Medicaid Program; Premiums and Cost Sharing, 9727-9740 [E8-3211]
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Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Proposed Rules
§ 440.345
EPSDT services requirement.
(a) The State must assure access to
early and periodic screening, diagnostic
and treatment (EPSDT) services through
benchmark or benchmark-equivalent
plan benefits or as wrap-around benefits
to those plans for any child under 19
years of age eligible in a category under
the State plan.
(1) Sufficiency: Any wrap-around
EPSDT benefits must be sufficient so
that, in combination with the
benchmark or benchmark-equivalent
benefits plan, these individuals have
access to the full EPSDT benefit.
(2) State Plan requirement: The State
must include a description of how the
wrap-around benefits will be provided
to ensure that these recipients have
access to the full EPSDT benefit.
(b) Individuals must first seek
coverage of EPSDT services through the
benchmark or benchmark equivalent
plan before seeking coverage of such
through wrap-around benefits.
§ 440.350 Employer-sponsored insurance
health plans.
(a) A State may provide benchmark or
benchmark-equivalent coverage by
obtaining employer sponsored health
plans (either alone or with the addition
of wrap-around services covered
separately under Medicaid) for
individuals with access to private health
insurance.
(b) The State must assure that
employer sponsored plans meet the
requirements of benchmark or
benchmark-equivalent coverage,
including the cost-effectiveness
requirements at § 440.370.
(c) A State may provide benchmark or
benchmark-equivalent coverage through
a combination of employer sponsored
health plans and additional benefit
coverage provided by the State that
wraps around the employer sponsored
health plan which, in the aggregate,
results in benchmark or benchmarkequivalent level of coverage for those
recipients.
§ 440.355
Payment of premiums.
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Payment of premiums by the State,
net of beneficiary contributions, to
obtain benchmark or benchmarkequivalent benefit coverage on behalf of
beneficiaries under this section will be
treated as medical assistance under
section 1905(a) of the Act.
§ 440.360 State plan requirement for
providing additional wrap-around services.
If the State opts to provide additional
or wrap-around coverage to individuals
enrolled in benchmark or benchmarkequivalent plans, the State plan must
describe the populations covered and
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9727
the payment methodology for these
services. Additional or wrap-around
services must be in categories that are
within the scope of the benchmark
coverage, or are described in section
1905(a) of the Act.
§ 440.365 Coverage of rural health clinic
and federally qualified health center (FQHC)
services.
(2) Do not apply in emergency
circumstances.
(3) Require that all provider plans are
paid on a timely basis in the same
manner as health care practitioners
must be paid under § 447.45 of the
chapter.
§ 440.390
If a State provides benchmark or
benchmark-equivalent coverage to
individuals, it must assure that the
individual has access, through that
coverage or otherwise, to rural health
clinic services and FQHC services as
defined in subparagraphs (B) and (C) of
section 1905(a)(2) of the Act. Payment
for these services must be made in
accordance with the payment provisions
of section 1902(bb) of the Act.
§ 440.370
Cost-effectiveness.
Benchmark and benchmarkequivalent coverage and any additional
benefits must be provided in accordance
with Federal upper payment limits,
procurement requirements and other
economy and efficiency principles that
would otherwise be applicable to the
services or delivery system through
which the coverage and benefits are
obtained.
§ 440.375
Comparability.
States have the option to amend their
State plan to provide benchmark or
benchmark-equivalent coverage to
recipients without regard to
comparability.
§ 440.380
Statewideness.
States have the option to amend their
State plan to provide benchmark or
benchmark-equivalent coverage to
recipients without regard to
statewideness.
§ 440.385
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(Catalog of Federal Domestic Assistance
Program No. 93.778, Medical Assistance
Program)
Dated: October 11, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: November 1, 2007.
Michael O. Leavitt,
Secretary.
Editorial Note: This document was
received at the Office of the Federal Register
on February 15, 2008.
[FR Doc. E8–3206 Filed 2–21–08; 8:45 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 447 and 457
[CMS–2244–P]
RIN 0938–A047
Medicaid Program; Premiums and Cost
Sharing
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
Freedom of choice.
(a) States have the option to amend
their State plan to provide benchmark or
benchmark-equivalent coverage to
recipients without regard to the
requirements for free choice of provider
in § 431.51 of this chapter.
(b) States may restrict recipients to
obtaining services from (or through)
selectively procured provider plans or
practitioners that meet, accept, and
comply with reimbursement, quality
and utilization standards under the
State Plan, to the extent that the
restrictions imposed meet the following
requirements:
(1) Do not discriminate among classes
of providers on grounds unrelated to
their demonstrated effectiveness and
efficiency in providing the benchmark
benefit package.
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Assurance of Transportation.
A State may at its option amend its
State plan to provide benchmark or
benchmark-equivalent coverage to
recipients without regard to the
assurance of transportation to medically
necessary services requirement
specified in § 431.53 of this chapter.
SUMMARY: This proposed rule would
implement and interpret the provisions
of sections 6041, 6042, and 6043 of the
Deficit Reduction Act of 2005 (DRA),
and section 405(a)(1) of the Tax Relief
and Health Care Act of 2006 (TRHCA).
These sections amend the Social
Security Act (the Act) by adding a new
section 1916A to provide State
Medicaid agencies with increased
flexibility to impose premium and cost
sharing requirements on certain
Medicaid recipients. This authority is in
addition to the existing authority States
have to impose premiums and cost
sharing under section 1916 of the Act.
The DRA provisions also specifically
address cost sharing for non-preferred
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Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Proposed Rules
drugs and non-emergency care
furnished in a hospital emergency
department.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on March 24, 2008.
ADDRESSES: In commenting, please refer
to file code CMS–2244–P. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
You may submit comments in one of
four ways (no duplicates, please):
1. Electronically. You may submit
electronic comments on specific issues
in this regulation to https://
www.cms.hhs.gov/eRulemaking. Click
on the link ‘‘Submit electronic
comments on CMS regulations with an
open comment period.’’ (Attachments
should be in Microsoft Word,
WordPerfect, or Excel; however, we
prefer Microsoft Word.)
2. By regular mail. You may mail
written comments (one original and two
copies) to the following address only:
Centers for Medicare & Medicaid
Services, Department of Health and
Human Services, Attention: CMS–2244–
P, P.O. Box 8016, Baltimore, MD 21244–
8016.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments (one
original and two copies) to the following
address only: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–2244–P, Mail Stop C4–26–05,
7500 Security Boulevard, Baltimore, MD
21244–1850.
4. By hand or courier. If you prefer,
you may deliver (by hand or courier)
your written comments (one original
and two copies) before the close of the
comment period to one of the following
addresses. If you intend to deliver your
comments to the Baltimore address,
please call telephone number (410) 786–
7195 in advance to schedule your
arrival with one of our staff members.
Room 445–G, Hubert H. Humphrey
Building, 200 Independence Avenue,
SW., Washington, DC 20201; or 7500
Security Boulevard, Baltimore, MD
21244–1850.
(Because access to the interior of the
HHH Building is not readily available to
persons without Federal Government
identification, commenters are
encouraged to leave their comments in
the CMS drop slots located in the main
lobby of the building. A stamp-in clock
is available for persons wishing to retain
a proof of filing by stamping in and
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retaining an extra copy of the comments
being filed.) Comments mailed to the
addresses indicated as appropriate for
hand or courier delivery may be delayed
and received after the comment period.
Submission of comments on
paperwork requirements. You may
submit comments on this document’s
paperwork requirements by mailing
your comments to the addresses
provided at the end of the ‘‘Collection
of Information Requirements’’ section in
this document.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Donna Schmidt, (410) 786–5532.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome
comments from the public on all issues
set forth in this rule to assist us in fully
considering issues and developing
policies. You can assist us by
referencing the file code CMS–2244–P
and the specific ‘‘issue identifier’’ that
precedes the section on which you
choose to comment.
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following Web
site as soon as possible after they have
been received: https://www.cms.hhs.gov/
eRulemaking. Click on the link
‘‘Electronic Comments on CMS
Regulations’’ on that Web site to view
public comments.
Comments received timely will also
be available for public inspection as
they are received, generally beginning
approximately 3 weeks after publication
of a document, at the headquarters of
the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday
through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an
appointment to view public comments,
phone 1–800–743–3951.
I. Background
A. General
For more than a decade, States have
been asking for the tools to modernize
their Medicaid programs. With the
enactment of the Deficit Reduction Act
of 2005 (DRA) (Pub. L. 109–171, enacted
on February 8, 2006), States now have
new options to create programs that are
aligned with today’s Medicaid
populations and the health care
environment. Alternative cost sharing,
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benefit flexibility through benchmark
plans, and the health opportunity
accounts (HOA) demonstration provide
the greatest opportunities to modernize
Medicaid, to make the cost of the
program and health care more
affordable, and to expand coverage for
the uninsured. States will be able to
reconnect families to the larger
insurance system that serves most
Americans and promote continuity of
coverage. The sweeping DRA provisions
on Medicaid include six chapters and
39 sections. Through a combination of
new options for States and new
requirements related to program
integrity, the DRA will help ensure the
sustainability of the Medicaid program
over time.
B. Statutory Authority
Sections 6041, 6042, and 6043 of the
DRA established a new section 1916A of
the Social Security Act (the Act).
Section 405(a)(1) of the Tax Relief and
Health Care Act of 2006 (TRHCA) (Pub.
L. 109–432, enacted on December 20,
2006) modified section 1916A of the
Act. Section 1916A sets forth options for
alternative premiums and cost sharing,
including options for higher cost
sharing for non-preferred prescription
drugs and for non-emergency use of a
hospital emergency room.
Section 6041 of the DRA established
new subsections 1916A(a) and (b), of the
Act, which allow States to amend their
State plans to impose alternative
premiums and cost sharing on certain
groups of individuals, for items and
services other than drugs (which are
subject to a separate provision discussed
below), and to enforce payment of the
premiums and cost sharing. Subsections
1916A(a) and (b) set forth limitations on
alternative premiums and cost-sharing
that vary based on family income, and
exclude some specific services from
alternative cost sharing. Section 6041
also created a new section 1916(h) of the
Act, which requires the Secretary to
increase the ‘‘nominal’’ cost sharing
amounts under section 1916 for each
year (beginning with 2006) by the
annual percentage increase in the
medical care component of the
consumer price index for all urban
consumers (CPI–U) as rounded up in an
appropriate manner. Section 405(a)(1) of
the TRHCA modified subsections
1916A(a) and (b) of the Act.
Section 6042 of the DRA created
section 1916A(c) of the Act, which
provides States with additional options
for establishing cost sharing
requirements for drugs to encourage the
use of preferred drugs. Section 405(a)(1)
of the TRHCA also modified section
1916A(c) of the Act. Under section
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1916A(c), States may amend their State
plans to require increased cost sharing
by certain groups of individuals for nonpreferred drugs and to waive or reduce
the otherwise applicable cost sharing for
preferred drugs. States may also permit
pharmacy providers to require the
receipt of a cost sharing payment from
an individual before filling a
prescription. We believe the Congress
intended to provide additional
flexibilities to States in issuing the DRA.
Thus, we have not defined preferred
drugs or non-preferred drugs within a
class of such drugs in this rule and we
believe defining these terms should be
at State discretion. We would anticipate
that States would publish schedules of
preferred drugs as part of, or as a
supplement to, the required public
schedule of cost sharing under 42 CFR
447.76.
Section 6043 of the DRA created
section 1916A(e) of the Act, which
permits States to amend their State
plans to allow hospitals, after an
appropriate medical screening
examination under section 1867
(EMTALA) of the Act, to impose higher
cost sharing upon certain groups of
individuals for non-emergency care or
services furnished in a hospital
emergency department. Section
405(a)(1) of the TRHCA modified
section 1916A(e) of the Act. Under this
option, if the hospital determines that
an individual does not have an
emergency medical condition, before
providing the non-emergency services
and imposing cost sharing, it must
inform the individual that an available
and accessible alternate non-emergency
services provider can provide the
services without the imposition of the
same cost sharing and that the hospital
can coordinate a referral to that
provider. After notice is given, the
hospital may require payment of the
cost sharing before providing the nonemergency services to the individual.
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II. Provisions of the Proposed
Regulations
[If you choose to comment on issues
in this section, please include the
caption ‘‘PROVISIONS OF THE
PROPOSED REGULATIONS’’ at the
beginning of your comments.]
A. Overview
The Department began issuing
guidance about the new flexibilities
available to States within months of the
enactment of the DRA. We released two
letters to State Medicaid directors and
health officials providing guidance on
sections 6041, 6042 and 6043 of the
DRA, and section 405(a)(1) of the
TRHCA as it relates to sections 6041 and
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6042 of the DRA respectively. States and
Territories have used this guidance to
design and implement the new options.
These regulations formalize the
guidance on alternative premiums and
cost sharing.
These proposed regulations would
amend existing Medicaid cost sharing
regulations at 42 CFR part 447 and State
Children’s Health Insurance Program
(SCHIP) cost sharing regulations at 42
CFR part 457. We propose this approach
to assist the reader in easily accessing
all Medicaid and SCHIP cost sharing
regulations.
B. Medicaid Regulations
1. Maximum Allowable Charges
(§ 447.54)
We are proposing to revise § 447.54 to
update the existing ‘‘nominal’’ Medicaid
cost sharing amounts, specifically the
nominal deductible amount described at
§ 447.54(a)(1) and the nominal
copayment amounts described at
§ 447.54(a)(3). We are also proposing to
add § 447.54(a)(4) to establish a
maximum copayment amount for
services provided by a managed care
organization (MCO).
Section 6041(b)(2) of the DRA
requires the Secretary to increase the
nominal cost sharing amounts under
section 1916 of the Act for each year
(beginning with 2006) by the annual
percentage increase in the medical care
component of the consumer price index
for all urban consumers (U.S. city
average) as rounded up in an
appropriate manner. In accordance with
the statute, we propose to increase the
nominal amounts on the beginning of
the Federal Fiscal Year (FY) (October 1)
in each calendar year by the percentage
increase in the medical care component
of the Consumer Price Index for All
Urban Consumers (CPI–U) for the period
of September to September ending in
the preceding calendar year. We use this
period to update other amounts, such as
the Medicaid spousal impoverishment
standards, by inflation. The first
adjustment would be for FY 2007, and
would be based on the CPI–U increases
during the period September 2004 to
September 2005. The medical care
component of the CPI–U increased by
3.9 percent between September 2004
and September 2005, so we propose to
update the nominal amounts by that
factor and then round to the next higher
10-cent increment. We propose to round
to the next higher 10-cent increment
because it will simplify calculation and
collection of the amounts involved.
Based on this methodology, we propose
a maximum deductible for $2.10 per
month per family for each period of
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9729
Medicaid eligibility. In addition, we
propose the following copayment
maximum amounts:
State payment for the service
$10 or less ................................
$10.01 to $25 ...........................
$25.01 to $50 ...........................
$50.01 or more .........................
Maximum
copayment
$ .60
1.10
2.10
3.20
States should use these updated
nominal amounts during FY 2007.
Thereafter, these amounts will be
updated each October 1 by the
percentage increase in the medical care
component of the CPI–U for the period
of September to September ending in
the preceding year, rounded to the next
higher 10-cent increment.
