Groundfish of the Bering Sea and Aleutian Islands Area

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 435 and 436

[MB-52-IFC]

RIN 0938-AF69

Medicaid Program: Outstation Intake Locations for Certain Low-

Income Pregnant Women, Infants, and Children Under Age 19

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule interprets the statutory requirement

that State Medicaid agencies must provide for receiving and initially

processing Medicaid applications by certain low-income pregnant women,

infants, and children under age 19 at locations other than those used

for the receipt and processing of applications for Aid to Families with

Dependent Children (AFDC). The statutory requirement also provides that

the application form for these individuals must be different from the

application form used for AFDC.

The basis for the rule is section 1902(a)(55) of the Social

Security Act, as added by section 4602(a)(3) of the Omnibus Budget

Reconciliation Act of 1990.

DATES: Effective Date. This interim final rule is effective on October

24, 1994.

Comment Date. Comments will be considered if received at the

appropriate address, as provided in the ``ADDRESSES'' section below, no

later than 5:00 p.m. on November 22, 1994.

ADDRESSES: Mail comments (original and three copies) to the following

address: Health Care Financing Administration, Department of Health and

Human Services, Attention: MB-52-IFC, P.O. Box 7518, Baltimore, Md.

21207-0518.

Please address a copy of comments on information collection

requirements to: Office of Information and Regulatory Affairs,

Attention: Laura Oliven, Office of Management and Budget, Room 3002,

New Executive Office Building, Washington, DC 20503.

If you prefer, you may deliver your comments (original and three

copies) to one of the following addresses: Room 309-G, Hubert H.

Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201,

or Room 132, East High Rise Building, 6325 Security Boulevard,

Baltimore, Maryland 21207.

Because of staffing and resource limitations, we cannot accept

comments of facsimile (FAX) transmission.

In commenting, please refer to file code MB-52-IFC. Timely comments

will be available for public inspection as they are received, beginning

approximately three weeks after publication of this document, in room

309-G of the Department's offices at 200 Independence Avenue, SW.,

Washington, DC, on Monday through Friday of each week from 8:30 a.m. to

5:00 p.m. (telephone: (202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Robert Tomlinson, (410) 966-4463.

SUPPLEMENTARY INFORMATION:

I. Background

Generally, sections 1902(a)(10)(A) and (C) of the Social Security

Act (the Act) specify the groups of individuals who may be eligible for

Medicaid. Among these groups are low-income pregnant women, infants,

and children under age 19 who have incomes that are a specified

percentage of the Federal poverty level. Because Medicaid eligibility

for many of the eligibility groups specified under section

1902(a)(10)(A) is associated with eligibility for or receipt of Aid to

Families With Dependent Children (AFDC), many State Medicaid agencies

provide for the receipt and processing of Medicaid applications at

welfare offices, either concurrent with or separate from application

for AFDC or other cash assistance. In most cases in which an individual

is determined to be eligible for AFDC on the basis of an AFDC

application, Medicaid eligibility is automatic without a separate

Medicaid application. For other eligibility groups, such as low-income

pregnant women, infants, and children under age 19 with incomes related

to the Federal poverty level, eligibility for Medicaid is not

associated with AFDC eligibility.

In an effort to make the Medicaid application process more

accessible to low-income pregnant women, infants, and children under

age 19, Congress enacted section 4602 of the Omnibus Budget

Reconciliation Act of 1990 (OBRA '90), Public Law 101-508, on November

5, 1990. Section 4602(a)(3) amended the Social Security Act to add a

new Medicaid State plan requirement under section 1902(a)(55) relating

to the application process for these eligibility groups. The new

section 1902(a)(55) requires that a State Medicaid plan provide for

receipt and initial processing of Medicaid applications from the

following groups of individuals at locations other than those used for

processing applications for AFDC and for using at these locations an

application form for Medicaid that is not the AFDC application form:

Individuals specified under section 1902(a)(10)(A)(i)(IV)

of the Act (the mandatory eligibility group of pregnant women or

infants with incomes up to 133 percent of the Federal poverty level);

Individuals specified under section 1902(a)(10)(A)(i)(VI)

of the Act (the mandatory eligibility group of children age 1 up to age

6 with incomes at 133 percent of the Federal poverty level);

Individuals specified under section 1902(a)(10)(A)(i)(VII)

of the Act (the mandatory eligibility group of children age 6 up to age

19 born after September 30, 1983, with incomes up to 100 percent of the

Federal poverty level);

Individuals specified under section 1902(a)(10)(A)(ii)(IX)

of the Act (the optional eligibility groups of pregnant women or

infants, children age 1 up to age 6, and children age 6 up to age 19,

who are not eligible as a mandatory group, with incomes up to 185

percent of the Federal poverty level).

