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| Montana Administrative Register Notice 37-552 | No. 13 07/14/2011 | |
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BEFORE THE DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES OF THE STATE OF
TO: All Concerned Persons 1. On August 3, 2011, at 10:00 a.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Public Health and 2. The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact Department of Public Health and Human Services no later than 5:00 p.m. on July 25, 2011, to advise us of the nature of the accommodation that you need. Please contact Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, 3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined: 37.82.101 MEDICAL ASSISTANCE, PURPOSE, AND INCORPORATION OF POLICY MANUALS (1) remains the same. (2) The department adopts and incorporates by reference the state policy manuals, namely the Family Medicaid Manual, dated January 1, 2010, and the Aged Blind Disabled (ABD) Medicaid Manual governing the administration of the Medicaid program dated IMP: 53-6-101, 53-6-131, 53-6-141, MCA 37.82.1005 MEDICAID FOR WORKERS WITH DISABILITIES: INCOME (1) An individual is eligible for benefits through the Medicaid for Workers with Disabilities program in regard to income if the individual's net family income is less than 250% of the (2) remains the same. IMP: 53-6-101, 53-6-131, 53-6-195, MCA 37.82.1320 POST-ELIGIBILITY APPLICATION OF PATIENT INCOME TO COST OF CARE (1) remains the same. (2) Amounts will be deducted from a single individual's gross income in the following order to determine the amount applicable toward his cost of care: (a) remains the same. (b) a personal needs allowance of $50 (c) a home maintenance allowance, when applicable, determined in accordance with (7) (d) through (3)(b) remain the same. (4) The following amounts will be deducted monthly in the following order from the gross income of an institutionalized spouse to determine the amount applicable toward the cost of care: (a) remains the same. (b) (c) through (5) remain the same. (6) Unless the institutionalized spouse specifically objects, a community spouse monthly income allowance will be deducted from the institutionalized spouse's monthly income and must be provided to the community spouse. (7) The home maintenance allowance for purposes of (2)(c) of this rule shall consist of (i) remains the same. (ii) leaves the facility into a community living arrangement on or before the last day of the month; and (c) remains the same but is renumbered (b). (8) Medical or remedial care expenses of the institutionalized individual for purposes of (2)(d) and (4)(e) of this rule include: (a) remains the same. (b) for three months or until paid in full, whichever comes first, medical or remedial care expenses which: (i) were incurred during the three months immediately prior to application for Medicaid coverage of institutional care or were incurred more than three months immediately prior to application for Medicaid coverage of institutional care if actual payments are currently being made on the expenses, and only in the amount of the payment currently being made; (ii) were unpaid at the time of application (iii) are recognized and regulated by state law as medical services, supplies, or equipment; (v) are expenses that have not been applied to another month's incurment or post-eligibility treatment of income. (c) no deduction is allowed for medical and remedial care expenses that were incurred during a penalty period imposed due to an uncompensated transfer of assets. (9) remains the same. AUTH: 53-6-113, MCA 4. STATEMENT OF REASONABLE NECESSITY: The Department of Public Health and Human Services (the department) is proposing amendments to ARM 37.82.101, 37.82.1005, and 37.82.1320, pertaining to Medicaid eligibility. The Montana Medicaid Program is a joint federal-state program that pays medical expenses for eligible individuals with limited income and assets. The eligibility requirements for the Montana Medicaid Program are set forth in Title 37, Chapter 82, of the Administrative Rules of Montana (ARM). Additionally, the Family Medicaid Manual and the Aged, Blind and Disabled (ABD) Medicaid Manual contain information about the eligibility requirements for Medicaid that is more detailed than that in the administrative rules. The department publishes these state policy manuals primarily to provide guidance to employees who determine Medicaid eligibility at the local Offices of Public Assistance. ARM 37.82.101 ARM 37.82.101 adopts and incorporates by reference the Medicaid policy manuals. By incorporating these manuals into the administrative rules, the department gives the public notice and an opportunity to comment on policies governing Medicaid eligibility. Additionally, as a result of the incorporation of the manuals into the administrative rules, the policies contained in the manual have the force of law in case of litigation between the department and a Medicaid applicant or recipient concerning Medicaid eligibility. ARM 37.82.101 currently adopts and incorporates by reference the Medicaid policy manuals dated January 1, 2010. The department proposes to revise Sections 904-2 and 904-3 of the ABD Medicaid Manual to take effect on September 1, 2011. The department is not making any changes to the Family Medicaid Manual at this time. The amendment of ARM 37.82.101 is therefore necessary to incorporate the revised version of the ABD Medicaid Manual into the ARM and to permit all interested parties to comment on the policy changes in the revised version. The ABD Manual and draft manual material are available for review in each local Office of Public Assistance and on