In addition, we have proposed to
specify a maximum copayment amount
for services provided by an MCO. When
we published the final Medicaid
managed care rules on June 14, 2002 (67
FR 40989), we also issued at § 447.60, a
requirement that contracts with MCOs
limit cost sharing charges an MCO may
impose on Medicaid enrollees to the
amounts that could be imposed if feefor-service payment rates were
applicable. Since some States do not
have fee-for-service programs, we have
proposed to specify maximum
copayment amounts for services
provided by an MCO.
2. Premiums and Cost Sharing: Basis,
Purpose and Scope (§ 447.62)
Section 1916A of the Act allows
States to impose alternative premiums
and cost sharing that are not subject to
the limitations on premiums and cost
sharing under section 1916 of the Act.
Section 1916A of the Act does not affect
the Secretary’s existing waiver authority
with regard to premiums and cost
sharing. Section 447.62 of the
regulations briefly describes this
statutory provision which is the basis
for § 447.64 through § 447.82. Section
447.62 also sets forth limitations on the
scope of these regulations by indicating
that they do not limit the Secretary’s
waiver authority, or affect existing
waivers, concerning premiums or cost
sharing.
Section 405(a)(1) of the TRHCA
amended section 1916A by explicitly
providing certain exemptions from the
provisions, and other protections, for
the population with family incomes at
or below 100 percent of the FPL. The
statute also includes protections for
individuals with family incomes
between 100 and 150 percent of the FPL
and individuals with family incomes
above 150 percent of the FPL.
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3. Premiums, Enrollment Fees, or
Similar Fees: State Plan Requirements
(§ 447.64)
Section 1916A(a)(1) of the Act
requires that the State plan specify the
group or groups of individuals upon
which it will impose alternate
premiums. In accordance with the
statute, at § 447.64(a), we propose that
the State plan describe the group or
groups of individuals that may be
subject to such premiums, enrollment
fees, or similar charges. For example,
States may impose premiums upon all
non-exempt childless adults (with
family incomes over 150 percent of the
FPL). We further propose in § 447.64(b)
that the State plan must include a
schedule of the premiums, enrollment
fees, or similar charges and the process
for informing recipients, applicants,
providers, and the public of the
schedule. States may vary the
premiums, enrollment fees, or similar
charges among the groups of
individuals.
Section 1916A(b)(4) of the Act
requires that the State plan specify the
manner and the period for which the
State determines family income. In
accordance with the statute, at
§ 447.64(c), we propose that the State
plan describe the methodology used to
determine family income, including the
period and periodicity of those
determinations. We also propose in
§ 447.64(d) that the State plan describe
the methodology the State will use to
ensure that the aggregate amount of
premiums and cost sharing imposed for
all individuals in the family does not
exceed 5 percent of family income as
applied during the monthly or quarterly
period specified by the State.
Section 1916A(d)(1) of the Act
requires that the State specify the group
or group of individuals for whom
payment of premiums is a condition of
eligibility. In accordance with the
statute, at § 447.64(e), we propose that
the State plan, list the group or groups
of individuals. We further propose in
§ 447.64(f) that the State plan describe
the premium payment terms for the
group or groups.
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4. General Premium Protections
(§ 447.66)
Under section 1916A(b)(3)(A) of the
Act, the State plan may not impose
premiums upon the following:
• Individuals under 18 years of age
who are required to be provided
medical assistance under section
1902(a)(10)(A)(i) of the Act, and
including individuals with respect to
whom child welfare services are made
available under Part B of title IV on the
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basis of being a child in foster care and
individuals with respect to whom
adoption or foster care assistance is
made available under part E of that title,
without regard to age;
• Pregnant women;
• Any terminally ill individual
receiving hospice care, as defined in
section 1905(o) of the Act;
• Any individual who is an inpatient
in a hospital, nursing facility,
intermediate care facility, or other
medical institution, if the individual is
required, as a condition of receiving
services in that institution under the
State plan, to spend for costs of medical
care all but a minimal amount of the
individual’s income required for
personal needs;
• Women who are receiving Medicaid
on the basis of the breast or cervical
cancer eligibility group under sections
1902(a)(10)(A)(ii)(XVIII) and 1902(aa) of
the Act; and
• Disabled children who are receiving
medical assistance by virtue of the
application of sections
1902(a)(10)(A)(ii)(XIX) and 1902(cc) of
the Act.
In accordance with the statute, at
§ 447.66(a), we propose that the State
exclude these classes of individuals
from the imposition of premiums.
Section 1916A(b)(3)(C) of the Act
clarifies that a State may exempt
additional classes of individuals from
premiums. At proposed § 447.66(b), we
would implement this section.
5. Copayments, Coinsurance,
Deductibles, or Similar Cost Sharing
Charges: State Plan Requirements
(§ 447.68)
Section 1916A(a)(1) of the Act
requires that the State plan specify the
group or groups of individuals upon
which it opts to impose cost sharing. In
accordance with the statute, at
§ 447.68(a), we propose that the State
plan describe the group or groups of
individuals that may be subject to cost
sharing. For example, States may
impose cost sharing for non-exempt
items and services to individuals in the
section 1931 eligibility group with
family incomes between 100 and 200
percent of the FPL. We further propose
that the State plan must include a
schedule of the copayments,
coinsurance, deductibles, or similar cost
sharing charges, the items or services for
which the charges apply, and the
process for informing recipients,
applicants, providers, and the public of
the schedule. States may vary cost
sharing among the types of items and
services.
Section 1916A(b)(4) of the Act
requires that the State plan specify the
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manner and the period for which the
State determines family income. In
accordance with the statute, at
§ 447.68(b), we propose that the State
plan describe the methodology used to
determine family income, including the
period and periodicity of such
determinations.
We also propose that the State plan
describe the methodology the State will
use to ensure that the aggregate amount
of premiums and cost sharing imposed
for all individuals in the family does not
exceed 5 percent of family income as
applied during the monthly or quarterly
period specified by the State. We further
propose that the State plan describe the
State’s methods for tracking cost sharing
charges, informing recipients and
providers of their liability, and notifying
recipients and providers when
individual recipients have reached their
aggregate limit on premiums and cost
sharing. States can use the same
methods that SCHIP programs use to
track cost sharing. For example, States
can program their automated systems to
track and compute recipients’ cost
sharing.
Finally, we propose that the State
plan specify whether the State permits
a provider participating under the State
plan to require payment of authorized
cost sharing as a condition for the
provision of covered care, items, or
services.
6. General Cost Sharing Protections
(§ 447.70)
Under section 1916A(b)(3)(B) of the
Act, the State plan may not impose
alternative cost sharing under 1916A(a)
for the following:
• Services furnished to individuals
under 18 years of age who are required
to be provided Medicaid under section
1902(a)(10)(A)(i) of the Act, and
including services furnished to
individuals with respect to whom child
welfare services are made available
under Part B of title IV on the basis of
being a child in foster care and
individuals with respect to whom
adoption or foster care assistance is
made available under part E of that title,
without regard to age;
• Preventive services (such as well
baby and well child care and
immunizations) provided to children
under 18 years of age regardless of
family income;
• Services furnished to pregnant
women, if those services relate to
pregnancy or to any other medical
condition that may complicate the
pregnancy;
• Services furnished to a terminally
ill individual who is receiving hospice
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Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Proposed Rules
care (as defined in section 1905(o) of the
Act);
• Services furnished to any
individual who is an inpatient in a
hospital, nursing facility, intermediate
care facility for the mentally retarded, or
other medical institution, if the
individual is required, as a condition of
receiving services in that institution
under the State plan, to spend for costs
of medical care all but a minimal
amount of the individual’s income
required for personal needs;
• Emergency services as defined by
the Secretary for the purposes of section
1916(a)(2)(D) of the Act;
• Family planning services and
supplies described in section
1905(a)(4)(C) of the Act;
• Services furnished to women who
are receiving medical assistance by
virtue of the application of sections
1902(a)(10)(A)(ii)(XVIII) and 1902(aa) of
the Act (breast or cervical cancer
provisions); and
• Services furnished to disabled
children who are receiving medical
assistance by virtue of the application of
sections 1902(a)(10)(A)(ii)(XIX) and
1902(cc) of the Act.
In addition, section 1916A(c)(1)(B) of
the Act prohibits the State plan from
imposing otherwise applicable cost
sharing for preferred drugs for
individuals ‘‘for whom cost sharing may
not otherwise be imposed under
subsection (a) due to the application of
1916A(b)(3)(B) of the Act.’’ Therefore, in
accordance with the statute, at
§ 447.70(a)(1)(x), we propose that the
State plan exclude these classes of
individuals from the imposition of cost
sharing for preferred drugs within a
class.
Section 1916A(b)(3)(C) of the Act
clarifies that a State may exempt
additional individuals or services from
cost sharing. At proposed § 447.70(c),
we would implement this section.
Finally, section 1916A(c)(3) of the Act
requires a State to charge cost sharing
applicable to a preferred drug in the
case of a non-preferred drug if the
prescribing physician determines that
the preferred drug would not be as
effective for the individual or would
have adverse effects for the individual
or both. We would implement this
section at proposed § 447.70(b). We
further propose at § 447.70(b) that such
overrides meet State criteria for prior
authorization and be approved through
the State prior authorization process.
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7. Premium and Cost Sharing
Exemptions and Protections for
Individuals With Family Income at or
Below 100 Percent of the FPL (§ 447.71)
Under section 1916A(a)(2)(A) of the
Act, the State plan may not impose
premiums on individuals whose family
income is at or below 100 percent of the
FPL. In accordance with the statute, at
§ 447.71(a) we propose that the State
plan exclude these individuals from the
imposition of premiums.
Under section 1916A(a)(2)(A) of the
Act, the State plan may not impose cost
sharing on individuals whose family
income is at or below 100 percent of the
FPL with the exception of cost sharing
for non-preferred drugs and for nonemergency services furnished in a
hospital emergency department.
However, section 1916A(c)(2)(A)(i) of
the Act prohibits a State from imposing,
with respect to a non-preferred drug,
cost sharing that exceeds the nominal
amount as otherwise determined under
section 1916 of the Act and described at
§ 447.54(a)(3) or (4) for those
individuals. In addition, section
1916A(e)(2)(B) of the Act prohibits a
State from imposing, with respect to
non-emergency services furnished in a
hospital emergency department, cost
sharing that exceeds the nominal
amount as otherwise determined under
section 1916 of the Act and described at
§ 447.54(a)(3) or (4). Furthermore, a
State may only impose nominal cost
sharing with respect to non-emergency
services so long as no cost sharing is
imposed to receive such care through an
outpatient department or other
alternative health care provider in the
geographic area of the hospital
emergency department involved.
In accordance with the statute, we
propose at § 447.71(b)(1) that cost
sharing for non-preferred drugs for those
individuals not exceed the nominal cost
sharing amount. In addition, we propose
at § 447.71(b)(2) that cost sharing for
non-emergency services furnished in a
hospital emergency department for
those individuals not exceed the
nominal cost sharing amount and be
imposed only so long as no cost sharing
is imposed on those individuals to
receive such care through an outpatient
department or other alternative nonemergency services provider in the
geographic area of the hospital
emergency department involved.
Section 1916A(a)(2)(B) of the Act
provides that the total aggregate amount
of cost sharing imposed under sections
1916A(c), 1916A(e), and/or 1916 of the
Act upon individuals whose family
income is at or below 100 percent of the
FPL may not exceed 5 percent of the
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family income of the family involved, as
applied on a quarterly or monthly basis
as specified by the State. In accordance
with the statute, we propose at
§ 447.71(c) that aggregate cost sharing
for individuals whose family income is
at or below 100 percent of the FPL
applicable to a family of the size
involved not exceed the maximum
permitted under § 447.78(b). At
§ 447.78(b), we propose that the total
aggregate amount of cost sharing may
not exceed 5 percent of such family’s
income for the monthly or quarterly
period, as specified in the State plan.
8. Premium and Cost Sharing
Exemptions and Protections for
Individuals Whose Family Income is
Above 100 Percent but Does Not Exceed
150 Percent of the FPL (§ 447.72)
Under section 1916A(b)(1)(A) of the
Act, the State plan may not impose
premiums on individuals whose family
incomes exceeds 100 percent, but does
not exceed 150 percent of the FPL
applicable to a family of the size
involved. In accordance with the
statute, at § 447.72(a), we propose that
the State plan exclude these individuals
from the imposition of premiums.
Section 1916A(b)(1)(B)(i) of the Act
provides that, in the case of individuals
whose family income exceeds 100
percent, but does not exceed 150
percent of the FPL applicable to a family
of the size involved, cost sharing
imposed under the State plan may not
exceed 10 percent of the cost of such
item or service. However, section
1916A(c)(2)(A)(i) of the Act prohibits a
State from imposing, with respect to a
non-preferred drug, cost sharing that
exceeds the nominal amount as
otherwise determined under section
1916 of the Act and described at
§ 447.54(a)(3) for those individuals. In
addition, section 1916A(e)(2)(A) of the
Act prohibits a State from imposing,
with respect to non-emergency services
furnished in a hospital emergency
department, cost sharing that exceeds
twice the nominal amount as otherwise
determined under section 1916 of the
Act and described at § 447.54(a)(3) for
those individuals.
Therefore, in accordance with the
statute, we propose at § 447.72(b) that
cost sharing for those individuals under
the State plan not exceed 10 percent of
the payment the agency makes for that
item or service, with the exception that
it not exceed the nominal cost sharing
amount for non-preferred drugs or twice
the nominal cost sharing amount for
non-emergency services furnished in a
hospital emergency department. In the
case of States that do not have fee-forservice payment rates, we propose that
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any copayment that the State imposes
for services provided by an MCO may
not exceed $5.20 for FY 2007. This
proposal would provide greater
flexibility to State Medicaid programs
consistent with that provided to State
SCHIP programs. Thereafter, any
copayment that the State imposes for
services provided by an MCO may not
exceed this amount as updated each
October 1 by the percentage increase in
the medical care component of the CPI–
U for the period of September to
September ending in the preceding
calendar year and then rounded to the
next highest 10-cent increment.
Section 1916A(b)(1)(B)(ii) of the Act
provides that the total aggregate amount
of cost sharing imposed under section
1916 and 1916A of the Act may not
exceed 5 percent of the family income
of the family involved, as applied on a
quarterly or monthly basis as specified
by the State. In accordance with the
statute, we propose at § 447.72(c) that
aggregate cost sharing for individuals
whose family income exceeds 100
percent, but does not exceed 150
percent of the FPL applicable to a family
of the size involved, not exceed the
maximum permitted under § 447.78(a).
At § 447.78(a), we propose that the total
aggregate amount of cost sharing may
not exceed 5 percent of such family’s
income for the monthly or quarterly
period, as specified in the State plan.
9. Premium and Cost Sharing
Protections for Individuals With Family
Income Above 150 Percent of the FPL
(§ 447.74)
Under section 1916A(b)(2) of the Act,
the State plan may impose premiums
upon individuals whose family income
exceeds 150 percent of the FPL
applicable to a family of the size
involved provided that, as described at
section 1916A(b)(2)(A)of the Act, the
total aggregate amount of premiums and
cost sharing imposed under section
1916 and 1916A of the Act not exceed
5 percent of the family income. In
accordance with the statute, at
§ 447.74(a), we state that the State plan
can impose premiums upon individuals
with family income above 150 percent
of the FPL subject to the aggregate limit
on premiums and cost sharing.
