Medicaid Program; State Flexibility for Medicaid Benefit Packages, 23068-23104 [2010-9734]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 75, Number 83 (Friday, April 30, 2010)]
[Rules and Regulations]
[Pages 23068-23104]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-9734]



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Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Part 440



Medicaid Program; State Flexibility for Medicaid Benefit Packages; 
Final Rule

Federal Register / Vol. 75 , No. 83 / Friday, April 30, 2010 / Rules 
and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 440

[CMS-2232-F4]
RIN 0938-AP72


Medicaid Program; State Flexibility for Medicaid Benefit Packages

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

ACTION: Final rule.

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SUMMARY: This rule revises the final rule published on December 3, 2008 
to implement provisions of section 6044 of the Deficit Reduction Act of 
2005, which amends the Social Security Act by adding a new section 1937 
related to the coverage of medical assistance under approved State 
plans. That rule provides States increased flexibility under an 
approved State plan to define the scope of covered medical assistance 
by offering coverage of benchmark or benchmark-equivalent benefit 
packages to certain Medicaid-eligible individuals. In addition, this 
final rule responds to public comments on the February 22, 2008 
proposed rule and comments received in response to rules published 
subsequently that delayed the effective date of the December 3, 2008 
final rule until July 1, 2010.

DATES: Effective Date: These regulations are effective on July 1, 2010.

FOR FURTHER INFORMATION CONTACT: Fran Crystal, (410) 786-1195.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Regulatory History

    On December 3, 2008, we published a final rule in the Federal 
Register entitled ``Medicaid Program; State Flexibility for Medicaid 
Benefit Packages'' (73 FR 73694), hereafter referred to as the December 
3, 2008 rule. The December 2008 rule was to implement provisions of 
section 6044 of the Deficit Reduction Act (DRA) of 2005, (Pub. L. 109-
171), enacted on February 8, 2006, which amends the Social Security Act 
(the Act) by adding a new section 1937 related to the coverage of 
medical assistance under approved State plans.
    Subsequent to the publication of the December 3, 2008 rule, and in 
accordance with the memorandum of January 20, 2009 from the Assistant 
to the President and the Chief of Staff, entitled ``Regulatory 
Review,'' we published an interim final rule with comment period (74 FR 
5808) on February 2, 2009 in the Federal Register to temporarily delay 
for 60 days the effective date of the December 3, 2008 rule entitled, 
``Medicaid Program; State Flexibility for Medicaid Benefit Packages.'' 
The February 2, 2009 interim final rule also reopened the comment 
period on the policies set out in the December 3, 2008 rule. We 
received nine timely items of correspondence in response to the 
February 2, 2009 interim final rule.
    On April 3, 2009, we published a second interim final rule (74 FR 
15221) in the Federal Register effectively delaying implementation of 
the December 3, 2008 rule until December 31, 2009. The second interim 
final rule was published in order to allow time to incorporate 
provisions of the Children's Health Insurance Program Reauthorization 
Act (CHIPRA) of 2009 (Pub. L. 111-3) enacted on February 4, 2009, which 
corrected language in the DRA as if these amendments were included in 
the DRA, and subsequently amended section 1937 of the Act ``State 
Flexibility for Medicaid Benefit Packages''. This delay also allowed 
for sufficient time to fully consider all of the public comments 
received on this regulation. In response to the April 3, 2009 interim 
final rule with a 30-day comment period, we received seven timely items 
of correspondence.
    Upon further review and consideration of the new provisions of the 
American Recovery and Reinvestment Act (ARRA) of 2009 (Pub. L. 111-5), 
enacted on February 17, 2009), CHIPRA, and the public comments received 
during the reopened comment period, we believed it necessary to revise 
a substantial portion of the December 3, 2008 rule. Therefore, on 
October 30, 2009, we published a proposed rule in the Federal Register 
(74 FR 56151) to solicit public comments on further delaying the 
effective date of the December 3, 2008 rule until July 1, 2010. We 
proposed to further delay the effective date of the December 3, 2008 
rule from December 31, 2009 to July 1, 2010 to allow us sufficient time 
to revise a substantial portion of the final rule based on our review 
and consideration of the new provisions of CHIPRA, ARRA, and the public 
comments received during the reopened comment periods. To allow time to 
make these revisions, the Department determined that several more 
months were needed to fully consider necessary changes to the rule.
    In the proposed rule, we noted that the comments received during 
the reopened comment periods were complex and presented numerous policy 
issues which require extensive consultation, review and analysis. 
Additionally, because both CHIPRA and ARRA contain provisions that 
impact the American Indian and Alaska Native community, we stated that 
the development of the final rule required collaboration with other HHS 
agencies and the Tribal governments. We believed that this time period 
would allow sufficient time to further consider public comments, 
analyze the impact of the revisions on affected stakeholders, and 
develop appropriate revisions to the regulation.
    We received one timely item of correspondence in response to the 
October 30, 2009 proposed rule. The comment did not directly address 
our proposal to delay the effective date of the December 3, 2008 rule 
until July 1, 2010. The comment was limited to the exemption of the 
benchmark and bench-mark equivalent packages from the assurance of 
transportation requirements. Because the comment was outside the scope 
of the proposed rule on the delay of the effective date of the December 
3, 2008 rule, but instead addresses the issue of revisions that are 
needed to comply with statutory changes, we have addressed the comment 
in the revisions to the final rule.
    On November 30, 2009, we published a final rule in the Federal 
Register (74 FR 62501) delaying the effective date of the December 3, 
2008 final rule until July 1, 2010.

B. General Provisions

    Under title XIX of the Act, the Secretary is authorized to provide 
funds to assist States in furnishing medical assistance to needy 
individuals, whose income and resources are insufficient to meet the 
costs of necessary medical services, including families with dependent 
children and individuals who are aged, blind, or disabled. To be 
eligible for funds under this program, States must submit a State plan, 
which must be approved by the Secretary. Programs under title XIX are 
jointly financed by Federal and State governments. Within broad Federal 
guidelines, each State determines the design of its program, eligible 
groups, benefit packages, payment levels for coverage and 
administrative and operating procedures.
    Before the passage of the DRA, States were required to offer at 
minimum a standard benefit package to eligible populations identified 
in section 1902(a)(10)(A) of the Act (with some specific exceptions, 
for example, for certain pregnant women, who could be

