SSI payments. The Medical Assistance and Others stratum includes Medical Assistance Only cases and SSI cases for States where Medicaid eligibility was not determined by SSA.

(4) The dollar amount to be disallowed will only include Federal matching funds for expenditures made for the AFDC and Medical Assistance Only or Medical Assistance and Others universes.

(5) HCFA will compute the dollar amount to be disallowed as follows:

(i) Subtract the target error rate from the computed weighted error payment rate;

(ii) If the difference is greater than zero, it will be multiplied by the Federal matching funds for the AFDC and Medical Assistance Only or Medical Assistance and Others universes. This product will be the amount of the disallowance.

(6) A State payment error rate for an annual assessment period will be the sum of the weighted payment error rates in the two 6-month review periods.

(7) The weights will be established as the percent of total annual payments that occur in each of the six month periods.

Example

The State's target error rate was 8 percent. During the first 6-month review period the payment error rate was 10 percent and the total payments made during that 6-month period were $20 million. During the second 6month review period, the payment error rate was 9 percent and total payments were $30 million. The total payments in the annual assessment period were $50 million.

(i) The weight applied to the payment error rate for the first 6-month period would be .4 ($20 million divided by $50 million).

(ii) The weight applied to the payment error rate for the second 6month period would be .6 ($30 million divided by $50 million).

(iii) Therefore, the payment error rate for the annual assessment period would be 9.4 percent or 4 percent (.4 x 10 percent for the first 6-month period) plus 5.4 percent (.6 x 9 percent for the second 6-month period).

(iv) Since the target error rate was 8 percent and the payment error rate was 9.4 percent, HCFA would disallow 1.4 percent of the amount of FFP claimed by the State for its Medicaid program for the annual assessment period.

(f) Notice to States and showing of good faith-(1) HCFA will notify a State that it will disallow matching funds because the State does not meet its target error rate.

(i) The State will have 65 days from the date on this notification to show that this disallowance should not be made because it made a good faith effort to meet the target error rate.

(ii) If the Secretary finds that the State did not meet its target error rate despite a good faith effort, HCFA will reduce the disallowance in whole, or in part, as the Secretary finds appropriate under the circumstances shown by the State.

(iii) A finding that a State did not meet the target error rate despite a good faith effort will be limited to extraordinary circumstances.

(2) Some examples of circumstances under which the Secretary may find that a State did not meet the target error rate despite a good faith effort

reasonably designed to meet the target error rate, but the target error rate was not achieved. In evaluating whether the State made a good faith effort in these circumstances, the Secretary will consider the following factors

(A) Demonstrated commitment by top management to the error reduction program, e.g., priorities and goals clearly enunciated to staff, accountability for performance, availability of resources;

(B) Sufficiency and quality of systems designed to reduce errors that are operational in the State, e.g., BENDEX, SDX, monthly reporting, error prone profiles, local agency monitoring systems, computer clearances;

(C) Use of effective system and procedures for the statistical and program analysis of QC and related data, e.g., statistical tests, tabulations and crosstabulations, error prone profiles, corrective action committees, special studies; and

(D) Effective management and execution of the corrective action process, e.g., assignment of responsibilities, milestones for completing tasks, substantial completion of tasks, monitoring of progress.

(3) The failure of a State to act upon necessary legislative changes or to obtain budget authorization for needed resources is not a ground for a waiver.

(4) A State may request reconsideration of a disallowance under this section in accordance with the procedures specified in 45 CFR Part 16.

[45 FR 6331, Jan. 25, 1980]

Sec.

432.31 Training and use of subprofessional

staff.

432.32 Training and use of volunteers.

Subpart C-Staffing and Training Expenditures 432.50 FFP: Staffing and training costs. 432.55 Reporting training and administrative costs.

432.60 Sources of State share of training expenditures and cost allocation.

AUTHORITY: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).

SOURCE: 43 FR 45199, Sept. 29, 1978, unless otherwise noted.

Subpart A-General Provisions

§ 432.1 Basis and purpose.

This part prescribes regulations to implement section 1902(a)(4) of the Act, which relates to a merit system of State personnel administration and training and use of subprofessional staff and volunteers in State Medicaid programs, and section 1903(a), rates of FFP for Medicaid staffing and training costs. It also prescribes regulations, based on the general administrative authority in section 1902(a)(4), for State training programs for all staff. § 432.2 Definitions.

"Community service aides" means subprofessional staff, employed in a variety of positions, whose duties are an integral part of the agency's responsibility for planning, administration, and for delivery of health services.

"Fringe benefits" means the employer's share of premiums for workmen's compensation, employees' retirement, unemployment compensation, health insurance, and similar expenses.

