[55 PA. CODE CH. 181] Income Provisions for Categorically Needy NMP-MA and MNO-MA [32 Pa.B. 4860] The Department of Public Welfare (Department) proposes to amend Chapter 181 (relating to income provisions for categorically needy NMP-MA and MNO-MA) under sections 201(2), 403(b), 441.1 and 442.1 of the Public Welfare Code (62 P. S. §§ 201(2), 403(b), 441.1 and 442.1); section 1902(a)(10)(A) and (C) and (17) of the Social Security Act (42 U.S.C.A. § 1396a(a)(10)(A) and (C) and (17)); and Federal regulations for optional Medical Assistance (MA) coverage and financial requirements found in 42 CFR 435.301, 435.601, 435.602 and 435.831.
Purpose
The purpose of this proposed rulemaking is to eliminate Non-Money Payment (NMP) spend-down and to limit the use of unpaid medical expenses of an applicant or recipient as a deduction for MA in determining Medically Needy Only (MNO) Spend-down eligibility. This proposed rulemaking provides that a medical expense may not be deducted if it was incurred before the first calendar day of the third month preceding the month of application.
Background
The Department is committed to administering an efficient, effective MA program that ensures access to quality health care for this Commonwealth's most vulnerable citizens. Notwithstanding this commitment, the Department must make changes to the MA Program to address the increasing fiscal demands.
Over the past year, the Commonwealth, as well as many other states, has experienced a significant increase in costs under the MA Program. No immediate relief is in sight. This fiscal pressure has required states to examine closely all expenditures and evaluate and prioritize what programs can continue to be fully funded.
The Department has taken steps to contain costs in past years, through the implementation of managed care and the institution of management controls to avoid payments for services which are not medically necessary. Despite these changes, expenses in the MA Program continue to grow.
MA is a means-tested Federal-State funded program designed to provide health care benefits to individuals with limited income and resources. While the Federal government provides a baseline of what eligibility groups must be covered and what services must be provided in order for states to receive Federal Financial Participation (FFP), states may choose to expand eligibility to include additional groups as well as provide additional services. Historically, the Commonwealth has adopted most of the eligibility and service options available under Federal law and exercised various options to use less restrictive methodologies to determine eligibility. As a result, the Commonwealth has one of the most generous MA Programs in the country.
In reviewing program areas to help reduce the significant growth in expenditures, the Department has compared its current MA Program requirements with the requirements the Federal government mandates as well as what other states provide. As a result of this comparison, options were identified that would bring the Commonwealth's program more in line with the Federal baseline as well as closer to what other states provide.
Despite the increasing cost, the Department, unlike its counterparts in other states, has not limited benefits. Instead, the Commonwealth's approach has been to try to protect benefits for those in greatest financial need while looking at those areas of the program where individuals have some existing income or resources to pay for at least part of their care. The Department recognizes that taking steps to reduce benefits causes concern. The basis of this concern is that the proposed changes to eliminate NMP spend-down and limit the use of an unpaid medical expense will result in approximately 7,196 individuals losing MA under the current NMP spend-down provisions and approximately 14,802 individuals losing MA under the current MNO provisions. However, taking less drastic action at this point to minimize growth now will hopefully mitigate the need to limit benefits to the Federally-mandated eligibility groups.
The Department's NMP spend-down provisions are not Federally mandated. Eliminating these provisions will allow the Department to continue to provide services to the population that must be served to assure FFP. Additionally, by limiting the retroactive period from which MNO clients can claim an income deduction for past medical expenses, the Department can further cut costs to assure continued benefits to the Federally-mandated eligibility groups.
Under the current regulations, an individual not eligible for MA due to having net income in excess of the NMP or MNO income limit can qualify for MA benefits by spending down the excess income on medical expenses. Unpaid medical expenses can be deducted from an applicant's or recipient's income as long as those expenses meet certain criteria. The unpaid medical expense must: 1) not be subject to payment by a third party; 2) not be paid by MA, once MA is authorized; 3) be the legal obligation of a member of the applicant or recipient group; 4) have a verified amount and date of service; and 5) not have been used in a prior MA eligibility determination.
Current regulations do not limit when the medical expense being used in the eligibility determination was incurred. As a result, the medical expense could have been incurred several years ago. This proposed rulemaking will limit the time period of an unpaid medical expense to those expenses incurred on or after the first calendar day of the third month preceding the month of application.
Need for Proposed Rulemaking
This proposed rulemaking is necessary to revise the MA eligibility requirements for applicants and recipients requesting MA to address the significant growth in costs of the MA Program.
Summary of Requirements
1. Sections 181.11(d), 181.13 and 181.21(b) and (c). These provisions propose deletion of references and cross references to NMP spend-down and deletion of eligibility requirements for that program.