the department's web site at www.dphhs.mt.gov. The proposed changes to the ABD Medicaid Manual are as follows: Section 904-2 Section 904-2 addresses post-eligibility treatment of income for institutionalized Medicaid recipients who are married. Medicaid recipients who reside in nursing homes or other medical institutions are required to apply a portion of their income to the cost of their institutional care. Medicaid then pays the difference between the amount the Medicaid recipient is required to pay to the nursing home and the Medicaid rate for nursing home care. In determining the amount the recipient must pay toward the cost of care, Medicaid policy takes into consideration the fact that the recipient's basic needs such as shelter and food are being met by the nursing home. However, certain expenses that the Medicaid recipient must continue to pay while living in a nursing home, such as Medicare and other health insurance premiums, are deducted from the recipient's gross income in calculating the recipient's liability for the cost of care. In the case of a Medicaid recipient who is married, known as an institutionalized spouse, some deductions are also permitted to provide for the needs of the recipient's spouse if the spouse still lives in the community rather than in an institution. Section 904-2 lists the deductions from gross income used to determine the institutionalized spouse's liability for institutional care. A deduction is allowed for certain unpaid medical expenses of the institutionalized spouse so that the institutionalized spouse will have enough income to pay old medical bills not covered by Medicare or other third parties. The current policy allows a deduction (if all other criteria specified in the manual are met) regardless of how old the bill is, that is, how many months before the application for Medicaid coverage of institutional care the medical expense was incurred. The current policy of placing no limits on the age of incurred medical expenses that may be deducted was adopted in 2008 in response to a Montana Supreme Court decision regarding the deduction of unpaid medical expenses. Prior to the Montana Supreme Court's decision it was the department's policy not to allow a deduction for medical expenses incurred before the recipient became eligible for Medicaid unless the expense was for a type of service that Medicaid does not cover for Medicaid recipients. Based on language in Montana's State Medicaid Plan at that time, the Montana Supreme Court held that the department must allow a deduction for unpaid medical expenses incurred before the recipient became eligible for Medicaid even if the expense was for a service that Medicaid covers for Medicaid recipients. Montana's State Medicaid Plan has recently been amended to delete the language that was the basis for the Montana Supreme Court's ruling that a deduction must be allowed for all unpaid medical expenses incurred before an institutionalized individual became eligible for Medicaid. As a result of the amendment of State Medicaid Plan, the department is now permitted to place limits on the age of medical bills for which a deduction is allowed. The department therefore proposes to amend Section 904-2 to allow a deduction only for expenses incurred during the three months immediately prior to the application for Medicaid coverage of institutional care and for payments the recipient is currently making on expenses incurred more than three months immediately prior to the application. It is necessary to place reasonable time limits on the deduction of medical expenses in order to reduce Medicaid expenditures for institutional care. If there is no limit on the age of expenses that can be deducted, the amount Medicaid recipients with old medical bills will be required to pay for their institutional care will be reduced and the amount Medicaid will have to pay will increase. The department determined it was reasonable to allow a deduction for medical expenses incurred more than three months prior to application if the Medicaid recipient is actually making payments on the bill, but the deduction should be limited to expenses incurred within the three months immediately prior to application unless the recipient is currently making payments on the bill. Section 904-3 Section 904-3 addresses the post-eligibility treatment of income for institutionalized individuals who are not married. A deduction is allowed for certain unpaid medical expenses of the institutionalized individual. The current policy allows a deduction (if all other criteria specified in the manual are met) regardless of how old the bill is, that is, how many months before the application for Medicaid coverage of institutional care the medical expense was incurred. For the reasons discussed in regard to Section 904-2, the department now proposes to amend Section 904-3 to allow a deduction only for expenses incurred during the three months immediately prior to the application for Medicaid coverage of institutional care and for payments the recipient is currently making on expenses incurred more than three months immediately prior to the application. ARM 37.82.1005 The department proposes to amend ARM 37.82.1005, which sets out the income criteria to qualify for benefits under the Medicaid for Workers with Disabilities coverage group. The rule currently specifies that an individual is eligible if the individual's net family income is less than 250% of the 2010 federal poverty level for a household of that size. The federal poverty levels are issued by the U.S. Department of Health and Human Services (HHS). HHS revises the poverty levels every year to take into account increases in the cost of living. The department