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limited to pregnancy-related services). Under section 1902(a)(10)(A) of 
the Act, this standard benefit package had to include certain specific 
benefits identified in the definition of ``medical assistance'' at 
section 1905(a) of the Act. These identified benefits include inpatient 
and outpatient hospital services, physician services, medical and 
surgical services furnished by a dentist, rural health clinic services, 
federally qualified health center services, laboratory and X-ray 
services, nursing facility services, early and periodic screening, 
diagnostic and treatment (EPSDT)services for individuals under age 21, 
family planning services and supplies to individuals of child-bearing 
age, nurse-midwife services, certified pediatric nurse practitioner, 
and certified family nurse practitioner services. Under section 
1902(a)(10)(D) of the Act, the standard benefit package is also 
required to include home health services.
    Section 6044 of the DRA amended the Act by adding a new section 
1937 that allows States to amend their Medicaid State plans to provide 
for the use of benefit packages other than the standard benefit 
package, namely benchmark benefit packages or benchmark-equivalent 
packages, for certain populations. The statute delineates what benefit 
packages qualify as benchmark packages and what would constitute a 
benchmark-equivalent package. The statute also specifies those exempt 
populations that may not be required to enroll in a benchmark coverage 
plan. To be eligible for funds under this new provision, States must 
submit a State plan amendment, which must be approved by the Secretary. 
On March 31, 2006, we issued a State Medicaid Director letter providing 
guidance on the implementation of section 6044 of the DRA.

C. CHIPRA Technical Corrections

    On February 4, 2009, CHIPRA was enacted. Section 611 of CHIPRA made 
technical corrections to the Benchmark Benefit provisions in section 
1937 of the Act, which were originally established under the DRA. The 
CHIPRA technical correction changes take effect as if included in the 
DRA.
    Section 611(a)(1)(C) and section 611(a)(3) of CHIPRA require States 
to assure that children under the age of 21, rather than those under 19 
as originally specified in the DRA, who are included in benchmark or 
benchmark-equivalent plans, have access to full EPSDT services (that 
is, those found in sections 1905(a)(4)(B), 1905(r), and 1902(a)(43) of 
the Act). These EPSDT services may be provided through a benchmark or 
benchmark-equivalent plan and/or as an additional benefit to those 
plans under section 1937 of the Act.
    Section 611(a)(1)(A)(i) of CHIPRA changed the ``Notwithstanding any 
other provision of this title * * *'' language in section 1937(a)(1)(A) 
of the Act to ``Notwithstanding section 1902(a)(1) (relating to 
statewideness), section 1902(a)(10)(B) (relating to comparability) and 
any other provision of this title which would be directly contrary to 
the authority under this section and subject to [subparagraph] (E)''. 
One effect of this CHIPRA change is to clarify the requirement, under 
42 CFR 431.53 and section 1902(a)(4) of the Act, to assure 
transportation for Medicaid beneficiaries in order for them to have 
access to covered State plan services is applicable, regardless of 
whether beneficiaries are or are not enrolled in benchmark or 
benchmark-equivalent plans.
    These two sections in CHIPRA affect the implementation of benchmark 
and benchmark-equivalent plans and thus the ``Analysis of and Responses 
to Public Comments'' in section III of this final rule, as well as the 
regulation, reflect these changes.
    Section 611(a)(2) of CHIPRA changed the heading of section 
1937(a)(1)(C) of the Act to replace the term ``Wrap-Around'' with 
``Additional'' and to accordingly strike the term ``wrap-around'' in 
the text of section 1937(a)(1)(C) of the Act.
    Section 611(b) of CHIPRA clarifies the reference to children 
receiving foster care under section 1937(a)(2)(B)(viii) to apply to 
individuals receiving ``child welfare services,'' not ``aid'' or 
``assistance''.
    Section 611(c) of CHIPRA requires the Secretary to post on the CMS 
Web site and publish in the Federal Register, with respect to benchmark 
and benchmark-equivalent plans approved by the Secretary, those 
provisions of title XIX of the Act which were determined by the 
Secretary as not applicable to the State's benchmark and/or benchmark-
equivalent plan, as well as the reason for such determinations.

II. Provisions of the Proposed Regulations

    We published a proposed rule in the Federal Register on February 
22, 2008 (73 FR 9714) that implemented the provisions of the DRA of 
2005, which amends the Act by adding a new section 1937 related to the 
coverage of medical assistance under approved State plans. Under this 
new provision, States have increased flexibility under an approved 
State plan to define the scope of covered medical assistance by 
offering coverage of benchmark or benchmark-equivalent benefit packages 
to certain Medicaid-eligible individuals. For a complete and full 
description of the States' Medicaid Benefit Packages provisions as 
required by the DRA, see the February 2008 State Flexibility for 
Medicaid Benefit Packages proposed rule. In the February 2008 proposed 
rule, we proposed to add a new subpart C beginning with Sec.  440.300 
as follows:

A. Subpart C--Benchmark Packages: General Provisions Sec.  440.300, 
Sec.  440.305, and Sec.  440.310 Basis, Scope, and Applicability

    At proposed Sec.  440.300 (Basis), Sec.  440.305 (Scope), and Sec.  
440.310 (Applicability), the regulations would reflect the statutory 
authority for States to provide medical assistance to individuals, 
within one or more groups of Medicaid eligible individuals specified by 
the State, through enrollment in benchmark coverage or benchmark-
equivalent coverage. A State may only require that individuals obtain 
benefits by enrolling in that coverage if they are a ``full benefit 
eligible'' whose eligibility is based on an eligibility category under 
section 1905(a) of the Act that would have been covered under the 
State's plan on or before February 8, 2006, and are not within exempted 
categories under the statute. The proposed regulatory definition of 
full benefit eligible individuals would include individuals who would 
otherwise be eligible to receive the standard full Medicaid benefit 
package under the approved Medicaid State plan, but would not include 
individuals who are within the statutory exemptions, who are determined 
eligible by the State for medical assistance under section 
1902(a)(10)(C) of the Act or by reason of section 1902(f) of the Act, 
or who are otherwise eligible based on a reduction of income due to 
costs incurred for medical or other remedial care (other medically 
needy and spend-down populations).

