81_FR_54137 81 FR 53980 - Medicaid Program; Disproportionate Share Hospital Payments-Treatment of Third Party Payers in Calculating Uncompensated Care Costs

81 FR 53980 - Medicaid Program; Disproportionate Share Hospital Payments-Treatment of Third Party Payers in Calculating Uncompensated Care Costs

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

Federal Register Volume 81, Issue 157 (August 15, 2016)

Page Range53980-53985
FR Document2016-19107

This proposed rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under section 1923(g)(1)(A) of the Social Security Act (Act), and the application of such limitation in the annual DSH audits required under section 1923(j) of the Act, by clarifying that the hospital-specific DSH limit is based only on uncompensated care costs. Specifically, this rule would make clearer in the text of the regulation an existing interpretation that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments received by hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. As a result, the hospital-specific limit calculation would reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source (other than state or local governmental payments for indigent patients).

Federal Register, Volume 81 Issue 157 (Monday, August 15, 2016)
[Federal Register Volume 81, Number 157 (Monday, August 15, 2016)]
[Proposed Rules]
[Pages 53980-53985]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-19107]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 447

[CMS-2399-P]
RIN 0938-AS92


Medicaid Program; Disproportionate Share Hospital Payments--
Treatment of Third Party Payers in Calculating Uncompensated Care Costs

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

ACTION: Proposed rule.

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[[Page 53981]]

SUMMARY: This proposed rule addresses the hospital-specific limitation 
on Medicaid disproportionate share hospital (DSH) payments under 
section 1923(g)(1)(A) of the Social Security Act (Act), and the 
application of such limitation in the annual DSH audits required under 
section 1923(j) of the Act, by clarifying that the hospital-specific 
DSH limit is based only on uncompensated care costs. Specifically, this 
rule would make clearer in the text of the regulation an existing 
interpretation that uncompensated care costs include only those costs 
for Medicaid eligible individuals that remain after accounting for 
payments received by hospitals by or on behalf of Medicaid eligible 
individuals, including Medicare and other third party payments that 
compensate the hospitals for care furnished to such individuals. As a 
result, the hospital-specific limit calculation would reflect only the 
costs for Medicaid eligible individuals for which the hospital has not 
received payment from any source (other than state or local 
governmental payments for indigent patients).

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. September 14, 2016.

ADDRESSES: In commenting please refer to file code CMS-2399-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-2399-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 to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-2399-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period: a. For delivery in Washington, DC--
Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Room 445-G, Hubert H. Humphrey Building, 200 
Independence Avenue SW., Washington, DC 20201.
    (Because access to the interior of the Hubert H. Humphrey 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.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-7195 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Wendy Harrison, (410) 786-2075 and 
Rory Howe, (410) 786-4878.

SUPPLEMENTARY INFORMATION: 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: http://regulations.gov. Follow the search instructions 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. Legislative History

    Title XIX of the Act authorizes the Secretary of the Department of 
Health and Human Services (the Secretary) to provide grants to states 
to help finance programs furnishing medical assistance (state Medicaid 
programs) to specified groups of eligible individuals in accordance 
with an approved state plan. ``Medical Assistance'' is defined at 
section 1905(a) of the Act as payment for part or all of the cost of a 
list of specified care for eligible individuals. Section 
1902(a)(13)(A)(iv) of the Act requires that payment rates for hospitals 
take into account the situation of hospitals that serve a 
disproportionate share of low-income patients with special needs. 
Section 1923 of the Act contains more specific requirements related to 
payments for such disproportionate share hospitals (DSH) payments. 
These specific statutory requirements include aggregate state level 
limits, hospital-specific limits, qualification requirements, and 
auditing requirements.
    Under section 1923(b) of the Act, a hospital meeting the minimum 
qualifying criteria in section 1923(d) of the Act is deemed as a DSH if 
it meets certain criteria. States have the option to define 
disproportionate share hospitals under the state plan using alternative 
qualifying criteria as long as the qualifying methodology comports with 
the deeming requirements of section 1923(b) of the Act. Subject to 
certain federal payment limits, states are afforded flexibility in 
setting DSH state plan payment methodologies to the extent that these 
methodologies are consistent with section 1923(c) of the Act.
    Section 1923(f) of the Act limits federal financial participation 
(FFP) for total statewide DSH payments made to eligible hospitals in 
each federal fiscal year (FY) to the amount specified in an annual DSH 
allotment for each state. These allotments essentially establish a 
finite pool of available federal DSH funds that states use to pay the 
federal portion of payments to all qualifying hospitals in each state. 
As states often use most or all of their federal DSH allotment, in 
practice, if one hospital gets more DSH funding, other DSH-eligible 
hospitals in the state get less.

B. Hospital-Specific DSH Limit

    Section 13621 of the Omnibus Budget Reconciliation Act of 1993 
(OBRA 93), which was signed into law on August 10, 1993, added section 
1923(g) of the Act, limiting Medicaid DSH payments during a year to a 
qualifying hospital to the amount of eligible uncompensated care costs 
during that same year. The Congress enacted the hospital-specific limit 
on DSH payments in response to reports that some hospitals received

[[Page 53982]]

DSH payment adjustments that exceeded ``the net costs, and in some 
instances the total costs, of operating the facilities.'' (H.R. Rep. 
No. 103-111, at 211-12 (1993), reprinted in 1993 U.S.C.C.A.N. 278, 538-
39.) Such excess payments were inconsistent with the purpose of the 
Medicaid DSH payment, which is to ameliorate the real economic burden 
faced by hospitals that treat a disproportionate share of low-income 
patients and to ensure continued access to care for Medicaid patients. 
Accordingly, Congress imposed a hospital-specific limit that restricts 
Medicaid DSH payments to qualifying hospitals to the costs incurred by 
the hospital for providing inpatient and outpatient hospital services 
during the year to Medicaid eligible patients and individuals who have 
no health insurance or other source of third party coverage for the 
services provided during the year. Costs for providing services are 
``as determined by the Secretary'' and are to be net of applicable 
payments received for those services.
    The Congress revisited the DSH payment requirements in the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), 
Public Law 108-173, enacted on December 8, 2003. The MMA added section 
1923(j) to the Act, which requires states to report specified 
information about their DSH payments, including independent, certified 
audits that, among other elements, are required to review compliance 
with the hospital-specific limits under section 1923(g)(1)(A) of the 
Act. Significantly, section 1923(j)(2)(B) of the Act provides a gloss 
on section 1923(g)(1)(A), by specifying that the audits must verify 
that ``Only the uncompensated care costs of providing inpatient 
hospital and outpatient hospital services to individuals described in 
paragraph (1)(A) of such subsection [1923(g) of the Act] are included 
in the calculation of the hospital-specific limits under such 
subsection.''
    Until the establishment of an audit requirement, there was no 
standardization among the states as to how the hospital-specific limit 
was calculated. In the late 1990's and early 2000's the Government 
Accountability Office (GAO) and the U.S. Department of Health and Human 
Services Office of Inspector General (OIG) issued a series of reports 
focusing on the hospital-specific DSH limit. Among other findings, the 
GAO and OIG reports identified multiple instances where states included 
unallowable cost or did not account for costs net of applicable 
payments when determining the hospital-specific limits. These reviews 
and audits led to the enactment, as part of the MMA, of the audit 
requirements at section 1923(j) of the Act. Section 1923(j) of the Act 
not only required that we promulgate standardized audit methods and 
procedures, it also provided clarity on how the hospital-specific limit 
should be applied. The Congress explicitly addressed any ambiguity 
about whether the hospital-specific limit could include costs that have 
been compensated by payers other than the individual or the Medicaid 
program. Section 1923(j)(2)(C) of the Act specifically provides that 
only the uncompensated care costs of providing inpatient hospital and 
outpatient hospital services to individuals (described in section 
1923(g)(1)(A of the Act) are included in the calculation of the 
hospital-specific limits under section 1923(g)(1)(A) of the Act. This 
provision makes clear that the Congress itself specified the hospital-
specific limit at section 1923(g)(1) of the Act to include only 
uncompensated care costs.
    As a result, it is clear that the Congress intended that FFP is not 
available for DSH payments that exceed a hospital's hospital-specific 
limit. The hospital-specific limit prevents hospitals from receiving 
DSH payments above the level of any net uncompensated cost incurred in 
the treatment of Medicaid eligible or uninsured individuals.
    As indicated in a 2008 final rule describing the required DSH audit 
process, 73 FR 77904, 77926 (December 19, 2008), to be considered an 
inpatient or outpatient hospital service for purposes of Medicaid DSH, 
a service must meet the federal and state definitions of an inpatient 
hospital service or outpatient hospital service and must be included in 
the state's definition of an inpatient hospital service or outpatient 
hospital service under the approved state plan and reimbursed under the 
state plan as an inpatient hospital or outpatient hospital service. 
While a state may have some flexibility to define the scope of 
inpatient or outpatient hospital services covered by the state plan, a 
state must use consistent definitions. Hospitals may engage in any 
number of activities, or may furnish practitioner, nursing facility, or 
other services to patients that are not within the scope of inpatient 
hospital services or outpatient hospital services and are not paid as 
such. These services are not considered inpatient or outpatient 
hospital services for purposes of calculating the Medicaid hospital-
specific DSH limit. In passing OBRA 93 and the hospital-specific DSH 
limit, the Congress contemplated that hospitals with ``large numbers of 
privately insured patients through which to offset their operating 
losses on the uninsured'' may not warrant Medicaid DSH payments (H. 
Rep. 103-111, p. 211).

