PART 430—GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS Authority: 42 U.S.C. 1302. Source: 53 FR 36571, Sept. 21, 1988, unless otherwise noted. Subpart A—Introduction; General Provisions § 430.0 Program description. Title XIX of the Social Security Act, enacted in 1965, authorizes Federal grants to States for medical assistance to low-income persons who are age 65 or over, blind, disabled, or members of families with dependent children or qualified pregnant women or children. The program is jointly financed by the Federal and State governments and administered by States. Within broad Federal rules, each State decides eligible groups, types and range of services, payment levels for services, and administrative and operating procedures. Payments for services are made directly by the State to the individuals or entities that furnish the services. § 430.1 Scope of subchapter C. The regulations in subchapter C set forth State plan requirements, standards, procedures, and conditions for obtaining Federal financial participation (FFP). Each part (or subpart of section) in the subchapter describes the specific statutory basis for the regulation. However, where the basis is the Secretary's general authority to issue regulations for any program under the Act (section 1102 of the Act), or his general authority to prescribe State plan requirements needed for proper and efficient administration of the plan (section 1902(a)(4)), those statutory provisions are simply cited without further description. § 430.2 Other applicable Federal regulations. Other regulations applicable to State Medicaid programs include the following: (a) 5 CFR part 900, subpart F, Administration of the Standards for a Merit System of Personnel Administration. (b) The following HHS Regulations in 45 CFR subtitle A: 2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Part 16—Procedures of the Departmental Appeals Board. Part 80—Nondiscrimination Under Programs Receiving Federal Assistance Through the Department of Health and Human Services: Effectuation of Title VI of the Civil Rights Act of 1964. Part 81—Practice and Procedure for Hearings Under 45 CFR part 80. Part 84—Nondiscrimination on the Basis of Handicap in Programs and Activities Receiving or Benefiting From Federal Financial Assistance. Part 95—General Administration—grant programs (public assistance and medical assistance). [53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8845, Mar. 1, 1991; 81 FR 3011, Jan. 20, 2016; 89 FR 80069, Oct. 2, 2024] § 430.3 Appeals under Medicaid. Four distinct types of disputes may arise under Medicaid. (a) Compliance with Federal requirements. (b) FFP in Medicaid expenditures. (c) Discretionary grants disputes. (d) Imposition of suspensions of procedural disenrollments and civil money penalties under section 430.49 of this part. (e) Disputes that pertain to disapproval of written approval by CMS of State directed payments under 42 CFR 438.6(c)(2)(i) are also heard by the Board in accordance with procedures set forth in 45 CFR part 16. 45 CFR part 16, appendix A, lists all the types of disputes that the Board hears. [53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8845, Mar. 1, 1991; 88 FR 84733, Dec. 6, 2023; 89 FR 41267, May 10, 2024] § 430.5 Definitions. As used in this subchapter, unless the context indicates otherwise— Contractor Federal redetermination requirements Procedural disenrollment termination Representative [67 FR 41094, June 14, 2002, as amended at 88 FR 84733, Dec. 6, 2023] Subpart B—State Plans § 430.10 The State plan. The State plan is a comprehensive written statement submitted by the agency describing the nature and scope of its Medicaid program and giving assurance that it will be administered in conformity with the specific requirements of title XIX, the regulations in this Chapter IV, and other applicable official issuances of the Department. The State plan contains all information necessary for CMS to determine whether the plan can be approved to serve as a basis for Federal financial participation (FFP) in the State program. § 430.12 Submittal of State plans and plan amendments. (a) Format. (b) Governor's review Basic rules. (i) The Medicaid agency must submit the State plan and State plan amendments to the State Governor or his designee for review and comment before submitting them to the CMS regional office. (ii) The plan must provide that the Governor will be given a specific period of time to review State plan amendments, long-range program planning projections, and other periodic reports on the Medicaid program, excluding periodic statistical, budget and fiscal reports. (iii) Any comments from the Governor must be submitted to CMS with the plan or plan amendment. (2) Exceptions. (ii) Governor's review is not required for preprinted plan amendments that are developed by CMS if they provide absolutely no options for the State. (c) Plan amendments. (i) Changes in Federal law, regulations, policy interpretations, or court decisions; or (ii) Material changes in State law, organization, or policy, or in the State's operation of the Medicaid program. For changes related to advance directive requirements, amendments must be submitted as soon as possible, but no later than 60 days from the effective date of the change to State law concerning advance directives. (2) Prompt submittal of amendments is necessary— (i) So that CMS can determine whether the plan continues to meet the requirements for approval; and (ii) To ensure the availability of FFP in accordance with § 430.20. [53 FR 36571, Sept. 21, 1988, as amended at 60 FR 33293, June 27, 1995; 81 FR 86447, Nov. 30, 2016] § 430.14 Review of State plan material. CMS regional staff reviews State plans and plan amendments, discusses any issues with the Medicaid agency, and consults with central office staff on questions regarding application of Federal policy. § 430.15 Basis and authority for action on State plan material. (a) Basis for action. (2) Guidelines are furnished to assist in the interpretation of the regulations. (b) Approval authority. (c) Disapproval authority. (2) The Administrator does not make a final determination of disapproval without first consulting the Secretary. § 430.16 Timing and notice of action on State plan material. (a) Timing. (i) Written notice of disapproval; or (ii) Written notice of any additional information it needs in order to make a final determination. (2) If CMS requests additional information, the 90-day period for CMS action on the plan or plan amendment begins on the day it receives that information. (b) Notice of final determination. (2) Only the Administrator gives notice of disapproval of a State plan or plan amendment. § 430.18 Administrative review of action on State plan material. (a) Request for reconsideration. (b) Notice and timing of hearing. (2) The hearing takes place not less than 30 days nor more than 60 days after the date of the notice, unless the State and the Administrator agree in writing on an earlier or later date. (c) Hearing procedures. (d) Decision. (e) Effect