42 C.F.R. Subpart J—Penalty for Failure To Make a Satisfactory Showing of an Effective Institutional Utilization Control Program
Title 42 - Public Health
Authority: Secs. 1102 and 1903(g) of the Social Security Act (42 U.S.C. 1302 and 1396 b(g)).
Source: 44 FR 56338, Oct. 1, 1979, unless otherwise noted.
(a) Basis. Section 1903(g) of the Act requires that FFP for long-stay inpatient services at a level of care be reduced, by a specified formula, for any quarter in which a State fails to make a satisfactory showing that it has an effective program of utilization control for that level of care. (b) Purpose. This subpart specifies— (1) What States must do to make a satisfactory showing; (2) How the Administrator will determine whether reductions will be imposed; and (3) How the required reductions will be implemented. (c) Scope. The reductions required by this subpart do not apply to— (1) Services provided under a contract with a health maintenance organization; or (2) Facilities in which a QIO is performing medical and utilization reviews under contract with the Medicaid agency in accordance with §431.630 of this chapter. [44 FR 56338, Oct. 1, 1979, as amended at 50 FR 15327, Apr. 17, 1985; 51 FR 43198, Dec. 1, 1986] For purposes of this subpart— Facility, with respect to inpatient psychiatric services for individuals under 21, includes a psychiatric program as specified in §441.151 of this chapter. Level of care means one of the following types of inpatient services: hospital, mental hospital, intermediate care facility, or psychiatric services for individuals under 21. Long-stay services means services provided to a recipient after a total of 60 days of inpatient stay (90 in the case of mental hospital services) during a 12-month period beginning July 1, not counting days of stay paid for wholly or in part by Medicare. [43 FR 45266, Sept. 29, 1978, as amended at 61 FR 38399, July 24, 1996] (a) General requirements. In order to avoid a reduction in FFP, the Medicaid agency must make a satisfactory showing to the Administrator, in each quarter, that it has met the following requirements for each recipient: (1) Certification and recertification of the need for inpatient care, as specified in §§456.60, 456.160, 456.360 and 456.481. (2) A plan of care established and periodically reviewed and evaluated by a physician, as specified in §§456.80, 456.180, and 456.481. (3) A continuous program of utilization review under which the admission of each recipient is reviewed or screened in accordance with section 1903(g)(1)(C) of the Act; and (4) A regular program of reviews, including medical evaluations, and annual on-site reviews of the care of each recipient, as specified in §§456.170, and 456.482 and subpart I of this part. (b) Annual on-site review requirements. (1) An agency meets the quarterly on-site review requirements of paragraph (a)(4) of this section for a quarter if it completes on-site reviews of each recipient in every facility in the State, and in every State-owned facility regardless of location, by the end of the quarter in which a review is required under paragraph (b)(2) of this section. (2) An on-site review is required in a facility by the end of a quarter if the facility entered the Medicaid program during the same calendar quarter 1 year earlier or has not been reviewed since the same calendar quarter 1 year earlier. If there is no Medicaid recipient in the facility on the day a review is scheduled, the review is not required until the next quarter in which there is a Medicaid recipient in the facility. (3) If a facility is not reviewed in the quarter in which it is required to be reviewed under paragraph (b)(2) of this section, it will continue to require a review in each subsequent quarter until the review is performed. (4) The requirement for an on-site review in a given quarter is not affected by the addition or deletion of a level of care in a facility's provider agreement. (c) Facilities without valid provider agreements. The requirements of paragraphs (a) and (b) of this section apply with respect to recipients for whose care the agency intends to claim FFP even if the recipients receive care in a facility whose provider agreement has expired or been terminated. [44 FR 56338, Oct. 1, 1979, as amended at 46 FR 48561, Oct. 1, 1981; 61 FR 38399, July 24, 1996] The Administrator will find an agency's showing satisfactory, even if it failed to meet the annual review requirements of §456.652(a)(4), if— (a) The agency demonstrates that— (1) It completed reviews by the end of the quarter in at least 98 percent of all facilities requiring review by the end of the quarter; (2) It completed reviews by the end of the quarter in all facilities with 200 or more certified Medicaid beds requiring review by the end of the quarter; and (3) With respect to all unreviewed facilities, the agency exercised good faith and due diligence by attempting to review those facilities and would have succeeded but for events beyond its control which it could not have reasonably anticipated; or (b) The agency demonstrates that it failed to meet the standard in paragraph (a) (1) and (2) of this section by the close of the quarter for technical reasons, but met the standard within 30 days after the close of the quarter. Technical reasons are circumstances within the agency's control. (c) Facilities that are reviewed under paragraph (b) of this section, after the quarter in which they were due for review, retain their original anniversary quarter due date for purposes of subsequent reviews. (a) An agency's showing for a quarter must— (1) Include a certification by the agency that the requirements of §456.652(a) (1) through (4) were met during the quarter for each level of care or, if applicable, a