2. Sections 181.12(c)(2) and 181.14(d)(1)(v). These provisions propose amendments to add language that indicates that unpaid medical expenses cannot be used as a deduction if the date of service is earlier than the first calendar day of the third month preceding the month of application and to remove language that permits expenses from other time periods to be used as a deduction.
Affected Persons and Organizations
This proposed rulemaking applies to applicants and recipients who apply for or receive MA benefits under NMP or MNO spend-down. The individuals affected by the elimination of NMP Spend-down will automatically be reviewed for MNO MA or Medical Assistance for Workers with Disabilities (MAWD) benefits before termination. The Department implemented MAWD by public notice at 32 Pa.B. 289 (January 12, 2002). A separate proposed rulemaking will be published to codify MAWD. Additionally, these individuals may be eligible for the Insurance Department's Children's Health Insurance Program (CHIP) or adultBasic Program or the Department of Aging's Pharmaceutical Assistance Contract for the Elderly (PACE) or PACE Needs Enhancement Tier (PACENET) if they meet the eligibility requirements of the specific program.
The changes to MNO spend-down will affect individuals who have unpaid medical expenses incurred before the first calendar day of the third month preceding the month of application and their eligibility was a result of using these unpaid medical expenses as a deduction when determining MA eligibility.
Accomplishments/Benefits
This proposed rulemaking will continue to allow the Department to provide MA benefits to this Commonwealth's Federally-mandated eligibility groups, while providing sound fiscal management of the Commonwealth's limited resources.
Fiscal Impact
Commonwealth
The Department has estimated savings for the MA Program by eliminating the spend-down eligibility group from NMP and the changes to the MNO spend-down process to be $18.923 million in Fiscal Year 2002-2003 with the Commonwealth's savings to be $9.272 million. The Commonwealth's savings will increase to approximately $43.784 million per year by Fiscal Year 2006-2007.
The Department's MAWD program may experience an increase in enrollment and the CHIP and adultBasic Programs, under the Department of Insurance, and the PACE/PACENET program, under the Department of Aging, may experience an increase in applications or enrollment.
Public Sector
There will be no impact on municipal or county governments.
Private Sector
There is potential for health care providers to have an increase in uncompensated care due to applicant or recipient ineligibility.
Paperwork Requirements
There are no additional forms or reports needed. There will be a reduction in the amount of medical expense paperwork the caseworker will handle, analyze and record.
Effective Date
This proposed rulemaking will be effective upon publication in the Pennsylvania Bulletin as final-form rulemaking.
Sunset Date
There is no sunset date. The Department monitors regulations through its quality control and corrective action agencies.
Public Comment Period
Interested persons are invited to submit written comments, suggestions or objections regarding the proposed rulemaking to the Department of Public Welfare, Edward J. Zogby, Director, Bureau of Policy, Room 431, Health and Welfare Building, Harrisburg, PA 17120, (717) 787-4081, within 30 days after the publication in the Pennsylvania Bulletin. Comments received within the 30-calendar days will be reviewed and considered in the preparation of the final-form regulations. Comments received after the 30-day comment period will be considered for subsequent revisions of these regulations.
Persons with a disability may use the AT&T Relay Service by calling (800) 654-5984 (TDD users) or (800) 654-5988 (Voice Users).
Regulatory Review Act
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on September 25, 2002, the Department submitted a copy of this proposed rulemaking to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Health and Human Services and the Senate Committee on Public Health and Welfare. In addition to submitting this proposed rulemaking, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, if IRRC has objections to any portion of the proposed rulemaking, it will notify the Department within 10 days of the close of the Committees' review period. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review, prior to final-form publication of the regulations, of objections raised by the Department, the General Assembly and the Governor.
FEATHER O. HOUSTOUN,
SecretaryFiscal Note: 14-477. No fiscal impact; (8) recommends adoption. Savings to the Medical Assistance Inpatient, Outpatient and Capitation Appropriations totaling $9.272 million is expected with the promulgation of these regulations.
Annex TITLE 55. PUBLIC WELFARE PART II. PUBLIC ASSISTANCE MANUAL Subpart D. DETERMINATION OF NEED AND AMOUNT OF ASSISTANCE CHAPTER 181. INCOME PROVISIONS FOR CATEGORICALLY NEEDY NMP-MA AND MNO-MA Subchapter A. GENERAL PROVISIONS FOR MA INCOME COMMON TO ALL CATEGORIES OF MA CONTINUING AND RETROACTIVE ELIGIBILITY PROVISIONS FOR ALL CATEGORIES OF MA § 181.11. Continuing eligibility.