C. The 2008 DSH Final Rule and Subsequent Policy Guidance

    Section 1001 of the Medicare Prescription Drug, Improvement and 
Modernization Act of 2003 (MMA) required annual state reports and 
audits to ensure the appropriate use of Medicaid DSH payments and 
compliance with the DSH limit imposed at section 1923(g) of the Act.
    In the August 26, 2005, Federal Register we published a proposed 
rule entitled, ``Medicaid Program; Disproportionate Share Hospital 
Payments'' (70 FR 50262) to implement the annual DSH audit and 
reporting requirements established or amended by the MMA. During the 
public comment period, one commenter requested clarification regarding 
the treatment of individuals dually eligible for Medicaid and Medicare 
for purposes of calculating the hospital-specific DSH limit. We 
responded to this comment in the final rule published in the Federal 
Register on December 19, 2008, entitled ``Medicaid Disproportionate 
Share Hospital Payments'' (73 FR 77904) (herein referred to as the 2008 
DSH final rule). As section 1923(g) of the Act limits DSH payments on a 
hospital-specific basis to ``uncompensated costs,'' the response to the 
comment clarified that all costs and payments associated with 
individuals dually eligible for Medicare and Medicaid, including 
Medicare payments received by the hospital on behalf of the patients, 
must be included in the calculation of the hospital-specific DSH limit. 
The extent to which a hospital receives Medicare payments for services 
rendered to Medicaid eligible patients must be accounted for in 
determining uncompensated care costs for those services.
    Following the publication of the 2008 DSH final rule, we received 
numerous questions from interested parties regarding the treatment of 
costs and payments associated with dual eligibles and Medicaid eligible 
individuals who also have a source of third party coverage (for 
example, coverage from a private insurance company) for purposes of 
calculating uncompensated care costs. We posted additional policy 
guidance titled ``Additional Information on the DSH Reporting and Audit 
Requirements'' on the Medicaid Web site at https://www.medicaid.gov/
medicaid-chip-program-information/by-topics/financing-and-
reimbursement/

[[Page 53983]]

downloads/part-1-additional-info-on-dsh-reporting-and-auditing.pdf 
providing that all costs and payments associated with dual eligibles 
and individuals with a source of third party coverage must be included 
in calculating the hospital-specific DSH limit, as section 1923(g) of 
the Act limits DSH payments to ``uncompensated'' care costs. This 
additional guidance was based upon the policy articulated in the 2008 
final rule and sub-regulatory guidance issued to all state Medicaid 
directors on August 16, 2002.
    In the August 16, 2002, letter to state Medicaid directors, we 
directed that when a state calculates the uninsured costs and the 
Medicaid shortfall for the OBRA 93 uncompensated care cost limits, it 
must reflect a hospital's costs of providing services to Medicaid 
patients and the uninsured, net of Medicaid payments (except DSH) made 
under the state plan and net of third party payments. Medicaid 
payments, include but are not limited to regular Medicaid fee-for-
service rate payments, any supplemental or enhanced payments and 
Medicaid managed care organization payments. The guidance also stated 
that not recognizing these payments would overstate a hospital's amount 
of uninsured costs and Medicaid shortfall, thus inflating the OBRA 93 
uncompensated care cost limits for that particular hospital. As state 
DSH payments are limited to an annual federal allotment, this policy is 
necessary to ensure that limited DSH resources are allocated to 
hospitals that have a net financial shortfall in serving Medicaid 
patients.
    Prior to the 2008 final rule, some states and hospitals were 
excluding both costs and payments associated with Medicaid eligible 
individuals with third party coverage, including Medicare, when 
calculating hospital-specific DSH limits (or were including costs while 
not including payments). This practice led to the artificial inflation 
of uncompensated care costs and, correspondingly, of hospital-specific 
DSH limits and permitted some hospitals to be paid based on the same 
costs by two payers--once by Medicare or other third party payer and 
once by Medicaid. The clarification included in the final rule and 
associated implementation promotes fiscal integrity and equitable 
distribution of DSH payments among hospitals by preventing payment to 
DSH hospitals based on costs that are covered by Medicare or a private 
insurer. It also promotes program integrity by ensuring that hospitals 
receive Medicaid DSH payments only up to the actual uncompensated care 
costs incurred in providing inpatient and outpatient hospital services 
to Medicaid eligible individuals or individuals with no health 
insurance or other source of third party coverage.
    Given the timing of the final rule and audit requirements, we 
recognized that there could have been a retroactive impact on some 
states and hospitals if the requirements had been imposed immediately. 
To ensure that states and hospitals did not experience any immediate 
adverse fiscal impact due to the publication of the DSH audit and 
reporting final rule and to foster development and refinement of 
auditing techniques, we included a transition period in the final rule. 
During this transition period, states were not required to repay FFP 
associated with Medicaid DSH overpayments identified through the annual 
DSH audits. The final rule allowed for a 3 year period between the 
close of the state plan rate year and when the final audit was due to 
us, which meant that audits for state plan rate year 2008 were not due 
to us until December 31, 2011. Recognizing that states would be 
auditing state plan rate years that closed prior to publication of the 
final rule, we stated in the final rule that there would be no 
financial implications until the audits for state plan rate year 2011 
were due to us on December 31, 2014. This allowed states and hospitals 
to adjust to the audit requirements and make adjustments as necessary. 
This resulted in a transition period for the audits associated with 
state plan rate years 2005 through 2010.
    The 2008 DSH final rule also reiterated our policy that costs and 
payments are treated on an aggregate, hospital-specific basis. For 
purposes of this hospital-specific limit calculation, any Medicaid 
payments, including but not limited to regular Medicaid fee-for-service 
rate payments, supplemental/enhanced Medicaid payments, and Medicaid 
managed care organization payments, made to a disproportionate share 
hospital for furnishing inpatient and outpatient hospital services to 
Medicaid eligible individuals, which are in excess of the Medicaid 
incurred costs for these services, are applied against the total 
uncompensated care costs of furnishing inpatient and outpatient 
hospital services to individuals with no source of third party coverage 
for such services.
    In this policy verification, we explicitly acknowledge there will 
be instances where Medicaid payments will be greater than the cost of 
treating Medicaid eligible patients. However, to avoid overstating the 
hospital-specific limit, we nonetheless require that all Medicaid 
payments be included in the calculation, explaining that any ``excess'' 
payments will be applied against the uncompensated care costs that 
result from the uninsured calculation. The same principle applies to 
payments received from third party payers that exceed the cost of the 
service provided to a particular Medicaid eligible individual. All 
third party payments (including, but not limited to, payments by 
Medicare and private insurance) must be included in the calculation of 
uncompensated care costs for purposes of determining the hospital-
specific DSH limit, regardless of what the Medicaid incurred cost is 
for treating the Medicaid eligible individual. For example, if a 
hospital treats two Medicaid eligible patients at a cost of $2,000 and 
receives a $500 payment from a third party for each individual and a 
$100 payment from Medicaid for each individual, the total uncompensated 
care cost to the hospital for is $800, regardless of whether the 
payments received for one patient exceeded the cost of providing the 
service to that individual.
    Subsequent to both the 2008 DSH final rule and the interpretive 
issued guidance, multiple states, hospitals, and other stakeholders 
expressed concern regarding this policy and requested clarification. In 
addition to requests for clarification, some states have challenged 
this policy. We have disapproved one state plan amendment proposing to 
exclude the portion of a Medicare payment that exceeds the cost 
providing a service to a dual eligible and one state plan amendment 
proposing to exclude the portion of a third party commercial that 
exceeds the cost providing a service to a Medicaid eligible individual 
with private insurance coverage. Additionally, some hospitals and state 
governments have sued us regarding the treatment of third party payers 
in calculating uncompensated care costs.
    In light of the statutory requirement limiting DSH payments on a 
hospital-specific basis to uncompensated care costs, it is inconsistent 
with the statute to assist hospitals with costs that have already been 
compensated by third party payments. This proposed rule is designed to 
reiterate the policy and make explicit within the terms of the 
regulation that all costs and payments associated with dual eligibles 
and individuals with a source of third party coverage must be included 
in calculating the hospital-specific DSH limit. This policy is 
necessary to ensure that only actual uncompensated care costs are 
included in the Medicaid hospital-specific DSH limit. And,