of hearing decision. (2) However, if the Administrator determines that his or her original decision was incorrect, CMS pays the State a lump sum equal to any funds incorrectly denied. § 430.20 Effective dates of State plans and plan amendments. For purposes of FFP, the following rules apply: (a) New plans. (1) May not be earlier than the first day of the quarter in which an approvable plan is submitted to the regional office; and (2) With respect to expenditures for medical assistance, may not be earlier than the first day on which the plan is in operation on a statewide basis. (b) Plan amendment. (2) For a plan amendment that changes the State's payment method and standards, the rules of § 447.256 of this chapter apply. (3) For other plan amendments, the effective date may be a date requested by the State if CMS approves it. [53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8845, Mar. 1, 1991] § 430.25 Waivers of State plan requirements. (a) Scope of section. (b) Purpose of waivers. (c) Effect of waivers. (i) Implement a primary care case-management system or a specialty physician system. (ii) Designate a locality to act as central broker in assisting Medicaid beneficiaries to choose among competing health care plans. (iii) Share with beneficiaries (through provision of additional services) cost-savings made possible through the beneficiaries' use of more cost-effective medical care. (iv) Limit beneficiaries' choice of providers (except in emergency situations and with respect to family planning services) to providers that fully meet reimbursement, quality, and utilization standards, which are established under the State plan and are consistent with access, quality, and efficient and economical furnishing of care. (2) A waiver under section 1915(c) of the Act allows a State to include as “medical assistance” under its plan home and community based services furnished to beneficiaries who would otherwise need inpatient care that is furnished in a hospital, SNF, ICF, or ICF/IID, and is reimbursable under the State plan. (3) A waiver under section 1916 (a)(3) or (b)(3) of the Act allows a State to impose a deduction, cost-sharing or similar charge of up to twice the “nominal charge” established under the plan for outpatient services, if— (i) The outpatient services are received in a hospital emergency room but are not emergency services; and (ii) The State has shown that Medicaid beneficiaries have actually available and accessible to them alternative services of nonemergency outpatient services. (d) Requirements that are waived. (1) Under section 1915(b) of the Act, and subject to certain limitations, any of the State plan requirements of section 1902 of the Act may be waived to achieve one of the purposes specified in that section. (2) Under section 1915(c) of the Act, the following requirements may be waived: (i) Statewideness—section 1902(a)(1). (ii) Comparability of services—section 1902(a)(10)(B). (iii) Income and resource rules—section 1902(a)(10)(C)(i)(III). (3) Under section 1916 of the Act, paragraphs (a)(3) and (b)(3) require that any cost-sharing imposed on beneficiaries be nominal in amount, and provide an exception for nonemergency services furnished in a hospital emergency room if the conditions of paragraph (c)(3) of this section are met. (e) Submittal of waiver request. (f) Review of waiver requests. (2) CMS regional and central office staff review waiver requests and submit a recommendation to the Administrator, who— (i) Has the authority to approve or deny waiver requests; and (ii) Does not deny a request without first consulting the Secretary. (3) A waiver request is considered approved unless, within 90 days after the request is received by CMS, the Administrator denies the request, or the Administrator or the Regional Administrator sends the State a written request for additional information necessary to reach a final decision. If additional information is requested, a new 90-day period begins on the day the response to the additional information request is received by the addressee. (g) Basis for approval Waivers under section 1915 (b) and (c). (2) Waivers under section 1916. (h) Effective date and duration of waivers Effective date. (2) Duration of waivers Home and community-based services under section 1915(c) of the Act. (B) For waivers that include individuals who are dually eligible for Medicare and Medicaid, 5-year initial approval periods may be granted at the discretion of the Secretary for waivers meeting all necessary programmatic, financial and quality requirements, and in a manner consistent with the interests of beneficiaries and the objectives of the Medicaid program. (ii) Waivers under section 1915(b) of the Act. (B) For waivers that include individuals who are dually eligible for Medicare and Medicaid, 5-year initial and renewal approval periods may be granted at the discretion of the Secretary for waivers meeting all necessary programmatic, financial and quality requirements, and in a manner consistent with the interests of beneficiaries and the objectives of the Medicaid program. (iii) Waivers under section 1916 of the Act. (3) Renewal of waivers. (ii) If a renewal request for a section 1915(c) waiver proposes a change in services provided, eligible population, service area, or statutory sections waived, the Administrator may consider it a new waiver, and approve it for a period of three years. [56 FR 8846, Mar. 1, 1991, as amended at 79 FR 3028, Jan. 16, 2014] Subpart C—Grants; Reviews and Audits; Withholding for Failure To Comply; Deferral and Disallowance of Claims; Reduction of Federal Medicaid Payments § 430.30 Grants procedures. (a) General provisions. (2) The amount of the quarterly grant is determined on the basis of information submitted by the State agency (in quarterly estimate and quarterly expenditure reports) and other pertinent documents. (b) Quarterly estimates. (c) Expenditure reports. (2) This report is the State's accounting of actual recorded expenditures. The disposition of Federal funds may not be reported on the basis of estimates. (d) Grant award Computation by CMS. (2) Content of award. (i) Penalty reductions imposed by law. (ii) Accounting adjustments. (iii) Deferrals or disallowances. (iv) Interest assessments. (v) Mandated adjustments such as those required by section 1914 of the Act. (3) Effect of award. (4) Drawing procedure. (e) General administrative requirements. (1) Cost sharing or matching, 2 CFR 200.306; and (2) Financial reporting, 2 CFR 200.328. [53 FR 36571, Sept. 21, 1988, as amended at 77 FR 31507, May 29, 2012; 81 FR 3011, Jan. 20, 2016; 89 FR 80069, Oct. 2, 2024] § 430.32 Program reviews. (a) Review of State and local administration. (b) Quality control program. (c) Action on review findings. § 430.33 Audits. (a) Purpose. (1) The program is being operated in a cost-efficient manner; and (2) Funds are being properly expended for the purposes for which they were appropriated under Federal and State law and regulations. (b) Reports. (2) The reports set forth OIG opinion and