[Federal Register: August 16, 2005 (Volume 70, Number 157)]
[Notices]
[Page 48155-48157]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16au05-80]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Notice of Hearing: Reconsideration of Disapproval of Maryland
State Plan Amendment (05-06)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice of hearing.
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SUMMARY: This notice announces an administrative hearing to be held on
September 15, 2005, at 12 noon, in the Virginia Room 229, 150 S.
Independence Mall, West, Suite 216, Philadelphia, Pennsylvania 19106,
to reconsider our decision to disapprove Maryland's State Plan
Amendment (SPA) 05-06.
[[Page 48156]]
DATES: Requests to participate in the hearing as a party must be
received by the presiding officer by August 31, 2005.
FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding
Officer, CMS, Lord Baltimore Drive, Mail Stop LB-23-20, Baltimore,
Maryland 21244, Telephone: (410) 786-2055.
SUPPLEMENTARY INFORMATION: This notice announces an administrative
hearing to reconsider CMS' decision to disapprove Maryland State plan
amendment (SPA) 05-06, which was submitted on January 25, 2005.
The amendment seeks approval to place what the State believes to be
reasonable limits on the amounts of incurred necessary medical and
remedial care expenses which must be deducted from a nursing facility
resident's income under the post-eligibility treatment of income
process.
Section 1902(r)(1)(A) of the Social Security Act (the Act) requires
States to take into account, under the post-eligibility process,
amounts for incurred medical and remedial care expenses that are not
subject to payment by a third party. Section 1902(r)(1)(A)(ii) of the
Act permits States to place ``reasonable'' limits on the amounts of
necessary medical and remedial care expenses recognized under State law
but not covered under the State plan. However, those reasonable limits
must ensure nursing home residents are able to use their own funds to
purchase necessary medical or remedial care not covered, i.e., not paid
for, by the State Medicaid program.
The SPA 05-06 proposes to limit the deduction of medical expenses
to those incurred only during a period of eligibility for Medicaid.
Thus, an individual who incurred medical expenses during the 3-month
period prior to the date of application would not have any protection
under the post-eligibility calculation for medical expenses incurred
during that period unless he or she were determined to be eligible
during that period.
In discussions with State Medicaid program staff, we confirmed this
is the intent of the proposed amendment. While we believe some
limitations imposed on the age of an incurred expense could be
considered reasonable, we do not believe it would be reasonable for a
State to exclude from post-eligibility protection an incurred medical
expense that could be deducted from a person's income under the
medically needy spenddown process. While the medically needy spenddown
rules in Federal regulations at 42 CFR 435.831(g)(2) permit States to
exclude expenses incurred earlier than 3 months before the month of
application, Maryland proposes to only permit deduction under its post-
eligibility process for expenses incurred while an individual is
actually eligible for Medicaid.
The State's limitation would result in an individual being able to
use certain incurred medical expenses to establish eligibility for
Medicaid, but not being able to deduct those same expenses under the
post-eligibility process. While the statue permits the State to
establish reasonable limits on the amount of non-covered expenses, we
do not believe the limit is reasonable if the result were to deny the
individual the ability to pay for a non-covered expense used to
establish eligibility during a budget period.
The intent of section 1902(r)(1) of the Act is to afford an
institutionalized individual with income the ability to actually pay
non-covered medical expenses for medical and remedial care. Section
1902(r)(1) of the Act was added to the Medicaid statute by the Medicare
Catastrophic Coverage Act of 1988. The Conference Report explains it
was enacted to reinstate policies set forth previously in Medicaid
regulations before they were revised by the Department of Health and
Human Services in February 1988. Under that revised regulation,
Maryland would have had the authority to implement the limits it
proposes in SPA 05-06. However, by enacting section 1902(r)(1) of the
Act, Congress specifically rejected that approach.