Section 1916A(b)(2)(B) of the Act
provides that, in the case of individuals
whose family income exceeds 150
percent of the FPL applicable to a family
of the size involved, cost sharing
imposed under the State plan may not
exceed 20 percent of the cost of that
item (including a non-preferred drug) or
service. Therefore, in accordance with
the statute, we propose at § 447.74(b)
that cost sharing for those individuals
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under the State plan not exceed 20
percent of the payment the agency
makes for that item or service. In the
case of States that do not have fee-forservice payment rates, we propose that
any copayment that the State imposes
for services provided by an MCO may
not exceed $5.20 for FY 2007. This
proposal would provide greater
flexibility to State Medicaid programs
consistent with that provided to State
SCHIP programs. Thereafter, any
copayment that the State imposes for
services provided by an MCO may not
exceed this amount as updated each
October 1 by the percentage increase in
the medical care component of the CPI–
U for the period of September to
September ending in the preceding
calendar year and then rounded to the
next highest 10-cent increment.
Section 1916A(b)(2)(A) of the Act
provides that the total aggregate amount
of cost sharing imposed under section
1916 and 1916A of the Act may not
exceed 5 percent of the family income
of the family involved, as applied on a
quarterly or monthly basis as specified
by the State. In accordance with the
statute, we propose at § 447.74(c) that
aggregate cost sharing for individuals
whose family income exceeds 150
percent of the FPL applicable to a family
of the size involved, not exceed the
maximum permitted under § 447.78(a).
At § 447.78(a), we propose that the total
aggregate amount of premiums and cost
sharing may not exceed 5 percent of
such family’s income for the monthly or
quarterly period, as specified in the
State plan.
10. Public Schedule (§ 447.76)
As described in this preamble, section
1916 and 1916A of the Act provides
authority for States to impose premiums
and cost sharing for items and services,
including prescription drugs and nonemergency use of a hospital emergency
department, and to require a group or
groups of individuals to make payment
as a condition of eligibility or of
receiving that item or service. In
§ 447.76(a), we propose that State plans
provide for schedules of premiums and
cost sharing. In § 447.76(a), we propose
that the public schedule contain the
following information: (1) Current
premiums, enrollment fees, or similar
fees; (2) current cost sharing charges; (3)
the aggregate limits on premiums and
cost sharing or only cost sharing; (4)
mechanisms for making payments for
required premiums and charges; (5) the
consequences for an applicant or
recipient who does not pay a premium
or charge; and (6) a list of hospitals
charging alternative cost sharing for
non-emergency use of the emergency
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department. In addition, at § 447.76(b)
we propose that the State make the
public schedule available to recipients,
at the time of enrollment and
reenrollment and when charges are
revised, applicants, all participating
providers, and the general public.
11. Aggregate Limits on Premiums and
Cost Sharing (§ 447.78)
As described above, section
1916A(b)(1)(B)(ii) of the Act provides
that the total aggregate amount of cost
sharing imposed under section 1916 and
1916A of the Act upon individuals with
family income above 100 percent but at
or below 150 percent of the FPL may not
exceed 5 percent of the family income,
as applied on a quarterly or monthly
basis as specified by the State. Section
1916A(c)(2)(C) of the Act reiterates that
this aggregate limit includes cost
sharing for prescription drugs and
section 1916A(e)(2)(C) of the Act
reiterates that this aggregate limit
includes cost sharing for non-emergency
use of a hospital emergency department.
Section 1916A(b)(2)(A) of the Act
provides that the total aggregate amount
of premiums and cost sharing imposed
under section 1916 and 1916A of the
Act upon individuals with family
income above 150 percent of the FPL
may not exceed 5 percent of the family
income, as applied on a quarterly or
monthly basis as specified by the State.
Again, section 1916A(c)(2)(C) of the Act
reiterates that this aggregate limit
includes cost sharing for prescription
drugs, and section 1916A(e)(2)(C) of the
Act reiterates that this aggregate limit
includes cost sharing for non-emergency
use of a hospital emergency department.
Finally, section 1916A(a)(2)(B) of the
Act provides that to the extent that cost
sharing under section 1916A(c) of the
Act for prescription drugs, cost sharing
under section 1916A(e) of the Act for
non-emergency use of a hospital
emergency department, and/or cost
sharing under section 1916 of the Act is
imposed upon individuals whose family
income is at or below 100 percent of the
FPL, the total aggregate amount of
premiums and cost sharing imposed
may not exceed 5 percent of the family
income.
In accordance with these provisions,
at § 447.78(a), we propose that for
individuals with family income above
100 percent of the FPL the aggregate
amount of premiums (when applicable)
and cost sharing under section 1916 and
1916A of the Act not exceed 5 percent
of a family’s income for the monthly or
quarterly period, as specified by the
State in the State plan. At § 447.78(b),
we propose that for individuals whose
family income is at or below 100
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percent of the FPL the aggregate amount
of cost sharing under sections 1916,
1916A(c), and/or 1916A(e) of the Act
not exceed 5 percent of a family’s
income for the monthly or quarterly
period, as specified by the State in the
State plan. We also propose at
§ 447.78(c) that family income shall be
determined in a manner and for that
period as specified by the State in the
State plan. We clarify that States may
use gross income to compute family
income and that they may use a
different methodology for computing
family income for purposes of
determining the aggregate limits than for
determining income eligibility.
12. Enforceability of Premiums and Cost
Sharing (§ 447.80)
Section 1916A(d)(1) of the Act
permits a State to condition Medicaid
eligibility upon the prepayment of
premiums imposed under section
1916A of the Act or to terminate
Medicaid eligibility for the failure to
pay such a premium for 60 days or
more. The statute provides States
flexibility to implement these
requirements for some or all groups of
individuals as specified in the State
plan. The statute also provides
flexibility to waive payment of any
premium in any case where the State
determines that requiring that payment
would create undue hardship.
In accordance with the statute, we
propose at § 447.80(a) to permit a State
to condition eligibility for a group or
group of individuals upon prepayment
of premiums, to terminate the eligibility
of an individual from a group or groups
of individuals for failure to pay for 60
days or more, and to waive payment in
any case where requiring the payment
would create undue hardship.
Section 1916A(d)(2) of the Act
permits a State to allow a provider to
require that an individual, as a
condition of receiving an item or
service, pay the cost sharing charge
imposed under section 1916A of the
Act. The provider is not prohibited by
this authority from choosing to reduce
or waive cost sharing on a case-by-case
basis. However, section 1916A(a)(2)(A)
specifies that section 1916A(d)(2) shall
not apply in the case of an individual
whose family income does not exceed
100 percent of the FPL applicable to a
family of the size involved.
In accordance with the statute, at
§ 447.80(b) we propose that a State
permit a provider, including a
pharmacy, to require an individual to
pay cost sharing imposed under section
1916A of the Act as a condition of
receiving an item or service. However,
at § 447.80(b)(1) we specify that a
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provider, including a pharmacy or
hospital, may not require an individual
whose family income is at or below 100
percent of the FPL to pay the cost
sharing charge as a condition of
receiving the item or service. In
addition, at § 447.80(b)(2) we propose
that a hospital that has determined after
an appropriate medical screening under
section 1867 of the Act that an
individual does not have an emergency
medical condition must first provide the
name and location of an available and
accessible alternate non-emergency
services provider, the fact that the
alternate provider can provide the
services without the imposition of that
cost sharing, and a referral to coordinate
scheduling of treatment before it can
require payment of the cost sharing.
Finally, at § 447.80(b)(3) we propose
that a provider may reduce or waive
cost sharing imposed under section
1916A of the Act on a case-by-case
basis.
13. Restrictions on Payments to
Providers (§ 447.82)
Proposed § 447.82 requires States to
reduce the amount of State payments to
providers by the amount of recipients’
cost sharing obligations under section
1916A of the Act. However, States have
the ability to increase total State plan
rates to providers to maintain the same
level of State payment when cost
sharing is introduced.
C. SCHIP Regulations
1. Maximum Allowable Cost Sharing
Charges on Targeted Low-Income
Children in Families With Incomes
From 101 to 150 Percent of the FPL
(§ 457.555)
We are revising § 457.555 to update
the existing ‘‘nominal’’ SCHIP cost
sharing amounts, specifically the
copayment amounts described at
§ 457.555(a)(1) and (2), (c), and (d) and
the deductible amount described at
§ 447.555(a)(4). Section 6041(b)(2) of the
DRA requires the Secretary to increase
the nominal Medicaid cost sharing
amounts under section 1916 of the Act
for each year (beginning with 2006) by
the annual percentage increase in the
medical care component of the
consumer price index for all urban
consumers (U.S. city average) as
rounded up in an appropriate manner.
While section 6041(b)(2) of the DRA
does not require the Secretary to
increase the SCHIP nominal cost sharing
amounts, we believe that our proposal is
consistent with sections
2103(e)(3)(A)(ii) and 2103(e)(1)(B) of the
SCHIP statute. Section 2103(e)(3)(A)(ii)
of the Act specifies that a State SCHIP
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plan may not impose a deductible, cost
sharing, or similar charge that exceeds
an amount that is nominal as
determined consistent with Medicaid
regulations at § 447.54, with an
appropriate adjustment for inflation or
other reasons as the Secretary
determines to be reasonable. Section
2103(e)(1)(B) of the Act prohibits a State
SCHIP plan from imposing cost sharing
that favors children from families with
higher income over children from
families with lower income. By
updating the existing SCHIP nominal
cost sharing amounts by the annual
percentage increase in the medical care
component of the CPI–U by the period
of September to September ending in
the preceding calendar year, we would
retain nominal cost sharing amounts
that reflect a SCHIP recipient’s ability to
pay higher cost sharing. The medical
care component of the CPI–U increased
by 3.9 percent between September 2004
and September 2005, so we propose to
update the nominal amounts by that
factor and then round to the next higher
10-cent increment. We propose to round
to the next higher 10-cent increment
because it will simplify calculation and
collection of the amounts involved.
Based on this methodology, we propose
the following copayment maximum
amounts:
Total cost of services
$15.00
$15.01
$40.01
$80.01
Maximum amount
or less ...............
to $40 ...............
to $80 ...............
or more .............
$1.10
2.10
3.20
5.20
We also propose that the copayments
for services provided by an MCO and for
emergency services provided by an
institution not exceed $5.20 per visit
and that the copayment for nonemergency services furnished in a
hospital emergency room to targeted
low-income children with family
income from 101 to 150 percent of the
FPL not exceed $10.40. Finally, we
propose that a deductible not exceed
$3.20 per family per month.
States should use these updated
nominal amounts during FY 2007.
Thereafter, we will update these
amounts each October 1 by the
percentage increase in the medical care
component of the CPI–U for the period
of September to September ending in
the preceding calendar year and then
rounding to the next higher 10-cent
increment.
III. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 60-
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day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we
solicit comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
We are soliciting public comment on
each of these issues for the following
sections of this document that contain
information collection requirements:
Section 447.64 Premiums, Enrollment
Fees, or Similar Fees: State Plan
Requirements
Section 447.64 requires a State
imposing premiums, enrollment fees, or
similar fees on individuals to describe
in the State plan:
(a) The group or groups of individuals
that may be subject to the premiums,
enrollment fees, or similar charges.
(b) The schedule of the premiums,
enrollment fees, or similar fees imposed.
(c) The methodology used to
determine family income for purposes
of the limitations related to family
income level that are described below,
including the period and periodicity of
those determinations.
(d) The methodology used to ensure
compliance with the requirements of
§ 447.78 that the aggregate amount of
premiums and cost sharing imposed for
all individuals in the family does not
exceed 5 percent of the family income
of the family involved.
(e) The process for informing the
recipients, applicants, providers, and
the public of the schedule of premiums,
enrollment fees, or similar fees for a
group or groups of individuals in
accordance with § 447.76.
(f) The notice of, timeframe for, and
manner of required premium payments
for a group or groups of individuals and
the consequences for an individual who
does not pay.
The burden associated with this
requirement is the time and effort it
would take for a State to include this
detailed description in the State plan.
We estimate it would take one State
approximately 20 minutes to
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incorporate this information in their
plan. We believe 56 States will be
affected by this requirement for a total
annual burden of 18.67 hours.
Section 447.68 Copayments,
Coinsurance, Deductibles, or Similar
Cost Sharing Charges: State Plan
Requirements
Section 447.68 requires a State
imposing copayments, coinsurance,
deductibles, or similar cost sharing
charges on individuals to describe in the
State plan:
(a) The group or groups of individuals
that may be subject to the cost sharing
charge.
(b) The methodology used to
determine family income, for purposes
of the limitations on cost sharing related
to family income that are described
below, including the period and
periodicity of those determinations.
(c) The item or service for which the
charge is imposed.
(d) The methods, such as the use of
integrated automated systems, for
tracking cost sharing charges, informing
recipients and providers of their
liability, and notifying recipients and
providers when individual recipients
have paid the maximum cost sharing
charges permitted for the period of time.
(e) The process for informing
recipients, applicants, providers, and
the public of the schedule of cost
sharing charges for specific items and
services for a group or groups of
individuals in accordance with § 447.76.
(f) The methodology used to ensure
that:
(1) The aggregate amount of premiums
and cost sharing imposed for all
individuals with family income above
100 percent of the FPL does not exceed
5 percent of the family income of the
family involved.
(2) The aggregate amount of cost
sharing under sections 1916, 1916A(c),
and/or 1916A(e) of the Act for
individuals with family income at or
below 100 percent of the FPL does not
exceed 5 percent of the family income
of the family involved.
(g) The notice of, timeframe for, and
manner of required cost sharing and the
consequences for failure to pay.
The burden associated with this
requirement is the time and effort it
would take for a State to include this
detailed description in the State plan.
We estimate it would take one State
approximately 20 minutes to
incorporate this information in their
plan. We believe 56 States will be
affected by this requirement for a total
annual burden of 18.67 hours.
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Section 447.76
Public Schedule
Section 447.76(a) requires States to
make available to the groups in
paragraph (b) of this section a public
schedule that contains the following
information:
(1) Current premiums, enrollment
fees, or similar fees.
(2) Current cost sharing charges.
(3) The aggregate limit on premiums
and cost sharing.
(4) Mechanisms for making payments
for required premiums and charges.
(5) The consequences for an applicant
or recipient who does not pay a
premium or charge.
(6) A list of hospitals charging
alternative cost sharing for nonemergency use of the emergency
department.
The burden associated with this
requirement is the time and effort it
would take the State to prepare and
make available to appropriate parties a
public schedule. We estimate that it
would take 20 minutes per State. We
believe 56 States will be affected by this
requirement for an annual burden of
18.67 hours.
Section 447.80 Enforceability of
Premiums and Cost Sharing
Section 447.80(b)(1) states that a
hospital that has determined after an
appropriate medical screening pursuant
to section 489.24, that an individual
does not have an emergency medical
condition before imposing cost sharing
on an individual must provide the name
and location of an available and
accessible alternate non-emergency
services provider as defined in section
1916A(e)(4)(B) of the Act, the fact that
the alternate provider can provide the
services with the imposition of a lesser
cost sharing amount or no cost sharing,
and a referral to coordinate scheduling
of treatment by this provider before
requiring payment of cost sharing.
The burden associated with this
requirement is the time and effort it
would take for a hospital to provide the
name and location of an alternate
provider who can provide services of a
lesser cost sharing amount or no cost
sharing and a referral. We estimate the
burden on a hospital to be 30 minutes.