recommendations regarding the practices it reviewed, and the allowability of the costs it audited. (3) Cognizant officials of the Department make final determinations on all audit findings. (c) Action on audit exceptions Concurrence or clearance. (2) Appeal. (3) Adjustment. [53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8846, Mar. 1, 1991; 77 FR 31507, May 29, 2012] § 430.35 Withholding of payment for failure to comply with Federal requirements. (a) Basis for withholding. (1) That the plan no longer complies with the provisions of section 1902 of the Act; or (2) That in the administration of the plan there is failure to comply substantially with any of those provisions. (Hearings under subpart D are generally not called until a reasonable effort has been made to resolve the issues through conferences and discussions. These may be continued even if a date and place have been set for the hearing.) (b) Noncompliance of the plan. (c) Noncompliance in practice. (d) Notice and implementation of withholding. (1) The Administrator notifies the State: (i) That no further payments will be made to the State (or that payments will be made only for those portions or aspects of the program that are not affected by the noncompliance); and (ii) That the total or partial withholding will continue until the Administrator is satisfied that the State's plan and practice are, and will continue to be, in compliance with Federal requirements. (2) CMS withholds payments, in whole or in part, until the Administrator is satisfied regarding the State's compliance. § 430.38 Judicial review. (a) Right to judicial review. (b) Petition for review. (2) The clerk of the court will file a copy of the petition with the Administrator and the Administrator will file in the court the record of the proceedings on which the determination was based. (c) Court action. (2) The court has jurisdiction to affirm the Administrator's decision, to set it aside in whole or in part, or, for good cause, to remand the case for additional evidence. (d) Response to remand. (2) The Administrator will certify to the court the transcript and record of the further proceedings. (e) Review by the Supreme Court. § 430.40 Deferral of claims for FFP. (a) Requirements for deferral. (1) The Administrator or current Designee questions its allowability and needs additional information to resolve the question; and (2) CMS takes action to defer the claim (by excluding the claimed amount from the grant award) within 60 days after the receipt of a Quarterly Statement of Expenditures (prepared in accordance with CMS instructions) that includes that claim. (b) Notice of deferral and State's responsibility. (i) Identifies the type and amount of the deferred claim and specifies the reason for deferral; and (ii) Requests the State to make available all the documents and materials the regional office then believes are necessary to determine the allowability of the claim. (2) It is the responsibility of the State to establish the allowability of a deferred claim. (c) Handling of documents and materials. (2) Regional office staff usually initiates review within 30 days after receipt of the documents and materials. (3) If the current Designee finds that the materials are not in readily reviewable form or that additional information is needed, he or she promptly notifies the State that it has 15 days to submit the readily reviewable or additional materials. (4) If the State does not provide the necessary materials within 15 days, the current Designee disallows the claim. (5) The current Designee has 90 days, after all documentation is available in readily reviewable form, to determine the allowability of the claim. (6) If the current Designee cannot complete review of the material within 90 days, CMS pays the claim, subject to a later determination of allowability. (d) Effect of decision to pay a deferred claim. (e) Notice and effect of decision on allowability. (2) If the decision is to disallow, the notice informs the State of its right to reconsideration in accordance with 45 CFR part 16. [53 FR 36571, Sept. 21, 1988, as amended at 77 FR 31507, May 29, 2012] § 430.42 Disallowance of claims for FFP. (a) Notice of disallowance and of right to reconsideration. (1) The date or dates on which the State's claim for FFP was made. (2) The time period during which the expenditures in question were made or claimed to have been made. (3) The date and amount of any payment or notice of deferral. (4) A statement of the amount of FFP claimed, allowed, and disallowed and the manner in which these amounts were computed. (5) Findings of fact on which the disallowance determination is based or a reference to other documents previously furnished to the State or included with the notice (such as a report of a financial review or audit) which contain the findings of fact on which the disallowance determination is based. (6) Pertinent citations to the law, regulations, guides and instructions supporting the action taken. (7) A request that the State make appropriate adjustment in a subsequent expenditure report. (8) Notice of the State's right to request reconsideration of the disallowance and the time allowed to make the request. (9) A statement indicating that the disallowance letter is the Department's final decision unless the State requests reconsideration under paragraph (b)(2) or (f)(2) of this section. (b) Reconsideration of a disallowance. (2) To request reconsideration of a disallowance, a State must complete the following: (i) Submit the following within 60 days after receipt of the disallowance letter: (A) A written request to the Administrator that includes the following: ( 1 ( 2 ( 3 ( 4 (B) A copy of the written request to the Regional Office. (C) Send all requests for reconsideration via registered or certified mail to establish the date the reconsideration was received by CMS. (ii) In all cases, the State has the burden of documenting the allowability of its claims for FFP. (iii) Additional information regarding the legal authority for the disallowance will not be reviewed in the reconsideration but may be presented in any appeal to the Departmental Appeals Board under paragraph (f)(2) of this section. (3) A State may request to retain the FFP during the reconsideration of the disallowance under section 1116(e) of the Act, in accordance with § 433.38 of this subchapter. (4) The State is not required to request reconsideration before seeking review from the Departmental Appeals Board. (5) The State may also seek reconsideration, and following the reconsideration decision, request a review from the Board. (6) If the State elects reconsideration, the reconsideration process must be completed or withdrawn before requesting review by the Board. (c) Procedures for reconsideration of a disallowance. (2) After consideration of the policies and factual matters pertinent to the issues in question, the Administrator shall, within 60 days from the date of receipt of the request for reconsideration, issue a written decision or a request for additional