B. Section 440.315 Exempt Individuals

    Proposed Sec.  440.315 would reflect statutory limitations on 
mandatory enrollment of specified categories of individuals. A State 
may not require enrollment in a benchmark or benchmark-equivalent 
benefit plan by the following individuals:
     An individual who is a pregnant woman who is required to 
be covered under the State plan under section 1902(a)(10)(A)(i) of the 
Act.
     An individual who qualifies for medical assistance under 
the State plan

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on the basis of being blind or disabled (or being treated as being 
blind or disabled) without regard to whether the individual is eligible 
for SSI benefits under title XVI on the basis of being blind or 
disabled and including an individual who is eligible for medical 
assistance on the basis of section 1902(e)(3) of the Act.
     An individual who is entitled to benefits under any part 
of Medicare.
     An individual who is terminally ill and is receiving 
benefits for hospice care under title XIX.
     An individual who is an inpatient in a hospital, nursing 
facility, intermediate care facility for the mentally retarded, or 
other medical institution, and is required, as a condition of receiving 
services in such 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.
     An individual who is medically frail or otherwise an 
individual with special medical needs (as described by the Secretary in 
section 440.315(f)). For purposes of this section, we proposed that 
individuals with special needs includes those groups defined by Federal 
regulations at Sec.  438.50(d)(1) and Sec.  438.50(d)(3) of the managed 
care regulations (that is, dual eligibles and certain children under 
age 19 who are eligible for SSI; eligible under section 1902(e)(3) of 
the Act, TEFRA children; children in foster care or other out of home 
placement; or children receiving foster care or adoption assistance). 
We did not propose a definition for medically frail populations but we 
invited public comments to assist us in defining this term in the final 
regulation.
     An individual who qualifies for Medicaid based on medical 
condition for medical assistance for long-term care services described 
in section 1917(c)(1)(C) of the Act.
     An individual who receives aid or assistance under part B 
of title IV for children in foster care or an individual with respect 
to whom adoption or foster care assistance is made available under part 
E of title IV, without regard to age.
     An individual who qualifies for medical assistance on the 
basis of eligibility to receive assistance under a State plan funded 
under part A of title IV (as in effect on or after the welfare reform 
effective date defined in section 1931(i) of the Act). This provision 
includes those individuals who qualify for Medicaid solely on the basis 
of qualification under the Temporary Assistance for Needy Families 
(TANF) rules (that is, the State links Medicaid eligibility to TANF 
eligibility).
     An individual who is a woman receiving medical assistance 
by virtue of the application of sections 1902(a)(10)(ii)(XVIII) and 
1902(a) of the Act. This provision relates to those individuals who are 
eligible for Medicaid based on the breast or cervical cancer 
eligibility provisions.
     An individual who qualifies for medical assistance as a 
TB-infected individual on the basis of section 1902(a)(10)(A)(ii)(XII) 
of the Act.
     Individuals who are only eligible for Medicaid coverage of 
the care and services necessary for the treatment of an emergency 
medical condition in accordance with section 1903(v) of the Act.

C. Section 440.320 State Plan Requirements: Optional Enrollment for 
Exempt Individuals

    At proposed Sec.  440.320, we would allow States to offer exempt 
individuals specified in Sec.  440.315 the option to enroll into a 
benchmark or benchmark-equivalent benefit plan. The State would 
identify in its State plan the exempt groups for which this coverage is 
available. There may be instances in which an exempt individual may 
benefit from enrolling in a benchmark or benchmark-equivalent benefit 
package. States would be permitted to elect in the State plan to offer 
exempt individuals a benchmark or benchmark-equivalent package, but 
States may not require them to enroll in one. For example, in some 
States the State employee benchmark coverage may be more generous than 
the State Medicaid plan. Secretary-approved coverage may offer the 
opportunity for disabled individuals to obtain integrated coverage for 
acute care and community-based long-term care services. Additionally, 
States may be able to improve the integration of disease management 
programs to provide better coordinated care that targets the specific 
needs of individuals with special health needs.

D. Section 440.325 State Plan Requirements: Coverage and Benefits

    At proposed Sec.  440.325, we set forth the conditions under which 
a State may offer enrollment to exempt individuals specified in Sec.  
440.315. When a State offers exempt individuals the option to enroll in 
a benchmark or benchmark-equivalent benefit package, the State would 
inform the individuals that enrollment is voluntary and that the 
individual may disenroll from the benchmark or benchmark-equivalent 
benefit package at any time and regain immediate eligibility for the 
standard full Medicaid program under the State plan. The State would 
inform the individual of the benefits available under the benchmark or 
benchmark-equivalent benefit package and provide a comparison of how 
they differ from the benefits available under the standard full 
Medicaid program. The State would document in the individual's 
eligibility file that the individual was informed in accordance with 
this paragraph and voluntarily chose to enroll in the benchmark or 
benchmark-equivalent benefit package.
    At proposed Sec.  440.325, a State would have the option to choose 
the benchmark or benchmark-equivalent coverage packages offered under 
the State's Medicaid plan. A State may select one or all of the 
benchmark plans described in Sec.  440.330 or establish benchmark-
equivalent plans described in Sec.  440.335, respectively.

E. Section 440.330 Benchmark Health Benefits Coverage

    At proposed Sec.  440.330, benchmark coverage is described as any 
one of the following:
     Federal Employees Health Benefit Plan Equivalent Coverage 
(FEHBP--Equivalent Health Insurance Coverage). A benefit plan 
equivalent to the standard Blue Cross/Blue Shield preferred provider 
option service benefit plan that is described in and offered to Federal 
employees under 5 U.S.C. 8903(1).
     State employee coverage. A health benefits plan that is 
offered and generally available to State employees in the State 
involved.
     Health Maintenance Organization (HMO) plan. A health 
insurance plan that is offered through an HMO (as defined in section 
2791(b)(3) of the Public Health Service Act) that has the largest 
insured commercial, non-Medicaid enrollment in the State.
     Secretary-approved coverage. Any other health benefits 
coverage that the Secretary determines, upon application by a State, 
provides appropriate coverage for the population proposed to be 
provided that coverage. As proposed, States wishing to opt for 
Secretarial-approved coverage should submit a full description of the 
proposed coverage and include a benefit-by-benefit comparison of the 
proposed plan to one or more of the three benchmark plans specified 
above or to the State's standard full Medicaid coverage package under 
section 1905(a) of the Act, as well as a full description of the 
population that would be receiving the coverage. In addition, the State 
should submit any other information that would be relevant to a 
determination that the proposed health benefits coverage would be 
appropriate for the

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proposed population. The scope of a Secretary approved health benefits 
package will be limited to benefits within the scope of the categories 
available under a benchmark coverage package or the standard full 
Medicaid coverage package under section 1905(a) of the Act.
    A State may select one or more benchmark coverage plan options. The 
State may also specify the benchmark plan for any specific individual. 
For example, one individual may be enrolled in the FEHBP-equivalent and 
another may be enrolled into State Employee Coverage at the option of 
the State.