Moreover, by not protecting income to pay for non-covered expenses
which were used to establish eligibility under the medically needy
spenddown, the State's proposed amendment undercuts the Medicaid
statute's purpose of requiring States to deduct incurred expenses under
the spenddown process. To the extent that Maryland's amendment fails to
protect income to enable the individual to actually pay for these
incurred expenses, we view the State's proposed limit as not being
reasonable. As a result, we believe the limit does not meet the
requirements of section 1902(a)(17) of the Act, as refined by section
1902(r)(1) of the Act. For individuals whose post-eligibility
calculation is determined using the spousal impoverishment rules,
specified at section 1924 of the Act and refined by section 1902(r)(1)
of the Act, we believe the limit does not meet the requirements of
section 1902(a)(51) of the Act, which requires the State plan to meet
the requirements of section 1924 of the Act.
The issues to be considered during the hearing are whether the
amendment's limit violates the requirements of sections 1902(a)(17) and
1902(a)(51) of the Act by imposing an unreasonable limit on expenses
for medical and remedial care which will be protected under the post-
eligibility process.
Section 1116 of the Act and Federal regulations at 42 CFR Part 430
establish Department procedures that provide an administrative hearing
for reconsideration of a disapproval of a State plan or plan amendment.
The CMS is required to publish a copy of the notice to a State Medicaid
agency that informs the agency of the time and place of the hearing and
the issues to be considered. If we subsequently notify the agency of
additional issues that will be considered at the hearing, we will also
publish that notice.
Any individual or group that wants to participate in the hearing as
a party must petition the presiding officer within 15 days after
publication of this notice, in accordance with the requirements
contained in Federal regulations at 42 CFR 430.76(b)(2). Any interested
person or organization that wants to participate as amicus curiae must
petition the presiding officer before the hearing begins in accordance
with the requirements contained in Federal regulations at 42 CFR
430.76(c). If the hearing is later rescheduled, the presiding officer
will notify all participants.
Therefore, based on the reasoning set forth above, and after
consultation with the Secretary as required under Federal regulations
at 42 CFR 430.15(c)(2), CMS disapproved Maryland SPA 05-06. The notice
to Maryland announcing an administrative hearing to reconsider the
disapproval of its SPA reads as follows:
Mr. Joel L. Tornari,
Assistant Attorney General, Department of Health and Mental
Hygiene,300 W. Preston Street, Suite 302, Baltimore, MD 21201
Dear Mr. Tornari: I am responding to your request for
reconsideration of the decision to disapprove Maryland State plan
amendment (SPA) 05-06, which was submitted on January 25, 2005.
In SPA 05-06, Maryland seeks approval to place what the State
believes to be reasonable limits on the amounts of incurred
necessary medical and remedial care expenses which must be deducted
from a nursing facility resident's income under the post-eligibility
treatment of income process.
Section 1902(r)(1)(A) of the Social Security Act (the Act)
requires States to take into account, under the post-eligibility
process, amounts for incurred medical and remedial care expenses
that are not subject to payment by a third party. Section
1902(r)(1)(A)(ii) of the Act permits States to place ``reasonable''
[[Page 48157]]
limits on the amounts of necessary medical and remedial care
expenses recognized under State law but not covered under the State
plan. However, those reasonable limits must ensure that nursing home
residents are able to use their own funds to purchase necessary
medical or remedial care not covered; i.e., not paid for, by the
State Medicaid program.
The SPA 05-06 proposes to limit the deduction of medical
expenses to those incurred only during a period of eligibility for
Medicaid. Thus, an individual who incurred medical expenses during
the 3-month period prior to the date of application would not have
any protection under the post-eligibility calculation for medical
expenses incurred during that period unless he or she were
determined to be eligible during that period.