"Full-time training” means training that requires employees to be relieved of all responsibility for performance of current agency work to participate in a training program.

"Part-time training” means training that allows employees to continue fulltime in their agency jobs or requires only partial reduction of work activities to participate in the training activity.

"Skilled professional medical personnel" means physicians, dentists, and other health practitioners; nurses;

medical and psychiatric social workers; medical, hospital, and public health administrators, and licensed nursing home administrators; and other specialized personnel in the field of medical care.

"Staff of other public agencies" means skilled professional medical personnel and supporting staff (as defined in this section), who are employed in State or local agencies other than the Medicaid agency, whose duties are directly related to the administration of the Medicaid program and are specified in an written agreement with the Medicaid agency.

"Subprofessional staff” means persons performing tasks that demand little or no formal education; a high school diploma; or less than 4 years of college.

"Supporting staff" means secretarial, stenographic, clerical, and other subprofessional staff whose activities are directly necessary to the carrying out of the functions which are the responsibility of skilled professional medical personnel, as defined in this section.

“Training program” means a program of educational activities based on the agency's training needs and aimed at insuring that agency staff acquire the knowledge and skills necessary to perform their jobs.

"Volunteer" means a person who contributes personal service to the community through the agency's program but is not a replacement or substitute for paid staff.

§ 432.10 Standards of personnel administration.

(a) State plan requirement. A State plan must provide that the requirements of paragraphs (c) through (h) of this section are met.

(b) Terms. In this section, "standards" refer to those specified in paragraph (c) of this section.

(c) Methods of personnel administration. Methods of personnel administration must be established and maintained, in the Medicaid agency and in local agencies administering the propgram, in conformity with:

(1) [Reserved]

(2) 5 CFR Part 900, Subpart F, Administration of the Standards for

Merit System of Personnel Administration.

(d) Compliance of local jurisdictions. The Medicaid agency must have in effect methods to assure compliance with the standards by local jurisdictions included in the plan.

(e) Review and adequacy of State laws, regulations, and policies. The agency must

(1) Assure that the U.S. Civil Service Commission has determined the adequacy of current State laws, regulations, and policy statements that effect methods of personnel administration in conformity with the standards, and

(2) Submit any changes in them to the Commission for review.

(f) Statements of acceptance by local agencies. If the Medicaid agency changes from a State-administered to a State-supervised, locally administered program, it must obtain statements of acceptance of the standards from the local agencies.

(g) Affirmative action plan. The Medicaid agency must have in effect an affirmative action plan for equal employment opportunity, that includes specific action steps and timetables to assure that opportunity, and meets all other requirements of 45 CFR 70.4.

(h) Submittal of requested materials. The Medicaid agency must submit to HHS, upon request, copies of the affirmative action plan and of the State and local materials that assure compliance with the standards.

[43 FR 45199, Sept. 29, 1978, as amended at 45 FR 24883, Apr. 11, 1980]

Subpart B-Training Programs; Subprofessional and Volunteer Programs

§ 432.30 Training programs: General requirements.

(a) A State plan must provide for a program of training for Medicaid agency personnel. (See also §§ 432.31 and 432.32 for training programs for subprofessional staff and for volun

teers.)

(b) The program must—

(1) Include initial inservice training for newly appointed staff, and con

tinuing training opportunities to improve the operation of the program;

(2) Be related to job duties performed or to be performed by the persons trained; and

(3) Be consistent with the program objectives of the agency.

§ 432.31 Training and use of subprofessional staff.

(a) State plan requirement. A State plan must provide for the training and effective use of subprofessional staff as community service aides, in accordance with the requirements of this section.

(b) Recruitment and selection. The Medicaid agency must have methods of recruitment and selection that afford opportunity for full-time or part-time employment of persons of low income, including:

(1) Young, middle-aged, and older persons;

(2) Physically and mentally disabled; and

(3) Recipients.

(c) Merit system. Subprofessional positions must be subject to merit system requirements except where special exemption is approved on the basis of a State alternative plan for employment of disadvantaged persons.

(d) Staffing plan. The agency staffing plan must include the kinds of jobs that subprofessional staff can perform.

(e) Career service. The agency must have a career service program that allows persons:

(1) To enter employment at the subprofessional level; and

(2) To progress to positions of increasing responsibility and reward:

(i) In accordance with their abilities; and

(ii) Through work experience and pre-service and in-service training.

(f) Training, supervision and supportive services. The agency must have an organized training program, supervision, and supportive services for subprofessional staff.

