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U.S. Code as of:
01/19/04
Section 1396n. Compliance with State plan and payment provisions
(a) Activities deemed as compliance
A State shall not be deemed to be out of compliance with the
requirements of paragraphs (1), (10), or (23) of section 1396a(a)
of this title solely by reason of the fact that the State (or any
political subdivision thereof) -
(1) has entered into -
(A) a contract with an organization which has agreed to
provide care and services in addition to those offered under
the State plan to individuals eligible for medical assistance
who reside in the geographic area served by such organization
and who elect to obtain such care and services from such
organization, or by reason of the fact that the plan provides
for payment for rural health clinic services only if those
services are provided by a rural health clinic; or
(B) arrangements through a competitive bidding process or
otherwise for the purchase of laboratory services referred to
in section 1396d(a)(3) of this title or medical devices if the
Secretary has found that -
(i) adequate services or devices will be available under
such arrangements, and
(ii) any such laboratory services will be provided only
through laboratories -
(I) which meet the applicable requirements of section
1395x(e)(9) of this title or paragraphs (16) and (17) of
section 1395x(s) of this title, and such additional
requirements as the Secretary may require, and
(II) no more than 75 percent of whose charges for such
services are for services provided to individuals who are
entitled to benefits under this subchapter or under part A
or part B of subchapter XVIII of this chapter; or
(2) restricts for a reasonable period of time the provider or
providers from which an individual (eligible for medical
assistance for items or services under the State plan) can
receive such items or services, if -
(A) the State has found, after notice and opportunity for a
hearing (in accordance with procedures established by the
State), that the individual has utilized such items or services
at a frequency or amount not medically necessary (as determined
in accordance with utilization guidelines established by the
State), and
(B) under such restriction, individuals eligible for medical
assistance for such services have reasonable access (taking
into account geographic location and reasonable travel time) to
such services of adequate quality.
(b) Waivers to promote cost-effectiveness and efficiency
The Secretary, to the extent he finds it to be cost-effective and
efficient and not inconsistent with the purposes of this
subchapter, may waive such requirements of section 1396a of this
title (other than subsection (s)) (other than sections
1396a(a)(15), 1396a(bb), and 1396a(a)(10)(A) of this title insofar
as it requires provision of the care and services described in
section 1396d(a)(2)(C) of this title) as may be necessary for a
State -
(1) to implement a primary care case-management system or a
specialty physician services arrangement which restricts the
provider from (or through) whom an individual (eligible for
medical assistance under this subchapter) can obtain medical care
services (other than in emergency circumstances), if such
restriction does not substantially impair access to such services
of adequate quality where medically necessary,
(2) to allow a locality to act as a central broker in assisting
individuals (eligible for medical assistance under this
subchapter) in selecting among competing health care plans, if
such restriction does not substantially impair access to services
of adequate quality where medically necessary,
(3) to share (through provision of additional services) with
recipients of medical assistance under the State plan cost
savings resulting from use by the recipient of more
cost-effective medical care, and
(4) to restrict the provider from (or through) whom an
individual (eligible for medical assistance under this
subchapter) can obtain services (other than in emergency
circumstances) to providers or practitioners who undertake to
provide such services and who meet, accept, and comply with the
reimbursement, quality, and utilization standards under the State
plan, which standards shall be consistent with the requirements
of section 1396r-4 of this title and are consistent with access,
quality, and efficient and economic provision of covered care and
services, if such restriction does not discriminate among classes
of providers on grounds unrelated to their demonstrated
effectiveness and efficiency in providing those services and if
providers under such restriction are paid on a timely basis in
the same manner as health care practitioners must be paid under
section 1396a(a)(37)(A) of this title.
No waiver under this subsection may restrict the choice of the
individual in receiving services under section 1396d(a)(4)(C) of
this title.