We believe the number of hospital visits
will be 4 million; therefore, the total
annual burden is 2 million hours.
We have submitted a copy of this
proposed rule to OMB for its review of
the information collection requirements
described above. These requirements are
not effective until they have been
approved by OMB.
If you comment on these information
collection and recordkeeping
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requirements, please mail copies
directly to the following:
Centers for Medicare & Medicaid
Services, Office of Strategic
Operations and Regulatory Affairs,
Division of Regulations Development,
Attn: Melissa Musotto, [CMS–2244–
P], Room C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–
1850; and
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10235, New Executive
Office Building, Washington, DC
20503,
Attn: Katherine Astrich, CMS Desk
Officer, CMS–2244–P,
katherine_astrich@omb.eop.gov. Fax
(202) 395–6974.
Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this
rule as required by Executive Order
12866 (September 1993, Regulatory
Planning and Review), the Regulatory
Flexibility Act (RFA) (September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Social Security Act, the Unfunded
Mandates Reform Act of 1995 (Pub. L.
104–4), and Executive Order 13132.
Executive Order 12866 (as amended
by Executive Order 13258, which
merely reassigns responsibility of
duties) directs agencies to assess all
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). A regulatory impact analysis
(RIA) must be prepared for major rules
with economically significant effects
($100 million or more in any 1 year).
This rule reaches the economic
threshold and thus is considered a
major rule.
The RFA requires agencies to analyze
options for regulatory relief of small
businesses. For purposes of the RFA,
small entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of $6.5 million to $31.5 million in any
1 year. Individuals and States are not
included in the definition of a small
entity. We have determined, and the
Secretary certifies, that this rule would
not have a significant economic impact
on a substantial number of small
entities.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 603 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a Core-Based Statistical Area and has
fewer than 100 beds. We have
determined, and the Secretary certifies,
that this rule would not have a
significant impact on the operations of
a substantial number of small rural
hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (Pub. L.
104–4) also requires that agencies assess
anticipated costs and benefits before
issuing any rule that may result in
expenditures in any 1 year by State,
local, or tribal governments, in the
aggregate, or by the private sector, of
$100 million, updated annually for
inflation. That threshold level is
currently approximately $127 million.
We have determined that this rule
would require new spending in excess
of the threshold. Table 2 outlines the
total increase to Medicaid enrollees cost
sharing as a result of all the provisions
of the DRA. This includes an estimated
cost increase to Medicaid recipients of
$105 million in 2007, $155 million in
2008, $255 million in 2009, $375
million in 2010, and $455 million in
2011.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on State and local
governments, preempts State law, or
otherwise has Federalism implications.
We have determined that this rule
would not impose substantial direct
requirement costs on State and local
governments.
B. Anticipated Effects
The following chart summarizes our
estimate of the anticipated effects of this
rule.
TABLE 1.—ESTIMATED SAVINGS OF THE COST SHARING PROVISIONS OF THE DEFICIT REDUCTION ACT (DRA) OF 2005
[Savings in millions of dollars]
2007
2008
2009
2010
2011
Federal Share
Sec. 6041 Optional alternative premiums/cost sharing ................................................................
Sec. 6042 Cost sharing for prescription drugs .............................................................................
Sec. 6043(a) Copays for non-emergency care in ER ...................................................................
65
40
5
85
65
10
135
120
15
190
185
20
220
240
25
145
140
15
165
180
20
State Share
Sec. 6041 Optional alternative premiums/cost sharing ................................................................
Sec. 6042 Cost sharing for prescription drugs .............................................................................
Sec. 6043(a) Copays for non-emergency care in ER ...................................................................
50
30
5
65
50
5
105
90
10
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TABLE 2.—MEDICAID ENROLLEES COST SHARING IMPACT AS A RESULT OF THE PROVISIONS OF THE DEFICIT REDUCTION
ACT (DRA) OF 2005
[Costs in millions of dollars]
2007
2008
2009
2010
2011
Medicaid Enrollee Share
Total increase in Medicaid enrollee/cost sharing for all provisions .................................................
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105
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255
375
455
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These estimates are based on data
regarding copayments in the Medicaid
program derived from a 2004 Kaiser
Family Foundation survey, and data on
premiums from a 2004 report by the
U.S. Government Accountability Office.
In addition, we have used enrollment
data from the Medicaid Statistical
Information System and utilization data
from the 2002 Medicaid Expenditure
Panel Survey conducted by the Agency
for Healthcare Research and Quality.
We assume that only States that
currently charge copayments and/or
premiums for some groups will take
advantage of the option to expand the
use of premiums and copayments under
the DRA provisions. States now
charging copayments are assumed to
increase them on average to 75 percent
of maximum possible levels by 2011,
and states currently charging premiums
are assumed to add premiums
requirements for some groups not
currently allowed, also reaching 75
percent of the maximum possible by
2011.
In addition to direct savings from
increased cost sharing, we assume there
would be declines in utilization as some
enrollees subject to new cost sharing
requirements choose to decrease their
use of services. The decline is assumed
to create additional savings of 75
percent of direct savings for physician
and outpatient hospital services, 100
percent for drugs, and 125 percent for
dental services. These additional
savings are assumed to be reduced
somewhat as a result of some providers
failing to collect copayments. Savings
are split between Federal and State
governments using an average matching
rate of 57 percent.
Table 2 illustrates that the estimated
impact for Medicaid enrollees as a result
of all of the cost-sharing provisions of
the DRA are $105 million for 2007, $155
million for 2008, $255 million for 2009,
$375 million for 2010, and $455 million
for 2011. Although, these estimates
reflect an increase of costs to
beneficiaries, we do not believe this will
pose a barrier to accessing health care.
The law provides that States can impose
alternative cost sharing. We believe
through the use of alternative cost
sharing, States will help recipients
become more educated and efficient
health care consumers. We do, however,
solicit comments on these assumptions.
C. Alternatives Considered
This rule is necessary to implement
section 1916A of the Social Security
Act, which was established by the
Deficit Reduction Act of 2005 (DRA)
and amended by the Tax Relief and
Health Care Act of 2006 (TRHCA).
D. Accounting Statement and Table
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/omb/circulars/
a004/a-4.pdf), in the table below, we
have prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of this proposed rule. This
table provides our best estimate of the
decrease in Medicaid payment as a
result of the changes presented in this
proposed rule. All savings are classified
as transfers to the Federal Government.
TABLE.—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM FY 2007 TO FY 2011
[In millions]
Category
Transfers
Annualized Monetized Transfers ......................................................
3% Units Discount Rate $278.2
From Whom To Whom? ...................................................................
Beneficiaries to Federal Government
Category
7% Units Discount Rate $270.7
Transfers
Year ..................................................................................................
2007
Annualized Monetized Transfers ......................................................
From Whom To Whom? ...................................................................
2008
$110
2009
$160
$270
$395
2011
$485
Beneficiaries to Federal Government
Category
Transfers
Annualized Monetized Transfers ......................................................
3% Units Discount Rate $210.6
From Whom To Whom? ...................................................................
Beneficiaries to Federal Government
Category
2007
Annualized Monetized Transfers ......................................................
From Whom To Whom? ...................................................................
E. Conclusion
We expect that this rule would
promote the modernization of the
Medicaid program. The proposed rule
would provide a new option to States to
create programs that are aligned with
today’s Medicaid populations and the
health care environment. Through
alternative cost sharing, States would
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7% Units Discount Rate $205.0
Transfers
Year ..................................................................................................
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2010
2008
$85
$120
Frm 00028
$205
2010
$300
2011
$365
Beneficiaries to Federal Government
help recipients become more educated
and efficient health care consumers.
Thus, this rule would help ensure the
sustainability of the Medicaid program
over time.
In accordance with the provisions of
Executive Order 12866, this regulation
was reviewed by the Office of
Management and Budget.
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List of Subjects
42 CFR Part 447
Accounting, Administrative practice
and procedure, Drugs, Grant programs—
Health, Health facilities, Health
professions, Medicaid, Reporting and
recordkeeping requirements, Rural
areas.
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42 CFR Part 457
Administrative practice and
procedure, Grant programs—Health,
Health insurance, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services propose to amend 42
CFR chapter IV as set forth below:
PART 447—PAYMENTS FOR
SERVICES
1. The authority citation for part 447
continues to read as follows:
Authority: Sec. 1102 of the Social Security
Act (42 U.S.C. 1302).
2. Section 447.54 is amended by—
a. Republishing the introductory text
to paragraph (a).
b. Revising paragraphs (a)(1) and
(a)(3).
c. Adding new paragraph (a)(4).
The republication, revisions, and
additions read as follows:
§ 447.54 Maximum allowable and nominal
charges.
(a) Non-institutional services. Except
as specified in paragraph (b) of this
section, for non-institutional services,
the plan must provide that the following
requirements are met:
(1) For Federal Fiscal Year 2007, any
deductible it imposes does not exceed
$2.10 per month per family for each
period of Medicaid eligibility. For
example, if Medicaid eligibility is
certified for a 3-month period, the
maximum deductible which may be
imposed on a family for the period of
eligibility is $6.30. Thereafter, any
deductible should not exceed these
amounts as updated each October 1 by
the percentage increase in the medical
care component of the CPI-U for the
period of September to September
ending in the preceding calendar year,
and then rounded to the next higher 10cent increment.
*
*
*
*
*
(3)(i) For Federal Fiscal Year 2007,
any copayments it imposes under a feefor-service delivery system do not
exceed the amounts shown in the
following table:
mstockstill on PROD1PC66 with PROPOSALS
State payment
Maximum
copayment
$10 or less ................................
$10.01 to $25 ...........................
$25.01 to $50 ...........................
$50.01 or more .........................
$.60
1.10
2.10
3.20
(ii) Thereafter, any copayments
should not exceed these amounts as
updated each October 1 by the
percentage increase in the medical care
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component of the CPI-U for the period
of September to September ending in
the preceding calendar year and then
rounded to the next higher 10-cent
increment.
(4) For Federal Fiscal Year 2007, any
copayment it imposes for services
provided by an MCO may not exceed
$5.20 per visit. Thereafter, any
copayment should not exceed these
amounts as updated each October 1 by
the percentage increase in the medical
care component of the CPI-U for the
period of September to September
ending in the preceding calendar year
and then rounded to the next higher 10cent increment.
*
*
*
*
*
3. Section 447.55 is amended by
revising paragraph (b) to read as follows:
§ 447.55
Standard copayment.
*
*
*
*
*
(b) This standard copayment amount
for any service may be determined by
applying the maximum copayment
amounts specified in § 447.54(a) and (b)
to the agency’s average or typical
payment for that service. For example,
if the agency’s typical payment for
prescribed drugs is $4 to $5 per
prescription, the agency might set a
standard copayment of $.60 per
prescription. This standard copayment
may be adjusted based on updated
copayments as permitted under
§ 447.54(a)(3).
4. New §§ 447.62, 447.64, 447.66,
447.68, 447.70, 447.71, 447.72, 447.74,
447.76, 447.78, 447.80, and § 447.82,
and a new undesignated center heading
are added to read as follows:
ALTERNATIVE PREMIUMS AND
COST SHARING UNDER SECTION
1916A
§ 447.62 Alternative premiums and cost
sharing: Basis, purpose and scope.
(a) Section 1916A of the Act sets forth
options for alternative premiums and
cost sharing, which are premiums and
cost sharing that are not subject to the
limitations under section 1916 of the
Act as described in § 447.51 through
§ 447.56. For States that impose
alternative premiums, § 447.64 through
§ 447.66, § 447.72, § 447.74, § 447.78,
and § 447.80 prescribe State plan
requirements and options for alternative
premiums and the standards and
conditions under which States may
impose them. For States that impose
alternative cost sharing, § 447.68
through § 447.72, § 447.74, § 447.78, and
§ 447.80 prescribe State plan
requirements and options for alternative
cost sharing and the standards and
conditions under which States may
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9737
impose alternative cost sharing. For
other individuals, premiums and cost
sharing must comply with the
requirements described in § 447.50
through § 447.60.
(b) Neither section 1916A of the Act
nor the regulations referenced in
paragraph (a) of this section affect the
following:
(1) The Secretary’s authority to waive
limitations on premiums and cost
sharing under this subpart.
(2) Existing waivers with regard to the
imposition of premiums and cost
sharing.
§ 447.64 Alternative premiums, enrollment
fees, or similar fees: State plan
requirements.
When a State imposes alternative
premiums, enrollment fees, or similar
fees on individuals, the State plan must
describe the following:
(a) The group or groups of individuals
that may be subject to the premiums,
enrollment fees, or similar charges.
(b) The schedule of the premiums,
enrollment fees, or similar fees imposed.
(c) The methodology used to
determine family income for purposes
of the limitations related to family
income level that are described below,
including the period and periodicity of
those determinations.
(d) The methodology used to ensure
compliance with the requirements of
§ 447.78 that the aggregate amount of
premiums and cost sharing imposed for
all individuals in the family do not
exceed 5 percent of the family income
of the family involved.
(e) The process for informing the
recipients, applicants, providers, and
the public of the schedule of premiums,
enrollment fees, or similar fees for a
group or groups of individuals in
accordance with § 447.76.
(f) The notice of, time frame for, and
manner of required premium payments
for a group or groups of individuals and
the consequences for an individual who
does not pay.
§ 447.66 General alternative premium
protections.
(a) States may not impose alternative
premiums upon the following
individuals:
(1) Individuals under 18 years of age
that are required to be provided medical
assistance under section
1902(a)(10)(A)(i) of the Act, and
including individuals with respect to
whom child welfare services are made
available under Part B of title IV on the
basis of being a child in foster care and
individuals with respect to whom
adoption or foster care assistance is
made available under Part E of that title,
without regard to age.
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(2) Pregnant women.
(3) Any terminally ill individual
receiving hospice care, as defined in
section 1905(o) of the Act.
(4) Any individual who is an
inpatient in a hospital, nursing facility,
intermediate care facility, or other
medical institution, if the individual is
required, as a condition of receiving
services in that institution under the
State plan, to spend for costs of medical
care all but a minimal amount of the
individual’s income required for
personal needs.
(5) Women who are receiving
Medicaid on the basis of the breast or
cervical cancer eligibility group under
sections 1902(a)(10)(A)(ii)(XVIII) and
1902(aa) of the Act.
(6) Disabled children who are
receiving medical assistance by virtue of
the application of sections
1902(a)(10)(A)(ii)(XIX) and 1902(cc) of
the Act.
(b) States may exempt additional
classes of individuals from premiums.
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§ 447.68 Alternative copayments,
coinsurance, deductibles, or similar cost
sharing charges: State plan r equirements.
When a State imposes alternative
copayments, coinsurance, deductibles,
or similar cost sharing charges on
individuals, the State plan must
describe the following:
(a) The group or groups of individuals
that may be subject to the cost sharing
charge.
(b) The methodology used to
determine family income, for purposes
of the limitations on cost sharing related
to family income that are described
below, including the period and
periodicity of those determinations.
(c) The item or service for which the
charge is imposed.
(d) The methods, such as the use of
integrated automated systems, for
tracking cost sharing charges, informing
recipients and providers of their
liability, and notifying recipients and
providers when individual recipients
have paid the maximum cost sharing
charges permitted for the period of time.