F. Section 440.335 Benchmark-Equivalent Health Benefits Coverage

    At proposed Sec.  440.335, we proposed to provide that if a State 
designs or selects a benchmark plan other than those specified in Sec.  
440.330, the State must provide coverage that is equivalent to 
benchmark coverage. Coverage that meets the following requirements will 
be considered to be benchmark-equivalent coverage:
     Required Coverage. Benchmark-equivalent coverage includes 
benefits for items and services within each of the following categories 
of basic services and must include coverage for the following 
categories of basic services:
    + Inpatient and outpatient hospital services.
    + Physicians' surgical and medical services.
    + Laboratory and x-ray services.
    + ``Well-baby'' and ``well-child'' care, including age-appropriate 
immunizations.
    + Other appropriate preventive services, as designated by the 
Secretary.
     Aggregate actuarial value equivalent to benchmark 
coverage. Benchmark-equivalent coverage must have an aggregate 
actuarial value, determined in accordance with proposed Sec.  440.340, 
that is at least equivalent to coverage under one of the benchmark 
packages outlined in Sec.  440.330.
     Additional coverage. In addition to the categories of 
services set forth above, benchmark-equivalent coverage may include 
coverage for any additional services included in the benchmark plan or 
described in section 1905(a) of the Act.
     Application of actuarial value for benchmark-equivalent 
coverage that includes prescription drugs, mental health, vision, and 
hearing services. Where the benchmark coverage package used by the 
State as a basis for comparison in establishing the aggregate actuarial 
value of the benchmark-equivalent package includes any or all of the 
following four categories of services: Prescription drugs; mental 
health services; vision services; and hearing services; then the 
actuarial value of the coverage for each of these categories of service 
in the benchmark-equivalent coverage package must be at least 75 
percent of the actuarial value of the coverage for that category of 
service in the benchmark plan used for comparison by the State.
    If the benchmark coverage package does not cover one of the four 
categories of services mentioned above, then the benchmark-equivalent 
coverage package may, but is not required to, include coverage for that 
category of service.

G. Section 440.340 Actuarial Report for Benchmark-Equivalent Health 
Benefit Coverage

    In accordance with 1937(a)(3) of the Act, at Sec.  440.340, we 
proposed to require a State, as a condition of approval of benchmark-
equivalent coverage, to provide an actuarial report, with an actuarial 
opinion that the benchmark-equivalent coverage meets the actuarial 
requirements of Sec.  440.335.
    At Sec.  440.340, we proposed to require the actuarial report to 
obtain approval for benchmark-equivalent health benefit coverage and to 
meet all the provisions of the statute. The actuarial report must state 
the following:
     The actuary issuing the opinion is a member of the 
American Academy of Actuaries (AAA) (and meets Academy standards for 
issuing an opinion).
     The actuary used generally accepted actuarial principles 
and methodologies of the AAA, standard utilization and price factors 
and a standardized population representative of the population 
involved.
     The same principles and factors were used in analyzing the 
value of different coverage (or categories of services) without taking 
into account differences in coverage based on the method of delivery or 
means of cost control or utilization used.
     The report should also state if the analysis took into 
account the State's ability to reduce benefits because of the increase 
in actuarial value of health benefits coverage offered under the State 
plan that results from the limitations on cost sharing (with the 
exception of premiums) under that coverage.
     The actuary preparing the opinion must select and specify 
the standardized set of utilization and pricing factors as well as the 
standardized population.
     The actuary preparing the opinion must provide sufficient 
detail to explain the basis of the methodologies used to estimate the 
actuarial value or, if requested by CMS, to replicate the State's 
result.

H. Section 440.345 EPSDT Services Requirement

    At Sec.  440.345, we proposed to require States to make available 
EPSDT services as defined in section 1905(r) of the Act that are 
medically necessary for those individuals under age 19 who are covered 
under the State plan. We expected that most benchmark or benchmark-
equivalent plans will offer the majority of EPSDT services. To the 
extent that any medically necessary EPSDT services are not covered 
through the benchmark or benchmark-equivalent plan, States are required 
to supplement the benchmark or benchmark-equivalent plan in order to 
ensure access to these services. As proposed, individuals mandated into 
a benchmark or benchmark-equivalent plan and entitled to have access to 
EPSDT services cannot disenroll from the benchmark or benchmark-
equivalent plan just to receive these services. While, as proposed, 
individuals are required to have access to such medically necessary 
services first under the benchmark or benchmark-equivalent plan, the 
State may provide wrap-around or additional coverage for medically 
necessary services not covered under such plan. Any wrap-around 
benefits must be sufficient so that, in combination with the benchmark 
or benchmark-equivalent benefits package, an individual would have 
coverage for his or her medically necessary services consistent with 
the requirements under section 1905(r) of the Act. The State plan would 
include a description of how wrap-around benefits or additional 
services will be provided to ensure that these individuals have access 
to full EPSDT services under section 1905(r) of the Act.
    In addition, as proposed, individuals would need to first seek 
coverage of EPSDT services through the benchmark or benchmark-
equivalent plan before seeking coverage of such services through other 
options established by the State for receiving wrap-around benefits 
under section 1937 of the Act.

I. Section 440.350 Employer Sponsored Insurance Health Plans

    At Sec.  440.350, we proposed that the use of benchmark or 
benchmark-equivalent benefit coverage would be at the discretion of the 
State and may be used in conjunction with employer sponsored health 
plans as a coverage option for individuals with access to private 
health insurance. Additionally, the use of benchmark or benchmark-
equivalent coverage may be used for

[[Page 23072]]

individuals with access to private health insurance coverage. For 
example, if an individual has access to employer sponsored coverage and 
that coverage is determined by the State to be benchmark or benchmark-
equivalent, a State may, at its option, provide premium payments on 
behalf of the individual to purchase the employer coverage. 
Additionally, a State could create a benchmark or benchmark-equivalent 
plan combining employer sponsored insurance and wrap-around benefits to 
that employer sponsored insurance benefit package. The premium payments 
would be considered medical assistance and the State could require the 
non-exempt individual to enroll in the group health plan.

J. Section 440.355 Payment of Premiums

    At Sec.  440.355, we proposed that payment of premiums by the 
State, net of beneficiary contributions, to obtain benchmark or 
benchmark-equivalent benefit coverage on behalf of beneficiaries under 
this section will be treated as medical assistance under section 
1905(a) of the Act.

K. Section 440.360 State Plan Requirement for Providing Additional 
Wrap-Around Services

    At Sec.  440.360, we proposed that a State may at its option 
provide additional wrap-around services to the benchmark or benchmark-
equivalent plans. The wrap-around services do not need to include all 
State plan services. However, the State plan would be required to 
describe the populations covered and the payment methodology for 
assuring those services. Such additional or wrap-around services must 
be within the scope of categories of services covered under the 
benchmark plan, or described in section 1905(a) of the Act.