Section 1902(a)(55) provides that the outstation locations for

receipt and initial processing of applications for these individuals

must include facilities defined as disproportionate share hospitals

under section 1923(a)(1)(A) of the Act and Federally-qualified health

centers described in section 1905(1)(2)(B) of the Act.

The provisions of section 1902(a)(55) apply to Medicaid payments

for calendar quarters beginning on or after July 1, 1991, without

regard to whether final regulations to carry out the provisions have

been promulgated by that date.

II. Provisions of the Regulations

We are amending the Medicaid regulations under 42 CFR parts 435 and

436 to incorporate the provisions of section 1902(a)(55) of the Act.

Specifically--

1. Outstation Locations

We have added a new Sec. 435.904 to require that the State Medicaid

agency provide an opportunity for the designated groups of low-income

pregnant women, infants, and children under age 19 to apply for

Medicaid and have their application initially processed at locations

other than those at which AFDC applications are received and processed.

The statutory language of section 1902(a)(55) of the Act, as added by

section 4602 of OBRA '90, requires that States provide an opportunity

to apply for Medicaid at locations other than welfare offices,

including Federally-qualified health centers and disproportionate share

hospitals. By specifying that certain types of facilities be among the

outstation locations, Congress clearly intended that, at a minimum,

Federally qualified health centers and disproportionate share hospitals

would be among the outstation locations.

We consulted extensively with States and related organizations and

agencies before developing these interim final regulations. During this

consultation, we considered the option of requiring States to

outstation staff at every site operated by each Federally-qualified

health center and disproportionate share hospital. However, we rejected

this requirement because we believe that it would be burdensome on the

States. Therefore, to provide States with as much flexibility as

possible, especially in this era of restricted resources, we have

chosen to offer States two choices for implementing the outstationing

requirement. A State may establish outstation locations at each

Federally-qualified health center and each disproportionate share

hospital participating in the State's Medicaid program and providing

services to Medicaid-eligible pregnant women and to children, but not

at every site operated by these entities. As an alternative, a State

may submit a plan that provides for outstation locations which include

at least some Federally-qualified health centers and disproportionate

share hospitals, but not all such entities that provide services to the

target populations. For the alternative plan to be approved by HCFA,

the State must demonstrate that it is equally or more effective in

outreach than a plan that would meet the general requirement, including

the same level of staffing and funding by the State as the State would

be required to commit to implement outstationing under the general

requirement.

We are requiring that the outstations include Indian health clinics

operated by a tribe or tribal organization, as these clinics are

specifically included in the definition of Federally-qualified health

centers under section 1905(1)(2)(B) of the Act, and included in the

definition of rural health clinics under 42 CFR part 491, subpart A. If

a Federally-qualified health center or disproportionate share hospital

has more than one site, the State must ensure that applications for

Medicaid can be taken at an outstation location.

In addition to placing outstationed eligibility workers at

Federally-qualified health centers and disproportionate share hospitals

(or locations under an approved alternative plan) that provide services

to Medicaid-eligible pregnant women and to children, States may

consider other locations that are frequently visited by the targeted

populations. For example, States may consider family support centers or

school-linked service centers in addition to other sites operated by

Federally-qualified health centers as suitable outstation locations.

To permit additional flexibility, we are allowing a State, at its

option, to enter into reciprocal agreements with adjoining States to

ensure that the population living in border areas of a State have the

opportunity to apply for Medicaid at the health care locations they

normally frequent when those facilities are in another State

(Sec. 435.904(c)(4)).

2. Initial Processing

Section 1902(a)(55) provides for ``initial processing'' of

applications for the designated low-income pregnant women, infant, and

children groups. However, the phrase ``initial processing'' is

ambiguous and is not defined in the statute. The House Report

accompanying OBRA '90 states that the ``entire application process

would be conducted at [an outstation],'' and that the final eligibility

determination could also be made there. The language of the House

Report goes further to state that ``even if the eligibility worker were

an employee of the hospital or clinic, the pregnant woman or child

would not be required to go to the welfare office for a face-to-face

interview in order to complete the eligibility determination process.