proposes to amend ARM 37.82.1005 to provide that the individual may have net family income up to 250% of the 2011 federal poverty level rather than 250% of the 2010 poverty level. The department has chosen to use the 2011 version of the poverty levels because they are higher than the 2010 levels. If the department continued to use last year's poverty levels, some individuals might be ineligible for Medicaid due to inflationary increases in the family's income that are not reflective of an increase in actual buying power. ARM 37.82.1320 Finally, the department proposes to amend ARM 37.82.1320 governing the post-eligibility application of income to the cost of care for Medicaid recipients who reside in nursing homes or other medical institutions. As discussed above in regard to the amendment of Section 904-2 of the ABD Medicaid Manual, Medicaid recipients who reside in a nursing home or similar medical institution are required to apply a portion of their income to the cost of their institutional care. ARM 37.82.1320 lists deductions from a recipient's gross income that are allowed in calculating the amount the recipient must pay for institutional care. Subsection (2)(b) of the rule currently provides that unmarried individuals are entitled to either a personal needs allowance of $90 for veterans receiving the minimum Veterans Administration (VA) pension of $90 per month or a personal needs allowance of $50 for everyone else. Several years ago it came to the department's attention that federal Medicaid policy requires state Medicaid agencies to exclude veteran's pension payments of $90 or less as income and also deduct the standard personal needs allowance from the veteran's other income, rather than counting the pension as income and allowing a deduction of $90 for the personal needs allowance. For a veteran whose veteran's pension payments is $90 or less, this has the effect of decreasing the amount the veteran must pay for institutional care because the payment is not counted as income and they also get a deduction for the personal needs allowance. However, veterans with veteran's pension payments of more than $90 pay more under this policy, because the veteran's pension payment is counted as income and they get the standard personal allowance instead of $90. The department changed its policy when it became aware of the federal policy to exclude all veteran's pension payments of $90 or less as income and also give veterans a deduction for the personal needs allowance. The department revised the ABD Medicaid Manual at that time to reflect the change in policy but did not amend ARM 37.82.1320 due to an oversight. The department now proposes to amend (2) by deleting (b)(i) which provides for a $90 personal needs allowance for veterans as an alternative to the standard personal needs allowance used for all other unmarried recipients. There is no Medicaid eligibility rule that lists exclusions from income, so there is no need to amend a rule to provide for the exclusion of VA pensions of $90 or less as income although that is the policy stated in the ABD Medicaid Manual. The amendment of ARM 37.82.1320 is necessary so that the rule will accurately state the department's policy and be consistent with the ABD Medicaid Manual and federal law and so that members of the public will be able to ascertain the Medicaid policy concerning personal needs allowances for veterans by reading the rule. Subsections (2)(b)(ii) and (4)(b) of ARM 37.82.1320 currently provide for a personal needs allowance of $40 per month. In 2007 the Montana Legislature mandated an increase in the personal needs allowance to $50 per month, and the department revised Section 904-2 and 904-3 of the ABD Medicaid Manual to provide for a $50 personal needs allowance in 2008. However, the department did not amend ARM 37.82.1320 to provide for the increased allowance at that time due to an oversight. The amendment of ARM 37.82.1320 is now necessary so that the rule will accurately state the department's policy and be consistent with the ABD Medicaid Manual and so that members of the public will be able to ascertain the correct amount of the personal needs allowance. Section (7) of the rule specifies that the home maintenance allowance provided for in (2)(c) is the greater of: (a) an amount for each dependent family member equal to one-third of the difference between the basic needs standard and the family member's gross monthly income; (b) the medically needy income level for one if the institutionalized spouse resided in the institution during only part of the month; or (c) the medically needy income level for one, for a maximum of six months, when a physician certifies that the individual is likely to return to the home within six months. The department proposes to delete (7)(a) because federal Medicaid law does not authorize the department to give the home maintenance allowance for an institutionalized spouse. The home maintenance allowance is a deduction for an institutionalized individual. For institutionalized spouses, the community spouse income maintenance allowance listed in (4)(c) and the family income maintenance allowance listed in (4)(d) take the place of the home maintenance allowance. The department realized that its policy on the home maintenance allowance was not in compliance with federal law over five years ago and changed its policy accordingly in the ABD Medicaid Manual at that time. It is now necessary to amend ARM 37.82.1320 by deleting (7)(a) so that the rule will accurately state the department's policy and be consistent with the ABD Medicaid Manual and federal law and so that members of the public will be able to ascertain the department's policy regarding