L. Section 440.365 Coverage of Rural Health Clinic and Federally 
Qualified Health Center (FQHC) Services

    At Sec.  440.365, we proposed that a State that provides benchmark 
or benchmark-equivalent coverage to individuals 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.

M. Section 440.370 Cost Effectiveness

    At Sec.  440.370, we proposed that benchmark or benchmark-
equivalent 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.

N. Section 440.375 Comparability

    At Sec.  440.375, we proposed that a State may at its option amend 
its State plan to provide benchmark or benchmark-equivalent coverage to 
individuals without regard to comparability.

O. Section 440.380 Statewideness

    At Sec.  440.380, we proposed that a State may at its option amend 
its State plan to provide benchmark or benchmark-equivalent coverage to 
individuals without regard to statewideness.

P. Section 440.385 Freedom of Choice

    At Sec.  440.385, we proposed that a State may at its option amend 
its State plan to provide benchmark or benchmark-equivalent coverage to 
individuals without regard to freedom of choice. States may restrict 
individuals 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:
    (+) Do not discriminate among classes of providers on grounds 
unrelated to their demonstrated effectiveness and efficiency in 
providing the benchmark benefit package.
    (+) Do not apply in emergency circumstances.
    (+) Require that all provider plans are paid on a timely basis in 
the same manner as health care practitioners must be paid under Sec.  
447.45 of the chapter.

Q. Section 440.390 Assurance of Transportation

    At Sec.  440.390, we proposed that a State may at its option amend 
its State plan to provide benchmark or benchmark-equivalent coverage to 
individuals without regard to the assurance of transportation to 
medically necessary services requirement specified in Sec.  431.53.

III. Analysis of and Responses to Public Comments

    In response to the February 2008 proposed rule, we received over 
1,100 timely items of correspondence. In response to the February 2, 
2009 interim final rule with a 30-day comment period (the first 
temporary delay of the December 3, 2008 final rule), we received nine 
timely items of correspondence. In response to the April 3, 2009 
interim final rule with a 30-day comment period (the second temporary 
delay of the December 3, 2008 final rule), we received seven timely 
items of correspondence. In response to the October 30, 2009 proposed 
rule on delaying the effective date of the final rule to July 1, 2010, 
we received one timely item of correspondence.
    The majority of the comments received on the proposed rule 
represented transportation providers, medical providers, and Medicaid 
beneficiaries, particularly Medicaid beneficiaries who rely on dialysis 
treatments. Other comments represented State and local advocacy groups, 
national associations that represent various beneficiary sub-groups, 
State Medicaid agency senior officials, and human services agencies. In 
this section, we provide a discussion of the public comments we 
received on the February 22, 2008 proposed rule, the February 2, 2009 
interim final rule with a 30-day comment period (the first temporary 
delay of the December 3, 2008 final rule) and the April 2, 2009 final 
rule with a 30-day comment period (the second temporary delay of the 
December 3, 2009 final rule), as well as the one comment that we 
received in response to our October 30, 2009 proposed rule delaying the 
effective date of the December 3, 2008 final rule, which addressed the 
issue of revisions required to comply with statutory changes. Comments 
related to the impact of this rule are addressed in the ``Collection of 
Information Requirements'' section of this regulation.
    Additionally, we published a proposed rule in the Federal Register 
on February 22, 2008 (73 FR 9727) titled, ``Medicaid Program: Premiums 
and Cost Sharing'' (CMS-2244-P). Comments on CMS-2244-P were also due 
March 24, 2008 similar to this rule. Some comments for CMS-2244-P were 
forwarded as comments to this rule (CMS-2232-P). Consistent with the 
Administrative Procedures Act, CMS is not responding to those comments 
in this regulation, but we addressed the issues raised by otherwise 
timely

[[Page 23073]]

comments in our publication of CMS-2244-F.

A. General Comments

    Comments: A few commenters supported the proposed rule and a few 
commenters strongly supported certain provisions of the December 3, 
2008 rule. However, most commenters oppose either the February 22, 2008 
proposed rule or certain sections of the December 3, 2008 rule. Many 
commenters are concerned that the benchmark or benchmark-equivalent 
benefit packages are inadequate benefit packages for, among others, 
individuals with mental illness, children with serious emotional 
disturbance, the disabled and elderly, individuals with end stage renal 
disease, and American Indians. Many of the commenters believe that to 
enroll Medicaid beneficiaries in benchmark or benchmark-equivalent 
benefit packages without the assurance of transportation could lead to 
poorer health outcomes, costlier care because individuals will be 
forced into hospital emergency rooms, and shifts in costs to the 
Emergency Medical Services.
    Response: We acknowledge and appreciate the views of the commenters 
who both supported and opposed the February 22, 2008 proposed rule and 
the December 3, 2008 rule. Those who opposed the rule generally raised 
concerns about the underlying wisdom of the statutory provision at 
section 1937 of the Act, which this final rule implements. CMS is 
charged with implementing the statute. We address comments relating to 
restrictive interpretations below in the discussion of specific 
proposed provisions that arguably were not required by the statutory 
provision.
    Comment: Several commenters believe that the accelerated pace of 
the short comment period for the proposed rule, given the broad 
implications, will lead to a short-sighted, onerous rule that has 
dangerous health impacts for the poor. The proposed rule was issued in 
the Federal Register on February 22, 2008. The deadline for submission 
of comments was March 24, 2008. The commenters stated that other 
rulemaking has taken a longer period and that given the impact of the 
provisions, a longer time period is warranted.
    Some commenters stated that the 30-day comment period in the 
proposed rule was not sufficient for Tribes to comment on a regulation 
that could potentially have a significant impact on Tribal communities.
    Other commenters noted that while the Department views the proposed 
rule as merely formalizing its earlier policy statements delivered only 
to State Medicaid Directors, a 30-day public comment period is too 
short for meaningful public review, analysis, and comment. Some 
commenters believe that the 30-day comment period is discouraging of 
full review and consideration by States.
    One commenter requests that the public comment period be extended 
by 60 days for a total of a 90-day comment period. Additional time is 
needed to provide sufficient time for stakeholders to be able to 
adequately assess the potential effects of the proposed rule.
    Response: As described in the ``Background'' in section I of this 
regulation under ``Regulatory History,'' in section I.A. of this 
regulation a 30-day public comment period on the February 22, 2008 
proposed rule was provided and two additional 30-day public comment 
periods were provided on the December 3, 2008 rule. We believe that 
these comment periods allowed sufficient time for public comment.

