, while States may use DSH payments generally to assist facilities
that have high levels of uncompensated care, the DSH provisions do not
authorize payments for specific services to non-Medicaid eligible
individuals.
Furthermore, under section 1923(g) of the Act there is a hospital-
specific limit on DSH payments under Medicaid. Such payments cannot
exceed the hospital's uncompensated costs of furnishing hospital
services to individuals who either are eligible for medical assistance
under the State plan or have no health insurance or other source of
third party coverage for services provided during the year. Individuals
in the custody of the DOC and the DCYF are wards of the State. As such,
the State is obligated to cover their basic economic needs (food,
housing, and medical care) because failure to do so would be in
violation of the Eighth amendment of the Constitution. Because State
obligations outside of the Medicaid program provide these individuals a
source of third party coverage, the individuals are neither eligible
for medical assistance nor are they uninsured. Therefore, the State
cannot make DSH payments to cover the costs of their care.
Therefore, based on the above, and after consultation with the
Secretary as required under 42 CFR 430.15(c)(2), HCFA disapproved Rhode
Island SPA 00-003.
The notice to Rhode Island announcing an administrative hearing to
reconsider the disapproval of its SPA reads as follows:
Christine C. Ferguson
Director
Department of Human Services
600 New London Avenue
Cranston, Rhode Island 02920
Dear Ms. Ferguson: I am responding to your request for
reconsideration of the decision to disapprove Rhode Island State
Plan Amendment (SPA) 00-003.
The issue in Rhode Island SPA 00-003 is whether the payments at
issue are consistent with the statutory requirements for
disproportionate share hospital (DSH) payments at section 1923 of
the Social Security Act (the Act). The payments are for specific
services furnished to individuals not eligible for Medicaid, and are
not generally available for the costs to ``serve a disproportionate
share of low income patients with special needs.'' Moreover, since
inmates in the custody of the Department of Corrections (DOC) or the
Department of Children and Youth (DCYF), have a source of third
party coverage, because of the legal obligation of those entities to
furnish food, housing and medical care to wards of the State, DSH
payments for those services would be contrary to the applicable
hospital-specific limits. HCFA contends that these inmates are
neither eligible for Medicaid nor are they uninsured.
Section 1923 of the Act establishes Federal requirements for DSH
payments to qualifying hospitals. DSH payments may be reasonably
related to the costs, volume or proportion of services provided to
patients eligible for medical assistance under a State plan or to
low-income patients. Unlike other Medicaid payments, DSH payments
are not payments for specific services, but are made to recognize
that DSH facilities ``serve a disproportionate share of low income
patients with special needs.'' The payments described in this State
plan are payments for specific services to specified inmates in the
custody of the DOC or DCYF, rather than payments available for the
overall costs of serving a disproportionate share of low-income
patients. It is important to note that, while States may use DSH
payments generally to assist facilities that have high levels of
uncompensated care, the DSH provisions do not authorize payments for
specific services to non-Medicaid eligible individuals.
Furthermore, under section 1923(g) of the Act there is a
hospital-specific limit on DSH payments under Medicaid. Such
payments cannot exceed the hospital's uncompensated costs of
furnishing hospital services to individuals who either are eligible
for medical assistance under the State plan or have no health
insurance or other source of third party coverage for services
provided during the year. Individuals in the custody of the DOC and
the DCYF are wards of the State. As such, the State is obligated to
cover their basic economic needs (food, housing, and medical care)
because failure to do so would be in violation of the Eighth
amendment of the Constitution. Because State obligations outside of
the Medicaid program provide these individuals a source of third
party coverage, the individuals are neither eligible for medical
assistance nor are they uninsured. Therefore, the State cannot make
DSH payments to cover the costs of their care.
Therefore, based on the above, and after consultation with the
Secretary as required under 42 CFR430.15(c)(2), HCFA disapproved
Rhode Island SPA 00-003.
I am scheduling a hearing on your request for reconsideration to
be held on January 25, 2001, Twenty-second Floor: Room 2255; JFK
Federal Building; 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. The
presiding officer may be reached at (410) 786-2055.
Sincerely,
Robert A. Berenson, M.D.
Acting Deputy 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: December 20, 2000.
Robert A. Berenson,
Acting Deputy Administrator, Health Care Financing Administration.
[FR Doc. 00-32922 Filed 12-26-00; 8:45 am]
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