(e) The process for informing
recipients, applicants, providers, and
the public of the schedule of cost
sharing charges for specific items and
services for a group or groups of
individuals in accordance with § 447.76.
(f) The methodology used to ensure
that:
(1) The aggregate amount of premiums
and cost sharing imposed for all
individuals with family income above
100 percent of the FPL does not exceed
5 percent of the family income of the
family involved.
(2) The aggregate amount of cost
sharing under sections 1916, 1916A(c),
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and/or 1916A(e) of the Act for
individuals with family income at or
below 100 percent of the FPL does not
exceed 5 percent of the family income
of the family involved.
(g) The notice of, time frame for, and
manner of required cost sharing and the
consequences for failure to pay.
§ 447.70 General alternative cost sharing
protections.
(a)(1) States may not impose
alternative cost sharing for the following
items/services. Except as indicated,
these limits do not apply to alternative
cost sharing for non-preferred
prescription drugs within a class of such
drugs or non-emergency use of the
emergency room.
(i) Services furnished to individuals
under 18 years of age who are required
to be provided Medicaid under section
1902(a)(10)(A)(i) of the Act, and
including services furnished to
individuals with respect to whom child
welfare services are made available
under Part B of title IV on the basis of
being a child in foster care and
individuals with respect to whom
adoption or foster care assistance is
made available under Part E of that title,
without regard to age.
(ii) Preventive services (such as well
baby and well child care and
immunizations) provided to children
under 18 years of age regardless of
family income.
(iii) Services furnished to pregnant
women, if those services relate to
pregnancy or to any other medical
condition which may complicate the
pregnancy.
(iv) Services furnished to a terminally
ill individual who is receiving hospice
care (as defined in section 1905(o) of the
Act).
(v) Services furnished to any
individual who is an inpatient in a
hospital, nursing facility, intermediate
care facility for the mentally retarded, or
other medical institution, if the
individual is required, as a condition of
receiving services in that institution
under the State plan, to spend for costs
of medical care all but a minimal
amount of the individual’s income
required for personal needs.
(vi) Emergency services as defined at
§ 447.53(b)(4), except charges for
services furnished after the hospital has
determined, based on the screening and
any other services required under
§ 489.24 of this chapter, that the
individual does not have an emergency
medical condition consistent with the
requirements of paragraph (a)(2) of this
section and § 447.80(b)(1).
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(vii) Family planning services and
supplies described in section
1905(a)(4)(C) of the Act.
(viii) Services furnished to women
who are receiving medical assistance by
virtue of the application of sections
1902(a)(10)(A)(ii)(XVIII) and 1902(aa) of
the Act (breast or cervical cancer
provisions).
(ix) Services furnished to disabled
children who are receiving medical
assistance by virtue of the application of
sections 1902(a)(10)(A)(ii)(XIX) and
1902(cc) of the Act.
(x) Preferred drugs within a class for
individuals for whom cost sharing may
not otherwise be imposed as described
in paragraphs (a)(1)(i) through (a)(1)(ix)
of this section.
(2) A State may impose nominal cost
sharing as defined in § 447.54 for
services furnished in a hospital
emergency department, other than those
required under § 489.24 of this chapter,
if the hospital has determined based on
the screening required under § 489.24
that the individual does not have an
emergency medical condition, the
requirements of § 447.80(b)(1) are met,
and no cost sharing is imposed to
receive the care through an outpatient
department or another alternative health
care provider in the geographic area of
the hospital emergency department
involved.
(b) In the case of a drug that is a
preferred drug within a class, cost
sharing may not exceed the levels
permitted under section 1916 of the Act.
Cost sharing can be imposed that
exceeds section 1916 levels only for
drugs that are not preferred drugs
within a class in accordance with
section 1916A(c).
(c) In the case of a drug that is not a
preferred drug, the cost sharing is
limited to the amount imposed for a
preferred drug if the following
conditions are met:
(1) The prescribing physician
determines that the preferred drug
would be less effective or would have
adverse effects for the individual or
both.
(2) State criteria for prior
authorization, if any, are met.
(d) States may exempt additional
individuals, items, or services from cost
sharing.
§ 447.71 Alternative premium and cost
sharing exemptions and protections for
individuals with family incomes at or below
100 percent of the FPL.
(a) The State may not impose
premiums under the State plan on
individuals whose family income is at
or below 100 percent of the FPL.
(b) The State may not impose cost
sharing under the State plan on
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individuals whose family income is at
or below 100 percent of the FPL, with
the following exceptions:
(1) The State may impose cost sharing
for non-preferred drugs that does not
exceed the nominal amount as defined
in § 447.54.
(2) The State may impose cost sharing
for non-emergency services furnished in
a hospital emergency department that
does not exceed the nominal amount as
defined in § 447.54 so long as no cost
sharing is imposed to receive such care
through an outpatient department or
other alternative non-emergency
services provider in the geographic area
of the hospital emergency department
involved.
(c) Aggregate cost sharing of the
family under sections 1916, 1916A(c),
and/or 1916A(e) may not exceed the
maximum permitted under § 447.78(b).
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§ 447.72 Alternative premium and cost
sharing exemptions and protections for
individuals with family incomes above 100
percent but at or below 150 percent of the
FPL.
(a) The State may not impose
premiums under the State plan on
individuals whose family income
exceeds 100 percent, but does not
exceed 150 percent, of the FPL.
(b) Cost sharing may not exceed 10
percent of the payment the agency
makes for the item or service, with the
following exceptions:
(1) Cost sharing for non-preferred
drugs cannot exceed the nominal
amount as defined in § 447.54.
(2) Cost sharing for non-emergency
services furnished in the hospital
emergency department cannot exceed
twice the nominal amount as defined in
§ 447.54. A hospital must meet the
requirements described at § 447.80
before the cost sharing can be imposed.
(3) In the case of States that do not
have fee-for-service payment rates, any
copayment that the State imposes for
services provided by an MCO may not
exceed $5.20 for Federal Fiscal Year
2007. Thereafter, any copayment may
not exceed this amount as updated each
October 1 by the percentage increase in
the medical care component of the CPI–
U for the period of September to
September ending in the preceding
calendar year and then rounded to the
next highest 10-cent increment.
(c) Aggregate cost sharing of the
family may not exceed the maximum
permitted under § 447.78(a).
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Jkt 214001
§ 447.74 Alternative premium and cost
sharing protections for individuals with
family incomes above 150 percent of the
FPL.
(a) States may impose premiums
consistent with the aggregate limits set
forth in § 447.78(a).
(b) Cost sharing may not exceed 20
percent of the payment the agency
makes for the item (including a nonpreferred drug) or service, with the
following exception: In the case of
States that do not have fee-for-service
payment rates, any copayment that the
State imposes for services provided by
an MCO may not exceed $5.20 for
Federal Fiscal Year 2007. Thereafter,
any copayment may not exceed this
amount as updated each October 1 by
the percentage increase in the medical
care component of the CPI–U for the
period of September to September
ending in the preceding calendar year
and then rounded to the next highest
10-cent increment.
(c) Aggregate premiums and cost
sharing of the family may not exceed the
maximum permitted under § 447.78(a).
§ 447.76
Public schedule.
(a) The State must make available to
the groups in paragraph (b) of this
section a public schedule that contains
the following information:
(1) Current premiums, enrollment
fees, or similar fees.
(2) Current cost sharing charges.
(3) The aggregate limit on premiums
and cost sharing or just cost sharing.
(4) Mechanisms for making payments
for required premiums and charges.
(5) The consequences for an applicant
or recipient who does not pay a
premium or charge.
(6) A list of hospitals charging
alternative cost sharing for nonemergency use of the emergency
department.
(b) The State must make the public
schedule available to the following:
(1) Recipients, at the time of their
enrollment and reenrollment after a
redetermination of eligibility, and when
premiums, cost sharing charges, and the
aggregate limits are revised.
(2) Applicants, at the time of
application.
(3) All participating providers.
(4) The general public.
§ 447.78 Aggregate limits on alternative
premiums and cost sharing.
(a) If a State imposes alternative
premiums or cost sharing, the total
aggregate amount of premiums and cost
sharing under section 1916, 1916A(c) or
1916A(e) for individuals with family
income above 100 percent of the FPL
may not exceed 5 percent of the family’s
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Sfmt 4702
9739
income for the monthly or quarterly
period, as specified by the State in the
State plan
(b) The total aggregate amount of cost
sharing under sections 1916, 1916A(c),
and/or 1916A(e) of the Act for
individuals with family income at or
below 100 percent of the FPL may not
exceed 5 percent of the family’s income
for the monthly or quarterly period, as
specified in the State plan.
(c) Family income shall be
determined in a manner and for that
period as specified by the State in the
State plan.
(1) States may use gross income or
any other methodology.
(2) States may use a different
methodology for determining the
aggregate limits than they do for
determining income eligibility.
§ 447.80 Enforceability of alternative
premiums and cost sharing.
(a) With respect to alternative
premiums, a State may do the following:
(1) Require a group or groups of
individuals to prepay.
(2) Terminate an individual from
medical assistance on the basis of
failure to pay for 60 days or more.
(3) Waive payment of a premium in
any case where it determines that
requiring the payment would create an
undue hardship.
(b) With respect to alternative cost
sharing, a State may permit a provider,
including a pharmacy, to require an
individual, as a condition for receiving
the item or service, to pay the cost
sharing charge, except as specified
below.
(1) A provider, including a pharmacy
and a hospital, may not require an
individual whose family income is at or
below 100 percent of the FPL to pay the
cost sharing charge as a condition of
receiving the service.
(2) A hospital that has determined
after an appropriate medical screening
pursuant to § 489.24, that an individual
does not have an emergency medical
condition, before imposing cost sharing
on an individual, must provide the
name and location of an available and
accessible alternate non-emergency
services provider as defined in section
1916A(e)(4)(B), the fact that the
alternate provider can provide the
services with the imposition of a lesser
cost sharing amount or no cost sharing,
and a referral to coordinate scheduling
of treatment by this provider before
requiring payment of cost sharing.
(3) The provider is not prohibited by
this authority from choosing to reduce
or waive cost sharing on a case-by-case
basis.
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Federal Register / Vol. 73, No. 36 / Friday, February 22, 2008 / Proposed Rules
mstockstill on PROD1PC66 with PROPOSALS
§ 447.82 Restrictions on payments to
providers.
calendar year and then rounded to the
next higher 10-cent increment.
The plan must provide that the
*
*
*
*
*
agency reduces the payment it makes to
(4) For Federal Fiscal Year 2007, any
any provider by the amount of a
deductible the State imposes may not
recipient’s cost sharing obligation,
exceed $3.20 per month, per family for
regardless of whether the provider
each period of eligibility. Thereafter,
successfully collects the cost sharing.
any deductible may not exceed this
amount as updated each October 1 by
PART 457—ALLOTMENTS AND
GRANTS TO STATES
the percentage increase in the medical
care component of the CPI-U for the
5. The authority citation for part 457
period of September to September
continues to read as follows:
ending in the preceding calendar year
Authority: Section 1102 of the Social
and then rounded to the next higher 10Security Act (42 U.S.C. 1302).
cent increment.
6. Section 457.555 is amended by—
*
*
*
*
*
a. Republishing paragraph (a)
(c) Institutional emergency services.
introductory text.
For Federal Fiscal Year 2007, any
b. Revising paragraphs (a)(1), (a)(2),
copayment that the State imposes on
and (a)(4).
emergency services provided by an
c. Revising paragraph (c).
institution may not exceed $5.20.
d. Revising paragraph (d).
Thereafter, any copayment may not
The republication and revisions read
exceed this amount as updated each
as follows:
October 1 by the percentage increase in
§ 457.555 Maximum allowable cost sharing the medical care component of the CPIcharges on targeted low-income children in U for the period of September to
families with income from 101 to 150
September ending in the preceding
percent of the FPL.
calendar year and then rounded to the
(a) Non-institutional services. For
next higher 10-cent increment.
targeted low-income children whose
(d) Non-emergency use of the
family income is from 101 to 150
emergency room. For Federal Fiscal
percent of the FPL, the State plan must
Year 2007, for targeted low-income
provide that for non-institutional
children whose family income is from
services, including emergency services,
the following requirements must be met: 101 to 150 percent of the FPL, the State
may charge up to twice the charge for
(1)(i) For Federal Fiscal Year 2007,
non-institutional services, up to a
any copayment or similar charge the
maximum amount of $10.40, for
State imposes under a fee-for-service
services furnished in a hospital
delivery system may not exceed the
emergency room if those services are not
following amounts:
emergency services as defined in
Maximum
§ 457.10. Thereafter, any charge may not
Total cost
amount
exceed this amount as updated each
October 1 by the percentage increase in
$15.00 or less ...........................
$1.10
$15.01 to $40 ...........................
2.10 the medical care component of the CPI$40.01 to $80 ...........................
3.20 U for the period of September to
$80.01 or more .........................
5.20 September ending in the preceding
calendar year and then rounded to the
(ii) Thereafter, any copayments may
next higher 10-cent increment.
not exceed these amounts as updated
*
*
*
*
*
each October 1 by the percentage
(Catalog of Federal Domestic Assistance
increase in the medical care component
of the CPI-U for the period of September Program No. 93.778, Medical Assistance
Program)
to September ending in the preceding
calendar year and then rounded to the
Dated: October 5, 2007.
next higher 10-cent increment.
Kerry Weems,
(2) For Federal Fiscal Year 2007, any
Acting Administrator, Centers for Medicare
copayment that the State imposes for
& Medicaid Services.
services provided by a managed care
Approved: November 1, 2007.
organization may not exceed $5.20 per
Michael O. Leavitt,
visit. Thereafter, any copayment may
not exceed this amount as updated each Secretary.
October 1 by the percentage increase in
[FR Doc. E8–3211 Filed 2–21–08; 8:45 am]
the medical care component of the CPIBILLING CODE 4120–01–P
U for the period of September to
September ending in the preceding
VerDate Aug<31>2005
16:29 Feb 21, 2008
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DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
44 CFR Part 67
[Docket No. FEMA–B–7763]
Proposed Flood Elevation
Determinations
Federal Emergency
Management Agency, DHS.
ACTION: Proposed rule.
AGENCY:
SUMMARY: Comments are requested on
the proposed Base (1 percent annualchance) Flood Elevations (BFEs) and
proposed BFE modifications for the
communities listed in the table below.
The purpose of this notice is to seek
general information and comment
regarding the proposed regulatory flood
elevations for the reach described by the
downstream and upstream locations in
the table below. The BFEs and modified
BFEs are a part of the floodplain
management measures that the
community is required either to adopt
or show evidence of having in effect in
order to qualify or remain qualified for
participation in the National Flood
Insurance Program (NFIP). In addition,
these elevations, once finalized, will be
used by insurance agents, and others to
calculate appropriate flood insurance
premium rates for new buildings and
the contents in those buildings.
DATES: Comments are to be submitted
on or before May 22, 2008.
ADDRESSES: The corresponding
preliminary Flood Insurance Rate Map
(FIRM) for the proposed BFEs for each
community are available for inspection
at the community’s map repository. The
respective addresses are listed in the
table below.
You may submit comments, identified
by Docket No. FEMA–B–7763, to
William R. Blanton, Jr., Chief,
Engineering Management Branch,
Mitigation Directorate, Federal
Emergency Management Agency, 500 C
Street, SW., Washington, DC 20472,
(202) 646–3151, or (e-mail)
bill.blanton@dhs.gov.