the home maintenance allowance by reading the rule. The department proposes to amend (8)(b) of ARM 37.82.1320 regarding the deduction for medical expenses. The rule currently allows a deduction, if all other criteria specified in the manual are met, regardless of how old the bill is, that is, how many months before the application for Medicaid coverage of institutional care the medical expense was incurred. For the reasons discussed in regard to Section 904-2, the department now proposes to amend (8)(b) to allow a deduction only for expenses incurred during the three months immediately prior to the application for Medicaid coverage of institutional care and for payments the recipient is currently making on expenses incurred more than three months immediately prior to the application. The department also proposes to add (8)(c) specifying that no deduction is allowed for medical expenses incurred during a penalty period imposed as a result of an uncompensated transfer of assets. This is being added for the purpose of clarification and does not indicate a change in policy, as it was previously specified in Section 904-2 and 904-3 of the ABD Manual. It was never the department's intention to allow medical expenses incurred during a period of ineligibility as a result of an uncompensated transfer of assets to be deducted, because this would mitigate the penalty for uncompensated transfers by decreasing the amount an individual had to pay for his or her care after becoming eligible based on payments the individual rather than Medicaid had to pay during the penalty period. The proposed amendment of ARM 37.82.1320 is now necessary so that the rule will more clearly state the department's policy and be consistent with the ABD Medicaid Manual and so that members of the public will be aware that medical expenses incurred during a transfer penalty period may not be used to reduce a Medicaid recipient's liability for the cost of institutional care. Fiscal Impact The fiscal impact of the proposed amendments is as follows: It is estimated that the amendments of ARM 37.82.101 and ARM 37.82.1320 to limit the deduction of unpaid medical expenses in determining a nursing home resident's liability will reduce state general fund expenditures for Medicaid by $81,458 per year and federal expenditures for Medicaid by $264,142 per year. It is estimated that limiting the medical expense deduction will affect 1% of all institutionalized Medicaid recipients, which would be approximately 32 recipients per year. The increase in Medicaid expenditures as a result of amending ARM 37.82.1005(1) to provide that the income limit for Medicaid for Workers with Disabilities is 250% of the 2011 federal poverty level (FPL) rather than 250% of the 2010 FPL is as follows: it is estimated that two individuals who would have been ineligible using the 2010 FPL will be eligible if the higher 2011 FPL is used. Based on an average expenditure of $1,502 per year per participant, the increased cost for two additional participants would be $3,004 per year, of which 33.81% or $1,016 is paid with general fund dollars and 66.19% or $1,988 is paid with federal dollars. There is no current fiscal impact as a result of deleting (7)(a) regarding the home maintenance allowance, because the policy was changed in the manual over five years ago. The cost to Medicaid and the number of persons affected at the time the policy was changed is unknown. The proposed amendment of ARM 37.82.1320 to increase the personal needs allowance from $40 to $50 will have no effect at the present time because the increase was implemented in 2008 and the rule is merely being amended so that the rule will accurately state the policy already being applied. When the increase in the personal needs allowance was implemented in 2008 it cost approximately $128,254 in state general funds per year and $279,680 in federal funds per year and affected approximately 3,300 per month. The proposed amendment of ARM 37.82.1320 to allow veterans with veteran's pension payments of $90 or less to keep their veteran's pension payments and also get the personal needs allowance of $50 has no fiscal impact. The revised policy has the effect of increasing the amount of income the veteran is allowed to keep for veterans whose veteran's pension payments is $90 or less because their VA payments are not counted as income and the standard personal needs allowance is also deducted from the veteran's income. However, veterans with veteran's pension payments of more than $90 are allowed to retain less income under the new policy, because they now receive a personal needs allowance of $50 instead of $90. Since some veterans pay more for their institutional care under the new policy and others pay less, there has been neither an increase nor a decrease in Medicaid expenditures for nursing home care due to the revised policy. 5. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail [email protected], and must be received no later than 5:00 p.m., August 11, 2011. 6. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing. 7. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 5 above or may be made by completing a request form at any rules hearing held by the department. 8. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems. 9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply. /s/ Barbara B. Hoffman /s/ Anna Whiting Sorrell Rule Reviewer Anna Whiting Sorrell, Director Public Health and Human Services Certified to the Secretary of State July 5, 2011.
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A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.
For questions about the organization of the ARM or this web site, contact [email protected].