information as described in paragraph (c)(3) of this section. (3) At the Administrator's option, CMS may request from the State any additional information or documents necessary to make a decision. The request for additional information must be sent via registered or certified mail to establish the date the request was sent by CMS and received by the State. (4) Within 30 days after receipt of the request for additional information, the State must submit to the Administrator, with a copy to the Regional Office in readily reviewable form, all requested documents and materials. (i) If the Administrator finds that the materials are not in readily reviewable form or that additional information is needed, he or she shall notify the State via registered or certified mail that it has 15 business days from the date of receipt of the notice to submit the readily reviewable or additional materials. (ii) If the State does not provide the necessary materials within 15 business days from the date of receipt of such notice, the Administrator shall affirm the disallowance in a final reconsideration decision issued within 15 days from the due date of additional information from the State. (5) If additional documentation is provided in readily reviewable form under the paragraph (c)(4) of this section, the Administrator shall issue a written decision, within 60 days from the due date of such information. (6) The final written decision shall constitute final CMS administrative action on the reconsideration and shall be (within 15 business days of the decision) mailed to the State agency via registered or certified mail to establish the date the reconsideration decision was received by the State. (7) If the Administrator does not issue a decision within 60 days from the date of receipt of the request for reconsideration or the date of receipt of the requested additional information, the disallowance shall be deemed to be affirmed upon reconsideration. (8) No section of this regulation shall be interpreted as waiving the Department's right to assert any provision or exemption under the Freedom of Information Act. (d) Withdrawal of a request for reconsideration of a disallowance. (2) Within 60 days after CMS' receipt of a State's withdrawal request, a State may, in accordance with (f)(2) of this section, submit a notice of appeal to the Board. (e) Implementation of decisions for reconsideration of a disallowance. (2) If the reconsideration decision requires an adjustment of FFP, either upward or downward, a subsequent grant award will be issued in the amount of such increase or decrease. (3) Within 60 days after the receipt of a reconsideration decision from CMS a State may, in accordance with paragraph (f)(2) of this section, submit a notice of appeal to the Board. (f) Appeal of Disallowance. (2) A State that wishes to appeal a disallowance to the Board must: (i) Submit a notice of appeal to the Board at the address given on the Departmental Appeals Board's web site within 60 days after receipt of the disallowance letter. (A) If a reconsideration of a disallowance was requested, within 60 days after receipt of the reconsideration decision; or (B) If reconsideration of a disallowance was requested and no written decision was issued, within 60 days from the date the decision on reconsideration of the disallowance was due to be issued by CMS. (ii) Include all of the following: (A) A copy of the disallowance letter. (B) A statement of the amount in dispute. (C) A brief statement of why the disallowance is wrong. (3) The Board's decision of an appeal under paragraph (f)(2) of this section shall be the final decision of the Secretary and shall be subject to reconsideration by the Board only upon a motion by either party that alleges a clear error of fact or law and is filed during the 60-day period that begins on the date of the Board's decision or to judicial review in accordance with paragraph (f)(2)(i) of this section. (g) Appeals procedures. (1) In all cases, the State has the burden of documenting the allowability of its claims for FFP. (2) The Board shall conduct a thorough review of the issues, taking into account all relevant evidence, including such documentation as the State may submit and the Board may require. (h) Implementation of decisions. (2) The Board will issue a final written decision to the State consistent with 45 CFR part 16. (3) If the appeal decision requires an adjustment of FFP, either upward or downward, a subsequent grant award will be issued in the amount of increase or decrease. [53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8846, Mar. 1, 1991; 77 FR 31507, May 29, 2012] § 430.45 Reduction of Federal Medicaid payments. (a) Methods of reduction. (1) The Federal Medical Assistance Percentage; (2) The amount of State expenditures subject to FFP; (3) The rates of FFP; or (4) The amount otherwise payable to the State. (b) Right to reconsideration. (c) Other applicable rules. § 430.48 Repayment of Federal funds by installments. (a) Basic conditions. (1) The amount to be repaid exceeds 0.25 percent of the estimated or actual annual State share for the Medicaid program. (2) The State has given the Regional Office written notice, before total repayment was due, of its intent to repay by installments. (b) Annual State share determination. (1) If the Medicaid program is ongoing, CMS uses the annual estimated State share of Medicaid expenditures for the current year, as shown on the State's latest Medicaid Program Budget Report (CMS-37). The current year is the year in which the State requests the repayment by installments. (2) If the Medicaid program has been terminated by Federal law or by the State, CMS uses the actual State share that is shown on the State's CMS-64 Quarterly Expense Report for the last four quarters filed. (c) Standard Repayment amounts, schedules, and procedures Repayment amount. (2) Repayment schedule. (3) Quarterly repayment amounts. (ii) The minimum quarterly repayment amounts for each of the quarters in the repayment schedule is 0.25 percent of the estimated State share of the current annual expenditures for Medicaid; (iii) The repayment period may be less than 12 quarters when the minimum repayment amount is required. (4) Extended schedule. (ii) The quarterly repayment amount will be 8 1/3 (5) Repayment process. (ii) A State may choose to make payment by Automated Clearing House (ACH) direct deposit, by check, or by Fedwire transfer. (6) Reductions. (d) Alternate repayment amounts, schedules, and procedures for States experiencing economic distress immediately prior to the repayment period Repayment amount. (2) Qualifying period of economic distress. (ii) A period of economic distress is one in which the State demonstrates distress for at least each of the previous 6 months, ending the month prior to the date of the State's written request for an alternate repayment schedule, as determined by a negative percent change in the monthly Philadelphia Federal Reserve Bank State coincident index. (3) Repayment schedule. (4) Quarterly