FOR FURTHER INFORMATION CONTACT:
William R. Blanton, Jr., Chief,
Engineering Management Branch,
Mitigation Directorate, Federal
Emergency Management Agency, 500 C
Street, SW., Washington, DC 20472,
(202) 646–3151 or.(e-mail)
bill.blanton@dhs.gov.
SUPPLEMENTARY INFORMATION: The
Federal Emergency Management Agency
(FEMA) proposes to make
E:\FR\FM\22FEP1.SGM
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Agencies
[Federal Register Volume 73, Number 36 (Friday, February 22, 2008)]
[Proposed Rules]
[Pages 9727-9740]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-3211]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 447 and 457
[CMS-2244-P]
RIN 0938-A047
Medicaid Program; Premiums and Cost Sharing
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would implement and interpret the
provisions of sections 6041, 6042, and 6043 of the Deficit Reduction
Act of 2005 (DRA), and section 405(a)(1) of the Tax Relief and Health
Care Act of 2006 (TRHCA). These sections amend the Social Security Act
(the Act) by adding a new section 1916A to provide State Medicaid
agencies with increased flexibility to impose premium and cost sharing
requirements on certain Medicaid recipients. This authority is in
addition to the existing authority States have to impose premiums and
cost sharing under section 1916 of the Act. The DRA provisions also
specifically address cost sharing for non-preferred
[[Page 9728]]
drugs and non-emergency care furnished in a hospital emergency
department.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on March 24, 2008.
ADDRESSES: In commenting, please refer to file code CMS-2244-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may submit electronic comments on specific
issues in this regulation to https://www.cms.hhs.gov/eRulemaking. Click
on the link ``Submit electronic comments on CMS regulations with an
open comment period.'' (Attachments should be in Microsoft Word,
WordPerfect, or Excel; however, we prefer Microsoft Word.)
2. By regular mail. You may mail written comments (one original and
two copies) to the following address only: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-2244-P, P.O. Box 8016, Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address only: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-2244-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to one of the following addresses. If you
intend to deliver your comments to the Baltimore address, please call
telephone number (410) 786-7195 in advance to schedule your arrival
with one of our staff members. Room 445-G, Hubert H. Humphrey Building,
200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security
Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.) Comments
mailed to the addresses indicated as appropriate for hand or courier
delivery may be delayed and received after the comment period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by mailing your
comments to the addresses provided at the end of the ``Collection of
Information Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Donna Schmidt, (410) 786-5532.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on all
issues set forth in this rule to assist us in fully considering issues
and developing policies. You can assist us by referencing the file code
CMS-2244-P and the specific ``issue identifier'' that precedes the
section on which you choose to comment.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: https://
www.cms.hhs.gov/eRulemaking. Click on the link ``Electronic Comments on
CMS Regulations'' on that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Background
A. General
For more than a decade, States have been asking for the tools to
modernize their Medicaid programs. With the enactment of the Deficit
Reduction Act of 2005 (DRA) (Pub. L. 109-171, enacted on February 8,
2006), States now have new options to create programs that are aligned
with today's Medicaid populations and the health care environment.
Alternative cost sharing, benefit flexibility through benchmark plans,
and the health opportunity accounts (HOA) demonstration provide the
greatest opportunities to modernize Medicaid, to make the cost of the
program and health care more affordable, and to expand coverage for the
uninsured. States will be able to reconnect families to the larger
insurance system that serves most Americans and promote continuity of
coverage. The sweeping DRA provisions on Medicaid include six chapters
and 39 sections. Through a combination of new options for States and
new requirements related to program integrity, the DRA will help ensure
the sustainability of the Medicaid program over time.
B. Statutory Authority
Sections 6041, 6042, and 6043 of the DRA established a new section
1916A of the Social Security Act (the Act). Section 405(a)(1) of the
Tax Relief and Health Care Act of 2006 (TRHCA) (Pub. L. 109-432,
enacted on December 20, 2006) modified section 1916A of the Act.
Section 1916A sets forth options for alternative premiums and cost
sharing, including options for higher cost sharing for non-preferred
prescription drugs and for non-emergency use of a hospital emergency
room.
Section 6041 of the DRA established new subsections 1916A(a) and
(b), of the Act, which allow States to amend their State plans to
impose alternative premiums and cost sharing on certain groups of
individuals, for items and services other than drugs (which are subject
to a separate provision discussed below), and to enforce payment of the
premiums and cost sharing. Subsections 1916A(a) and (b) set forth
limitations on alternative premiums and cost-sharing that vary based on
family income, and exclude some specific services from alternative cost
sharing. Section 6041 also created a new section 1916(h) of the Act,
which requires the Secretary to increase the ``nominal'' cost sharing
amounts under section 1916 for each year (beginning with 2006) by the
annual percentage increase in the medical care component of the
consumer price index for all urban consumers (CPI-U) as rounded up in
an appropriate manner. Section 405(a)(1) of the TRHCA modified
subsections 1916A(a) and (b) of the Act.
Section 6042 of the DRA created section 1916A(c) of the Act, which
provides States with additional options for establishing cost sharing
requirements for drugs to encourage the use of preferred drugs. Section
405(a)(1) of the TRHCA also modified section 1916A(c) of the Act. Under
section
[[Page 9729]]
1916A(c), States may amend their State plans to require increased cost
sharing by certain groups of individuals for non-preferred drugs and to
waive or reduce the otherwise applicable cost sharing for preferred
drugs. States may also permit pharmacy providers to require the receipt
of a cost sharing payment from an individual before filling a
prescription. We believe the Congress intended to provide additional
flexibilities to States in issuing the DRA. Thus, we have not defined
preferred drugs or non-preferred drugs within a class of such drugs in
this rule and we believe defining these terms should be at State
discretion. We would anticipate that States would publish schedules of
preferred drugs as part of, or as a supplement to, the required public
schedule of cost sharing under 42 CFR 447.76.
Section 6043 of the DRA created section 1916A(e) of the Act, which
permits States to amend their State plans to allow hospitals, after an
appropriate medical screening examination under section 1867 (EMTALA)
of the Act, to impose higher cost sharing upon certain groups of
individuals for non-emergency care or services furnished in a hospital
emergency department. Section 405(a)(1) of the TRHCA modified section
1916A(e) of the Act. Under this option, if the hospital determines that
an individual does not have an emergency medical condition, before
providing the non-emergency services and imposing cost sharing, it must
inform the individual that an available and accessible alternate non-
emergency services provider can provide the services without the
imposition of the same cost sharing and that the hospital can
coordinate a referral to that provider. After notice is given, the
hospital may require payment of the cost sharing before providing the
non-emergency services to the individual.
II. Provisions of the Proposed Regulations
[If you choose to comment on issues in this section, please include
the caption ``PROVISIONS OF THE PROPOSED REGULATIONS'' at the beginning
of your comments.]
A. Overview
The Department began issuing guidance about the new flexibilities
available to States within months of the enactment of the DRA. We
released two letters to State Medicaid directors and health officials
providing guidance on sections 6041, 6042 and 6043 of the DRA, and
section 405(a)(1) of the TRHCA as it relates to sections 6041 and 6042
of the DRA respectively. States and Territories have used this guidance
to design and implement the new options. These regulations formalize
the guidance on alternative premiums and cost sharing.
These proposed regulations would amend existing Medicaid cost
sharing regulations at 42 CFR part 447 and State Children's Health
Insurance Program (SCHIP) cost sharing regulations at 42 CFR part 457.
We propose this approach to assist the reader in easily accessing all
Medicaid and SCHIP cost sharing regulations.
B. Medicaid Regulations
1. Maximum Allowable Charges (Sec. 447.54)
We are proposing to revise Sec. 447.54 to update the existing
``nominal'' Medicaid cost sharing amounts, specifically the nominal
deductible amount described at Sec. 447.54(a)(1) and the nominal
copayment amounts described at Sec. 447.54(a)(3). We are also
proposing to add Sec. 447.54(a)(4) to establish a maximum copayment
amount for services provided by a managed care organization (MCO).
Section 6041(b)(2) of the DRA requires the Secretary to increase
the nominal cost sharing amounts under section 1916 of the Act for each
year (beginning with 2006) by the annual percentage increase in the
medical care component of the consumer price index for all urban
consumers (U.S. city average) as rounded up in an appropriate manner.
In accordance with the statute, we propose to increase the nominal
amounts on the beginning of the Federal Fiscal Year (FY) (October 1) in
each calendar year by the percentage increase in the medical care
component of the Consumer Price Index for All Urban Consumers (CPI-U)
for the period of September to September ending in the preceding
calendar year. We use this period to update other amounts, such as the
Medicaid spousal impoverishment standards, by inflation. The first
adjustment would be for FY 2007, and would be based on the CPI-U
increases during the period September 2004 to September 2005. The
medical care component of the CPI-U increased by 3.9 percent between
September 2004 and September 2005, so we propose to update the nominal
amounts by that factor and then round to the next higher 10-cent
increment. We propose to round to the next higher 10-cent increment
because it will simplify calculation and collection of the amounts
involved. Based on this methodology, we propose a maximum deductible
for $2.10 per month per family for each period of Medicaid eligibility.
In addition, we propose the following copayment maximum amounts:
------------------------------------------------------------------------
Maximum
State payment for the service copayment
------------------------------------------------------------------------
$10 or less................................................ $ .60
$10.01 to $25.............................................. 1.10
$25.01 to $50.............................................. 2.10
$50.01 or more............................................. 3.20
------------------------------------------------------------------------
States should use these updated nominal amounts during FY 2007.
Thereafter, these amounts will be updated each October 1 by the
percentage increase in the medical care component of the CPI-U for the
period of September to September ending in the preceding year, rounded
to the next higher 10-cent increment.
In addition, we have proposed to specify a maximum copayment amount
for services provided by an MCO. When we published the final Medicaid
managed care rules on June 14, 2002 (67 FR 40989), we also issued at
Sec. 447.60, a requirement that contracts with MCOs limit cost sharing
charges an MCO may impose on Medicaid enrollees to the amounts that
could be imposed if fee-for-service payment rates were applicable.
Since some States do not have fee-for-service programs, we have
proposed to specify maximum copayment amounts for services provided by
an MCO.
2. Premiums and Cost Sharing: Basis, Purpose and Scope (Sec. 447.62)
Section 1916A of the Act allows States to impose alternative
premiums and cost sharing that are not subject to the limitations on
premiums and cost sharing under section 1916 of the Act. Section 1916A
of the Act does not affect the Secretary's existing waiver authority
with regard to premiums and cost sharing. Section 447.62 of the
regulations briefly describes this statutory provision which is the
basis for Sec. 447.64 through Sec. 447.82. Section 447.62 also sets
forth limitations on the scope of these regulations by indicating that
they do not limit the Secretary's waiver authority, or affect existing
waivers, concerning premiums or cost sharing.
Section 405(a)(1) of the TRHCA amended section 1916A by explicitly
providing certain exemptions from the provisions, and other
protections, for the population with family incomes at or below 100
percent of the FPL. The statute also includes protections for
individuals with family incomes between 100 and 150 percent of the FPL
and individuals with family incomes above 150 percent of the FPL.
[[Page 9730]]
3. Premiums, Enrollment Fees, or Similar Fees: State Plan Requirements
(Sec. 447.64)
Section 1916A(a)(1) of the Act requires that the State plan specify
the group or groups of individuals upon which it will impose alternate
premiums. In accordance with the statute, at Sec. 447.64(a), we
propose that the State plan describe the group or groups of individuals
that may be subject to such premiums, enrollment fees, or similar
charges. For example, States may impose premiums upon all non-exempt
childless adults (with family incomes over 150 percent of the FPL). We
further propose in Sec. 447.64(b) that the State plan must include a
schedule of the premiums, enrollment fees, or similar charges and the
process for informing recipients, applicants, providers, and the public
of the schedule. States may vary the premiums, enrollment fees, or
similar charges among the groups of individuals.
Section 1916A(b)(4) of the Act requires that the State plan specify
the manner and the period for which the State determines family income.
In accordance with the statute, at Sec. 447.64(c), we propose that the
State plan describe the methodology used to determine family income,
including the period and periodicity of those determinations. We also
propose in Sec. 447.64(d) that the State plan describe the methodology
the State will use to ensure that the aggregate amount of premiums and
cost sharing imposed for all individuals in the family does not exceed
5 percent of family income as applied during the monthly or quarterly
period specified by the State.
Section 1916A(d)(1) of the Act requires that the State specify the
group or group of individuals for whom payment of premiums is a
condition of eligibility. In accordance with the statute, at Sec.
447.64(e), we propose that the State plan, list the group or groups of
individuals. We further propose in Sec. 447.64(f) that the State plan
describe the premium payment terms for the group or groups.
4. General Premium Protections (Sec. 447.66)
Under section 1916A(b)(3)(A) of the Act, the State plan may not
impose premiums upon the following:
Individuals under 18 years of age who are required to be
provided medical assistance under section 1902(a)(10)(A)(i) of the Act,
and including individuals with respect to whom child welfare services
are made available under Part B of title IV on the basis of being a
child in foster care and individuals with respect to whom adoption or
foster care assistance is made available under part E of that title,
without regard to age;
Pregnant women;
Any terminally ill individual receiving hospice care, as
defined in section 1905(o) of the Act;
Any individual who is an inpatient in a hospital, nursing
facility, intermediate care facility, or other medical institution, if
the individual is required, as a condition of receiving services in
that institution under the State plan, to spend for costs of medical
care all but a minimal amount of the individual's income required for
personal needs;
Women who are receiving Medicaid on the basis of the
breast or cervical cancer eligibility group under sections
1902(a)(10)(A)(ii)(XVIII) and 1902(aa) of the Act; and
Disabled children who are receiving medical assistance by
virtue of the application of sections 1902(a)(10)(A)(ii)(XIX) and
1902(cc) of the Act.
In accordance with the statute, at Sec. 447.66(a), we propose that
the State exclude these classes of individuals from the imposition of
premiums.
Section 1916A(b)(3)(C) of the Act clarifies that a State may exempt
additional classes of individuals from premiums. At proposed Sec.
447.66(b), we would implement this section.
5. Copayments, Coinsurance, Deductibles, or Similar Cost Sharing
Charges: State Plan Requirements (Sec. 447.68)
Section 1916A(a)(1) of the Act requires that the State plan specify
the group or groups of individuals upon which it opts to impose cost
sharing. In accordance with the statute, at Sec. 447.68(a), we propose
that the State plan describe the group or groups of individuals that
may be subject to cost sharing. For example, States may impose cost
sharing for non-exempt items and services to individuals in the section
1931 eligibility group with family incomes between 100 and 200 percent
of the FPL. We further propose that the State plan must include a
schedule of the copayments, coinsurance, deductibles, or similar cost
sharing charges, the items or services for which the charges apply, and
the process for informing recipients, applicants, providers, and the
public of the schedule. States may vary cost sharing among the types of
items and services.
Section 1916A(b)(4) of the Act requires that the State plan specify
the manner and the period for which the State determines family income.
In accordance with the statute, at Sec. 447.68(b), we propose that the
State plan describe the methodology used to determine family income,
including the period and periodicity of such determinations.
