Federal Register Cms 062909 Rescissions

[Federal Register: June 30, 2009 (Volume 74, Number 124)][Rules and Regulations][Page 31183-31196]From the Federal Register Online via GPO Access [wais.access.gpo.gov][DOCID:fr30jn09-15]=======================================================================-----------------------------------------------------------------------DEPARTMENT OF HEALTH AND HUMAN SERVICESCenters for Medicare & Medicaid Services42 CFR Parts 431, 433, 440 and 441[CMS-2287-F2; CMS-2213-F2; CMS 2237-F]RIN 0938-AP75 Medicaid Program: Rescission of School-Based Administration/Transportation Final Rule, Outpatient Hospital Services Final Rule, andPartial Rescission of Case Management Interim Final RuleAGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.ACTION: Final rule.-----------------------------------------------------------------------SUMMARY: This rule finalizes our proposal to rescind the December 28,2007 final rule entitled, ``Elimination of Reimbursement under Medicaidfor School Administration Expenditures and Costs Related toTransportation of School-Age Children Between Home and School;'' theNovember 7, 2008 final rule entitled, ``Clarification of OutpatientHospital Facility (Including Outpatient Hospital Clinic) ServicesDefinition;'' and certain provisions of the December 4, 2007 interimfinal rule entitled, ``Optional State Plan Case Management Services.''These regulations have been the subject of Congressional moratoria andhave not yet been implemented (or, with respect to the case managementinterim final rule, have only been partially implemented) by CMS. Inlight of concerns raised about the adverse effects that could resultfrom these regulations, in particular, the potential restrictions onservices available to beneficiaries and the lack of clear evidencedemonstrating that the approaches taken in the regulations arewarranted, CMS is rescinding the two final rules in full, and partiallyrescinding the interim final rule. Rescinding these provisions willpermit further opportunity to determine the best approach to furtherthe objectives of the Medicaid program in providing necessary healthbenefits coverage to needy individuals.DATES: Effective Date: These regulations are effective on July 1, 2009.FOR FURTHER INFORMATION CONTACT: Sharon Brown (410) 786-0673 or JudiWallace (410) 786-3197, for issues related to the School-BasedAdministration/Transportation final rule.Jeremy Silanskis (410) 786-1592, for issues related to theOutpatient Hospital Services final rule.Jean Close (410) 786-2804 or Melissa Harris (410) 786-3397, for

issues related to the Case Management interim final rule.SUPPLEMENTARY INFORMATION:I. BackgroundA. Elimination of Reimbursement Under Medicaid for SchoolAdministration Expenditures and Costs Related to Transportation ofSchool-Age Children Between Home and SchoolUnder the Medicaid program, Federal payment is available for thecosts of administrative activities as found necessary by the Secretaryfor the proper and efficient administration of the State plan. OnDecember 28, 2007, we published a final rule entitled, ``Elimination ofReimbursement under Medicaid for School Administration Expenditures andCosts Related to Transportation of School-Age Children Between Home andSchool'' (hereinafter referred to as the School-Based Administration/Transportation final rule (72 FR 73635)), to eliminate Federal Medicaidpayment for the costs of certain school-based administrative andtransportation activities based on a Secretarial finding that theseactivities are not necessary for the proper and efficientadministration of the Medicaid State plan and are not within thedefinition of the optional transportation benefit. Under the finalrule, Federal Medicaid payments were not available for administrativeactivities performed by school employees or contractors, or anyoneunder the control of a public or private educational institution, orfor transportation between home and school. Federal financialparticipation (FFP) remained available for covered services furnishedat or through a school that are included in a child's individualizededucation program (IEP), and for transportation from school to aprovider in the community for a covered service. FFP also remainedavailable for the costs of school-based Medicaid administrativeactivities conducted by employees of the State or local Medicaidagency, and for transportation to and from a school for children whoare not yet school age but are receiving covered direct medicalservices at the school.The December 28, 2007, School-Based Administration/Transportationfinal rule became effective on February 26, 2008. Subsequent topublication of the final rule, section 206 of the Medicare, Medicaid,and SCHIP Extension Act of 2007 (Pub. L. 110-173) imposed a moratoriumuntil June 30, 2008, that precluded CMS from imposing any restrictionscontained in the rule that are more stringent than those applied as ofJuly 1, 2007. Section 7001(a)(2) of the Supplemental Appropriations Actof 2008 (Pub. L. 110-252) extended this moratorium until April 1, 2009;and section 5003(b) of the American Recovery and Reinvestment Act of2009 (the Recovery Act) (Pub. L. 111-5) further extended the moratoriumuntil July 1, 2009.[[Page 31184]]B. Clarification of Outpatient Hospital Facility (Including OutpatientHospital Clinic) Services DefinitionOutpatient hospital services are a required service under Medicaid.On November 7, 2008, we published a final rule entitled,``Clarification of Outpatient Hospital Facility (Including OutpatientHospital Clinic) Services Definition'' (hereinafter referred to asOutpatient Hospital Services final rule), to introduce new limitations

on which treatments could be billed and paid as an outpatient hospitalservice, thereby altering the pre-existing definition of ``outpatienthospital services.'' The final rule became effective on December 8,2008. Section 5003(c) of the Recovery Act precludes CMS from taking anyaction to implement the final rule with respect to services furnishedbetween December 8, 2008 and June 30, 2009.C. Optional State Plan Case Management ServicesOn December 4, 2007, we published an interim final rule entitled,``Optional State Plan Case Management Services'' (hereinafter referredto as the Case Management interim final rule (72 FR 68077)), thatrevised current Medicaid regulations to incorporate changes made bysection 6052 of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171). In addition, we placed new limitations on the services andactivities that could be covered and paid as an optional targeted casemanagement (TCM) service or optional case management service.The interim final rule became effective on March 3, 2008. Section7001(a)(3)(B)(I) of the Supplemental Appropriations Act imposed apartial moratorium until April 1, 2009, precluding CMS from taking anyaction to impose restrictions on case management services that weremore restrictive than those in effect on December 3, 2007. The lawcontained an exception for the portion of the regulation as it relateddirectly to implementing the definition of case management services andtargeted case management services. That partial moratorium was extendedby section 5003(a) of the Recovery Act until July 1, 2009.II. Provisions of the Proposed Regulation and Response to CommentsSince the publication of these final regulations, we have receivedadditional public input about the adverse effects that could resultfrom these regulations. In addition, the statutory moratoria indicatestrong concern in Congress about the effects of these regulations. Inparticular, we have become aware that the provisions of these rulescould result in restrictions on services available to beneficiaries andthere is a lack of clear evidence demonstrating that the approachestaken in the regulations are warranted at this time.On May 6, 2009, we published a proposed rule (74 FR 21230) in theFederal Register to rescind the November 7, 2008 Outpatient HospitalServices final rule; the December 28, 2007 School-Based Administration/Transportation final rule; and certain provisions of the December 4,2007 Case Management interim final rule. The May 6, 2009 proposed rulesolicited public comments on our proposal to rescind these rules and toaid our consideration of the many complex questions surrounding theseissues and the need for regulation in these areas.We received a total of 556 timely comments from State officials,school districts and consortia, educational organizations, childadvocacy groups, health care organizations, school nurses, parents,teachers, school officials, providers, and other interestedindividuals. All comments were reviewed and analyzed. After associatinglike comments, we placed them in categories based on subject matter.The commenters were overwhelmingly supportive of our proposal torescind the School-Based Administration/Transportation final rule, theOutpatient Hospital Services final rule, and portions of the CaseManagement interim final rule. Summaries of the public comments and ourresponses to those comments are set forth under the appropriateheadings below.