repayment amounts. (ii) The maximum quarterly repayment amounts for each of the first 8 quarters in the repayment schedule is 0.25 percent of the annual State share determination as defined in paragraph (b) of this section; (iii) For the remaining 4 quarters, the quarterly repayment amount equals the remaining balance of the overpayment amount divided by the remaining 4 quarters. (5) Extended schedule. (A) In these circumstances, paragraph (d)(3) of this section is followed for repayment of the amount equal to 100 percent of the estimated State share of current annual expenditures. (B) The remaining amount of the repayment is in quarterly amounts equal to 8 1/3 (ii) Upon request by the State, the repayment schedule may be extended beyond 12 quarterly installments if the State has qualifying periods of economic distress in accordance with paragraph (d)(2) of this section during the first 8 quarters of the alternate repayment schedule. (A) To qualify for additional quarters, the States must demonstrate a period of economic distress in accordance with paragraph (d)(2) of this section for at least 1 month of a quarter during the first 8 quarters of the alternate repayment schedule. (B) For each quarter (of the first 8 quarters of the alternate payment schedule) identified as qualified period of economic distress, one quarter will be added to the remaining 4 quarters of the original 12 quarter repayment period. (C) The total number of quarters in the alternate repayment schedule shall not exceed 20 quarters. (6) Repayment process. (ii) A State may choose to make payment by Automated Clearing House (ACH) direct deposit, by check, or by Fedwire transfer. (7) If the State chooses to repay amounts representing higher percentages during the early quarters, any corresponding reduction in required minimum percentages is applied first to the last scheduled payment, then to the next to the last payment, and so forth as necessary. (e) Alternate repayment amounts, schedules, and procedures for States entering into distress during a standard repayment schedule Repayment amount. (2) Qualifying period of economic distress. (ii) A period of economic distress is one in which the State demonstrates distress for each of the previous 6 months, that begins on the date of the State's request for an alternate repayment schedule, as determined by a negative percent change in the monthly Philadelphia Federal Reserve Bank State coincident index. (3) Repayment schedule. (4) Quarterly repayment amounts. (ii) The maximum quarterly repayment amounts for each of the first 8 quarters in the repayment schedule is 0.25 percent of the annual State share determination as defined in paragraph (b) of this section; (iii) For the remaining 4 quarters, the quarterly repayment amount equals the remaining balance of the overpayment amount divided by the remaining 4 quarters. (5) Extended schedule. (ii) In these circumstances, paragraph (d)(3) of this section is followed for repayment of the amount equal to 100 percent of the estimated State share of current annual expenditures; (iii) The remaining amount of the repayment is in quarterly amounts equal to 8 1/3 (6) Repayment process. (ii) A State may choose to make payment by Automated Clearing House (ACH) direct deposit, by check, or by Fedwire transfer. (7) If the State chooses to repay amounts representing higher percentages during the early quarters, any corresponding reduction in required minimum percentages is applied first to the last scheduled payment, then to the next to the last payment, and so forth as necessary. [77 FR 31509, May 29, 2012] § 430.49 Corrective action plans, suspensions of procedural disenrollments, and civil money penalties. (a) Statutory basis. (b) Corrective action plans Basis for corrective action. (i) The requirement to submit data required under section 1902(tt)(1) of the Act in accordance with § 435.927 of this subchapter; or (ii) Federal redetermination requirements described at § 430.5. (2) Notice of need for corrective action plan. (i) Explain the violation of Federal redetermination or reporting requirements that CMS has identified and the basis for CMS' finding; (ii) Inform the State of the requirement to submit and implement a corrective action plan: (iii) Include instructions on the method and deadline by which the State must submit a corrective action plan to CMS; and (iv) Explain the enforcement actions that CMS may pursue if the State fails to submit or implement an approved corrective action plan, including if CMS disapproves the State's submitted CAP or if the State fails to meet the requirements set forth in the approved CAP, in accordance with this section. (3) Content of corrective action plan. (i) The actions the State will take immediately, if needed to prevent further harm or risk of harm to beneficiaries while it implements the corrective action plan, including to prevent increased burden for beneficiaries in completing the renewal process, loss of coverage at renewal for individuals who continue to meet the substantive eligibility criteria and whose eligibility should otherwise be retained but for failure to meet a procedural requirement, and delays in access to coverage or care; (ii) The steps the State will take to ensure compliance with Federal requirements, including but not limited to new policies, procedures, operational processes or systems changes it will implement; (iii) Key milestones and a detailed timeline for achieving compliance; and (iv) A plan for communicating the steps the State will take to prevent actual harm or risk of harm to beneficiaries and to ensure compliance with Federal requirements per paragraphs (b)(3)(i) and (ii) of this section to State staff, including staff of non-Medicaid agencies or entities to which the agency has delegated authority to conduct redeterminations of eligibility in accordance with § 431.10(c)(1)(i) of this subchapter; CMS; and beneficiaries, as applicable. (4) Timeframes for submission, approval, and implementation of corrective action plan Submission. (ii) Approval. (iii) Implementation. (5) Approval or disapproval of corrective action plan. (i) Meets the requirements at paragraph (b)(3) of this section; (ii) Promptly eliminates or minimizes any harm or risk of harm to beneficiaries, including increased burden for beneficiaries in completing the renewal process, loss of coverage at renewal for individuals who continue to meet the substantive eligibility criteria and whose eligibility should otherwise be retained but for failure to meet a procedural requirement, and delays in access to coverage or care due to the noncompliance to be addressed by the plan; and (iii) Results in the State achieving compliance in a reasonable time, taking into account systems challenges and circumstances faced by the agencies involved. (c) Suspensions of procedural disenrollments and civil money penalties. (i) Require the State to suspend some or all procedural disenrollments, in accordance with paragraph (c)(3)(i) of this section; and (ii) Impose civil money penalties in accordance