We also propose that the State plan describe the methodology the
State will use to ensure that the aggregate amount of premiums and cost
sharing imposed for all individuals in the family does not exceed 5
percent of family income as applied during the monthly or quarterly
period specified by the State. We further propose that the State plan
describe the State's methods for tracking cost sharing charges,
informing recipients and providers of their liability, and notifying
recipients and providers when individual recipients have reached their
aggregate limit on premiums and cost sharing. States can use the same
methods that SCHIP programs use to track cost sharing. For example,
States can program their automated systems to track and compute
recipients' cost sharing.
Finally, we propose that the State plan specify whether the State
permits a provider participating under the State plan to require
payment of authorized cost sharing as a condition for the provision of
covered care, items, or services.
6. General Cost Sharing Protections (Sec. 447.70)
Under section 1916A(b)(3)(B) of the Act, the State plan may not
impose alternative cost sharing under 1916A(a) for the following:
Services furnished to individuals under 18 years of age
who are required to be provided Medicaid under section
1902(a)(10)(A)(i) of the Act, and including services furnished to
individuals with respect to whom child welfare services are made
available under Part B of title IV on the basis of being a child in
foster care and individuals with respect to whom adoption or foster
care assistance is made available under part E of that title, without
regard to age;
Preventive services (such as well baby and well child care
and immunizations) provided to children under 18 years of age
regardless of family income;
Services furnished to pregnant women, if those services
relate to pregnancy or to any other medical condition that may
complicate the pregnancy;
Services furnished to a terminally ill individual who is
receiving hospice
[[Page 9731]]
care (as defined in section 1905(o) of the Act);
Services furnished to any individual who is an inpatient
in a hospital, nursing facility, intermediate care facility for the
mentally retarded, or other medical institution, if the individual is
required, as a condition of receiving services in that institution
under the State plan, to spend for costs of medical care all but a
minimal amount of the individual's income required for personal needs;
Emergency services as defined by the Secretary for the
purposes of section 1916(a)(2)(D) of the Act;
Family planning services and supplies described in section
1905(a)(4)(C) of the Act;
Services furnished to women who are receiving medical
assistance by virtue of the application of sections
1902(a)(10)(A)(ii)(XVIII) and 1902(aa) of the Act (breast or cervical
cancer provisions); and
Services furnished to disabled children who are receiving
medical assistance by virtue of the application of sections
1902(a)(10)(A)(ii)(XIX) and 1902(cc) of the Act.
In addition, section 1916A(c)(1)(B) of the Act prohibits the State
plan from imposing otherwise applicable cost sharing for preferred
drugs for individuals ``for whom cost sharing may not otherwise be
imposed under subsection (a) due to the application of 1916A(b)(3)(B)
of the Act.'' Therefore, in accordance with the statute, at Sec.
447.70(a)(1)(x), we propose that the State plan exclude these classes
of individuals from the imposition of cost sharing for preferred drugs
within a class.
Section 1916A(b)(3)(C) of the Act clarifies that a State may exempt
additional individuals or services from cost sharing. At proposed Sec.
447.70(c), we would implement this section.
Finally, section 1916A(c)(3) of the Act requires a State to charge
cost sharing applicable to a preferred drug in the case of a non-
preferred drug if the prescribing physician determines that the
preferred drug would not be as effective for the individual or would
have adverse effects for the individual or both. We would implement
this section at proposed Sec. 447.70(b). We further propose at Sec.
447.70(b) that such overrides meet State criteria for prior
authorization and be approved through the State prior authorization
process.
7. Premium and Cost Sharing Exemptions and Protections for Individuals
With Family Income at or Below 100 Percent of the FPL (Sec. 447.71)
Under section 1916A(a)(2)(A) of the Act, the State plan may not
impose premiums on individuals whose family income is at or below 100
percent of the FPL. In accordance with the statute, at Sec. 447.71(a)
we propose that the State plan exclude these individuals from the
imposition of premiums.
Under section 1916A(a)(2)(A) of the Act, the State plan may not
impose cost sharing on individuals whose family income is at or below
100 percent of the FPL with the exception of cost sharing for non-
preferred drugs and for non-emergency services furnished in a hospital
emergency department. However, section 1916A(c)(2)(A)(i) of the Act
prohibits a State from imposing, with respect to a non-preferred drug,
cost sharing that exceeds the nominal amount as otherwise determined
under section 1916 of the Act and described at Sec. 447.54(a)(3) or
(4) for those individuals. In addition, section 1916A(e)(2)(B) of the
Act prohibits a State from imposing, with respect to non-emergency
services furnished in a hospital emergency department, cost sharing
that exceeds the nominal amount as otherwise determined under section
1916 of the Act and described at Sec. 447.54(a)(3) or (4).
Furthermore, a State may only impose nominal cost sharing with respect
to non-emergency services so long as no cost sharing is imposed to
receive such care through an outpatient department or other alternative
health care provider in the geographic area of the hospital emergency
department involved.
In accordance with the statute, we propose at Sec. 447.71(b)(1)
that cost sharing for non-preferred drugs for those individuals not
exceed the nominal cost sharing amount. In addition, we propose at
Sec. 447.71(b)(2) that cost sharing for non-emergency services
furnished in a hospital emergency department for those individuals not
exceed the nominal cost sharing amount and be imposed only so long as
no cost sharing is imposed on those individuals to receive such care
through an outpatient department or other alternative non-emergency
services provider in the geographic area of the hospital emergency
department involved.
Section 1916A(a)(2)(B) of the Act provides that the total aggregate
amount of cost sharing imposed under sections 1916A(c), 1916A(e), and/
or 1916 of the Act upon individuals whose family income is at or below
100 percent of the FPL may not exceed 5 percent of the family income of
the family involved, as applied on a quarterly or monthly basis as
specified by the State. In accordance with the statute, we propose at
Sec. 447.71(c) that aggregate cost sharing for individuals whose
family income is at or below 100 percent of the FPL applicable to a
family of the size involved not exceed the maximum permitted under
Sec. 447.78(b). At Sec. 447.78(b), we propose that the total
aggregate amount of cost sharing may not exceed 5 percent of such
family's income for the monthly or quarterly period, as specified in
the State plan.
8. Premium and Cost Sharing Exemptions and Protections for Individuals
Whose Family Income is Above 100 Percent but Does Not Exceed 150
Percent of the FPL (Sec. 447.72)
Under section 1916A(b)(1)(A) of the Act, the State plan may not
impose premiums on individuals whose family incomes exceeds 100
percent, but does not exceed 150 percent of the FPL applicable to a
family of the size involved. In accordance with the statute, at Sec.
447.72(a), we propose that the State plan exclude these individuals
from the imposition of premiums.
Section 1916A(b)(1)(B)(i) of the Act provides that, in the case of
individuals whose family income exceeds 100 percent, but does not
exceed 150 percent of the FPL applicable to a family of the size
involved, cost sharing imposed under the State plan may not exceed 10
percent of the cost of such item or service. However, section
1916A(c)(2)(A)(i) of the Act prohibits a State from imposing, with
respect to a non-preferred drug, cost sharing that exceeds the nominal
amount as otherwise determined under section 1916 of the Act and
described at Sec. 447.54(a)(3) for those individuals. In addition,
section 1916A(e)(2)(A) of the Act prohibits a State from imposing, with
respect to non-emergency services furnished in a hospital emergency
department, cost sharing that exceeds twice the nominal amount as
otherwise determined under section 1916 of the Act and described at
Sec. 447.54(a)(3) for those individuals.
Therefore, in accordance with the statute, we propose at Sec.
447.72(b) that cost sharing for those individuals under the State plan
not exceed 10 percent of the payment the agency makes for that item or
service, with the exception that it not exceed the nominal cost sharing
amount for non-preferred drugs or twice the nominal cost sharing amount
for non-emergency services furnished in a hospital emergency
department. In the case of States that do not have fee-for-service
payment rates, we propose that
[[Page 9732]]
any copayment that the State imposes for services provided by an MCO
may not exceed $5.20 for FY 2007. This proposal would provide greater
flexibility to State Medicaid programs consistent with that provided to
State SCHIP programs. Thereafter, any copayment that the State imposes
for services provided by an MCO may not exceed this amount as updated
each October 1 by the percentage increase in the medical care component
of the CPI-U for the period of September to September ending in the
preceding calendar year and then rounded to the next highest 10-cent
increment.
Section 1916A(b)(1)(B)(ii) of the Act provides that the total
aggregate amount of cost sharing imposed under section 1916 and 1916A
of the Act may not exceed 5 percent of the family income of the family
involved, as applied on a quarterly or monthly basis as specified by
the State. In accordance with the statute, we propose at Sec.
447.72(c) that aggregate cost sharing for individuals whose family
income exceeds 100 percent, but does not exceed 150 percent of the FPL
applicable to a family of the size involved, not exceed the maximum
permitted under Sec. 447.78(a). At Sec. 447.78(a), we propose that
the total aggregate amount of cost sharing may not exceed 5 percent of
such family's income for the monthly or quarterly period, as specified
in the State plan.
9. Premium and Cost Sharing Protections for Individuals With Family
Income Above 150 Percent of the FPL (Sec. 447.74)
Under section 1916A(b)(2) of the Act, the State plan may impose
premiums upon individuals whose family income exceeds 150 percent of
the FPL applicable to a family of the size involved provided that, as
described at section 1916A(b)(2)(A)of the Act, the total aggregate
amount of premiums and cost sharing imposed under section 1916 and
1916A of the Act not exceed 5 percent of the family income. In
accordance with the statute, at Sec. 447.74(a), we state that the
State plan can impose premiums upon individuals with family income
above 150 percent of the FPL subject to the aggregate limit on premiums
and cost sharing.
Section 1916A(b)(2)(B) of the Act provides that, in the case of
individuals whose family income exceeds 150 percent of the FPL
applicable to a family of the size involved, cost sharing imposed under
the State plan may not exceed 20 percent of the cost of that item
(including a non-preferred drug) or service. Therefore, in accordance
with the statute, we propose at Sec. 447.74(b) that cost sharing for
those individuals under the State plan not exceed 20 percent of the
payment the agency makes for that item or service. In the case of
States that do not have fee-for-service payment rates, we propose that
any copayment that the State imposes for services provided by an MCO
may not exceed $5.20 for FY 2007. This proposal would provide greater
flexibility to State Medicaid programs consistent with that provided to
State SCHIP programs. Thereafter, any copayment that the State imposes
for services provided by an MCO may not exceed this amount as updated
each October 1 by the percentage increase in the medical care component
of the CPI-U for the period of September to September ending in the
preceding calendar year and then rounded to the next highest 10-cent
increment.
Section 1916A(b)(2)(A) of the Act provides that the total aggregate
amount of cost sharing imposed under section 1916 and 1916A of the Act
may not exceed 5 percent of the family income of the family involved,
as applied on a quarterly or monthly basis as specified by the State.
In accordance with the statute, we propose at Sec. 447.74(c) that
aggregate cost sharing for individuals whose family income exceeds 150
percent of the FPL applicable to a family of the size involved, not
exceed the maximum permitted under Sec. 447.78(a). At Sec. 447.78(a),
we propose that the total aggregate amount of premiums and cost sharing
may not exceed 5 percent of such family's income for the monthly or
quarterly period, as specified in the State plan.
10. Public Schedule (Sec. 447.76)
As described in this preamble, section 1916 and 1916A of the Act
provides authority for States to impose premiums and cost sharing for
items and services, including prescription drugs and non-emergency use
of a hospital emergency department, and to require a group or groups of
individuals to make payment as a condition of eligibility or of
receiving that item or service. In Sec. 447.76(a), we propose that
State plans provide for schedules of premiums and cost sharing. In
Sec. 447.76(a), we propose that the public schedule contain the
following information: (1) Current premiums, enrollment fees, or
similar fees; (2) current cost sharing charges; (3) the aggregate
limits on premiums and cost sharing or only cost sharing; (4)
mechanisms for making payments for required premiums and charges; (5)
the consequences for an applicant or recipient who does not pay a
premium or charge; and (6) a list of hospitals charging alternative
cost sharing for non-emergency use of the emergency department. In
addition, at Sec. 447.76(b) we propose that the State make the public
schedule available to recipients, at the time of enrollment and
reenrollment and when charges are revised, applicants, all
participating providers, and the general public.
11. Aggregate Limits on Premiums and Cost Sharing (Sec. 447.78)
As described above, section 1916A(b)(1)(B)(ii) of the Act provides
that the total aggregate amount of cost sharing imposed under section
1916 and 1916A of the Act upon individuals with family income above 100
percent but at or below 150 percent of the FPL may not exceed 5 percent
of the family income, as applied on a quarterly or monthly basis as
specified by the State. Section 1916A(c)(2)(C) of the Act reiterates
that this aggregate limit includes cost sharing for prescription drugs
and section 1916A(e)(2)(C) of the Act reiterates that this aggregate
limit includes cost sharing for non-emergency use of a hospital
emergency department. Section 1916A(b)(2)(A) of the Act provides that
the total aggregate amount of premiums and cost sharing imposed under
section 1916 and 1916A of the Act upon individuals with family income
above 150 percent of the FPL may not exceed 5 percent of the family
income, as applied on a quarterly or monthly basis as specified by the
State. Again, section 1916A(c)(2)(C) of the Act reiterates that this
aggregate limit includes cost sharing for prescription drugs, and
section 1916A(e)(2)(C) of the Act reiterates that this aggregate limit
includes cost sharing for non-emergency use of a hospital emergency
department. Finally, section 1916A(a)(2)(B) of the Act provides that to
the extent that cost sharing under section 1916A(c) of the Act for
prescription drugs, cost sharing under section 1916A(e) of the Act for
non-emergency use of a hospital emergency department, and/or cost
sharing under section 1916 of the Act is imposed upon individuals whose
family income is at or below 100 percent of the FPL, the total
aggregate amount of premiums and cost sharing imposed may not exceed 5
percent of the family income.
In accordance with these provisions, at Sec. 447.78(a), we propose
that for individuals with family income above 100 percent of the FPL
the aggregate amount of premiums (when applicable) and cost sharing
under section 1916 and 1916A of the Act not exceed 5 percent of a
family's income for the monthly or quarterly period, as specified by
the State in the State plan. At Sec. 447.78(b), we propose that for
individuals whose family income is at or below 100
[[Page 9733]]
percent of the FPL the aggregate amount of cost sharing under sections
1916, 1916A(c), and/or 1916A(e) of the Act not exceed 5 percent of a
family's income for the monthly or quarterly period, as specified by
the State in the State plan. We also propose at Sec. 447.78(c) that
family income shall be determined in a manner and for that period as
specified by the State in the State plan. We clarify that States may
use gross income to compute family income and that they may use a
different methodology for computing family income for purposes of
determining the aggregate limits than for determining income
eligibility.
12. Enforceability of Premiums and Cost Sharing (Sec. 447.80)
Section 1916A(d)(1) of the Act permits a State to condition
Medicaid eligibility upon the prepayment of premiums imposed under
section 1916A of the Act or to terminate Medicaid eligibility for the
failure to pay such a premium for 60 days or more. The statute provides
States flexibility to implement these requirements for some or all
groups of individuals as specified in the State plan. The statute also
provides flexibility to waive payment of any premium in any case where
the State determines that requiring that payment would create undue
hardship.