B. Section 440.300 Basis

    Comment: One commenter believed that the proposed limitations on 
eligibility groups who can be provided alternative benefit packages are 
overly restrictive. The commenter suggested that the rule should allow 
application to any eligibility category the State had the option to 
implement on or before the date of enactment of section 1937 (February 
8, 2006). The commenter reasoned that States are continually adding and 
changing eligibility requirements and these program changes are 
inherent in Medicaid programs. The commenter asserted that, if the rule 
is considered beneficial for individuals in eligibility categories that 
existed before February 8, 2006, it is logical to suppose it would also 
be beneficial for those created after that date.
    Response: The language in section 1937(a)(1)(B) of the Act 
specifies that the State may only exercise the option to offer 
benchmark or benchmark-equivalent coverage for an individual eligible 
under an eligibility category that had been established under the State 
plan on or before February 8, 2006. We have interpreted this statutory 
term to mean any eligibility category listed under section 1905(a) of 
the Act. Thus, all individuals within a category covered or potentially 
covered under the State's Medicaid plan could be eligible to 
participate in a benchmark or benchmark-equivalent plan at the State's 
option, unless specifically excluded by statute, even when the State 
makes modifications to the income and resource eligibility levels or 
methodologies, ages covered, etc. for a group or category after 
February 8, 2006.

C. Section 440.305 Scope

    Comment: Numerous commenters believed that offering benchmark and 
benchmark-equivalent benefit packages to certain Medicaid individuals 
will deter those individuals, including children, from receiving 
appropriate care. Commenters indicated that individuals with low 
incomes are likely to forego needed treatment if all medically 
necessary services and transportation are not included in the benchmark 
program. Most commenters believed that our most vulnerable populations, 
those with chronic medical needs, will be required to choose to provide 
for their basic needs like food and shelter rather than obtain 
necessary medical health care because of the rigor created by following 
a private health insurance model of benefits and the need to provide 
their own method of transportation.
    Response: The benchmark and benchmark-equivalent coverage was 
authorized by the statute. Under the statute, the benchmark flexibility 
is an option that States can choose to use in redesigning their current 
Medicaid benefit program. It should be noted that as a result of the 
CHIPRA changes to the DRA, this option is not as broad as it had been 
and we have revised the regulations to comply with CHIPRA by stating 
that States must comply with all requirements of title XIX other than 
sections 1902(a)(1) and 1902(a)(10(B) of the Act, unless such 
requirement can be shown to be directly contrary to the authority under 
section 1937 of the Act. For example, under the CHIPRA changes 
transportation is a required service and benchmark plans utilizing 
managed care delivery systems must meet managed care rules.
    Comment: Other commenters indicated that the DRA does not require 
that States offer the same Medicaid benefits statewide, meaning States 
could design different benefit packages for rural and urban areas. 
States may also ``tailor'' packages for different populations, although 
the commenter acknowledges, certain groups are exempt from mandatory 
changes to their Medicaid benefits package. In States where this has 
already been done, there have been some reports that the changes have 
been unsatisfactory. Several commenters believed that allowing States 
to ``tailor'' benefit packages would mean that individuals may not have 
access to the services they need. Benefit packages designed outside the 
important consumer protections in

[[Page 23074]]

traditional Medicaid may fail to meet beneficiaries' needs, and will 
not save money if these individuals experience significant unmet needs 
that escalate into problems that require treatment in emergency rooms.
    One commenter mentioned that private health plans, such as those 
listed as benchmarks under the law, frequently have limited coverage of 
mental health services. The commenter asserted that few cover any of 
the intensive community services that are covered by Medicaid under the 
rehabilitation category or the home and community-based services 
option. The commenter noted that, under the DRA, these limited mental 
health benefits can be further reduced by 25 percent of their actuarial 
value. Other commenters expressed concern that the reliance on 
commercial benefit plans is inappropriate for Medicaid individuals. 
Those commenters are concerned that many private insurance plans do not 
provide adequate mental health services. Other commenters noted that 
benchmark coverage is likely to prove entirely inadequate for 
individuals who need mental health services. The commenters noted that 
children with serious mental and/or physical disorders often qualify 
for Medicaid on a basis of family income and are not, for various 
reasons, receiving Supplemental Security Income (SSI) benefits or 
otherwise recognized as children with disabilities and would not be 
exempt from mandatory enrollment. In addition, the commenters noted 
that many low-income parents on Medicaid have been found to have 
serious depression, which could not be adequately treated with a very 
limited mental health benefit.
    Similarly, many commenters believed that the proposed rule has the 
potential to become the behavioral healthcare Medicaid ``Trojan 
horse'': It appears harmless but it will reverse hard fought progress 
won over years of struggle that brought about equitable, decent care 
for Medicaid-eligible individuals experiencing mental illness or who 
have a developmental disability. The commenters asserted that, in the 
end, these rules will have costlier results and not the desired 
economizing while also negatively impacting peoples' lives, their well-
being and care, and our society.
    Another commenter believed that it is critical for beneficiaries 
with life-threatening conditions such as HIV/AIDS to maintain access to 
the comprehensive range of medical and support services required to 
effectively manage HIV disease. The commenter stated that allowing 
States to ``tailor'' benefit packages in ways that essentially 
eliminate coverage for critical health services places the health of 
Medicaid beneficiaries with HIV/AIDS in serious jeopardy.
    Response: The DRA created section 1937 in response to States' 
desire for more flexibility in designing their Medicaid programs and 
adopting benefit programs tailored to the needs of the varied 
populations they serve. The DRA provides that States can provide 
alternative benchmark or benchmark-equivalent benefit packages at their 
option; that is, States are not required to implement these provisions. 
We have incorporated elements in this regulation that are designed to 
protect vulnerable populations and to help assure that individuals 
enrolled in a benchmark benefit plan will have access to services that 
are appropriate to their individual needs to the extent permitted by 
the statute.
    To protect individuals with disabilities we have included in this 
rule a basic minimum definition of medically frail and special medical 
needs to insure that people with disabilities and special health care 
needs are not mandatorily enrolled in benchmark benefit plans. Rather, 
they can only be voluntarily enrolled after being fully informed of the 
differences between the benchmark benefit plan and the traditional 
State plan. We have added language at Sec.  440.305(b)(2) that requires 
States electing to offer benchmark benefit plans or wishing to 
substantively change an approved benchmark benefit plan to provide 
advance public notice with an opportunity to comment. Before submitting 
to CMS a State plan amendment to implement a benchmark benefit plan or 
an amendment to substantially modify the benefits or eligibility 
provisions of an approved benchmark benefit plan, the State must first 
provide the public the opportunity to review the proposed change and 
comment on it.
    We acknowledge and agree with the commenters on the importance of 
providing adequate mental health benefits and will be separately 
addressing how post DRA-enactments, specifically the Paul Wellstone and 
Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 
relate to benchmark benefits.
    The new benefit option provides States with additional tools to 
provide care to maximize health outcomes for certain individuals. These 
tools may be used in conjunction with other Medicaid and Children's 
Health Insurance Program (CHIP) authorities to strategically align the 
Medicaid program with the current health care environment and expand 
access to care by leveraging existing benefit and coverage options to 
improve quality and coordination of care.
    States seeking to use benchmark and benchmark-equivalent plans to 
provide coverage for children and adults with special medical needs, 
individuals with HIV/AIDS, and long-term care and community-based 
service options, must design a benchmark benefit package that is 
appropriate to meet the health care needs of the population being 
served, including coverage that may be more generous than a State's 
Medicaid plan.
    We think it is important to note that States are required to 
provide children under the age of 21 with EPSDT services either as an 
additional service and or as part of the benchmark or benchmark-
equivalent benefit plan. States are required to inform families about 
how and where to access these services particularly if the benchmark or 
benchmark-equivalent benefit does not identify the full range of EPSDT 
services needed by the beneficiary as being covered. States must assure 
that these services are provided in the most seamless way possible and 
the families understand how to access such services through the 
Medicaid State plan.
    Moreover, certain groups cannot be included in a mandatory 
enrollment for an alternative benefit package--among others, pregnant 
women, dual eligibles, terminally ill individuals receiving hospice, 
inpatients in institutional settings, and individuals who are medically 
frail or have special medical needs. These individuals may be offered a 
choice to enroll and, in considering the choice, must be provided a 
comparison of benchmark benefits versus the traditional Medicaid State 
plan benefit. Their decision to enroll is voluntary and individuals 
must be provided the opportunity to revert back to traditional Medicaid 
at any time.
    Comment: One commenter noted that the preamble language refers to 
meeting the ``* * * needs of today's Medicaid populations and the 
health care environment.'' The commenter believed the preamble should 
describe these needs in some detail so that there is a shared 
understanding of the types of needs this new flexibility is intended to 
address.
    Response: We agree that it is important to understand the needs of 
today's Medicaid populations and the health care environment. Congress 
has provided States with the flexibility to align Medicaid benefit 
packages for certain populations with commercial insurance plans. 
States now have the ability to provide additional services that are 
uniquely designed to meet the