with paragraph (c)(3)(ii) of this section. (2) Notice. (A) A description of the enforcement action(s) CMS is taking and the basis for such action(s); (B) Whether CMS is requiring the State to suspend some or all procedural disenrollments and, in the case of a partial suspension, the affected populations; (C) The date on which the State must begin suspending procedural disenrollments, if applicable; (D) The daily amount owed for any civil money penalties imposed, the date the penalties will begin to be charged, the timeline for payment (including information on how the timeline for payment would be affected by an appeal), and instructions on how to submit payment; (E) The steps the State must take to cure its noncompliance and for CMS to lift the enforcement action(s); and (F) Information on the State's appeal rights as described in paragraph (f) of this section, including the deadline to submit an appeal request, and the effect of requesting an appeal on the applicability of any enforcement actions pending the decision in such appeal. The notice must also provide that the decision outlined in the notice is final unless it is timely appealed as described in paragraph (f) of this section. (ii) CMS may issue additional notices requiring a State to take additional actions (including paying increased civil money penalties or implementing or broadening the scope of a required suspension of procedural disenrollments) if CMS identifies additional violations of corrective action plan provisions. Such notices will meet the requirements outlined in paragraph (c)(2)(i) of this section. (3) Scope of actions Suspensions of procedural disenrollments. (B) If the impact of the noncompliance is limited (for example, to a specific population or geographic area), CMS may limit the suspension of procedural disenrollments to the impacted population(s). After requiring a limited suspension of procedural disenrollments, CMS may later opt to require the State to suspend all procedural disenrollments if CMS subsequently determines that the impact of the noncompliance is greater than was initially determined, or if the State fails to comply with the initial requirement to suspend some procedural disenrollments in accordance with the notice issued under paragraph (c)(2) of this section. In these circumstances, CMS will issue a subsequent notice under paragraph (c)(2). (ii) Civil money penalties. (A) Civil money penalties will start accruing five (5) calendar days after the date of the initial notice described in paragraph (c)(2) of this section and become payable 60 calendar days after the date of the notice, if not timely appealed, or 60 calendar days after issuance of a final determination at the conclusion of any appeal pursuant to paragraph (f) of this section. (B) The amount of any applicable civil money penalties for failure to submit or implement a corrective action plan, including if CMS disapproves the State's submitted corrective action plan or if the State fails to meet the requirements set forth in the approved corrective action plan, will be determined according to the following formula, after the date specified in paragraph (c)(3)(ii)(A) of this section: Days 1-30 of noncompliance: $25,000/day; Days 31-60 of noncompliance: $50,000/day; and Days 61 or more of noncompliance until lifted in accordance with paragraph (e) of this section: $100,000/day. Each of these amounts is adjusted annually under 45 CFR part 102. (C) Consistent with paragraph (c)(2)(ii) of this section, if CMS identifies additional violations of corrective action plan provisions, CMS may issue additional notices to increase civil money penalties more quickly than provided for by the formula in paragraph (c)(3)(ii)(B) of this section. (4) Noncompliance with requirements to suspend procedural disenrollments or pay civil money penalties. (d) Mitigating circumstances. (1) Requirement to submit corrective action plan for violation of redetermination requirements. (i) The noncompliance caused neither actual harm nor a substantial risk of harm to beneficiaries, including increased burden for beneficiaries in completing the renewal process, loss of coverage at renewal for individuals who continue to meet the substantive eligibility criteria and whose eligibility should otherwise be retained but for failure to meet a procedural requirement, and delays in access to coverage or care to beneficiaries; or (ii) CMS determines that there is an emergency or other extraordinary circumstances preventing the State's compliance. (2) Requirement to submit corrective action plan for violation of reporting requirements. (i) CMS has determined that the State implementing a corrective action plan is not necessary to ensure that the noncompliance is remedied; or (ii) CMS determines that there is an emergency or other extraordinary circumstances preventing the State's compliance. (3) Suspensions of procedural disenrollments and imposition of civil money penalties. (A) Occurred after the violation resulting in CMS' requirement of a CAP for noncompliance with Federal redetermination requirements or reporting requirements under § 435.927; and (B) Has significantly impeded the State's ability to submit or implement a corrective action plan. (ii) In the case of a State's failure to submit or implement a corrective action plan relating to a violation of the reporting requirements under § 435.927 of this subchapter in which the underlying reporting violation does not impede CMS' oversight of the State's procedural disenrollments, CMS will: (A) Delay suspension of procedural disenrollments for 1 month; and (B) Impose civil money penalties, except in cases where there are also extraordinary circumstances as described in paragraph (d)(3)(i) of this section. (e) Lifting of enforcement actions. (i) The State will be required to continue any suspension of procedural disenrollments required pursuant to such notice, and any civil money penalties imposed in accordance with the terms of such notice will continue to be charged, until— (A) For a State that failed to submit a corrective action plan, the State submits a corrective action plan that CMS determines is approvable consistent with paragraph (b)(5) of this section. (B) For a State that failed to implement an approved corrective action plan, the State has implemented or resumed implementation of such plan. (ii) CMS will continue the accrual of civil money penalties from the date specified in the original notice provided to the State under paragraph (c)(2) of this section until CMS determines whether the plan is approvable. If CMS determines that the plan is approvable, CMS will retroactively end the accrual of the civil money penalties on the day the CAP was submitted and cease charging civil money penalties prospectively. If CMS determines that the plan is not approvable, CMS will continue charging civil money penalties imposed under the terms of the enforcement notice without interruption until the State submits an approvable plan. (2) Where a State has met the conditions under paragraph (e)(1)(i) of this section, CMS will notify the State that the enforcement actions are being lifted. For States that were required to suspend procedural disenrollments, such notice will include the date on which the State may resume such disenrollments. For States that were subject to civil money penalties, such notice will include the date on which such civil money penalties stopped accruing, the total number of days for which civil money penalties accrued and the amount(s) of such civil money penalties, and the total amount of civil money penalties owed. (f) Administrative review Appeal to the Departmental Appeals Board. (2) Reconsiderations by Administrator. (A) The request for reconsideration must be filed with the Administrator and must include a copy of the Board's decision, a brief statement of why the party believes the decision was wrong, and a statement of the amount of any civil money penalties in dispute. (B) The party requesting reconsideration must send a copy of the request described in paragraph (f)(2)(i)(A) of this section to all other parties to the appeal and other participants in the appeal (as described in 45 CFR 16.16) at the same time that the request is filed with the Administrator. (C) Any other party to the appeal, or other participant in the appeal, may respond to the request for reconsideration in writing and file their response with the Administrator within 15 calendar days of the date the request for reconsideration is filed with the Administrator. (D) The Administrator will review the Board's decision and any additional information submitted by the parties and other participants under paragraphs (f)(2)(i)(A) or (C) of this section and, within 60 calendar days after the Board issues notice of its decision under 45 CFR 16.21, will either affirm the Board's decision or issue a new decision. (ii) Within the 60-day period that is described in paragraph (f)(2)(i)(D) of this section, the Administrator may also modify or reverse the Board's decision even if no party to the appeal has requested reconsideration of that decision. (iii) If no request for reconsideration is filed under paragraph (f)(2)(i) of this section and the Administrator does not modify or reverse the Board's decision within the 60-day period described in paragraph (f)(2)(ii) of this section, then the decision of the Board is the final determination of the Secretary and is final agency action, as described in paragraph (f)(2)(v) of this section, and the Administrator will provide notice to all parties and other participants of such decision as described in paragraph (f)(2)(iv) of this section. (iv) The Administrator will provide a notice to all parties and other participants of the final decision together with a notice indicating that this is the final determination of the Secretary (v) The determination of the Administrator pursuant to paragraph (f)(2)(i)(D) or (f)(2)(ii) of this section is the final determination of the Secretary (g) Severability. [88 FR 84733, Dec. 6, 2023] Subpart D—Hearings on Conformity of State Medicaid Plans and Practice to Federal Requirements § 430.60 Scope. (a) This subpart sets forth the rules for hearings to States that appeal a decision to disapprove State plan material (under § 430.18) or to withhold Federal funds (under § 430.35), because the State plan or State practice in the Medicaid program is not in compliance with Federal requirements. (b) Nothing in this subpart is intended to preclude or limit negotiations between CMS and the State, whether before, during, or after the hearing to resolve the issues that are, or otherwise would be, considered at the hearing. Such negotiations and resolution of issues are not part of the hearing, and are not governed by the rules in this subpart except as expressly provided. § 430.62 Records to be public. All pleadings, correspondence, exhibits, transcripts of testimony, exceptions, briefs, decisions, and other documents filed in the docket in any proceeding may be inspected and copied in the office of the CMS Docket Clerk. Inquiries may be made to the Docket Clerk, Hearing Staff, Bureau of Eligibility, Reimbursment and Coverage, 300 East High Rise, 6325 Security Boulevard, Baltimore, Maryland, 21207. Telephone: (301) 594-8261. § 430.63 Filing and service of papers. (a) Filing. (b) Service. § 430.64 Suspension of rules. Upon notice to all parties, the Administrator or the presiding officer may modify or waive any rule in this subpart upon determination that no party will be unduly prejudiced and the ends of justice will thereby be served. § 430.66 Designation of presiding officer for hearing. (a) The presiding officer at a hearing is the Administrator or his designee. (b) The designation of the presiding officer is in writing. A copy of the designation is served on all parties. § 430.70 Notice of hearing or opportunity for hearing. The Administrator mails the State a notice of hearing or opportunity for hearing that— (a) Specifies the time and place for the hearing; (b) Specifies the issues that will be considered; (c) Identifies the presiding officer; and (d) Is published in the Federal Register. § 430.72 Time and place of hearing. (a) Time. (b) Place. § 430.74 Issues at hearing. The list of issues specified in the notice of hearing may be augmented or reduced as provided in this section. (a) Additional issues. Federal Register. (2) If the notice of additional issues is furnished to the State less than 20 days before the scheduled hearing date, postponement is granted if requested by the State or any other party. The new date may be 20 days after the date of the notice, or a later date agreed to by the presiding officer. (b) New or modified issues. (c) Issues removed from consideration Basis for removal. (2) Notice to parties. (i) A statement of the intent to remove and the reasons for removal; and (ii) A copy of the proposed State plan provision on which CMS and the State have agreed. (3) Opportunity for written comment. (d) Remaining issues. § 430.76 Parties to the hearing. (a) CMS and the State. (b) Other individuals Basis for participation. (2) Petition for participation. Federal Register, (i) Petitioner's interest in the proceeding; (ii) Who will appear for petitioner; (iii) The issues on which petitioner wishes to participate; and (iv) Whether petitioner intends to present witnesses. The petitioner must also serve a copy of the petition on each party of record at that time. (3) Comments on petition. (4) Action on petition. (ii) If petitions are made by more than one individual or group with common interests, the presiding officer may— (A) Request all those petitioners to designate a single representative; or (B) Recognize one or more of those petitioners to represent all of them. (iii) The presiding officer gives each petitioner written notice of the decision and, if the decision is to deny, briefly states the grounds for denial. (c) Amicus curiae (friend of the court) Petition for participation. (i) The petitioners' interest in the hearing; (ii) Who will represent the petitioner; and (iii) The issues