[[Page 53984]]

because state DSH payments are limited to an annual federal allotment, 
this policy is also necessary to ensure that limited DSH resources are 
allocated to hospitals that have a net financial shortfall in serving 
Medicaid patients.
    In a simplified example, consider a state that has only two 
hospitals. The first hospital treated only patients who were either 
uninsured or eligible for Medicaid, and received no payments other than 
from Medicaid. The hospital-specific limit for this hospital would be 
equal to the hospital's total costs of treating its patients through 
inpatient hospital or outpatient hospital services minus the non-DSH 
Medicaid payments. The second hospital, on the other hand, treated only 
patients who were either uninsured or dually eligible for Medicaid and 
Medicare, and received no payments other than from Medicaid and 
Medicare. Under 1902(a)(13)(A)(iv) of the Act, the ``situation'' of the 
second hospital that receives comparatively generous payments from 
Medicare for the dual eligibles is relevantly different than the 
``situation'' of the first hospital that has not received such 
payments. Our policy--that Medicare and other third party payments must 
be taken into account when determining a hospital's costs for the 
purpose of calculating Medicaid DSH payments--ensures that the DSH 
payment reflects the real economic burden of hospitals that treat a 
disproportionate share of low-income patients (i.e. the ``situation'' 
of the hospitals). Turning back to the example, the hospital-specific 
limit for the second hospital must take into account both the Medicaid 
and Medicare payments. If the hospital-specific limit did not take into 
account the Medicare payments, the second hospital would be able to 
receive DSH dollars in excess of its uncompensated care costs. As 
federal DSH funding is limited by the state-wide DSH allotment, the 
excess DSH payments to the second hospital may be at the expense of the 
first hospital, which could otherwise receive these DSH dollars.

II. Specific Proposed Regulatory Changes

A. Treatment of Payments Associated With Dual Eligibles and Medicaid 
Eligible Individuals With a Source of Third Party Coverage Under 
Section 1923(g) of the Act

    We are proposing to clarify the hospital-specific limitation on 
Medicaid DSH payments under section 1923(g)(1)(A) of the Act and annual 
DSH audit requirements under section 1923(j) of the Act. Specifically, 
this rule proposes to modify the terms of the current regulation to 
make it explicit that ``costs'' for purposes of calculating hospital-
specific DSH limits are costs net of third-party payments received.
    We are proposing at Sec.  447.299 to clarify the definition of 
``Total cost of care for Medicaid IP/OP services'' to specify that the 
total annual costs of inpatient hospital and outpatient hospital (IP/
OP) services must account for all third party payments, including, but 
not limited to payments by Medicare and private insurance.
    We are aware of at least one court that has questioned whether it 
is a permissible interpretation of the statute to take third party 
payments into account when calculating the uncompensated care costs of 
treating Medicaid patients. The court reasoned that because Congress 
had expressly stated that costs must be net of Medicaid payments, it 
was unreasonable to interpret the statute as allowing other payments, 
not specifically mentioned, to be taken into account. At this time, we 
respectfully disagree. We believe that our interpretation--that all 
third party payments should be taken into account--better reflects the 
real economic burden of hospitals that treat a disproportionate share 
of low-income patients, and accordingly, better facilitates the 
Congressional directive of section 1923 of the Act in general and the 
hospital-specific limit in particular. Additionally, we believe that 
the statutory language indicating that costs are ``as determined by the 
Secretary'' gives us the discretion to take Medicare and other third 
party payments into account when determining a hospital's costs for the 
purpose of calculating Medicaid DSH payments. Nevertheless, in light of 
the court's opinion, we request comments on this issue.

III. Collection of Information Requirements

    This document does not impose new information collection and 
recordkeeping requirements, though states will continue to be required 
to meet annual reporting requirements in 42 CFR 447.299. The burden for 
these requirements is currently approved under OMB #0938-0746 with an 
expiration date of March 31, 2017. Consequently, this proposed rule 
need not be reviewed by the Office of Management and Budget under the 
authority of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 
35).

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

V. Regulatory Impact Statement

A. Statement of Need

    This proposed regulation would ensure that only the uncompensated 
care costs for covered services provided to Medicaid eligible 
individuals are included in the calculation of the hospital-specific 
DSH limit, as required by section 1923(g) of the Act.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96 354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2).
    Executive Orders 12866 and 13563 direct 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). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) (Having 
an annual effect on the economy of $100 million or more in any 1 year, 
or adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or

[[Page 53985]]

the principles set forth in the Executive Order.
    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 does not reach the economic threshold and thus is not 
considered a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
for small entities, and if a rule has a significant impact on a 
substantial number of small entities. For purposes of the RFA, small 
entities include small businesses, nonprofit organizations, and small 
government jurisdictions. The great majority of hospitals and most 
other health care providers and suppliers are small entities, either by 
being nonprofit organizations or by meeting the SBA definition of a 
small business (having revenues of less than $7.5 million to $38.5 
million in any 1 year).
    We are not preparing an analysis for the RFA because we have 
determined, and the Secretary certifies, that this proposed 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 Metropolitan 
Statistical Area for Medicare payment regulations and has fewer than 
100 beds. We are not preparing an analysis for section 1102(b) of the 
Act because we have determined, and the Secretary certifies, that this 
proposed 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 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2016, that 
is approximately $146 million. Since this rule would not mandate 
spending costs on state, local, or tribal governments in the aggregate, 
or by the private sector over the threshold of $146 million or more in 
any 1 year, the requirements of the UMRA are not applicable.
    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. Since this regulation does not impose any costs on state 
or local governments, the requirements of Executive Order 13132 are not 
applicable.

C. Anticipated Effects

1. Effects on State Medicaid Programs
    Because this is not a change in policy, we do not anticipate that 
this proposed rule would have significant financial effects on state 
Medicaid programs. This rule would only make explicit within the terms 
of the regulation that ``costs'' for purposes of section 1923(g) of the 
Act are costs net of third-party payments.
2. Effects on Other Providers
    Because this is not a change in policy, we do not anticipate that 
this proposed rule would have significant financial effects on other 
providers. This rule would only make explicit within the regulation 
that ``costs'' for purposes of section 1923(g) of the Act are costs net 
of amounts that have been paid by third parties and will ensure a more 
equitable distribution of Medicaid DSH payments within each state.

D. Alternatives Considered

    We considered not proposing this rule. However, numerous states and 
other stakeholders have requested clarification regarding this 
requirement. Accordingly, we are proposing to make explicit within the 
terms of our regulation our existing policy that implements section (j) 
of the Act, in part.
    Additionally, we considered issuing additional policy guidance 
through sub-regulatory means, such as a letter to all state Medicaid 
directors. However, we anticipate that modifying the regulatory text of 
42 CFR part 447 is as clear and comprehensive as possible on this 
issue, avoiding any need for future clarification.

List of Subjects in 42 CFR Part 447

    Accounting, Administrative practice and procedure, Drugs, Grant 
programs-health, Health facilities, Health professions, Medicaid, 
Reporting and recordkeeping requirements, Rural areas.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 447--PAYMENTS FOR SERVICES

0
1. The authority citation for part 447 continues as follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

0
2. Section 447.299 is amended by revising paragraph (c)(10) to read as 
follows:


Sec.  447.299  Reporting requirements.

* * * * *
    (c) * * *
    (10) Total Cost of Care for Medicaid IP/OP Services. The total 
annual costs incurred by each hospital for furnishing inpatient 
hospital and outpatient hospital services to Medicaid eligible 
individuals. The total annual costs are determined on a hospital-
specific basis, not a service-specific basis. For purposes of this 
section, costs--
    (i) Are defined as costs net of third-party payments, including, 
but not limited to, payments by Medicare and private insurance.
    (ii) Must capture the total burden on the hospital of treating 
Medicaid eligible patients prior to payment by Medicaid. Thus, costs 
must be determined in the aggregate and not by estimating the cost of 
individual patients. For example, if a hospital treats two Medicaid 
eligible patients at a cost of $2,000 and receives a $500 payment from 
a third party for each individual, the total cost to the hospital for 
purposes of this section is $1,000, regardless of whether the third 
party payments received for one patient exceeds the cost of providing 
the service to that individual.
* * * * *

    Dated: July 19, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: July 29, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-19107 Filed 8-12-16; 8:45 am]
BILLING CODE 4120-01-P



                                                  53980                        Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Proposed Rules

                                                  element Mission (Operational), in the                       element Conference-Other Than                           Appendix C to Chapter 301—Standard
                                                  ‘‘description’’ column; and                                 Training, in the ‘‘description’’ column.                Data Elements for Federal Travel
                                                  ■ b. Revising the entry for Travel                                                                                  [Traveler Identification]
                                                                                                                The revisions read as follows:
                                                  Purpose Identifier, next to the data

                                                                  Group name                                Data elements                                                      Description


                                                           *                        *                         *                            *                      *                   *                     *
                                                  Travel Purpose Identifier ................     Mission (Operational) ..................... Travel to a particular site in order to perform operational or manage-
                                                                                                                                               rial activities. Travel to attend a meeting to discuss general agency
                                                                                                                                               operations, review status reports, or discuss topics of general inter-
                                                                                                                                               est.
                                                                                                                                             Examples: Employee’s day-to-day operational or managerial activities,
                                                                                                                                               as defined by the agency, to include, but not be limited to: Hear-
                                                                                                                                               ings, site visit, information meeting, inspections, audits, investiga-
                                                                                                                                               tions, and examinations. Travel to a conference to serve as a
                                                                                                                                               speaker, panelist, or provide information in one’s official capacity.