[[Page 23075]]

needs of targeted populations. For example, individuals with asthma and 
chronic obstructive pulmonary disease who reside in a certain area of 
the State may be offered disease management services which are not 
otherwise available under the traditional State plan to all individuals 
with asthma and chronic obstructive pulmonary disease. A State may 
elect to provide beneficiaries with incentives for healthy behavior by 
offering additional services. For example, a State could offer certain 
(enhanced) preventive services not available under the regular State 
plan, such as smoking cessation counseling or nutritional/dietary 
management, to beneficiaries with certain medical conditions and/or in 
certain parts of the State. Prior to the enactment of the DRA, a State 
that wanted to tailor its Medicaid program to meet the unique needs of 
its beneficiaries would have to utilize a demonstration or waiver 
program.
    Comment: One commenter stated that the proposed rule, read together 
with other CMS rules like the citizenship documentation requirement and 
CMS's Children's Health Insurance Program (CHIP) crowd-out directive of 
August 17, 2007, create major barriers to access to appropriate health 
care, and that the proposed rule has a devastating impact on the low 
income populations. In particular, some commenters raised concerns 
about requirements for American Indians and Alaska Natives to prove 
both citizenship and identity in order to obtain Medicaid services. 
Commenters also raised concerns about the CHIP review strategy outlined 
in an August 17, 2007 letter sent to State Health Officials. Commenters 
also asserted that other proposed rules released by CMS like the 
Rehabilitation Rule and the Targeted Case Management Rule coupled with 
this rule will have a devastating effect on individuals in need of 
transportation since these rules also eliminate non-emergency medical 
transportation services.
    Response: We agree that the DRA benchmark rules can create some 
risk that beneficiaries may not be able to access needed care, and we 
will implement the rules mindful of this possibility and consistent 
with the Federal law. Additionally, CHIPRA included two significant 
technical changes to the DRA that amended section 1937 of the Act. In 
order to reflect these changes, we modified the regulation at Sec.  
440.390 to clarify that States must assure necessary transportation to 
and from providers and at Sec.  440.345 to clarify that States must 
assure that children under the age of 21 who are enrolled in 
alternative benefit plans must have full access to EPSDT services. 
Additionally, we expanded paragraph (b)(5) in Sec.  440.335, which 
lists the mandatory services that benchmark-equivalent plans must 
provide, to include family planning services and supplies as a required 
preventive service.
    Citizenship documentation requirements and the rehabilitation and 
case management requirements are not part of this rule and we do not 
address them here. This regulation implements the statutory provisions 
of section 1937 of the Act. However, it should be noted that the August 
17, 2007 State Health Officials letter on CHIP eligibility levels and 
crowd out was withdrawn on February 4, 2009, at the direction of 
President Obama. The CHIPRA, signed into law on that same day, provides 
new flexibility to States for streamlining citizenship documentation. 
CHIPRA also includes technical amendments to the DRA which clarify 
documentation requirements, provide for a reasonable opportunity period 
for individuals to submit such documentation, and expand the list of 
documents that are acceptable for verifying citizenship.
    Comment: Several comments were provided by organizations that have 
an interest in how the benchmark and benchmark-equivalent benefit 
packages impact American Indians/Alaska Natives. The commenters 
believed that alternative benefit packages serve as a substantial 
barrier to American Indians/Alaska Natives enrollment in the Medicaid 
program. They noted that, because of the Federal government's trust 
responsibility to provide health care to American Indians/Alaska 
Natives, implementing benchmark and benchmark-equivalent benefit 
packages have specific tribal implications that were not addressed in 
the proposed rule. Several commenters believed that American Indians/
Alaska Natives should be exempt from mandatory enrollment in benchmark 
and benchmark-equivalent benefit programs entirely.
    Response: In Medicaid, there is no statutory basis to exempt 
American Indians/Alaska Natives from Medicaid alternative benefit 
provisions. Section 1937 of the Act does not provide for such an 
exemption. Section 1937 does provide some specific exemptions from 
mandatory enrollment in benchmark or benchmark-equivalent benefit 
packages and it is possible that some American Indians/Alaska Natives 
would fit into one of these exempt groups. Section 1937 does not 
however give CMS authority to identify additional exempt groups.
    To address the unique needs of the American Indians/Alaska Natives 
population, we expect States to ensure that alternative benefit 
packages recognize the unique services offered by IHS and tribal 
providers, and the unique health needs of the American Indians/Alaska 
Natives population. To ensure this, section 5006 of ARRA requires 
States to consult with Indian Health Programs or Urban Indian 
Organizations that furnish health care services on matters that are 
likely to have a direct effect on these health programs. It also 
requires that services provided to Indians through managed care 
organizations provide access to IHS providers.
    Comment: One commenter contended that there are no provisions to 
require States to ensure that American Indians/Alaska Natives continue 
to have access to culturally competent health services through the 
Indian Health Service (IHS) or tribally operated health programs. The 
commenter stated that the proposed rules allow States to offer coverage 
without regard to comparability, statewideness, freedom of choice, the 
assurance of transportation to medically necessary services, and other 
requirements. There are large disparities between American Indians/
Alaska Natives' health care status and the health care status of the 
rest of the country. The commenter added that for American Indians/
Alaska Natives, the patient should always have the option of the 
provider being an Indian Health Service or tribal health program.
    Response: State Medicaid programs provide health care services to 
many diverse populations including American Indians/Alaska Natives 
individuals. We believe that culturally competent services are 
important for all Medicaid beneficiaries and access to care and 
facilities in remote parts of the country, where it is especially 
difficult to find providers who will agree to participate in the 
Medicaid program, is paramount. Section 1937 of the Act does not 
provide any special protections for benefit packages applicable to 
American Indians/Alaska Natives individuals, but this does not mean 
that benefit packages will be deficient.
    Section 5006(e) of the ARRA, which was signed on February 17, 2009 
and became effective July 1, 2009, requires that in the case of any 
State in which one or more Indian Health Program or Urban Indian 
Organization furnishes health care services, the Medicaid State plan 
specify a process under which the State seeks advice from designees of 
such programs or organizations on matters that are likely to have a 
direct effect on these health programs.
    As noted previously, to address the unique needs of the American 
Indians/