Instead, the simplified application form, along with necessary

documentation, would then be forwarded to the welfare office for final

determination.'' (H. Rept. No. 881, 101st Cong., 2d Sess. 105 (1990)).

We are, therefore, defining ``initial processing'' to mean taking

applications, assisting applicants in completing the application,

providing information and referrals, obtaining required documentation

to complete processing of the application, assuring that the

information contained on the application form is complete, and

conducting any necessary interviews. Initial processing does not

include evaluating the information contained on the application and the

supporting documentation nor making a determination of eligibility or

ineligibility Sec. 435.904(d)(2). Even though the phrase ``initial

processing'' is not defined to include determinations of eligibility or

ineligibility, State eligibility workers who are assigned to outstation

locations may perform these tasks if they are authorized to do so in

the regular Medicaid agency intake office, as discussed in detail

below. If we were to define initial processing to include making a

determination of eligibility, the definition would conflict with the

requirement of section 1902(a)(5) of the Act. Under section 1902(a)(5),

the plan must be administered by a single State agency and

determination of eligibility is restricted by this section to the

Medicaid agency, the title IV-A agency, or SSA when administering the

SSI program.

3. Staffing

The State must assure HCFA that staff are available at each

outstation location to accept applications and assist applicants with

the application process during the hours that the regular State

Medicaid offices are normally open (Sec. 435.904(e)). In addition, we

are providing an exception to this requirement for staffing, and hours

when staff are available, at locations that are infrequently used by

the designated groups of low-income pregnant women, infants, and

children. To fulfill the spirit of this legislation, we also encourage

States to make outstation workers available at additional hours in the

evening or on weekends beyond the minimum staffing requirement set

forth in these regulations, thereby making access and the opportunity

to apply for Medicaid as easy as possible for the designated groups.

In order to provide the States with as much flexibility as

possible, we are allowing States to target and conserve their resources

while complying with the requirement on availability of staff. We are

not requiring outstation intake workers to be employees of the State

Medicaid agency, which is consistent with our regulations under 42 CFR

Part 432. However, all staff that perform this function must be trained

to assist applicants in filing applications and to accurately answer

questions that applicants may have or to refer such questions to the

State agency's regular office for answers. At a minimum, staff must be

available at all Federally-qualified health centers and

disproportionate share hospitals that provide services to Medicaid-

eligible pregnant women and to children. Proper application forms must

be on hand at all locations.

We are permitting States to staff outstation locations with State

employees, provider or contractor employees, or volunteers under

certain conditions and limitations. When a State places staff at

outstation locations, the State may schedule persons to either work at

a specific location or rotate among several locations. State employees

who are placed at outstation locations may perform any tasks in

connection with the receipt of, and processing of, an application for

Medicaid at the outstation location that the employee would be

authorized to perform at the State agency office, including the

eligibility determination. Provider or contractor employees at these

locations may only perform initial processing. This includes taking all

actions in receiving and processing applications and excludes

evaluating information provided on applications and supporting

documentation and making eligibility determinations. If contractor or

provider employees, including provider contractors, are used, the State

must ensure, whether by contract or other means, that these employees

adhere to State and Federal confidentiality of information provisions

concerning applicant and recipient information as specified in 42 CFR

431.300 through 431.307, to the prohibition on reassignment of provider

claims, as specified in 42 CFR 447.10, and to all State and Federal

laws concerning conflicts of interest. Volunteers may be used in the

same manner as provider or contractor employees, with the same

requirements for adherence to confidentiality of information and

conflict of interest prohibitions. These provisions are consistent with

our regulations at 42 CFR 431.10 (c) and (e) which specify the entities

authorized to make determinations of eligibility for Medicaid and the

authority of the single State agency.

At locations that are infrequently used by low-income pregnant

women, infants, and children under 19, States may use volunteers,

provider or contractor employees, or State agency staff, or telephone

assistance. At these locations, the State must display a notice in a

prominent place advising potential applicants about when outstation

intake staff will be available. The notification methods must take into

account the needs and characteristics of the population served. The

notice must provide a telephone number that applicants may call for

assistance with initial processing of an application when staff are not

available. The notice also must comply with Federal and State laws and

regulations concerning the provision of adequate notice to persons who

are blind or deaf or who cannot read or understand the English

language. The notice must adequately inform these people of the

opportunity to apply for Medicaid at locations other than the welfare

office.