                                                              *                         *                   *                   *                    *                  *                   *
                                                                                                 Conference—Other Than Training   Travel performed in connection with a prearranged meeting, retreat,
                                                                                                                                    convention, seminar, or symposium for consultation or exchange of
                                                                                                                                    information or discussion. Agencies have to distinguish between
                                                                                                                                    conference and training attendance and use the appropriate identi-
                                                                                                                                    fier (see Training below).
                                                                                                                                  Examples: To participate in a planned program as a host, planner, or
                                                                                                                                    others designated to oversee the conference or attendance with no
                                                                                                                                    formal role, or as an exhibitor.

                                                              *                         *                         *                      *                       *                       *                  *



                                                  *       *        *       *      *                           at http://www.defensetravel.dod.mil/                    § 304–6.6 How do we determine the value
                                                                                                              site/travelreg.cfm.                                     of payments in kind that are to be reported
                                                  PART 304–2—DEFINITIONS                                                                                              on Standard Form (SF) 326?
                                                                                                              PART 304–3—EMPLOYEE                                     *     *     *    *     *
                                                  ■ 3. The authority citation for part 304–                   RESPONSIBILITY                                            (a) For conference, training, or similar
                                                  2 continues to read as follows:
                                                                                                                                                                      fees waived or paid by a non-Federal
                                                      Authority: 5 U.S.C. 5707; 31 U.S.C. 1353.               ■ 5. The authority citation for part 304–               source, you must report the amount
                                                  ■ 4. Amend § 304–2.1 by—                                    3 continues to read as follows:                         charged to other participants, unless the
                                                  ■ a. Removing from the definition                               Authority: 5 U.S.C. 5707; 31 U.S.C. 1353.           employee attended the meeting or
                                                  ‘‘Meeting(s) or similar functions                           ■   6. Add § 304–3.10 to read as follows:               similar function as a speaker, panelist,
                                                  (meeting)’’, introductory text, ‘‘(i.e., a                                                                          or presenter, and the registration fee was
                                                  function that is essential to an agency’s                   § 304–3.10 If I am asked or assigned to                 waived for all speakers, panelists, or
                                                  mission)’’.                                                 participate as a speaker, panelist, or                  presenters by the organizing entity of
                                                  ■ b. Revising the second sentence of the                    presenter at a meeting or similar function,             the event.
                                                  definition ‘‘Payment in kind’’; and                         and the organizing entity of the event
                                                                                                              waives the registration fee for all speakers,           *     *     *    *     *
                                                  ■ c. Revise the last two sentences of the                                                                           [FR Doc. 2016–18556 Filed 8–12–16; 8:45 am]
                                                                                                              panelists, or presenters, is that a payment
                                                  definitions ‘‘Travel, subsistence, and                      in kind?                                                BILLING CODE 6820–14–P
                                                  related expenses (travel expenses)’’.
                                                    The revisions read as follows:                              No. A full or partial waiver of a
                                                                                                              registration fee by the organizing entity
                                                  § 304–2.1       What definitions apply to this              of the event is not a payment in kind                   DEPARTMENT OF HEALTH AND
                                                  chapter?                                                    when provided to speakers, panelists, or                HUMAN SERVICES
                                                  *      *    *     *     *                                   presenters.
                                                     Payment in kind * * * Payment in                                                                                 Centers for Medicare & Medicaid
                                                                                                                Note to § 304–3.10: If registration fees are
                                                  kind also includes waiver of any fees                                                                               Services
                                                                                                              not waived for all speakers, panelists, or
                                                  that a non-Federal source collects from                     presenters, and instead are waived only for
                                                  meeting attendees (e.g., registration                       the Federal speakers, panelists, or presenters,         42 CFR Part 447
                                                  fees), unless the employee attending the                    then the waiver is considered to be a
                                                                                                                                                                      [CMS–2399–P]
                                                  meeting or similar function is serving as                   payment in kind, and must be reviewed
                                                  a speaker, panelist, or presenter, and the                  under the procedures set forth in this                  RIN 0938–AS92
                                                  fee is waived for all speakers, panelists,                  chapter.
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                                                  or presenters at the event.                                                                                         Medicaid Program; Disproportionate
                                                  *      *    *     *     *                                   PART 304–6—PAYMENT GUIDELINES                           Share Hospital Payments—Treatment
                                                     Travel, subsistence, and related                                                                                 of Third Party Payers in Calculating
                                                                                                              ■ 7. The authority citation for part 304–               Uncompensated Care Costs
                                                  expenses (travel expenses) * * * The                        6 continues to read as follows:
                                                  Foreign Affairs Manual is available for                                                                             AGENCY:  Centers for Medicare &
                                                  download from the internet at                                   Authority: 5 U.S.C. 5707; 31 U.S.C. 1353.
                                                                                                                                                                      Medicaid Services (CMS), HHS.
                                                  FAM.state.gov. The Joint Travel                             ■ 8. Amend § 304–6.6 by revising
                                                                                                                                                                      ACTION: Proposed rule.
                                                  Regulations are available for download                      paragraph (a) to read as follows:


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                                                                         Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Proposed Rules                                            53981