certification of the reasons the annual on-site review requirements of §456.652(a)(4) were not met in any facilities; (2) For all mental hospitals, intermediate care facilities, and facilities providing inpatient psychiatric services for individuals under 21, participating in Medicaid any time during the 12–month period ending on the last day of the quarter, list each facility by level of care, name, address and provider number; (3) For each facility entering or leaving the program during the 12–month period ending on the last day of the quarter, list the beginning or ending dates of the provider agreement and supply a copy of the provider agreement; (4) If review has been contracted to a QIO under §431.630 of this chapter, list the date the QIO contracted for review. (5) List all dates of on-site reviews completed by review teams anytime during the 12–month period ending on the last day of the quarter; (6) For all facilities in which an on-site review was required but not conducted, list the facility by name, address and provider number; (7) For each on-site review in a mental hospital, intermediate care facility that primarily cares for mental patients, or inpatient psychiatric facility, list the name and qualifications of one team member who is a physician; and (8) For each on-site review in an intermediate care facility that does not primarily care for mental patients, list the name and qualifications of one team member who is either a physician or registered nurse. (b) The quarterly showing must be in the form prescribed by the Administrator. (c) The quarterly showing must be postmarked or received within 30 days after the close of the quarter for which it is made, unless the agency demonstrates good cause for later submittal and the showing is postmarked or received within 45 days after the close of the quarter. Good cause means unanticipated circumstances beyond the agency's control. [44 FR 56338, Oct. 1, 1979, as amended at 50 FR 15327, Apr. 17, 1985; 51 FR 43198, Dec. 1, 1986; 61 FR 38399, July 24, 1996] (a) The Administrator will periodically validate showings submitted under §456.654. Validation procedures will include on-site sample surveys of institutions and surveys at the Medicaid agencies. (b) The Administrator will not find an agency's showing satisfactory if the information obtained through his validation procedures demonstrates, that any of the requirements of §456.652(a) (1) through (4) were not met during the quarter for which the showing was made. (a) If the Administrator determines an agency's showing does not meet each of the requirements of this sub-part, he will give the agency 30 days notice before making the required reduction. (b) If the Administrator determines that a showing for any quarter is unsatisfactory on its face, he will make the required reduction in the grant award based on the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program for that quarter. (This form CMS–64 is described in §430.30(c) of this chapter.) (c) If the Administrator finds a showing satisfactory on its face, but after validation determines the showing to be unsatisfactory, he will notify the agency of any required reduction in FFP no later than the first day of the fourth calendar quarter following the calendar quarter for which the showing was made. Any required reduction will be made by amending or adjusting the agency's grant award. (d) The agency may request reconsideration of a reduction in accordance with the procedures specified in 45 CFR part 16. (a) For each level of care specified in a provider agreement, and for each quarter for which a satisfactory showing is not made, the amount of the reduction in FFP is computed as follows: (1) For each level of care, the number of recipients who received services in facilities that did not meet the requirements of this subpart is divided by the total number of recipients who received services in facilities for which a showing was required under this subpart. If any of the requirements specified in §456.652(a)(1) through (4) were not met for any recipient in a facility, the reduction will be computed on the total number of recipients in that facility at the level of care in question. (2) The fraction obtained in paragraph (a)(1) of this section is multiplied by one-third. (3) The product obtained in paragraph (a)(2) of this section is multiplied by the Federal Medical Assistance Percentage (FMAP). (4) The product obtained in paragraph (a)(3) of this section is multiplied by the agency payments for longstay services furnished during the quarter at that level of care. (b) If any of the data required to compute the amount of the reduction in FFP are unavailable, the Administrator will substitute an estimate. If the agency determines the exact data to the satisfaction of the Administrator, the estimate may later be adjusted. If the number of recipients in individual facilities is not available, the fraction specified in paragraph (a)(1) of this section will be estimated, for each level of care, by dividing the number of facilities in which the requirements were not met by the total number of facilities for which a showing is required under this subpart.
Title 42: Public Health
PART 456—UTILIZATION CONTROL
Subpart J—Penalty for Failure To Make a Satisfactory Showing of an Effective Institutional Utilization Control Program
§ 456.650 Basis, purpose and scope.
§ 456.651 Definitions.
§ 456.652 Requirements for an effective utilization control program.
§ 456.653 Acceptable reasons for not meeting requirements for annual on-site review.
§ 456.654 Requirements for content of showings and procedures for submittal.
§ 456.655 Validation of showings.
§ 456.656 Reductions in FFP.
§ 456.657 Computation of reductions in FFP.