4. Application Forms

Section 1902(a)(55)(B) specifies that the application form that is

to be used by the designated groups of low-income pregnant women,

infants, and children under 19 at the Medicaid outstation locations

must be an application other than that used to apply for AFDC. The

legislative history for OBRA '90 states that the House Committee bill

would require States to provide for the use of applications for

Medicaid-only coverage at outreach locations. It also states that

``States would develop application forms for use at designated

hospitals, health centers, and other outreach locations. These

simplified forms would contain only those information requirements

necessary to determine eligibility for Medicaid.'' (Emphasis added.) H.

Rept. No. 881, 101st Cong., 2d. Sess. 105 (1990). The legislative

history language further lists the items which should appear on the

application form.

To permit as much flexibility as possible within the scope of the

statutory language, we are specifying in Sec. 435.907(c) that the

application form, including any computerized application form, used at

outstation locations be an application designed for the designated

groups of low-income pregnant women, infants, and children under age

19, an application already used by Medicaid for applicants seeking

Medicaid only, or a multiple-program application form in which only

that information appropriate for the Medicaid program is obtained from

the designated low-income eligibility groups. The application form used

may not be the application form used to apply for AFDC. In response to

expressed concerns, we are permitting States to continue to use an

application form that is designed to accommodate all assistance

programs under certain circumstances. States may continue to use a

multiple-program application form if the form contains Medicaid-only

application sections or parts and it is clear to Medicaid applicants

that they can choose to complete only those sections or parts of the

application relating to Medicaid information requirements. The person

assisting the applicant at the outstation location must make it clear

to the applicant before the application is completed that only the

information pertinent to Medicaid eligibility for the groups described

in section 1902(a)(55) needs to be completed.

III. Federal Financial Participation

Federal financial participation (FFP) is available for costs

associated with the outstation locations, regardless of who provides

the services. However, effective October l, 1992, under the provisions

of section l903(w) (as added by section 2(a) of the Medicaid Voluntary

Contribution and Provider Specific Tax Amendments of 1991, Public Law

102-234, December 12, 1991), FFP is limited if a State receives

donations for outstationed eligibility workers made by a hospital,

clinic, or similar entity for the direct costs of State or local agency

personnel who are stationed at a facility to determine Medicaid

eligibility or to provide outreach services to eligible (or potentially

eligible) individuals. Direct costs include salaries and fringe

benefits for outstationed workers and the cost of pamphlets and

materials distributed by outstationed eligibility workers at the site.

These donations may not exceed 10 percent of the State's total Medicaid

administrative costs, excluding costs for family planning services.

Donations in excess of this 10-percent limit will be deducted from the

State's medical assistance expenditures prior to calculation of FFP.

Outstationed worker donations are also included in an overall

limitation (computed in accordance with a formula specified in section

1903(w) of the Act) on permissible donations that a State may receive.

The administrative functions of taking and processing applications

are reimbursed at the 50 percent rate under the provisions of section

1903(a)(7) of the Act as costs found necessary by the Secretary for the

proper and efficient administration of the State plan. Subject to the

limitations for outstationed eligibility worker donations discussed

above, this rate includes costs incurred by the State to implement and

provide outstationing of intake workers who are State employees,

provider employees, volunteers, or provider contractors. FFP is

available for necessary administrative costs such as salaries, fringe

benefits, travel, training, equipment, and space directly attributable

to the outstationing of intake workers.

Existing regulations under Secs. 432.50, 433.15, and 435.1001

already contain provisions for FFP for staffing and training costs and

for administrative costs that States incur in determining and

redetermining Medicaid eligibility.

IV. Application of Rules in Territories

The requirements of section 1902(a)(55) are applicable in Guam,

Puerto Rico, and the Virgin Islands. Our existing regulations on

eligibility determinations in the Territories cross-refer to the

regulations under Part 435. Therefore, no further major changes in the

regulations are necessary to make these interim final regulations

applicable in the Territories. We have made a minor conforming change

to Sec. 436.2.

V. Waiver of Proposed Rulemaking

The statutory effective date of section 1902(a)(55) of the Act (as

added by section 4602(a)(3) of OBRA '90) is July 1, 1991, without

regard to whether regulations have been promulgated. Section 4207(k) of

OBRA '90 gives the Secretary authority to issue regulations on an

interim or other basis as may be necessary to implement the amendments

made by the provisions of OBRA '90. Thus, we are utilizing the

authority given by section 4207(k) and publishing this rule as an

interim final rule. As stated earlier in this preamble, we have had

extensive consultation with States and related organizations and

agencies in developing the regulations. We are also providing a 60-day

comment period for public comments on this interim final rule.