                                                  SUMMARY:    This proposed rule addresses                Washington, DC—Centers for Medicare                   and Human Services (the Secretary) to
                                                  the hospital-specific limitation on                     & Medicaid Services, Department of                    provide grants to states to help finance
                                                  Medicaid disproportionate share                         Health and Human Services, Room 445–                  programs furnishing medical assistance
                                                  hospital (DSH) payments under section                   G, Hubert H. Humphrey Building, 200                   (state Medicaid programs) to specified
                                                  1923(g)(1)(A) of the Social Security Act                Independence Avenue SW.,                              groups of eligible individuals in
                                                  (Act), and the application of such                      Washington, DC 20201.                                 accordance with an approved state plan.
                                                  limitation in the annual DSH audits                        (Because access to the interior of the             ‘‘Medical Assistance’’ is defined at
                                                  required under section 1923(j) of the                   Hubert H. Humphrey Building is not                    section 1905(a) of the Act as payment
                                                  Act, by clarifying that the hospital-                   readily available to persons without                  for part or all of the cost of a list of
                                                  specific DSH limit is based only on                     federal government identification,                    specified care for eligible individuals.
                                                  uncompensated care costs. Specifically,                 commenters are encouraged to leave                    Section 1902(a)(13)(A)(iv) of the Act
                                                  this rule would make clearer in the text                their comments in the CMS drop slots                  requires that payment rates for hospitals
                                                  of the regulation an existing                           located in the main lobby of the                      take into account the situation of
                                                  interpretation that uncompensated care                  building. A stamp-in clock is available               hospitals that serve a disproportionate
                                                  costs include only those costs for                      for persons wishing to retain a proof of              share of low-income patients with
                                                  Medicaid eligible individuals that                      filing by stamping in and retaining an                special needs. Section 1923 of the Act
                                                  remain after accounting for payments                    extra copy of the comments being filed.)              contains more specific requirements
                                                  received by hospitals by or on behalf of                   b. For delivery in Baltimore, MD—                  related to payments for such
                                                  Medicaid eligible individuals, including                Centers for Medicare & Medicaid                       disproportionate share hospitals (DSH)
                                                  Medicare and other third party                          Services, Department of Health and                    payments. These specific statutory
                                                  payments that compensate the hospitals                  Human Services, 7500 Security                         requirements include aggregate state
                                                  for care furnished to such individuals.                 Boulevard, Baltimore, MD 21244–1850.                  level limits, hospital-specific limits,
                                                  As a result, the hospital-specific limit                   If you intend to deliver your                      qualification requirements, and auditing
                                                  calculation would reflect only the costs                comments to the Baltimore address, call               requirements.
                                                  for Medicaid eligible individuals for                   telephone number (410) 786–7195 in                       Under section 1923(b) of the Act, a
                                                  which the hospital has not received                     advance to schedule your arrival with                 hospital meeting the minimum
                                                  payment from any source (other than                     one of our staff members.                             qualifying criteria in section 1923(d) of
                                                  state or local governmental payments for                   Comments erroneously mailed to the                 the Act is deemed as a DSH if it meets
                                                  indigent patients).                                     addresses indicated as appropriate for                certain criteria. States have the option to
                                                                                                          hand or courier delivery may be delayed               define disproportionate share hospitals
                                                  DATES: To be assured consideration,
                                                                                                          and received after the comment period.                under the state plan using alternative
                                                  comments must be received at one of                                                                           qualifying criteria as long as the
                                                                                                             For information on viewing public
                                                  the addresses provided below, no later                                                                        qualifying methodology comports with
                                                                                                          comments, see the beginning of the
                                                  than 5 p.m. September 14, 2016.                                                                               the deeming requirements of section
                                                                                                          SUPPLEMENTARY INFORMATION section.
                                                  ADDRESSES: In commenting please refer                                                                         1923(b) of the Act. Subject to certain
                                                                                                          FOR FURTHER INFORMATION CONTACT:
                                                  to file code CMS–2399–P. Because of                     Wendy Harrison, (410) 786–2075 and                    federal payment limits, states are
                                                  staff and resource limitations, we cannot               Rory Howe, (410) 786–4878.                            afforded flexibility in setting DSH state
                                                  accept comments by facsimile (FAX)                                                                            plan payment methodologies to the
                                                                                                          SUPPLEMENTARY INFORMATION: Inspection
                                                  transmission.                                                                                                 extent that these methodologies are
                                                     You may submit comments in one of                    of Public Comments: All comments
                                                                                                          received before the close of the                      consistent with section 1923(c) of the
                                                  four ways (please choose only one of the                                                                      Act.
                                                  ways listed):                                           comment period are available for
                                                                                                                                                                   Section 1923(f) of the Act limits
                                                     1. Electronically. You may submit                    viewing by the public, including any
                                                                                                                                                                federal financial participation (FFP) for
                                                  electronic comments on this regulation                  personally identifiable or confidential
                                                                                                                                                                total statewide DSH payments made to
                                                  to http://www.regulations.gov. Follow                   business information that is included in
                                                                                                                                                                eligible hospitals in each federal fiscal
                                                  the ‘‘Submit a comment’’ instructions.                  a comment. We post all comments
                                                                                                                                                                year (FY) to the amount specified in an
                                                     2. By regular mail. You may mail                     received before the close of the
                                                                                                                                                                annual DSH allotment for each state.
                                                  written comments to the following                       comment period on the following Web
                                                                                                                                                                These allotments essentially establish a
                                                  address ONLY: Centers for Medicare &                    site as soon as possible after they have
                                                                                                                                                                finite pool of available federal DSH
                                                  Medicaid Services, Department of                        been received: http://regulations.gov.
                                                                                                                                                                funds that states use to pay the federal
                                                  Health and Human Services, Attention:                   Follow the search instructions on that
                                                                                                                                                                portion of payments to all qualifying
                                                  CMS–2399–P, P.O. Box 8016, Baltimore,                   Web site to view public comments.
                                                                                                                                                                hospitals in each state. As states often
                                                  MD 21244–8016.                                             Comments received timely will also
                                                                                                                                                                use most or all of their federal DSH
                                                     Please allow sufficient time for mailed              be available for public inspection as
                                                                                                                                                                allotment, in practice, if one hospital
                                                  comments to be received before the                      they are received, generally beginning
                                                                                                                                                                gets more DSH funding, other DSH-
                                                  close of the comment period.                            approximately 3 weeks after publication
                                                                                                                                                                eligible hospitals in the state get less.
                                                     3. By express or overnight mail. You                 of a document, at the headquarters of
                                                  may send written comments to the                        the Centers for Medicare & Medicaid                   B. Hospital-Specific DSH Limit
                                                  following address ONLY: Centers for                     Services, 7500 Security Boulevard,                      Section 13621 of the Omnibus Budget
                                                  Medicare & Medicaid Services,                           Baltimore, Maryland 21244, Monday                     Reconciliation Act of 1993 (OBRA 93),
                                                  Department of Health and Human                          through Friday of each week from 8:30                 which was signed into law on August
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                                                  Services, Attention: CMS–2399–P, Mail                   a.m. to 4 p.m. To schedule an                         10, 1993, added section 1923(g) of the
                                                  Stop C4–26–05, 7500 Security                            appointment to view public comments,                  Act, limiting Medicaid DSH payments
                                                  Boulevard, Baltimore, MD 21244–1850.                    phone 1–800–743–3951.                                 during a year to a qualifying hospital to
                                                     4. By hand or courier. Alternatively,                I. Background                                         the amount of eligible uncompensated
                                                  you may deliver (by hand or courier)                                                                          care costs during that same year. The
                                                  your written comments ONLY to the                       A. Legislative History                                Congress enacted the hospital-specific
                                                  following addresses prior to the close of                 Title XIX of the Act authorizes the                 limit on DSH payments in response to
                                                  the comment period: a. For delivery in                  Secretary of the Department of Health                 reports that some hospitals received


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                                                  53982                  Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Proposed Rules