[[Page 23076]]

Alaska Natives population, we expect States to work with Indian Health 
Programs or Urban Indian Organizations that furnish health care 
services to ensure that alternative benefit packages recognize the 
unique services offered by IHS and tribal providers, and the unique 
health needs of the American Indians/Alaska Natives population.
    With regard to the assurance of transportation and freedom of 
choice of providers, CHIPRA amended the ``notwithstanding any other 
provisions of this title'' language. This change in the law clarifies 
that the authority under section 1937 of the Act to deviate from 
otherwise applicable Medicaid requirements is limited. Therefore, we 
revised the regulation at Sec.  440.390 to require States to assure 
necessary transportation to and from providers for individuals enrolled 
in benchmark and benchmark-equivalent plans and at Sec.  440.385 by 
removing the option to provide benchmark and benchmark-equivalent 
coverage without regard to freedom of choice of providers. While we do 
not anticipate that there will be many requirements of title XIX that 
would be contrary to implementing a benchmark benefit plan, States may 
request an exemption from a provision of title XIX if they can 
demonstrate how the provision would be directly contrary to section 
1937 of the Act.
    Comment: Another commenter stated on behalf of American Indians/
Alaska Natives, the Indian and tribal health care system is woefully 
under-funded and tribal providers rely on Medicaid revenues to 
supplement that meager funding. Forcing American Indians/Alaska Natives 
into benchmark plans, which may have dramatically reduced coverage or 
payments, would thus jeopardize Indian health, injure tribal health 
systems, and thereby violate the Federal trust obligation to care for 
the health needs of Indian people.
    Response: We acknowledge that benchmark plans could reduce covered 
benefits. To date, however, CMS has approved ten benchmark benefit 
programs, and most offer State plan services plus additional services 
like preventive care, personal assistance services, or disease 
management services. For individuals under the age of 21, section 1937 
of the Act ensures that all needed services will be available through 
the requirement that EPSDT services must be provided either in addition 
to, or as part of, the benchmark or benchmark-equivalent plan.
    Section 1937 of the Act does not provide a basis to exclude IHS or 
tribal health providers from participation in the delivery system for 
alternative benefits. Futhermore, CMS does not determine IHS funding 
levels.
    In an effort to reach out to Tribes we held several discussions 
with Tribes about the changes made to the DRA and section 1937 of the 
Act by section 611 of CHIPRA. These discussions took place during the 
All Tribes call on July 2, 2009, and during two face to face open 
consultation meetings held with Tribes on July 8th and July 10th, 2009. 
We covered all CHIPRA related issues, including the changes made to 
section 1937 of the Act during all of these meetings. Also, on June 29, 
2009 we covered section 611 of CHIPRA during the Tribal Technical 
Advisory Group (T-TAG) meeting CMSO had with the T-TAG policy advisors. 
CMS is committed to enhancing communication with Tribes and to assuring 
that the obligation of States to consult with American Indians/Alaska 
Natives on all issues affecting Indian health services are followed by 
State Medicaid agencies.
    Comment: Some commenters believed that the proposed rule did not 
comply with the Department of Health and Human Services' Tribal 
Consultation policy, since CMS did not consult with Tribes in the 
development of these regulations before they were promulgated.
    These commenters noted that CMS did not obtain advice and input 
from the CMS Tribal Technical Advisory Group (TTAG), even though the 
TTAG meets on a monthly basis through conference calls and holds 
quarterly face to face meetings in Washington, DC. They also noted that 
CMS did not utilize the CMS TTAG Policy Subcommittee, which was 
specifically established by CMS for the purpose of obtaining advice and 
input in the development of policy guidance and regulations.
    These commenters also noted that the proposed rule does not contain 
a Tribal summary impact statement describing the extent of the tribal 
consultation or lack thereof, nor an explanation of how the concerns of 
Tribal officials have been met. Several commenters request that these 
regulations not be made applicable to American Indians/Alaska Natives 
Medicaid beneficiaries until Tribal consultation is conducted, or be 
modified to specifically require State Medicaid programs to consult 
with Indian Tribes before the development of any policy which would 
require mandatory enrollment of American Indians/Alaska Natives in 
benchmark or benchmark-equivalent plans. One commenter suggested that 
this consultation should be similar to the way in which consultation 
takes place with Indian Tribes in the development of waiver proposals. 
And, a commenter urged that, after appropriate tribal consultation and 
revision reflecting these and other comments, the rule be republished 
with a longer public comment period.
    One Tribe commented that the proposed rule does not honor treaty 
obligations for health services that are required by the Federal 
government'