Interagency Subagreements

4006 - Interagency Subagreements (Rev. 1, 05-21-04) 4006A - Authority (Rev. 1, 05-21-04) When an SA wishes to assign part of its responsibility to another State or local public agency or a private agency, the authority to seek such assignment is found in the agreements of State plans negotiated by the States and the Secretary of HHS in Article IV of the §1864 Agreement. With prior written authorization of the Secretary, the State may utilize the services, facilities, and records of any other State agency or any local governmental agency to assist the State survey agency in carrying out its functions authorized by this Agreement. Only the reasonable and necessary costs incurred by such agencies in furnishing to the State survey agency such services, facilities, or records, may be allowed under this Agreement, in accordance with Article IX. 4006B - Need for Subagreements With Public Entities (Rev. 1, 05-21-04) The consideration contained in subsection A.3 of the §1864 Agreement does not apply where use of individuals or services not an integral part of the SA are generally obtained by detail or reassignment within State government. Neither would the consideration contained in subsection A.3 apply where licensure responsibility is delegated to local entities, when a pattern of close administrative relationships has been established. In such situations, no formal agreement is necessary, except where required by State practice. The necessary costs of services are identified in the normal manner used by the SA for survey and certification activities. The fact that the activities are decentralized would not in itself require an assignment of responsibility, provided decentralization is an integral part of the SA. If the SA has already established operating arrangements with the local agency under State law and supervises local health department activities, or generally oversees these activities through conditional financial assistance similar to Federal-State grants-in-aid, no formal agreement is needed, and the costs of the services should be identified and reported in the normal manner. There may be situations, however, in which the SA finds it desirable to arrange for services which it would not directly supervise, but over which it would maintain a certain amount of control. This might occur when the SA wishes to delegate survey functions to a local health department, yet retain the authority to make final evaluation of recommendations and forward certifications to CMS. The SA would need to enter into an agreement with the local health department setting forth the responsibilities of both entities and enabling the department to be paid the necessary costs incurred in furnishing such services. The SA includes such costs in estimates for advance of funds and in reports of its actual expenditures. 4006C - Program Specialization of Tasks Performed by Subagreement Entity (Rev. 1, 05-21-04) Section 1902(a)(9) of the Act requires that the same SA that performs title XVIII certification functions must also be responsible for pursuing compliance in title XIX institutional standards. Section 1902(a)(33) of the Act provides that the State health licensing agency (which may or may not be the same agency) determines for title XIX whether institutions meet the standards for participation. The combined practical effect of these provisions is to require that the same SA make certifications for both titles XVIII and XIX. However, in no way does this preclude division of functions for inspecting and providing consultation between different State components. The important thing is that the SA designated in the §1864 State Agreement has control and responsibility for both title XVIII certification recommendations and title XIX approval decisions in all cases. As long as this is the case, it does not matter that another State or local agency is designated to perform field functions as long as the following provisions are included: • A clear delineation of responsibilities and duties to be carried out by both parties; • Provision for the degree of supervision and control to be exercised by the SA; • Provision for payment by the SA on an approved cost basis; • A termination clause specifying the length of the agreement (normally one year, with provision for extensions as necessary); and • A statement acknowledging the applicability of the §1864 Agreement or State plan to the other agency which includes the following: All of the terms and provisions of the agreement or State plan between the State of (insert State) and the Secretary of Health and Human Services entered into (insert date), pursuant to §1864 or §1902, respectively, of the Social Security Act, as amended, which are applicable to the (insert title of State agency) also shall be applicable to the (insert title of other agency) in its performance on behalf of the (insert title of State agency) of the functions herein enumerated. In conformity with usual State practice, the format should make provision for signatures of representatives of the two contracting agencies. Since the document relates to understandings reached at the State-local level, a representative of CMS should not make provision in the agreement for signature. When a suitable title XVIII agreement is negotiated, two copies of the agreement are forwarded to the CMS. The CMS approval will be in the form of a separate letter from CMS and will constitute authorization for utilization of the other agency’s services as provided in the agreement. Approval from CMS must be obtained whenever such an agreement is renewed or renegotiated.