Question: I read the recent Fact Sheet you prepared for the National Disability Rights Network that discussed selected Medicaid provisions of the Deficit Reduction Act of 2005.1 I noticed that states have the option of whether to implement many of these provisions. Can you explain the process that states use to implement optional Medicaid programs?
Brief answer: Each state has implemented its Medicaid program through a state Medicaid plan. States choosing to exercise an option set forth in the federal Medicaid Act must ordinarily submit a state plan amendment to the U.S. Department of Health and Human Services Centers for Medicare & Medicaid Services (CMS). CMS can approve or deny the amendment. There are steps you can take to participate in the review process on behalf of your clients.
Discussion: Medicaid is joint program administered by the federal and state governments pursuant to the Medicaid Act, 42 U.S.C. § 1396. To receive federal Medicaid funding, each state must have in effect a comprehensive, written state plan for medical assistance that has been submitted to and approved by the Secretary of the U.S. Department of Health and Human Services (HHS). The state Medicaid plan describes the nature and scope of the state?s Medicaid program and includes assurances by the state to the federal government that the state Medicaid program will be operated in conformity with the federal Medicaid Act, regulations, and official issuances of HHS. See 42 U.S.C. § 1396a(a) (listing required contents of state Medicaid plans), 42 U.S.C. §§ 1396b, 1396c (describing federal funding mechanisms for state Medicaid programs); see also 42 C.F.R. § 430.10.
Overview to the state Medicaid plan
The state Medicaid plan is a series of pre-printed documents that states complete to show that they are implementing the basic federal Medicaid rules. In addition, there are individualized attachments and state plan amendments that describe particular characteristics of a state?s program. For example, states specify which optional Medicaid services they cover on pre-print pages by marking an ?X? in the appropriate box accompanying the listing of services. Additional text discussion, on the pre-print, an attachment or state plan amendment will describe particular characteristics of coverage (e.g. any quantitative limits on services for adults). CMS has posted state Medicaid plans and amendments at: http://www.cms.hhs.gov/medicaid/stateplans/.
The state Medicaid plan must be amended whenever necessary to reflect changes in federal statute, regulation, or court decisions and to reflect ?material changes? in state law, policy, organization, or operation of the program.2 According to the Second Circuit Court of Appeals, a change is considered material if ?the clear and unequivocal effect of the interpretation is actually to alter the written terms of the plan.?3 States choosing to implement the Medicaid options authorized by the DRA will need to submit a state plan amendment and receive CMS approval because the DRA options will result in material changes to the operation of the state program.
The state plan amendment process
State plan amendments are typically developed by state Medicaid agency employees. Except in the circumstances discussed below, each plan amendment must be submitted to the Governor or his designee for review and comment before it is submitted to CMS.4 The state Medicaid plan must give the Governor a specific period of time to review the state plan amendment.5 Any comments from the Governor must be submitted to CMS along with the plan amendment.
As noted, there are exceptions to this submission process. A state plan amendment need not be submitted to the Governor if the Governor?s designee is the head of the Medicaid agency. Also, the Governor?s review is not required for pre-printed plan amendments that are developed by CMS if they provide ?absolutely no options for the State.?6
Once developed and approved by the Governor (if required), the state plan amendment is submitted to the appropriate CMS regional office.7 The regional office will discuss issues with the state Medicaid agency and consult with the central CMS office. The determination of whether a state plan amendment is approval is based on relevant federal statutes and regulations.8 Each CMS Regional Administrator has been delegated authority to approve state plan amendments. However, only the CMS Administrator, in consultation with the Secretary of HHS, may disapprove a state plan amendment.9
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