Section 1178(a)(2) lists several exceptions to the general preemption rule of section 1178(a)(1). The first set of exceptions are those listed at sections 1178(a)(2)(A)(i) and 1178(a)(2)(A)(ii). These exceptions are for provisions of State law which the Secretary determines are necessary: (1) to prevent fraud and abuse; (2) to ensure appropriate State regulation of insurance and health plans; (3) for State reporting on health care delivery or costs; (4) for other purposes; or (5) which address controlled substances.
Proposed § 160.203(a) below provides for determinations under these statutory provisions. The criteria at proposed § 160.203(a) follow the statute. As is more fully discussed below, however, two of the terms used in this section of the proposed rules are defined terms: “contrary” and “State law.” The process for making such determinations is discussed below.