In accordance with the statute, we propose at Sec. 447.80(a) to
permit a State to condition eligibility for a group or group of
individuals upon prepayment of premiums, to terminate the eligibility
of an individual from a group or groups of individuals for failure to
pay for 60 days or more, and to waive payment in any case where
requiring the payment would create undue hardship.
Section 1916A(d)(2) of the Act permits a State to allow a provider
to require that an individual, as a condition of receiving an item or
service, pay the cost sharing charge imposed under section 1916A of the
Act. The provider is not prohibited by this authority from choosing to
reduce or waive cost sharing on a case-by-case basis. However, section
1916A(a)(2)(A) specifies that section 1916A(d)(2) shall not apply in
the case of an individual whose family income does not exceed 100
percent of the FPL applicable to a family of the size involved.
In accordance with the statute, at Sec. 447.80(b) we propose that
a State permit a provider, including a pharmacy, to require an
individual to pay cost sharing imposed under section 1916A of the Act
as a condition of receiving an item or service. However, at Sec.
447.80(b)(1) we specify that a provider, including a pharmacy or
hospital, may not require an individual whose family income is at or
below 100 percent of the FPL to pay the cost sharing charge as a
condition of receiving the item or service. In addition, at Sec.
447.80(b)(2) we propose that a hospital that has determined after an
appropriate medical screening under section 1867 of the Act that an
individual does not have an emergency medical condition must first
provide the name and location of an available and accessible alternate
non-emergency services provider, the fact that the alternate provider
can provide the services without the imposition of that cost sharing,
and a referral to coordinate scheduling of treatment before it can
require payment of the cost sharing. Finally, at Sec. 447.80(b)(3) we
propose that a provider may reduce or waive cost sharing imposed under
section 1916A of the Act on a case-by-case basis.
13. Restrictions on Payments to Providers (Sec. 447.82)
Proposed Sec. 447.82 requires States to reduce the amount of State
payments to providers by the amount of recipients' cost sharing
obligations under section 1916A of the Act. However, States have the
ability to increase total State plan rates to providers to maintain the
same level of State payment when cost sharing is introduced.
C. SCHIP Regulations
1. Maximum Allowable Cost Sharing Charges on Targeted Low-Income
Children in Families With Incomes From 101 to 150 Percent of the FPL
(Sec. 457.555)
We are revising Sec. 457.555 to update the existing ``nominal''
SCHIP cost sharing amounts, specifically the copayment amounts
described at Sec. 457.555(a)(1) and (2), (c), and (d) and the
deductible amount described at Sec. 447.555(a)(4). Section 6041(b)(2)
of the DRA requires the Secretary to increase the nominal Medicaid cost
sharing amounts under section 1916 of the Act for each year (beginning
with 2006) by the annual percentage increase in the medical care
component of the consumer price index for all urban consumers (U.S.
city average) as rounded up in an appropriate manner. While section
6041(b)(2) of the DRA does not require the Secretary to increase the
SCHIP nominal cost sharing amounts, we believe that our proposal is
consistent with sections 2103(e)(3)(A)(ii) and 2103(e)(1)(B) of the
SCHIP statute. Section 2103(e)(3)(A)(ii) of the Act specifies that a
State SCHIP plan may not impose a deductible, cost sharing, or similar
charge that exceeds an amount that is nominal as determined consistent
with Medicaid regulations at Sec. 447.54, with an appropriate
adjustment for inflation or other reasons as the Secretary determines
to be reasonable. Section 2103(e)(1)(B) of the Act prohibits a State
SCHIP plan from imposing cost sharing that favors children from
families with higher income over children from families with lower
income. By updating the existing SCHIP nominal cost sharing amounts by
the annual percentage increase in the medical care component of the
CPI-U by the period of September to September ending in the preceding
calendar year, we would retain nominal cost sharing amounts that
reflect a SCHIP recipient's ability to pay higher cost sharing. The
medical care component of the CPI-U increased by 3.9 percent between
September 2004 and September 2005, so we propose to update the nominal
amounts by that factor and then round to the next higher 10-cent
increment. We propose to round to the next higher 10-cent increment
because it will simplify calculation and collection of the amounts
involved. Based on this methodology, we propose the following copayment
maximum amounts:
------------------------------------------------------------------------
Total cost of services Maximum amount
------------------------------------------------------------------------
$15.00 or less...................................... $1.10
$15.01 to $40....................................... 2.10
$40.01 to $80....................................... 3.20
$80.01 or more...................................... 5.20
------------------------------------------------------------------------
We also propose that the copayments for services provided by an MCO
and for emergency services provided by an institution not exceed $5.20
per visit and that the copayment for non-emergency services furnished
in a hospital emergency room to targeted low-income children with
family income from 101 to 150 percent of the FPL not exceed $10.40.
Finally, we propose that a deductible not exceed $3.20 per family per
month.
States should use these updated nominal amounts during FY 2007.
Thereafter, we will update these amounts each October 1 by the
percentage increase in the medical care component of the CPI-U for the
period of September to September ending in the preceding calendar year
and then rounding to the next higher 10-cent increment.
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-
[[Page 9734]]
day notice in the Federal Register and solicit public comment before a
collection of information requirement is submitted to the Office of
Management and Budget (OMB) for review and approval. In order to fairly
evaluate whether an information collection should be approved by OMB,
section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires
that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements:
Section 447.64 Premiums, Enrollment Fees, or Similar Fees: State Plan
Requirements
Section 447.64 requires a State imposing premiums, enrollment fees,
or similar fees on individuals to describe in the State plan:
(a) The group or groups of individuals that may be subject to the
premiums, enrollment fees, or similar charges.
(b) The schedule of the premiums, enrollment fees, or similar fees
imposed.
(c) The methodology used to determine family income for purposes of
the limitations related to family income level that are described
below, including the period and periodicity of those determinations.
(d) The methodology used to ensure compliance with the requirements
of Sec. 447.78 that the aggregate amount of premiums and cost sharing
imposed for all individuals in the family does not exceed 5 percent of
the family income of the family involved.
(e) The process for informing the recipients, applicants,
providers, and the public of the schedule of premiums, enrollment fees,
or similar fees for a group or groups of individuals in accordance with
Sec. 447.76.
(f) The notice of, timeframe for, and manner of required premium
payments for a group or groups of individuals and the consequences for
an individual who does not pay.
The burden associated with this requirement is the time and effort
it would take for a State to include this detailed description in the
State plan. We estimate it would take one State approximately 20
minutes to incorporate this information in their plan. We believe 56
States will be affected by this requirement for a total annual burden
of 18.67 hours.
Section 447.68 Copayments, Coinsurance, Deductibles, or Similar Cost
Sharing Charges: State Plan Requirements
Section 447.68 requires a State imposing copayments, coinsurance,
deductibles, or similar cost sharing charges on individuals to describe
in the State plan:
(a) The group or groups of individuals that may be subject to the
cost sharing charge.
(b) The methodology used to determine family income, for purposes
of the limitations on cost sharing related to family income that are
described below, including the period and periodicity of those
determinations.
(c) The item or service for which the charge is imposed.
(d) The methods, such as the use of integrated automated systems,
for tracking cost sharing charges, informing recipients and providers
of their liability, and notifying recipients and providers when
individual recipients have paid the maximum cost sharing charges
permitted for the period of time.
(e) The process for informing recipients, applicants, providers,
and the public of the schedule of cost sharing charges for specific
items and services for a group or groups of individuals in accordance
with Sec. 447.76.
(f) The methodology used to ensure that:
(1) The aggregate amount of premiums and cost sharing imposed for
all individuals with family income above 100 percent of the FPL does
not exceed 5 percent of the family income of the family involved.
(2) The aggregate amount of cost sharing under sections 1916,
1916A(c), and/or 1916A(e) of the Act for individuals with family income
at or below 100 percent of the FPL does not exceed 5 percent of the
family income of the family involved.
(g) The notice of, timeframe for, and manner of required cost
sharing and the consequences for failure to pay.
The burden associated with this requirement is the time and effort
it would take for a State to include this detailed description in the
State plan. We estimate it would take one State approximately 20
minutes to incorporate this information in their plan. We believe 56
States will be affected by this requirement for a total annual burden
of 18.67 hours.
Section 447.76 Public Schedule
Section 447.76(a) requires States to make available to the groups
in paragraph (b) of this section a public schedule that contains the
following information:
(1) Current premiums, enrollment fees, or similar fees.
(2) Current cost sharing charges.
(3) The aggregate limit on premiums and cost sharing.
(4) Mechanisms for making payments for required premiums and
charges.
(5) The consequences for an applicant or recipient who does not pay
a premium or charge.
(6) A list of hospitals charging alternative cost sharing for non-
emergency use of the emergency department.
The burden associated with this requirement is the time and effort
it would take the State to prepare and make available to appropriate
parties a public schedule. We estimate that it would take 20 minutes
per State. We believe 56 States will be affected by this requirement
for an annual burden of 18.67 hours.
Section 447.80 Enforceability of Premiums and Cost Sharing
Section 447.80(b)(1) states that a hospital that has determined
after an appropriate medical screening pursuant to section 489.24, that
an individual does not have an emergency medical condition before
imposing cost sharing on an individual must provide the name and
location of an available and accessible alternate non-emergency
services provider as defined in section 1916A(e)(4)(B) of the Act, the
fact that the alternate provider can provide the services with the
imposition of a lesser cost sharing amount or no cost sharing, and a
referral to coordinate scheduling of treatment by this provider before
requiring payment of cost sharing.
The burden associated with this requirement is the time and effort
it would take for a hospital to provide the name and location of an
alternate provider who can provide services of a lesser cost sharing
amount or no cost sharing and a referral. We estimate the burden on a
hospital to be 30 minutes. We believe the number of hospital visits
will be 4 million; therefore, the total annual burden is 2 million
hours.
We have submitted a copy of this proposed rule to OMB for its
review of the information collection requirements described above.
These requirements are not effective until they have been approved by
OMB.
If you comment on these information collection and recordkeeping
[[Page 9735]]
requirements, please mail copies directly to the following:
Centers for Medicare & Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Division of Regulations Development,
Attn: Melissa Musotto, [CMS-2244-P], Room C4-26-05, 7500 Security
Boulevard, Baltimore, MD 21244-1850; and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503,
Attn: Katherine Astrich, CMS Desk Officer, CMS-2244-P, katherine_
astrich@omb.eop.gov. Fax (202) 395-6974.
Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 (as amended by Executive Order 13258, which
merely reassigns responsibility of duties) directs agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
This rule reaches the economic threshold and thus is considered a major
rule.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6.5 million to $31.5 million in any 1 year. Individuals and States are
not included in the definition of a small entity. We have determined,
and the Secretary certifies, that this rule would not have a
significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Core-Based
Statistical Area and has fewer than 100 beds. We have determined, and
the Secretary certifies, that this rule would not have a significant
impact on the operations of a substantial number of small rural
hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4) also requires that agencies assess anticipated costs and
benefits before issuing any rule that may result in expenditures in any
1 year by State, local, or tribal governments, in the aggregate, or by
the private sector, of $100 million, updated annually for inflation.
That threshold level is currently approximately $127 million. We have
determined that this rule would require new spending in excess of the
threshold. Table 2 outlines the total increase to Medicaid enrollees
cost sharing as a result of all the provisions of the DRA. This
includes an estimated cost increase to Medicaid recipients of $105
million in 2007, $155 million in 2008, $255 million in 2009, $375
million in 2010, and $455 million in 2011.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have determined that this rule would not impose
substantial direct requirement costs on State and local governments.
B. Anticipated Effects
The following chart summarizes our estimate of the anticipated
effects of this rule.
Table 1.--Estimated Savings of the Cost Sharing Provisions of the Deficit Reduction Act (DRA) of 2005
[Savings in millions of dollars]
----------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
Federal Share
----------------------------------------------------------------------------------------------------------------
Sec. 6041 Optional alternative premiums/cost sharing............... 65 85 135 190 220
Sec. 6042 Cost sharing for prescription drugs...................... 40 65 120 185 240
Sec. 6043(a) Copays for non-emergency care in ER................... 5 10 15 20 25
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State Share
----------------------------------------------------------------------------------------------------------------
Sec. 6041 Optional alternative premiums/cost sharing............... 50 65 105 145 165
Sec. 6042 Cost sharing for prescription drugs...................... 30 50 90 140 180
Sec. 6043(a) Copays for non-emergency care in ER................... 5 5 10 15 20
----------------------------------------------------------------------------------------------------------------
Table 2.--Medicaid Enrollees Cost Sharing Impact as a Result of the Provisions of the Deficit Reduction Act
(DRA) of 2005
[Costs in millions of dollars]
----------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
Medicaid Enrollee Share
----------------------------------------------------------------------------------------------------------------
Total increase in Medicaid enrollee/cost sharing for all provisions 105 155 255 375 455
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[[Page 9736]]
These estimates are based on data regarding copayments in the
Medicaid program derived from a 2004 Kaiser Family Foundation survey,
and data on premiums from a 2004 report by the U.S. Government
Accountability Office. In addition, we have used enrollment data from
the Medicaid Statistical Information System and utilization data from
the 2002 Medicaid Expenditure Panel Survey conducted by the Agency for
Healthcare Research and Quality.
We assume that only States that currently charge copayments and/or
premiums for some groups will take advantage of the option to expand
the use of premiums and copayments under the DRA provisions. States now
charging copayments are assumed to increase them on average to 75
percent of maximum possible levels by 2011, and states currently
charging premiums are assumed to add premiums requirements for some
groups not currently allowed, also reaching 75 percent of the maximum
possible by 2011.
In addition to direct savings from increased cost sharing, we
assume there would be declines in utilization as some enrollees subject
to new cost sharing requirements choose to decrease their use of
services. The decline is assumed to create additional savings of 75
percent of direct savings for physician and outpatient hospital
services, 100 percent for drugs, and 125 percent for dental services.
These additional savings are assumed to be reduced somewhat as a result
of some providers failing to collect copayments. Savings are split
between Federal and State governments using an average matching rate of
57 percent.
Table 2 illustrates that the estimated impact for Medicaid
enrollees as a result of all of the cost-sharing provisions of the DRA
are $105 million for 2007, $155 million for 2008, $255 million for
2009, $375 million for 2010, and $455 million for 2011. Although, these
estimates reflect an increase of costs to beneficiaries, we do not
believe this will pose a barrier to accessing health care. The law
provides that States can impose alternative cost sharing. We believe
through the use of alternative cost sharing, States will help
recipients become more educated and efficient health care consumers. We
do, however, solicit comments on these assumptions.
C. Alternatives Considered
This rule is necessary to implement section 1916A of the Social
Security Act, which was established by the Deficit Reduction Act of
2005 (DRA) and amended by the Tax Relief and Health Care Act of 2006
(TRHCA).
D. Accounting Statement and Table
As required by OMB Circular A-4 (available at https://
www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in the table below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this proposed rule. This
table provides our best estimate of the decrease in Medicaid payment as
a result of the changes presented in this proposed rule. All savings
are classified as transfers to the Federal Government.
Table.--Accounting Statement: Classification of Estimated Expenditures, from FY 2007 to FY 2011
[In millions]
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Annualized Monetized Transfers...................................................... 3% Units 7% Units
Discount Discount
Rate $278.2 Rate $270.7
----------------------------------------------------------------------------------------------------------------
From Whom To Whom?......................................................................................... Beneficiaries to Federal Government
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category Transfers
-------------------------------------------------------