42 C.F.R. Subpart B—Payment Methods: General Provisions
Title 42 - Public Health
This subpart prescribes State plan requirements for setting payment rates to implement, in part, section 1902(a)(30) of the Act, which requires that payments for services be consistent with efficiency, economy, and quality of care. [46 FR 48560, Oct. 1, 1981] (a) A State plan must provide that the requirements in this subpart are met. (b) The plan must describe the policy and the methods to be used in setting payment rates for each type of service included in the State's Medicaid program. The Medicaid agency must assure appropriate audit of records if payment is based on costs of services or on a fee plus cost of materials. (a) The agency must maintain documentation of payment rates and make it available to HHS upon request. (b) The agency must record, in State manuals or other official files, the following information for increases in payment rates for individual practitioner services: (1) An estimate of the percentile of the range of customary charges to which the revised payment structure equates and a description of the methods used to make the estimate. (2) An estimate of the composite average percentage increase of the revised payment rates over the preceding rates. The agency's payments must be sufficient to enlist enough providers so that services under the plan are available to recipients at least to the extent that those services are available to the general population. (a) When notice is required. Except as specified in paragraph (b) of this section, the agency must provide public notice of any significant proposed change in its methods and standards for setting payment rates for services. (b) When notice is not required. Notice is not required if— (1) The change is being made to conform to Medicare methods or levels of reimbursement; (2) The change is required by court order; or (3) The change is based on changes in wholesalers' or manufacturers' prices of drugs or materials, if the agency's reimbursement system is based on material cost plus a professional fee. (c) Content of notice. The notice must— (1) Describe the proposed change in methods and standards; (2) Give an estimate of any expected increase or decrease in annual aggregate expenditures; (3) Explain why the agency is changing its methods and standards; (4) Identify a local agency in each county (such as the social services agency or health department) where copies of the proposed changes are available for public review; (5) Give an address where written comments may be sent and reviewed by the public; and (6) If there are public hearings, give the location, date and time for hearings or tell how this information may be obtained. (d) Publication of notice. The notice must— (1) Be published before the proposed effective date of the change; and (2) Appear as a public announcement in one of the following publications: (i) A State register similar to the (ii) The newspaper of widest circulation in each city with a population of 50,000 or more. (iii) The newspaper of widest circulation in the State, if there is no city with a population of 50,000 or more. [46 FR 58680, Dec. 3, 1981; 47 FR 8567, Mar. 1, 1982, as amended at 48 FR 56057, Dec. 19, 1983]
Title 42: Public Health
PART 447—PAYMENTS FOR SERVICES
Subpart B—Payment Methods: General Provisions
§ 447.200 Basis and purpose.
§ 447.201 State plan requirements.
§ 447.202 Audits.
§ 447.203 Documentation of payment rates.
§ 447.204 Encouragement of provider participation.
§ 447.205 Public notice of changes in Statewide methods and standards for setting payment rates.