In discussions with State Medicaid program staff, we confirmed
this is the intent of the proposed amendment. While we believe some
limitations imposed on the age of an incurred expense could be
considered reasonable, we do not believe it would be reasonable for
a State to exclude from post-eligibility protection an incurred
medical expense that could be deducted from a person's income under
the medically needy spenddown process. While the medically needy
spenddown rules in Federal regulations at 42 CFR 435.831(g)(2)
permit States to exclude expenses incurred earlier than 3 months
before the month of application, Maryland proposes to only permit
deduction under its post-eligibility process for expenses incurred
while an individual is actually eligible for Medicaid.
The State's limitation would result in an individual being able
to use certain incurred medical expenses to establish eligibility
for Medicaid, but not being able to deduct those same expenses under
the post-eligibility process. While the statute permits the State to
establish reasonable limits on the amount of non-covered expenses,
we do not believe the limit is reasonable if the result were to deny
the individual the ability to pay for a non-covered expense used to
establish eligibility during a budget period.
The intent of section 1902(r)(1) of the Act is to afford an
institutionalized individual with income the ability to actually pay
non-covered medical expenses for medical and remedial care. Section
1902(r)(1) of the Act was added to the Medicaid statute by the
Medicare Catastrophic Coverage Act of 1988. The Conference Report
explains it was enacted to reinstate policies set forth previously
in Medicaid regulations before they were revised by the Department
of Health and Human Services in February 1988. Under that revised
regulation, Maryland would have had the authority to implement the
limits it proposes in SPA 05-06. However, by enacting section
1902(r)(1) of the Act, Congress specifically rejected that approach.
Moreover, by not protecting income to pay for non-covered
expenses which were used to establish eligibility under the
medically needy spenddown, the State's proposed amendment undercuts
the Medicaid statute's purpose of requiring States to deduct
incurred expenses under the spenddown process. To the extent that
Maryland's amendment fails to protect income to enable the
individual to actually pay for these incurred expenses, we view the
State's proposed limit as not being reasonable. As a result, we
believe the limit does not meet the requirements of section
1902(a)(17) of the Act, as refined by section 1902(r)(1) of the Act.
For individuals whose post-eligibility calculation is determined
using the spousal impoverishment rules, specified at section 1924 of
the Act and refined by section 1902(r)(1) of the Act, we believe the
limit does not meet the requirements of section 1902(a)(51) of the
Act, which requires the State plan to meet the requirements of
section 1924 of the Act.
Based on the reasoning set forth above, and after consulting
with the Secretary as required by Federal regulations at 42 CFR
430.15(c)(2), the Centers for Medicare & Medicaid Services (CMS)
disapproved Maryland Medicaid SPA 05-06.
I am scheduling a hearing to be held on September 15, 2005, at
12:00 Noon in CMS'' Philadelphia Regional Office, in the Virginia
Room 229;150 S. Independence Mall, West; Suite 216; Philadelphia,
Pennsylvania 19106, to reconsider our decision to disapprove
Maryland's SPA 05-06. If this date is not acceptable, we would be
glad to set another date that is mutually agreeable to the parties.
The hearing will be governed by the procedures prescribed at 42 CFR,
part 430.
The issues to be considered during the hearing are whether the
amendment's limit violates the requirements of sections 1902(a)(17)
and 1902(a)(51) of the Act by imposing an unreasonable limit on
expenses for medical and remedial care which will be protected under
the post-eligibility process.
I am designating Ms. Kathleen Scully-Hayes as the presiding
officer. If these arrangements present any problems, please contact
the presiding officer. In order to facilitate any communication
which may be necessary between the parties to the hearing, please
notify the presiding officer to indicate acceptability of the
hearing date that has been scheduled and provide names of the
individuals who will represent the State at the hearing. The
presiding officer may be reached at (410) 786-2055.
Sincerely,
Mark B. McClellan, M.D., Ph.D.
Section 1116 of the Social Security Act (42 U.S.C. section
1316); 42 CFR section 430.18.
(Catalog of Federal Domestic Assistance Program No. 13.714, Medicaid
Assistance Program.)
Dated: July 19, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 05-16304 Filed 8-12-05; 1:32 pm]
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