VI. Response to Public Comments

Because of the large number of items of correspondence we normally

receive on a rule, we are not able to acknowledge or respond to them

individually. However, we will consider all comments that we receive by

the date specified in the ``Comment Period'' section of this preamble

and respond to them in the preamble to any subsequent rule that we

issue.

VII. Paperwork Burden

Section 435.907(c) of these interim final regulations with comment

period contains a revised information collection requirement that is

subject to review by the Office of Management and Budget under the

Paperwork Reduction Act of 1980 (44 U.S.C. Chapter 35). State agencies

may be required to develop a separate Medicaid-only application form

for the designated groups of low-income pregnant women, infants, and

children who may apply for Medicaid at outstation locations if a

Medicaid-only application is not currently available, or to amend their

existing multiple-program application form to conform it to the

requirement that there must be a clearly identified Medicaid-only

application section. We estimate that the burden hours for States to

develop or revise this application format will be 20 hours.

We do not anticipate any additional reporting burden hours on

applicants in the designated groups, as they are required under

currently approved reporting requirements to complete a Medicaid

application form for a determination of eligibility for Medicaid.

We do, however, anticipate an increased reporting burden for those

States that choose the option of submitting an alternate plan for the

establishment of outstation location sites under Sec. 435.904(c). These

States will have to demonstrate that the alternate plan compares

favorably to a plan to establish outstation locations at each

disproportionate share hospital and each Federally-qualified health

center. The State must demonstrate that the alternative plan, at a

minimum, is equally effective and commits an equal amount of staffing

and funding. We estimate that it will require a minimum of 40

additional hours to develop an alternative plan.

We will publish a notice in the Federal Register when the approval

of the information collection requirements is obtained.

VIII. Regulatory Impact Statement

We generally prepare a regulatory flexibility analysis that is

consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601

through 612), unless the Secretary certifies that a final regulation

will not have a significant economic impact on a substantial number of

small entities. For purposes of the RFA, individuals and States are not

included in the definition of a small entity.

We do not believe that this interim final rule will have a

significant effect on a substantial number of small entities. The

statutory changes increase Medicaid program expenditures independently

of the promulgation of this rule and are effective on the statutory

established date, regardless of whether we have issued final

regulations. Costs associated with the interim final rule are the

result of legislation or due to interpretation of statutory changes

already in effect. We estimate that the Federal Medicaid costs

associated with implementation of the legislative changes will be

approximately $40 million per fiscal year, and the State costs to be

approximately $30 million per fiscal year.

This interim final rule incorporates, and, in some cases,

interprets in regulations statutory changes that are already in effect.

In cases where it was necessary to provide interpretations, we have

relied on the available legislative history of the statutory provisions

to reach the best reading of the provision. Therefore, we have not

prepared a regulatory flexibility analysis under the RFA.

Section 1102(b) of the Act requires the Secretary to prepare a

regulatory impact analysis if a final rule will have a significant

impact on the operations of a substantial number of small rural

hospitals. Such an analysis must conform to the provisions of section

604 of the RFA. For purposes of section 1102(b) of the Act, we define a

small rural hospital as a hospital that has fewer than 50 beds and is

located outside a Metropolitan Statistical Area.

We have determined, and the Secretary certifies, that this interim

final rule with comment period will not have a significant economic

impact on the operations of a substantial number of small rural

hospitals, and, therefore, have not prepared a rural hospital impact

statement.

The statute requires that all State Medicaid agencies must provide

an opportunity for the designated groups of low-income pregnant women,

infants, and children under age 19 to apply for Medicaid and to have

their applications initially processed at locations other than welfare

offices, including locations at Federally-qualified health centers and

disproportionate share hospitals. Although this provision appears to be

prescriptive, a majority of the States consider this to be a worthwhile

option and have provided outstation locations in their respective

States. Not only do we consider these provisions to be cost effective

for potential Medicaid recipients through savings from travel, we

expect State costs to be limited as a result of the availability of

FFP. However, to the extent that these requirements may be burdensome,

we request comments on any alternative approaches.