                                                  DSH payment adjustments that                            hospital-specific limits. These reviews               with ‘‘large numbers of privately
                                                  exceeded ‘‘the net costs, and in some                   and audits led to the enactment, as part              insured patients through which to offset
                                                  instances the total costs, of operating the             of the MMA, of the audit requirements                 their operating losses on the uninsured’’
                                                  facilities.’’ (H.R. Rep. No. 103–111, at                at section 1923(j) of the Act. Section                may not warrant Medicaid DSH
                                                  211–12 (1993), reprinted in 1993                        1923(j) of the Act not only required that             payments (H. Rep. 103–111, p. 211).
                                                  U.S.C.C.A.N. 278, 538–39.) Such excess                  we promulgate standardized audit
                                                                                                                                                                C. The 2008 DSH Final Rule and
                                                  payments were inconsistent with the                     methods and procedures, it also
                                                                                                                                                                Subsequent Policy Guidance
                                                  purpose of the Medicaid DSH payment,                    provided clarity on how the hospital-
                                                  which is to ameliorate the real economic                specific limit should be applied. The                    Section 1001 of the Medicare
                                                  burden faced by hospitals that treat a                  Congress explicitly addressed any                     Prescription Drug, Improvement and
                                                  disproportionate share of low-income                    ambiguity about whether the hospital-                 Modernization Act of 2003 (MMA)
                                                  patients and to ensure continued access                 specific limit could include costs that               required annual state reports and audits
                                                  to care for Medicaid patients.                          have been compensated by payers other                 to ensure the appropriate use of
                                                  Accordingly, Congress imposed a                         than the individual or the Medicaid                   Medicaid DSH payments and
                                                  hospital-specific limit that restricts                  program. Section 1923(j)(2)(C) of the Act             compliance with the DSH limit imposed
                                                  Medicaid DSH payments to qualifying                     specifically provides that only the                   at section 1923(g) of the Act.
                                                  hospitals to the costs incurred by the                  uncompensated care costs of providing                    In the August 26, 2005, Federal
                                                  hospital for providing inpatient and                    inpatient hospital and outpatient                     Register we published a proposed rule
                                                  outpatient hospital services during the                 hospital services to individuals                      entitled, ‘‘Medicaid Program;
                                                  year to Medicaid eligible patients and                  (described in section 1923(g)(1)(A of the             Disproportionate Share Hospital
                                                  individuals who have no health                          Act) are included in the calculation of               Payments’’ (70 FR 50262) to implement
                                                  insurance or other source of third party                the hospital-specific limits under                    the annual DSH audit and reporting
                                                  coverage for the services provided                      section 1923(g)(1)(A) of the Act. This                requirements established or amended by
                                                  during the year. Costs for providing                    provision makes clear that the Congress               the MMA. During the public comment
                                                  services are ‘‘as determined by the                     itself specified the hospital-specific                period, one commenter requested
                                                  Secretary’’ and are to be net of                        limit at section 1923(g)(1) of the Act to             clarification regarding the treatment of
                                                  applicable payments received for those                  include only uncompensated care costs.                individuals dually eligible for Medicaid
                                                  services.                                                  As a result, it is clear that the                  and Medicare for purposes of
                                                     The Congress revisited the DSH                       Congress intended that FFP is not                     calculating the hospital-specific DSH
                                                  payment requirements in the Medicare                    available for DSH payments that exceed                limit. We responded to this comment in
                                                  Prescription Drug, Improvement, and                     a hospital’s hospital-specific limit. The             the final rule published in the Federal
                                                  Modernization Act of 2003 (MMA),                        hospital-specific limit prevents                      Register on December 19, 2008, entitled
                                                  Public Law 108–173, enacted on                          hospitals from receiving DSH payments                 ‘‘Medicaid Disproportionate Share
                                                  December 8, 2003. The MMA added                         above the level of any net                            Hospital Payments’’ (73 FR 77904)
                                                  section 1923(j) to the Act, which                       uncompensated cost incurred in the                    (herein referred to as the 2008 DSH final
                                                  requires states to report specified                     treatment of Medicaid eligible or                     rule). As section 1923(g) of the Act
                                                  information about their DSH payments,                   uninsured individuals.                                limits DSH payments on a hospital-
                                                  including independent, certified audits                    As indicated in a 2008 final rule                  specific basis to ‘‘uncompensated
                                                  that, among other elements, are required                describing the required DSH audit                     costs,’’ the response to the comment
                                                  to review compliance with the hospital-                 process, 73 FR 77904, 77926 (December                 clarified that all costs and payments
                                                  specific limits under section                           19, 2008), to be considered an inpatient              associated with individuals dually
                                                  1923(g)(1)(A) of the Act. Significantly,                or outpatient hospital service for                    eligible for Medicare and Medicaid,
                                                  section 1923(j)(2)(B) of the Act provides               purposes of Medicaid DSH, a service                   including Medicare payments received
                                                  a gloss on section 1923(g)(1)(A), by                    must meet the federal and state                       by the hospital on behalf of the patients,
                                                  specifying that the audits must verify                  definitions of an inpatient hospital                  must be included in the calculation of
                                                  that ‘‘Only the uncompensated care                      service or outpatient hospital service                the hospital-specific DSH limit. The
                                                  costs of providing inpatient hospital and               and must be included in the state’s                   extent to which a hospital receives
                                                  outpatient hospital services to                         definition of an inpatient hospital                   Medicare payments for services
                                                  individuals described in paragraph                      service or outpatient hospital service                rendered to Medicaid eligible patients
                                                  (1)(A) of such subsection [1923(g) of the               under the approved state plan and                     must be accounted for in determining
                                                  Act] are included in the calculation of                 reimbursed under the state plan as an                 uncompensated care costs for those
                                                  the hospital-specific limits under such                 inpatient hospital or outpatient hospital             services.
                                                  subsection.’’                                           service. While a state may have some                     Following the publication of the 2008
                                                     Until the establishment of an audit                  flexibility to define the scope of                    DSH final rule, we received numerous
                                                  requirement, there was no                               inpatient or outpatient hospital services             questions from interested parties
                                                  standardization among the states as to                  covered by the state plan, a state must               regarding the treatment of costs and
                                                  how the hospital-specific limit was                     use consistent definitions. Hospitals                 payments associated with dual eligibles
                                                  calculated. In the late 1990’s and early                may engage in any number of activities,               and Medicaid eligible individuals who
                                                  2000’s the Government Accountability                    or may furnish practitioner, nursing                  also have a source of third party
                                                  Office (GAO) and the U.S. Department                    facility, or other services to patients that          coverage (for example, coverage from a
                                                  of Health and Human Services Office of                  are not within the scope of inpatient                 private insurance company) for
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                                                  Inspector General (OIG) issued a series                 hospital services or outpatient hospital              purposes of calculating uncompensated
                                                  of reports focusing on the hospital-                    services and are not paid as such. These              care costs. We posted additional policy
                                                  specific DSH limit. Among other                         services are not considered inpatient or              guidance titled ‘‘Additional Information
                                                  findings, the GAO and OIG reports                       outpatient hospital services for purposes             on the DSH Reporting and Audit
                                                  identified multiple instances where                     of calculating the Medicaid hospital-                 Requirements’’ on the Medicaid Web
                                                  states included unallowable cost or did                 specific DSH limit. In passing OBRA 93                site at https://www.medicaid.gov/
                                                  not account for costs net of applicable                 and the hospital-specific DSH limit, the              medicaid-chip-program-information/by-
                                                  payments when determining the                           Congress contemplated that hospitals                  topics/financing-and-reimbursement/


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                                                                         Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Proposed Rules                                           53983

                                                  downloads/part-1-additional-info-on-                    providing inpatient and outpatient                    Medicaid payments be included in the
                                                  dsh-reporting-and-auditing.pdf                          hospital services to Medicaid eligible                calculation, explaining that any
                                                  providing that all costs and payments                   individuals or individuals with no                    ‘‘excess’’ payments will be applied
                                                  associated with dual eligibles and                      health insurance or other source of third             against the uncompensated care costs
                                                  individuals with a source of third party                party coverage.                                       that result from the uninsured
                                                  coverage must be included in                               Given the timing of the final rule and             calculation. The same principle applies
                                                  calculating the hospital-specific DSH                   audit requirements, we recognized that                to payments received from third party
                                                  limit, as section 1923(g) of the Act limits             there could have been a retroactive                   payers that exceed the cost of the
                                                  DSH payments to ‘‘uncompensated’’                       impact on some states and hospitals if                service provided to a particular
                                                  care costs. This additional guidance was                the requirements had been imposed                     Medicaid eligible individual. All third
                                                  based upon the policy articulated in the                immediately. To ensure that states and                party payments (including, but not
                                                  2008 final rule and sub-regulatory                      hospitals did not experience any                      limited to, payments by Medicare and
                                                  guidance issued to all state Medicaid                   immediate adverse fiscal impact due to                private insurance) must be included in
                                                  directors on August 16, 2002.                           the publication of the DSH audit and                  the calculation of uncompensated care
                                                    In the August 16, 2002, letter to state               reporting final rule and to foster                    costs for purposes of determining the
                                                  Medicaid directors, we directed that                    development and refinement of auditing                hospital-specific DSH limit, regardless
                                                  when a state calculates the uninsured                   techniques, we included a transition                  of what the Medicaid incurred cost is
                                                  costs and the Medicaid shortfall for the                period in the final rule. During this                 for treating the Medicaid eligible
                                                  OBRA 93 uncompensated care cost                         transition period, states were not                    individual. For example, if a hospital
                                                  limits, it must reflect a hospital’s costs              required to repay FFP associated with                 treats two Medicaid eligible patients at
                                                  of providing services to Medicaid                       Medicaid DSH overpayments identified                  a cost of $2,000 and receives a $500
                                                  patients and the uninsured, net of                      through the annual DSH audits. The                    payment from a third party for each
                                                  Medicaid payments (except DSH) made                     final rule allowed for a 3 year period                individual and a $100 payment from
                                                  under the state plan and net of third                   between the close of the state plan rate              Medicaid for each individual, the total
                                                  party payments. Medicaid payments,                      year and when the final audit was due                 uncompensated care cost to the hospital
                                                  include but are not limited to regular                  to us, which meant that audits for state              for is $800, regardless of whether the
                                                  Medicaid fee-for-service rate payments,                 plan rate year 2008 were not due to us                payments received for one patient
                                                  any supplemental or enhanced                            until December 31, 2011. Recognizing                  exceeded the cost of providing the
                                                  payments and Medicaid managed care                      that states would be auditing state plan              service to that individual.
                                                  organization payments. The guidance                     rate years that closed prior to                          Subsequent to both the 2008 DSH
                                                  also stated that not recognizing these                  publication of the final rule, we stated              final rule and the interpretive issued
                                                  payments would overstate a hospital’s                   in the final rule that there would be no              guidance, multiple states, hospitals, and
                                                  amount of uninsured costs and                           financial implications until the audits               other stakeholders expressed concern
                                                  Medicaid shortfall, thus inflating the                  for state plan rate year 2011 were due                regarding this policy and requested
                                                  OBRA 93 uncompensated care cost                         to us on December 31, 2014. This                      clarification. In addition to requests for
                                                  limits for that particular hospital. As                 allowed states and hospitals to adjust to             clarification, some states have
                                                  state DSH payments are limited to an                    the audit requirements and make                       challenged this policy. We have
                                                  annual federal allotment, this policy is                adjustments as necessary. This resulted               disapproved one state plan amendment
                                                  necessary to ensure that limited DSH                    in a transition period for the audits                 proposing to exclude the portion of a
                                                  resources are allocated to hospitals that               associated with state plan rate years                 Medicare payment that exceeds the cost
                                                  have a net financial shortfall in serving               2005 through 2010.                                    providing a service to a dual eligible
                                                  Medicaid patients.                                         The 2008 DSH final rule also                       and one state plan amendment
                                                    Prior to the 2008 final rule, some                    reiterated our policy that costs and                  proposing to exclude the portion of a
                                                  states and hospitals were excluding both                payments are treated on an aggregate,                 third party commercial that exceeds the
                                                  costs and payments associated with                      hospital-specific basis. For purposes of              cost providing a service to a Medicaid
                                                  Medicaid eligible individuals with third                this hospital-specific limit calculation,             eligible individual with private
                                                  party coverage, including Medicare,                     any Medicaid payments, including but                  insurance coverage. Additionally, some
                                                  when calculating hospital-specific DSH                  not limited to regular Medicaid fee-for-              hospitals and state governments have
                                                  limits (or were including costs while not               service rate payments, supplemental/                  sued us regarding the treatment of third
                                                  including payments). This practice led                  enhanced Medicaid payments, and                       party payers in calculating
                                                  to the artificial inflation of                          Medicaid managed care organization                    uncompensated care costs.
                                                  uncompensated care costs and,                           payments, made to a disproportionate                     In light of the statutory requirement
                                                  correspondingly, of hospital-specific                   share hospital for furnishing inpatient               limiting DSH payments on a hospital-
                                                  DSH limits and permitted some                           and outpatient hospital services to                   specific basis to uncompensated care
                                                  hospitals to be paid based on the same                  Medicaid eligible individuals, which are              costs, it is inconsistent with the statute
                                                  costs by two payers—once by Medicare                    in excess of the Medicaid incurred costs              to assist hospitals with costs that have
                                                  or other third party payer and once by                  for these services, are applied against               already been compensated by third
                                                  Medicaid. The clarification included in                 the total uncompensated care costs of                 party payments. This proposed rule is
                                                  the final rule and associated                           furnishing inpatient and outpatient                   designed to reiterate the policy and
                                                  implementation promotes fiscal                          hospital services to individuals with no              make explicit within the terms of the
                                                  integrity and equitable distribution of                 source of third party coverage for such               regulation that all costs and payments
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                                                  DSH payments among hospitals by                         services.                                             associated with dual eligibles and
                                                  preventing payment to DSH hospitals                        In this policy verification, we                    individuals with a source of third party
                                                  based on costs that are covered by                      explicitly acknowledge there will be                  coverage must be included in
                                                  Medicare or a private insurer. It also                  instances where Medicaid payments                     calculating the hospital-specific DSH
                                                  promotes program integrity by ensuring                  will be greater than the cost of treating             limit. This policy is necessary to ensure
                                                  that hospitals receive Medicaid DSH                     Medicaid eligible patients. However, to               that only actual uncompensated care
                                                  payments only up to the actual                          avoid overstating the hospital-specific               costs are included in the Medicaid
                                                  uncompensated care costs incurred in                    limit, we nonetheless require that all                hospital-specific DSH limit. And,