(c) Waiver respecting medical assistance requirement in State plan;
scope, etc.; "habilitation services" defined; imposition of
certain regulatory limits prohibited; computation of expenditures
for certain disabled patients; coordinated services; substitution
of participants
(1) The Secretary may by waiver provide that a State plan
approved under this subchapter may include as "medical assistance"
under such plan payment for part or all of the cost of home or
community-based services (other than room and board) approved by
the Secretary which are provided pursuant to a written plan of care
to individuals with respect to whom there has been a determination
that but for the provision of such services the individuals would
require the level of care provided in a hospital or a nursing
facility or intermediate care facility for the mentally retarded
the cost of which could be reimbursed under the State plan. For
purposes of this subsection, the term "room and board" shall not
include an amount established under a method determined by the
State to reflect the portion of costs of rent and food attributable
to an unrelated personal caregiver who is residing in the same
household with an individual who, but for the assistance of such
caregiver, would require admission to a hospital, nursing facility,
or intermediate care facility for the mentally retarded.
(2) A waiver shall not be granted under this subsection unless
the State provides assurances satisfactory to the Secretary that -
(A) necessary safeguards (including adequate standards for
provider participation) have been taken to protect the health and
welfare of individuals provided services under the waiver and to
assure financial accountability for funds expended with respect
to such services;
(B) the State will provide, with respect to individuals who -
(i) are entitled to medical assistance for inpatient hospital
services, nursing facility services, or services in an
intermediate care facility for the mentally retarded under the
State plan,
(ii) may require such services, and
(iii) may be eligible for such home or community-based care
under such waiver,
for an evaluation of the need for inpatient hospital services,
nursing facility services, or services in an intermediate care
facility for the mentally retarded;
(C) such individuals who are determined to be likely to require
the level of care provided in a hospital, nursing facility, or
intermediate care facility for the mentally retarded are informed
of the feasible alternatives, if available under the waiver, at
the choice of such individuals, to the provision of inpatient
hospital services, nursing facility services, or services in an
intermediate care facility for the mentally retarded;
(D) under such waiver the average per capita expenditure
estimated by the State in any fiscal year for medical assistance
provided with respect to such individuals does not exceed 100
percent of the average per capita expenditure that the State
reasonably estimates would have been made in that fiscal year for
expenditures under the State plan for such individuals if the
waiver had not been granted; and
(E) the State will provide to the Secretary annually,
consistent with a data collection plan designed by the Secretary,
information on the impact of the waiver granted under this
subsection on the type and amount of medical assistance provided
under the State plan and on the health and welfare of recipients.
(3) A waiver granted under this subsection may include a waiver
of the requirements of section 1396a(a)(1) of this title (relating
to statewideness), section 1396a(a)(10)(B) of this title (relating
to comparability), and section 1396a(a)(10)(C)(i)(III) of this
title (relating to income and resource rules applicable in the
community). A waiver under this subsection shall be for an initial
term of three years and, upon the request of a State, shall be
extended for additional five-year periods unless the Secretary
determines that for the previous waiver period the assurances
provided under paragraph (2) have not been met. A waiver may
provide, with respect to post-eligibility treatment of income of
all individuals receiving services under that waiver, that the
maximum amount of the individual's income which may be disregarded
for any month for the maintenance needs of the individual may be an
amount greater than the maximum allowed for that purpose under
regulations in effect on July 1, 1985.
(4) A waiver granted under this subsection may, consistent with
paragraph (2) -
(A) limit the individuals provided benefits under such waiver
to individuals with respect to whom the State has determined that
there is a reasonable expectation that the amount of medical
assistance provided with respect to the individual under such
waiver will not exceed the amount of such medical assistance
provided for such individual if the waiver did not apply, and
(B) provide medical assistance to individuals (to the extent
consistent with written plans of care, which are subject to the
approval of the State) for case management services,
homemaker/home health aide services and personal care services,
adult day health services, habilitation services, respite care,
and such other services requested by the State as the Secretary
may approve and for day treatment or other partial
hospitalization services, psychosocial rehabilitation services,
and clinic services (whether or not furnished in a facility) for
individuals with chronic mental illness.