In accordance with the provisions of Executive Order 12866, this

regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 435

Aid to Families with Dependent Children, Grant programs--health,

Medicaid, Reporting and recordkeeping requirements, Supplemental

Security Income (SSI), Wages.

42 CFR Part 436

Aid to Families with Dependent Children, Grant programs--health,

Guam, Medicaid, Puerto Rico, Supplemental Security Income (SSI), Virgin

Islands.

42 CFR Chapter IV, Subchapter C is amended as follows:

PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE

NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA

A. Part 435 is amended as follows:

1. The authority citation for part 435 continues to read as

follows:

Authority: Sec. 1102 of the Social Security Act, 42 U.S.C. 1302.

2. Section 435.3 is amended by republishing the introductory text

of paragraph (a) and adding a new citation in numerical order to read

as follows:

Sec. 435.3 Basis.

(a) This part implements the following sections of the Act and

public laws that state eligibility requirements and standards:

* * * * *

1902(a)(55) Mandatory use of outstation locations other than welfare

offices to receive and initially process applications of certain low-

income pregnant women, infants, and children under age 19.

* * * * *

Sec. 435.902 [Redesignated as Sec. 435.901]

Sec. 435.903 [Redesignated as Sec. 435.902]

Sec. 435.904 [Redesignated as Sec. 435.903]

3. Sections 435.902, 435.903, and 435.904 are redesignated as

Secs. 435.901, 435.902, and 435.903, respectively.

4. A new Sec. 435.904 is added to read as follows:

Sec. 435.904 Establishment of outstation locations to process

applications for certain low-income eligibility groups.

(a) State plan requirements. The Medicaid State plan must specify

that the requirements of this section are met.

(b) Opportunity to apply. The agency must provide an opportunity

for the following groups of low-income pregnant women, infants, and

children under age 19 to apply for Medicaid at outstation locations

other than AFDC offices:

(1) The groups of pregnant women or infants with incomes up to 133

percent of the Federal poverty level as specified under section

1902(a)(10)(A)(i)(IV) of the Act;

(2) The group of children age 1 up to age 6 with incomes at 133

percent of the Federal poverty level as specified under section

1902(a)(10)(A)(i)(VI) of the Act;

(3) The group of children age 6 up to age 19 born after September

30, 1983, with incomes up to 100 percent of the Federal poverty level

as specified under section 1902(a)(10)(A)(i)(VII) of the Act; and

(4) The groups of pregnant women or infants, children age 1 up to

age 6, and children age 6 up to age 19, who are not eligible as a

mandatory group, with incomes up to 185 percent of the Federal poverty

level as specified under section 1902(a)(10)(A)(ii)(IX) of the Act.

(c) Outstation locations: general requirements.

(1) The agency must establish either--

(i) Outstation locations at each disproportionate share hospital,

as defined in section 1923(a)(1)(A) of the Act, and each Federally-

qualified health center, as defined in section 1905(1)(2)(B) of the

Act, participating in the Medicaid program and providing services to

Medicaid-eligible pregnant women and children; or

(ii) Other outstation locations, which include at least some,

disproportionate share hospitals and federally-qualified health

centers, as specified under an alternative State plan that is submitted

to and approved by HCFA if the following conditions are met:

(A) The State must demonstrate that the alternative plan for

outstationing is equally effective as, or more effective than, a plan

that would meet the requirements of paragraph (c)(1)(i) of this section

in enabling the individuals described in paragraph (b) of this section

to apply for and receive Medicaid; and

(B) The State must provide assurances that the level of staffing

and funding committed by the State under the alternative plan equals or

exceeds the level of staffing and funding under a plan that would meet

the requirements of establishing the outstation locations at the sites

specified in paragraph (c)(1)(i) of this section.

(2) The agency must establish outstation locations at Indian health

clinics operated by a tribe or tribal organization as these clinics are

specifically included in the definition of Federally-qualified health

centers under section 1905(l)(2)(B) of the Act and are also included in

the definition of rural health clinics under part 491, subpart A of

this chapter.

(3) The agency may establish additional outstation locations at any

other site where potentially eligible pregnant women or children

receive services--for example, at school-linked service centers and

family support centers. These additional sites may also include sites

other than the main outstation location of those Federally-qualified

health centers or disproportionate share hospitals providing services

to Medicaid-eligible pregnant women and to children and that operate

more than one site.