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                                                  53984                  Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Proposed Rules

                                                  because state DSH payments are limited                  proposes to modify the terms of the                   Federal Register documents, we are not
                                                  to an annual federal allotment, this                    current regulation to make it explicit                able to acknowledge or respond to them
                                                  policy is also necessary to ensure that                 that ‘‘costs’’ for purposes of calculating            individually. We will consider all
                                                  limited DSH resources are allocated to                  hospital-specific DSH limits are costs                comments we receive by the date and
                                                  hospitals that have a net financial                     net of third-party payments received.                 time specified in the DATES section of
                                                  shortfall in serving Medicaid patients.                    We are proposing at § 447.299 to                   this preamble, and, when we proceed
                                                     In a simplified example, consider a                  clarify the definition of ‘‘Total cost of             with a subsequent document, we will
                                                  state that has only two hospitals. The                  care for Medicaid IP/OP services’’ to                 respond to the comments in the
                                                  first hospital treated only patients who                specify that the total annual costs of                preamble to that document.
                                                  were either uninsured or eligible for                   inpatient hospital and outpatient
                                                  Medicaid, and received no payments                      hospital (IP/OP) services must account                V. Regulatory Impact Statement
                                                  other than from Medicaid. The hospital-                 for all third party payments, including,              A. Statement of Need
                                                  specific limit for this hospital would be               but not limited to payments by
                                                  equal to the hospital’s total costs of                  Medicare and private insurance.                         This proposed regulation would
                                                  treating its patients through inpatient                    We are aware of at least one court that            ensure that only the uncompensated
                                                  hospital or outpatient hospital services                has questioned whether it is a                        care costs for covered services provided
                                                  minus the non-DSH Medicaid                              permissible interpretation of the statute             to Medicaid eligible individuals are
                                                  payments. The second hospital, on the                   to take third party payments into                     included in the calculation of the
                                                  other hand, treated only patients who                   account when calculating the                          hospital-specific DSH limit, as required
                                                  were either uninsured or dually eligible                uncompensated care costs of treating                  by section 1923(g) of the Act.
                                                  for Medicaid and Medicare, and                          Medicaid patients. The court reasoned
                                                                                                          that because Congress had expressly                   B. Overall Impact
                                                  received no payments other than from
                                                  Medicaid and Medicare. Under                            stated that costs must be net of                         We have examined the impacts of this
                                                  1902(a)(13)(A)(iv) of the Act, the                      Medicaid payments, it was                             rule as required by Executive Order
                                                  ‘‘situation’’ of the second hospital that               unreasonable to interpret the statute as              12866 on Regulatory Planning and
                                                  receives comparatively generous                         allowing other payments, not                          Review (September 30, 1993), Executive
                                                  payments from Medicare for the dual                     specifically mentioned, to be taken into              Order 13563 on Improving Regulation
                                                  eligibles is relevantly different than the              account. At this time, we respectfully                and Regulatory Review (January 18,
                                                  ‘‘situation’’ of the first hospital that has            disagree. We believe that our                         2011), the Regulatory Flexibility Act
                                                  not received such payments. Our                         interpretation—that all third party                   (RFA) (September 19, 1980, Pub. L. 96
                                                  policy—that Medicare and other third                    payments should be taken into                         354), section 1102(b) of the Social
                                                  party payments must be taken into                       account—better reflects the real                      Security Act, section 202 of the
                                                  account when determining a hospital’s                   economic burden of hospitals that treat               Unfunded Mandates Reform Act of 1995
                                                  costs for the purpose of calculating                    a disproportionate share of low-income                (March 22, 1995; Pub. L. 104–4),
                                                  Medicaid DSH payments—ensures that                      patients, and accordingly, better                     Executive Order 13132 on Federalism
                                                  the DSH payment reflects the real                       facilitates the Congressional directive of            (August 4, 1999) and the Congressional
                                                  economic burden of hospitals that treat                 section 1923 of the Act in general and                Review Act (5 U.S.C. 804(2).
                                                  a disproportionate share of low-income                  the hospital-specific limit in particular.
                                                                                                          Additionally, we believe that the                        Executive Orders 12866 and 13563
                                                  patients (i.e. the ‘‘situation’’ of the                                                                       direct agencies to assess all costs and
                                                  hospitals). Turning back to the example,                statutory language indicating that costs
                                                                                                          are ‘‘as determined by the Secretary’’                benefits of available regulatory
                                                  the hospital-specific limit for the second                                                                    alternatives and, if regulation is
                                                  hospital must take into account both the                gives us the discretion to take Medicare
                                                                                                          and other third party payments into                   necessary, to select regulatory
                                                  Medicaid and Medicare payments. If the                                                                        approaches that maximize net benefits
                                                  hospital-specific limit did not take into               account when determining a hospital’s
                                                                                                          costs for the purpose of calculating                  (including potential economic,
                                                  account the Medicare payments, the                                                                            environmental, public health and safety
                                                  second hospital would be able to receive                Medicaid DSH payments. Nevertheless,
                                                                                                          in light of the court’s opinion, we                   effects, distributive impacts, and
                                                  DSH dollars in excess of its                                                                                  equity). Section 3(f) of Executive Order
                                                  uncompensated care costs. As federal                    request comments on this issue.
                                                                                                                                                                12866 defines a ‘‘significant regulatory
                                                  DSH funding is limited by the state-                    III. Collection of Information                        action’’ as an action that is likely to
                                                  wide DSH allotment, the excess DSH                      Requirements                                          result in a rule: (1) (Having an annual
                                                  payments to the second hospital may be                                                                        effect on the economy of $100 million
                                                                                                             This document does not impose new
                                                  at the expense of the first hospital,                                                                         or more in any 1 year, or adversely and
                                                                                                          information collection and
                                                  which could otherwise receive these                                                                           materially affecting a sector of the
                                                                                                          recordkeeping requirements, though
                                                  DSH dollars.                                                                                                  economy, productivity, competition,
                                                                                                          states will continue to be required to
                                                  II. Specific Proposed Regulatory                        meet annual reporting requirements in                 jobs, the environment, public health or
                                                  Changes                                                 42 CFR 447.299. The burden for these                  safety, or state, local or tribal
                                                                                                          requirements is currently approved                    governments or communities (also
                                                  A. Treatment of Payments Associated                                                                           referred to as ‘‘economically
                                                                                                          under OMB #0938–0746 with an
                                                  With Dual Eligibles and Medicaid                                                                              significant’’); (2) creating a serious
                                                                                                          expiration date of March 31, 2017.
                                                  Eligible Individuals With a Source of                                                                         inconsistency or otherwise interfering
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                                                                                                          Consequently, this proposed rule need
                                                  Third Party Coverage Under Section                                                                            with an action taken or planned by
                                                                                                          not be reviewed by the Office of
                                                  1923(g) of the Act                                                                                            another agency; (3) materially altering
                                                                                                          Management and Budget under the
                                                    We are proposing to clarify the                       authority of the Paperwork Reduction                  the budgetary impacts of entitlement
                                                  hospital-specific limitation on Medicaid                Act of 1995 (44 U.S.C. Chapter 35).                   grants, user fees, or loan programs or the
                                                  DSH payments under section                                                                                    rights and obligations of recipients
                                                  1923(g)(1)(A) of the Act and annual DSH                 IV. Response to Comments                              thereof; or (4) raising novel legal or
                                                  audit requirements under section                          Because of the large number of public               policy issues arising out of legal
                                                  1923(j) of the Act. Specifically, this rule             comments we normally receive on                       mandates, the President’s priorities, or