Except as provided under paragraph (2)(D), the Secretary may not
restrict the number of hours or days of respite care in any period
which a State may provide under a waiver under this subsection.
(5) For purposes of paragraph (4)(B), the term "habilitation
services" -
(A) means services designed to assist individuals in acquiring,
retaining, and improving the self-help, socialization, and
adaptive skills necessary to reside successfully in home and
community based settings; and
(B) includes (except as provided in subparagraph (C))
prevocational, educational, and supported employment services;
but
(C) does not include -
(i) special education and related services (as defined in
paragraphs (16) and (17) of section 1401(a) )1(! of title 20)
which otherwise are available to the individual through a local
educational agency; and
(ii) vocational rehabilitation services which otherwise are
available to the individual through a program funded under
section 730 of title 29.
(6) The Secretary may not require, as a condition of approval of
a waiver under this section under paragraph (2)(D), that the actual
total expenditures for home and community-based services under the
waiver (and a claim for Federal financial participation in
expenditures for the services) cannot exceed the approved estimates
for these services. The Secretary may not deny Federal financial
payment with respect to services under such a waiver on the ground
that, in order to comply with paragraph (2)(D), a State has failed
to comply with such a requirement.
(7)(A) In making estimates under paragraph (2)(D) in the case of
a waiver that applies only to individuals with a particular illness
or condition who are inpatients in, or who would require the level
of care provided in, hospitals, nursing facilities, or intermediate
care facilities for the mentally retarded, the State may determine
the average per capita expenditure that would have been made in a
fiscal year for those individuals under the State plan separately
from the expenditures for other individuals who are inpatients in,
or who would require the level of care provided in, those
respective facilities.
(B) In making estimates under paragraph (2)(D) in the case of a
waiver that applies only to individuals with developmental
disabilities who are inpatients in a nursing facility and whom the
State has determined, on the basis of an evaluation under paragraph
(2)(B), to need the level of services provided by an intermediate
care facility for the mentally retarded, the State may determine
the average per capita expenditures that would have been made in a
fiscal year for those individuals under the State plan on the basis
of the average per capita expenditures under the State plan for
services to individuals who are inpatients in an intermediate care
facility for the mentally retarded, without regard to the
availability of beds for such inpatients.
(C) In making estimates under paragraph (2)(D) in the case of a
waiver to the extent that it applies to individuals with mental
retardation or a related condition who are resident in an
intermediate care facility for the mentally retarded the
participation of which under the State plan is terminated, the
State may determine the average per capita expenditures that would
have been made in a fiscal year for those individuals without
regard to any such termination.
(8) The State agency administering the plan under this subchapter
may, whenever appropriate, enter into cooperative arrangements with
the State agency responsible for administering the program for
children with special health care needs under subchapter V of this
chapter in order to assure improved access to coordinated services
to meet the needs of such children.
(9) In the case of any waiver under this subsection which
contains a limit on the number of individuals who shall receive
home or community-based services, the State may substitute
additional individuals to receive such services to replace any
individuals who die or become ineligible for services under the
State plan.
(10) The Secretary shall not limit to fewer than 200 the number
of individuals in the State who may receive home and
community-based services under a waiver under this subsection.
(d) Home and community-based services for elderly
(1) Subject to paragraph (2), the Secretary shall grant a waiver
to provide that a State plan approved under this subchapter shall
include as "medical assistance" under such plan payment for part or
all of the cost of home or community-based services (other than
room and board) which are provided pursuant to a written plan of
care to individuals 65 years of age or older with respect to whom
there has been a determination that but for the provision of such
services the individuals would be likely to require the level of
care provided in a skilled nursing facility or intermediate care
facility the cost of which could be reimbursed under the State
plan. For purposes of this subsection, the term "room and board"
shall not include an amount established under a method determined
by the State to reflect the portion of costs of rent and food
attributable to an unrelated personal caregiver who is residing in
the same household with an individual who, but for the assistance
of such caregiver, would require admission to a hospital, nursing
facility, or intermediate care facility for the mentally retarded.