(4) The agency may, at its option, enter into reciprocal agreements

with neighboring States to ensure that the groups described in

paragraph (b) of this section who customarily receive services in a

neighboring State have the opportunity to apply at outstation locations

specified in paragraphs (c)(l) and (2) of this section.

(d) Outstation functions. (1) The agency must provide for the

receipt and initial processing of Medicaid applications from the

designated eligibility groups at each outstation location.

(2) ``Initial processing'' means taking applications, assisting

applicants in completing the application, providing information and

referrals, obtaining required documentation to complete processing of

the application, assuring that the information contained on the

application form is complete, and conducting any necessary interviews.

It does not include evaluating the information contained on the

application and the supporting documentation nor making a determination

of eligibility or ineligibility.

(3) The agency may, at its option, allow appropriate State

eligibility workers assigned to outstation locations to evaluate the

information contained on the application and the supporting

documentation and make a determination of eligibility if the workers

are authorized to determine eligibility for the agency which determines

Medicaid eligibility under Sec. 431.10 of this subchapter.

(e) Staffing. (1) Except for outstation locations that are

infrequently used by the low-income eligibility groups, the State

agency must have staff available at each outstation location during the

regular office operating hours of the State Medicaid agency to accept

applications and to assist applicants with the application process.

(2) The agency may station staff at one outstation location or

rotate staff among several locations as workload and staffing

availability dictate.

(3) The agency may use State employees, provider or contractor

employees, or volunteers who have been properly trained to staff

outstation locations under the following conditions:

(i) State outstation intake staff may perform all eligibility

processing functions, including the eligibility determination, if the

staff is authorized to do so at the regular Medicaid intake office.

(ii) Provider or contractor employees and volunteers may perform

only initial processing functions as defined in paragraph (d)(2) of

this section.

(4) Provider and contractor employees and volunteers are subject to

the confidentiality of information rules specified in part 431, subpart

F, of this subchapter, to the prohibition against reassignment of

provider claims specified in Sec. 447.10 of this subchapter, and to all

other State or Federal laws concerning conflicts of interest.

(5) At locations that are infrequently used by the designated low-

income eligibility groups, the State agency may use volunteers,

provider or contractor employees, or its own eligibility staff, or

telephone assistance.

(i) The agency must display a notice in a prominent place at the

outstation location advising potential applicants of when outstation

intake workers will be available.

(ii) The notice must include a telephone number that applicants may

call for assistance.

(iii) The agency must comply with Federal and State laws and

regulations governing the provision of adequate notice to persons who

are blind or deaf or who are unable to read or understand the English

language.

3. Section 435.907 is revised to read as follows:

Sec. 435.907 Written application.

(a) The agency must require a written application from the

applicant, an authorized representative, or, if the applicant is

incompetent or incapacitated, someone acting responsibly for the

applicant.

(b) Subject to the conditions specified in paragraph (c) of this

section, the application must be on a form prescribed by the agency and

signed under a penalty of perjury.

(c) The application form used at outstation locations for low-

income pregnant women, infants, and children specified in Sec. 435.904

must not be the application form used to apply for AFDC. The

application form (including any computerized application form) for

these designated eligibility groups may be--

(1) A Medicaid-only form prescribed by the agency specifically for

the designated eligibility groups;

(2) An existing Medicaid-only application; or

(3) A multiple-program application that contains clearly

identifiable Medicaid-only sections or parts.

PART 436--ELIGIBILITY IN GUAM, PUERTO RICO AND THE VIRGIN ISLANDS

B. Part 436 is amended as follows:

1. The authority citation for part 436 continues to read as

follows:

Authority: Sec. 1102 of the Social Security Act (42 U.S.C.

1302).

2. Section 436.2 is amended by revising the introductory text and

adding a new entry in numerical order to read as follows:

Sec. 436.2 Basis.

This part implements the following sections of the Act and public

laws that state requirements and standards for eligibility:

* * * * *

1902(a)(55) Mandatory use of outstation locations other than

welfare offices to receive and initially process applications of

certain low-income pregnant women, infants, and children under age 19.

* * * * *

(Catalog of Federal Domestic Assistance Program No. 93.778--Medical

Assistance Programs)

Dated: July 15, 1994.

Bruce C. Vladeck,

Administrator, Health Care Financing Administration.

Dated: July 28, 1994.

Donna E. Shalala,

Secretary.

[FR Doc. 94-23279 Filed 9-22-94; 8:45 am]

BILLING CODE 4120-01-P