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                                                                         Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Proposed Rules                                                 53985

                                                  the principles set forth in the Executive               requirement costs on state and local                  PART 447—PAYMENTS FOR
                                                  Order.                                                  governments, preempts state law, or                   SERVICES
                                                     A regulatory impact analysis (RIA)                   otherwise has federalism implications.
                                                  must be prepared for major rules with                   Since this regulation does not impose                 ■ 1. The authority citation for part 447
                                                  economically significant effects ($100                  any costs on state or local governments,              continues as follows:
                                                  million or more in any 1 year). This rule               the requirements of Executive Order
                                                  does not reach the economic threshold                                                                          Authority: Sec. 1102 of the Social Security
                                                                                                          13132 are not applicable.                             Act (42 U.S.C. 1302).
                                                  and thus is not considered a major rule.
                                                     The RFA requires agencies to analyze                 C. Anticipated Effects
                                                  options for regulatory relief for small                                                                       ■ 2. Section 447.299 is amended by
                                                  entities, and if a rule has a significant               1. Effects on State Medicaid Programs                 revising paragraph (c)(10) to read as
                                                  impact on a substantial number of small                                                                       follows:
                                                                                                             Because this is not a change in policy,
                                                  entities. For purposes of the RFA, small                we do not anticipate that this proposed               § 447.299   Reporting requirements.
                                                  entities include small businesses,
                                                                                                          rule would have significant financial                 *      *    *     *     *
                                                  nonprofit organizations, and small
                                                                                                          effects on state Medicaid programs. This
                                                  government jurisdictions. The great                                                                             (c) * * *
                                                  majority of hospitals and most other                    rule would only make explicit within
                                                                                                          the terms of the regulation that ‘‘costs’’              (10) Total Cost of Care for Medicaid
                                                  health care providers and suppliers are                                                                       IP/OP Services. The total annual costs
                                                  small entities, either by being nonprofit               for purposes of section 1923(g) of the
                                                                                                          Act are costs net of third-party                      incurred by each hospital for furnishing
                                                  organizations or by meeting the SBA
                                                                                                          payments.                                             inpatient hospital and outpatient
                                                  definition of a small business (having
                                                  revenues of less than $7.5 million to                                                                         hospital services to Medicaid eligible
                                                                                                          2. Effects on Other Providers                         individuals. The total annual costs are
                                                  $38.5 million in any 1 year).
                                                     We are not preparing an analysis for                    Because this is not a change in policy,            determined on a hospital-specific basis,
                                                  the RFA because we have determined,                     we do not anticipate that this proposed               not a service-specific basis. For
                                                  and the Secretary certifies, that this                  rule would have significant financial                 purposes of this section, costs—
                                                  proposed rule would not have a                          effects on other providers. This rule                   (i) Are defined as costs net of third-
                                                  significant economic impact on a                        would only make explicit within the                   party payments, including, but not
                                                  substantial number of small entities.                   regulation that ‘‘costs’’ for purposes of             limited to, payments by Medicare and
                                                     In addition, section 1102(b) of the Act                                                                    private insurance.
                                                                                                          section 1923(g) of the Act are costs net
                                                  requires us to prepare a regulatory
                                                                                                          of amounts that have been paid by third                 (ii) Must capture the total burden on
                                                  impact analysis if a rule may have a
                                                  significant impact on the operations of                 parties and will ensure a more equitable              the hospital of treating Medicaid eligible
                                                  a substantial number of small rural                     distribution of Medicaid DSH payments                 patients prior to payment by Medicaid.
                                                  hospitals. This analysis must conform to                within each state.                                    Thus, costs must be determined in the
                                                  the provisions of section 603 of the                    D. Alternatives Considered                            aggregate and not by estimating the cost
                                                  RFA. For purposes of section 1102(b) of                                                                       of individual patients. For example, if a
                                                  the Act, we define a small rural hospital                 We considered not proposing this                    hospital treats two Medicaid eligible
                                                  as a hospital that is located outside of                rule. However, numerous states and                    patients at a cost of $2,000 and receives
                                                  a Metropolitan Statistical Area for                     other stakeholders have requested                     a $500 payment from a third party for
                                                  Medicare payment regulations and has                    clarification regarding this requirement.             each individual, the total cost to the
                                                  fewer than 100 beds. We are not                         Accordingly, we are proposing to make                 hospital for purposes of this section is
                                                  preparing an analysis for section 1102(b)               explicit within the terms of our                      $1,000, regardless of whether the third
                                                  of the Act because we have determined,                  regulation our existing policy that                   party payments received for one patient
                                                  and the Secretary certifies, that this                  implements section (j) of the Act, in                 exceeds the cost of providing the service
                                                  proposed rule would not have a                          part.                                                 to that individual.
                                                  significant impact on the operations of
                                                                                                            Additionally, we considered issuing                 *      *    *     *     *
                                                  a substantial number of small rural
                                                  hospitals.                                              additional policy guidance through sub-                 Dated: July 19, 2016.
                                                     Section 202 of the Unfunded                          regulatory means, such as a letter to all
                                                                                                                                                                Andrew M. Slavitt,
                                                  Mandates Reform Act of 1995 (UMRA)                      state Medicaid directors. However, we
                                                                                                          anticipate that modifying the regulatory              Acting Administrator, Centers for Medicare
                                                  also requires that agencies assess                                                                            & Medicaid Services.
                                                  anticipated costs and benefits before                   text of 42 CFR part 447 is as clear and
                                                                                                          comprehensive as possible on this issue,                Dated: July 29, 2016.
                                                  issuing any rule whose mandates
                                                  require spending in any 1 year of $100                  avoiding any need for future                          Sylvia M. Burwell,
                                                  million in 1995 dollars, updated                        clarification.                                        Secretary, Department of Health and Human
                                                  annually for inflation. In 2016, that is                                                                      Services.
                                                                                                          List of Subjects in 42 CFR Part 447
                                                  approximately $146 million. Since this                                                                        [FR Doc. 2016–19107 Filed 8–12–16; 8:45 am]
                                                  rule would not mandate spending costs                     Accounting, Administrative practice                 BILLING CODE 4120–01–P
                                                  on state, local, or tribal governments in               and procedure, Drugs, Grant programs-
                                                  the aggregate, or by the private sector
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                                                                                                          health, Health facilities, Health
                                                  over the threshold of $146 million or                   professions, Medicaid, Reporting and
                                                  more in any 1 year, the requirements of                 recordkeeping requirements, Rural
                                                  the UMRA are not applicable.                            areas.
                                                     Executive Order 13132 establishes
                                                  certain requirements that an agency                       For the reasons set forth in the
                                                  must meet when it promulgates a                         preamble, the Centers for Medicare &
                                                  proposed rule (and subsequent final                     Medicaid Services proposes to amend
                                                  rule) that imposes substantial direct                   42 CFR chapter IV as set forth below:


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Document Created: 2016-08-13 02:22:40
Document Modified: 2016-08-13 02:22:40
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesTo be assured consideration, comments must be received at one of
ContactWendy Harrison, (410) 786-2075 and Rory Howe, (410) 786-4878.
FR Citation81 FR 53980 
RIN Number0938-AS92
CFR AssociatedAccounting; Administrative Practice and Procedure; Drugs; Grant Programs-Health; Health Facilities; Health Professions; Medicaid; Reporting and Recordkeeping Requirements and Rural Areas

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