(2) A waiver shall not be granted under this subsection unless
the State provides assurances satisfactory to the Secretary that -
(A) necessary safeguards (including adequate standards for
provider participation) have been taken to protect the health and
welfare of individuals provided services under the waiver and to
assure financial accountability for funds expended with respect
to such services;
(B) with respect to individuals 65 years of age or older who -
(i) are entitled to medical assistance for skilled nursing or
intermediate care facility services under the State plan,
(ii) may require such services, and
(iii) may be eligible for such home or community-based
services under such waiver,
the State will provide for an evaluation of the need for such
skilled nursing facility or intermediate care facility services;
and
(C) such individuals who are determined to be likely to require
the level of care provided in a skilled nursing facility or
intermediate care facility are informed of the feasible
alternatives to the provision of skilled nursing facility or
intermediate care facility services, which such individuals may
choose if available under the waiver.
Each State with a waiver under this subsection shall provide to the
Secretary annually, consistent with a reasonable data collection
plan designed by the Secretary, information on the impact of the
waiver granted under this subsection on the type and amount of
medical assistance provided under the State plan and on the health
and welfare of recipients.
(3) A waiver granted under this subsection may include a waiver
of the requirements of section 1396a(a)(1) of this title (relating
to statewideness), section 1396a(a)(10)(B) of this title (relating
to comparability), and section 1396a(a)(10)(C)(i)(III) of this
title (relating to income and resource rules applicable in the
community). Subject to a termination by the State (with notice to
the Secretary) at any time, a waiver under this subsection shall be
for an initial term of 3 years and, upon the request of a State,
shall be extended for additional 5-year periods unless the
Secretary determines that for the previous waiver period the
assurances provided under paragraph (2) have not been met. A waiver
may provide, with respect to post-eligibility treatment of income
of all individuals receiving services under the waiver, that the
maximum amount of the individual's income which may be disregarded
for any month is equal to the amount that may be allowed for that
purpose under a waiver under subsection (c) of this section.
(4) A waiver under this subsection may, consistent with paragraph
(2), provide medical assistance to individuals for case management
services, homemaker/home health aide services and personal care
services, adult day health services, respite care, and other
medical and social services that can contribute to the health and
well-being of individuals and their ability to reside in a
community-based care setting.
(5)(A) In the case of a State having a waiver approved under this
subsection, notwithstanding any other provision of section 1396b of
this title to the contrary, the total amount expended by the State
for medical assistance with respect to skilled nursing facility
services, intermediate care facility services, and home and
community-based services under the State plan for individuals 65
years of age or older during a waiver year under this subsection
may not exceed the projected amount determined under subparagraph
(B).
(B) For purposes of subparagraph (A), the projected amount under
this subparagraph is the sum of the following:
(i) The aggregate amount of the State's medical assistance
under this subchapter for skilled nursing facility services and
intermediate care facility services furnished to individuals who
have attained the age of 65 for the base year increased by a
percentage which is equal to the lesser of 7 percent times the
number of years (rounded to the nearest quarter of a year)
beginning after the base year and ending at the end of the waiver
year involved or the sum of -
(I) the percentage increase (based on an appropriate
market-basket index representing the costs of elements of such
services) between the beginning of the base year and the
beginning of the waiver year involved, plus
(II) the percentage increase between the beginning of the
base year and the beginning of the waiver year involved in the
number of residents in the State who have attained the age of
65, plus
(III) 2 percent for each year (rounded to the nearest quarter
of a year) beginning after the base year and ending at the end
of the waiver year.
(ii) The aggregate amount of the State's medical assistance
under this subchapter for home and community-based services for
individuals who have attained the age of 65 for the base year
increased by a percentage which is equal to the lesser of 7
percent times the number of years (rounded to the nearest quarter
of a year) beginning after the base year and ending at the end of
the waiver year involved or the sum of -
(I) the percentage increase (based on an appropriate
market-basket index representing the costs of elements of such
services) between the beginning of the base year and the
beginning of the waiver year involved, plus
(II) the percentage increase between the beginning of the
base year and the beginning of the waiver year involved in the
number of residents in the State who have attained the age of
65, plus
(III) 2 percent for each year (rounded to the nearest quarter
of a year) beginning after the base year and ending at the end
of the waiver year.