on which the petitioner intends to present argument. (2) Action on amicus curiae petition. (3) Nature of amicus participation. (i) Submitting a written statement of position to the presiding officer before the beginning of the hearing; (ii) Presenting a brief oral statement at the hearing, at the point in the proceedings specified by the presiding officer; and (iii) Submitting a brief or written statement when the parties submit briefs. The amicus curiae must serve copies of any briefs or written statements on all parties. § 430.80 Authority of the presiding officer. (a) The presiding officer has the duty to conduct a fair hearing, to avoid delay, maintain order, and make a record of the proceedings. He or she has the authority necessary to accomplish those ends, including but not limited to authority to take the following actions: (1) Change the date, time, and place of the hearing after due notice to the parties. This includes authority to postpone or adjourn the hearing in whole or in part. In a hearing on disapproval of a State plan, or State plan amendments, changes in the date of the hearing are subject to the time limits imposed by section 1116(a)(2) of the Act. (2) Hold conferences to settle or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the issues. (3) Regulate participation of parties and amici curiae and require parties and amici curiae to state their position with respect to the various issues in the proceeding. (4) Administer oaths and affirmations. (5) Rule on motions and other procedural items, including issuance of protective orders or other relief to a party against whom discovery is sought. (6) Regulate the course of the hearing and conduct of counsel. (7) Examine witnesses. (8) Receive, rule on, exclude or limit evidence or discovery. (9) Fix the time for filing motions, petitions, briefs, or other items. (10) If the presiding officer is the Administrator, make a final decision. (11) If the presiding officer is a designee of the Administrator, certify the entire record including recommended findings and proposed decision to the Administrator. (12) Take any action authorized by the rules in this subpart or in conformance with the provisions of 5 U.S.C. 551 through 559. (b) The presiding officer does not have authority to compel by subpoena the production of witnesses, papers, or other evidence. (c) If the presiding officer is a designee of the Administrator, his or her authority pertains to the issues of compliance by a State with Federal requirements, and does not extend to the question of whether, in case of any noncompliance, Federal payments will be denied in respect to the entire State plan or only for certain categories under, or parts of, the State plan affected by the noncompliance. § 430.83 Rights of parties. All parties may: (a) Appear by counsel or other authorized representative, in all hearing proceedings. (b) Participate in any prehearing conference held by the presiding officer. (c) Agree to stipulations as to facts which will be made a part of the record. (d) Make opening statements at the hearing. (e) Present relevant evidence on the issues at the hearing. (f) Present witnesses who then must be available for cross-examination by all other parties. (g) Present oral arguments at the hearing. (h) Submit written briefs, proposed findings of fact, and proposed conclusions of law, after the hearing. § 430.86 Discovery. CMS and any party named in the notice issued under § 430.70 has the right to conduct discovery (including depositions) against opposing parties. Rules 26-37 of the Federal Rules of Civil Procedures apply to such proceedings; there will be no fixed rule on priority of discovery. Upon written motion, the presiding officer promptly rules upon any objection to discovery action initiated under this section. The presiding officer also has the power to grant a protective order or relief to any party against whom discovery is sought and to restrict or control discovery so as to prevent undue delay in the conduct of the hearing. Upon the failure of any party to make discovery, the presiding officer may issue any order and impose any sanction (other than contempt orders) authorized by Rule 37 of the Federal Rules of Civil Procedure. § 430.88 Evidence. (a) Evidentiary purpose. (b) Testimony. (c) Stipulations and exhibits. (d) Rules of evidence. (2) A witness may be cross-examined on any matter material to the proceeding without regard to the scope of his or her direct examination. (3) The presiding officer may exclude irrelevant, immaterial, or unduly repetitious evidence. (4) All documents and other evidence offered or taken for the record are open to examination by the parties and an opportunity is given to refute facts and arguments advanced on either side of the issues. § 430.90 Exclusion from hearing for misconduct. The presiding officer may immediately exclude from the hearing any person who— (a) Uses disrespectful, disorderly, or contumacious language or engages in contemptuous behavior; (b) Refuses to comply with directions; or (c) Uses dilatory tactics. § 430.92 Unsponsored written material. Letters expressing views or urging action and other unsponsored written material regarding matters in issue in a hearing are placed in the correspondence section of the docket of the proceeding. These data are not considered part of the evidence or record in the hearing. § 430.94 Official transcript. (a) Filing. (b) Availability of transcripts. (c) Correction of transcript. § 430.96 Record for decision. The transcript of testimony, exhibits, and all papers and requests filed in the proceedings, except the correspondence section of the docket, including rulings and any recommended or initial decision constitute the exclusive record for decision. § 430.100 Posthearing briefs. The presiding officer fixes the time for filing posthearing briefs, which may contain proposed findings of fact and conclusions of law. The presiding officer may also permit reply briefs. § 430.102 Decisions following hearing. (a) Administrator presides. (b) Administrator's designee presides. (1) Upon expiration of the period allowed for submission of posthearing briefs, the presiding officer certifies the entire record, including his or her recommended findings and proposed decision, to the Administrator. The Administrator serves a copy of the recommended findings and proposed decision upon all parties and amici, if any. (2) Any party may, within 20 days, file with the Administrator exceptions to the recommended findings and proposed decision and a supporting brief or statement. (3) The Administrator reviews the recommended decision and, within 60 days of its issuance, issues his or her own decision. (c) Effect of Administrator's decision. § 430.104 Decisions that affect FFP. (a) Scope of decisions. (1) Whether no further payments will be made to the State or whether payments will be limited to parts of the program not affected by the noncompliance; and (2) The effective date of the decision to withhold. (b) Consultation. (c) Effective date of decision.