(g) Progressive expansion. The agency must provide for annual increase in the number of subprofessional staff until:

(1) An appropriate ratio of subprofessional and professional staff has been achieved; and

(2) There is maximum use of subprofessional staff as community aides in the operation of the program.

§ 432.32 Training and use of volunteers.

(a) State plan requirement. A State plan must provide for the training and use of non-paid or partially paid volunteers in accordance with the requirements of this section.

(b) Functions of volunteers. The Medicaid agency must make use of volunteers in:

(1) Providing services to applicants and recipients; and

(2) Assisting any advisory committees established by the agency.

As used in this paragraph, "partially paid volunteers" means volunteers who are reimbursed only for actual expenses incurred in giving service, without regard to the value of the service or the time required to provide it.

(c) Staffing. The agency must designate a position whose incumbent is responsible for:

(1) The development, organization, and administration of the volunteer program; and

(2) Coordination of the program with related functions.

(d) Recruitment, selection, training, and supervision. The agency must have:

(1) Methods of recruitment and selection that assure participation of volunteers of all income levels, in planning capacities and service provision; and

(2) A program of organized training and supervision of volunteers.

(e) Reimbursement of expenses. The agency must

(1) Reimburse volunteers for actual expenses incurred in providing services; and

(2) Assure that no volunteer is deprived of the opportunity to serve because of the expenses involved.

(f) Progressive expansion. The agency must provide for annual increase in the number of volunteers used until the volunteer program is adequate for the achievement of the agency's service goals.

Subpart C-Staffing and Training Expenditures

§ 432.50 FFP: Staffing and training costs. (a) Availability of FFP. FFP is available in expenditures for salary or other compensation, fringe benefits, travel, per diem, and training, at rates determined on the basis of the individual's position, as specified in paragraph (b) of this section.

(b) Rates of FFP. (1) For skilled professional medical personnel and supporting, staff of the Medicaid agency or of other public agencies (as defined in § 432.2), the rate is 75 percent.

(2) For personnel engaged directly in the operation of mechanized claims processing and information retrieval systems, the rate is 75 percent.

(3) For personnel engaged in the design, development, or installation of mechanized claims processing and information retrieval systems, the rate is 50 percent for training and 90 percent for all other costs specified in paragraph (a) of this section.

(4) For personnel of the State licensing agency who are responsible for inspections of skilled nursing or intermediate care facilities, the rate is 100 percent through September 30, 1980:

(i) If a work plan and budget plan relative to this personnel have been approved by the HCFA regional office, and

(ii) Only for those expenditures that are not attributable to the overall cost of meeting the State licensing agency's responsibilities under State law and regulations, but are necessary and proper for carrying out the required inspections.

(5) For personnel administering family planning services and supplies, the rate is 90 percent.

(6) For all other staff of the Medicaid agency or other public agencies providing services to the Medicaid agency, and for training and other expenses of volunteers, the rate is 50 percent.

(c) Specific limitations. (1) Rates of FFP in excess of 50 percent are applicable only to those portions of the individual's working time that are devoted to the kinds of positions or duties that qualify for those rates.

(2) The special matching rates for persons working on mechanized claims processing and information retrieval systems (paragraphs (b) (2) and (3) of this section) are applicable only if the design, development and installation, or the operation, have been approved by the Administrator in accordance with Part 433, Subpart C, of this subchapter.

§ 432.55 Reporting training and administrative costs.

(a) Scope. This section identifies activities and costs to be reported as training or administrative costs on quarterly estimate and expenditure reports to HCFA.

(b) Activities and costs to be reported on training expenditures. (1) For fulltime training (with no assigned agency duties): Salaries, fringe benefits, dependency allowances, travel, tuition, books, and educational supplies.

(2) For part-time training: Travel, per diem, tuition, books and educational supplies.

(3) For State and local Medicaid agency staff development personnel (including supporting staff) assigned fulltime training functions: Salaries, fringe benefits, travel, and per diem. Costs for staff spending less than full time on training for the Medicaid program must be allocated between training and administration in accordance with § 433.34 of this subchapter.

(4) For experts engaged to develop or conduct special programs: Salary, fringe benefits, travel, and per diem.

(5) For agency training activities directly related to the program: Use of space, postage, teaching supplies, and purchase or development of teaching materials and equipment, for example, books and audiovisual aids.

(6) For field instruction in Medicaid: Instructors' salaries and fringe benefits, rental of space, travel, clerical assistance, teaching materials and equipment such as books and audiovisual aids.

(c) Activities and costs not to be reported as training expenditures. The following activities are to be reported as administrative costs:

(1) Salaries of supervisors (day-today supervision of staff is not a training activity); and