(iii) The Secretary shall develop and promulgate by regulation
(by not later than October 1, 1989) -
(I) a method, based on an index of appropriately weighted
indicators of changes in the wages and prices of the mix of
goods and services which comprise both skilled nursing facility
services and intermediate care facility services (regardless of
the source of payment for such services), for projecting the
percentage increase for purposes of clause (i)(I);
(II) a method, based on an index of appropriately weighted
indicators of changes in the wages and prices of the mix of
goods and services which comprise home and community-based
services (regardless of the source of payment for such
services), for projecting the percentage increase for purposes
of clause (ii)(I); and
(III) a method for projecting, on a State specific basis, the
percentage increase in the number of residents in each State
who are over 65 years of age for any period.
The Secretary shall develop (by not later than October 1, 1989) a
method for projecting, on a State-specific basis, the percentage
increase in the number of residents in each State who are over 65
years of age for any period. Effective on and after the date the
Secretary promulgates the regulation under clause (iii), any
reference in this subparagraph to the "lesser of 7 percent" shall
be deemed to be a reference to the "greater of 7 percent".
(iv) If there is enacted after December 22, 1987, an Act which
amends this subchapter whose provisions become effective on or
after such date and which results in an increase in the aggregate
amount of medical assistance under this subchapter for nursing
facility services and home and community-based services for
individuals who have attained the age of 65 years, the Secretary,
at the request of a State with a waiver under this subsection for
a waiver year or years and in close consultation with the State,
shall adjust the projected amount computed under this
subparagraph for the waiver year or years to take into account
such increase.
(C) In this paragraph:
(i) The term "home and community-based services" includes
services described in sections 1396d(a)(7) and 1396d(a)(8) of
this title, services described in subsection (c)(4)(B) of this
section, services described in paragraph (4), and personal care
services.
(ii)(I) Subject to subclause (II), the term "base year" means
the most recent year (ending before December 22, 1987) for which
actual final expenditures under this subchapter have been
reported to, and accepted by, the Secretary.
(II) For purposes of subparagraph (C), in the case of a State
that does not report expenditures on the basis of the age
categories described in such subparagraph for a year ending
before December 22, 1987, the term "base year" means fiscal year
1989.
(iii) The term "intermediate care facility services" does not
include services furnished in an institution certified in
accordance with section 1396d(d) of this title.
(6)(A) A determination by the Secretary to deny a request for a
waiver (or extension of waiver) under this subsection shall be
subject to review to the extent provided under section 1316(b) of
this title.
(B) Notwithstanding any other provision of this chapter, if the
Secretary denies a request of the State for an extension of a
waiver under this subsection, any waiver under this subsection in
effect on the date such request is made shall remain in effect for
a period of not less than 90 days after the date on which the
Secretary denies such request (or, if the State seeks review of
such determination in accordance with subparagraph (A), the date on
which a final determination is made with respect to such review).
(e) Waiver for children infected with AIDS or drug dependent at
birth
(1)(A) Subject to paragraph (2), the Secretary shall grant a
waiver to provide that a State plan approved under this subchapter
shall include as "medical assistance" under such plan payment for
part or all of the cost of nursing care, respite care, physicians'
services, prescribed drugs, medical devices and supplies,
transportation services, and such other services requested by the
State as the Secretary may approve which are provided pursuant to a
written plan of care to a child described in subparagraph (B) with
respect to whom there has been a determination that but for the
provision of such services the infants would be likely to require
the level of care provided in a hospital or nursing facility the
cost of which could be reimbursed under the State plan.
(B) Children described in this subparagraph are individuals under
5 years of age who -
(i) at the time of birth were infected with (or tested
positively for) the etiologic agent for acquired immune
deficiency syndrome (AIDS),
(ii) have such syndrome, or
(iii) at the time of birth were dependent on heroin, cocaine,
or phencyclidine,
and with respect to whom adoption or foster care assistance is (or
will be) made available under part E of subchapter IV of this
chapter.
(2) A waiver shall not be granted under this subsection unless
the State provides assurances satisfactory to the Secretary that -
(A) necessary safeguards (including adequate standards for
provider participation) have been taken to protect the health and
welfare of individuals provided services under the waiver and to
assure financial accountability for funds expended with respect
to such services;
(B) under such waiver the average per capita expenditure
estimated by the State in any fiscal year for medical assistance
provided with respect to such individuals does not exceed 100
percent of the average per capita expenditure that the State
reasonably estimates would have been made in that fiscal year for
expenditures under the State plan for such individuals if the
waiver had not been granted; and
(C) the State will provide to the Secretary annually,
consistent with a data collection plan designed by the Secretary,
information on the impact of the waiver granted under this
subsection on the type and amount of medical assistance provided
under the State plan and on the health and welfare of recipients.
(3) A waiver granted under this subsection may include a waiver
of the requirements of section 1396a(a)(1) of this title (relating
to statewideness) and section 1396a(a)(10)(B) of this title
(relating to comparability). A waiver under this subsection shall
be for an initial term of 3 years and, upon the request of a State,
shall be extended for additional five-year periods unless the
Secretary determines that for the previous waiver period the
assurances provided under paragraph (2) have not been met.
(4) The provisions of paragraph (6) of subsection (d) of this
section shall apply to this subsection in the same manner as it
applies to subsection (d) of this section.
(f) Monitor of implementation of waivers; termination of waiver for
noncompliance; time limitation for action on requests for plan
approval, amendments, or waivers
(1) The Secretary shall monitor the implementation of waivers
granted under this section to assure that the requirements for such
waiver are being met and shall, after notice and opportunity for a
hearing, terminate any such waiver where he finds noncompliance has
occurred.
(2) A request to the Secretary from a State for approval of a
proposed State plan or plan amendment or a waiver of a requirement
of this subchapter submitted by the State pursuant to a provision
of this subchapter shall be deemed granted unless the Secretary,
within 90 days after the date of its submission to the Secretary,
either denies such request in writing or informs the State agency
in writing with respect to any additional information which is
needed in order to make a final determination with respect to the
request. After the date the Secretary receives such additional
information, the request shall be deemed granted unless the
Secretary, within 90 days of such date, denies such request.
(g) Optional targeted case management services
(1) A State may provide, as medical assistance, case management
services under the plan without regard to the requirements of
section 1396a(a)(1) of this title and section 1396a(a)(10)(B) of
this title. The provision of case management services under this
subsection shall not restrict the choice of the individual to
receive medical assistance in violation of section 1396a(a)(23) of
this title. A State may limit the provision of case management
services under this subsection to individuals with acquired immune
deficiency syndrome (AIDS), or with AIDS-related conditions, or
with either, or to individuals described in section 1396a(z)(1)(A)
of this title and a State may limit the provision of case
management services under this subsection to individuals with
chronic mental illness. The State may limit the case managers
available with respect to case management services for eligible
individuals with developmental disabilities or with chronic mental
illness in order to ensure that the case managers for such
individuals are capable of ensuring that such individuals receive
needed services.
(2) For purposes of this subsection, the term "case management
services" means services which will assist individuals eligible
under the plan in gaining access to needed medical, social,
educational, and other services.
(h) Period of waivers; continuations
No waiver under this section (other than a waiver under
subsection (c), (d), or (e) of this section) may extend over a
period of longer than two years unless the State requests
continuation of such waiver, and such request shall be deemed
granted unless the Secretary, within 90 days after the date of its
submission to the Secretary, either denies such request in writing
or informs the State agency in writing with respect to any
additional information which is needed in order to make a final
determination with respect to the request. After the date the
Secretary receives such additional information, the request shall
be deemed granted unless the Secretary, within 90 days of such
date, denies such request.
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