* * * * * (d) For persons who do not meet the requirements of subsection (b) or (c), eligibility for continuing MA benefits exists if the applicant/recipient meets the eligibility requirements under § [181.13 or] 181.14 (relating to [eligibility under NMP-MA spend-down; and] eligibility under MNO-MA spend-down).
§ 181.12. Retroactive eligibility.
* * * * * (c) For MNO-MA categories, income eligibility for retroactive MA benefits exists if one of the following applies:
* * * * * (2) The applicant's/recipient's countable net income in the combined retroactive/prospective period, less medical expenses is equal to, or less than, the appropriate MNO-MA 6-month period income limits in Appendix F. Unpaid medical expenses [that are not subject to payment by a third-party, which remain the legal obligation of the applicant/recipient, and are not to be paid for under the MA Program once MA is authorized], incurred on or after the first calendar day of the third month preceding the month of application, and paid medical expenses, are deducted from the countable net income in the combined retroactive/prospective period as provided under § 181.14(e)(1)--(6) (relating to eligibility under MNO-MA spend-down) [. This includes medical expenses incurred before the retroactive period.] if the unpaid medical expenses meet the following conditions:
(i) Are not subject to payment by a third party.
(ii) Remain the legal obligation of the applicant/recipient.
(iii) Are not to be paid for under the MA Program once MA is authorized.
§ 181.13. [Eligibility under NMP-MA spend-down] (Reserved).
[(a) Eligibility under NMP-MA spend-down is available to an applicant/recipient except for an applicant/recipient receiving skilled nursing care or intermediate care.
(b) The applicant/recipient shall meet the NMP-MA eligibility criteria, including the income criteria, to qualify for NMP-MA spend-down.
(c) The period of NMP-MA spend-down eligibility begins the day of the calendar month in which eligibility for NMP-MA spend-down is established and continues through the last day of that calendar month.
(d) Income eligibility for NMP-MA spend-down exists when the applicant's/recipient's:
(1) Countable net income less $10 is equal to, or less than, the appropriate NMP-MA income limits in Appendix A for the aged, blind and disabled categories not receiving skilled nursing care or intermediate care.
(2) Countable net income less $10 and medical expenses in subsection (e) is equal to, or less than, the appropriate NMP-MA income limits in Appendix A for the aged, blind and disabled categories not receiving skilled nursing care or intermediate care.
(3) Countable net income less $10 is equal to, or less than, the appropriate NMP-MA income limits in Appendix C for the AFDC categories and the GA categories not receiving skilled nursing care or intermediate care.
(4) Countable net income less $10 and medical expenses in subsection (f) is equal to, or less than, the appropriate NMP-MA income limits in Appendix C for the AFDC categories and the GA categories not receiving skilled nursing care or intermediate care.
(e) Deductible medical expenses include:
(1) Unpaid medical expenses, including those reasonably expected to be incurred, which meet the requirements in this paragraph. The unpaid medical expenses:
(i) Are not subject to payment by a third-party.
(ii) Are not to be paid for under the NMP-MA Program once NMP-MA is authorized.
(iii) Are the legal obligation of the applicant/recipient.
(iv) Have not previously been used as a deduction in the determination of eligibility for a prior authorization of MA.
(2) Paid medical expenses which meet the requirements in this paragraph. The paid medical expenses:
(i) Are paid in the calendar month for which spend-down is requested.
(ii) Have not previously been used as a deduction in the determination of eligibility for a prior authorization of MA.
(f) Medical expenses meeting the requirements in subsection (e) are deducted in the calendar month for which spend-down is requested in the following order:
(1) Medicare and other health insurance premiums including enrollment fees, deductibles or coinsurance charges incurred by the applicant/recipient regardless of whether they are paid or unpaid.
(2) Copayments or deductibles required by the Department. An applicant/recipient participating in the Copayment Program required by the Department is permitted a medical expense deduction for copayment expenses, subject to the copayment limit established by the Department.
(3) Expenses incurred--paid and unpaid--by the applicant/recipient for necessary medical and remedial services recognized under State statutes or regulations but not included in the NMP-MA Program.
(4) Expenses incurred--paid and unpaid--by the applicant/recipient for necessary medical and remedial services that are included in the NMP-MA Program.
(g) A monthly review of eligibility for NMP-MA spend-down is required except when the countable net income less $10 is equal to, or less than, the appropriate income limit. A monthly review does not require a reapplication unless:
(1) The monthly review falls in the month that a complete reapplication of eligibility for NMP-MA is due.
(2) Three consecutive months have elapsed since the applicant/recipient requested a determination of eligibility for NMP-MA spend-down.]
§ 181.14 Eligibility under MNO-MA spend-down.
* * * * * (d) Deductible medical expenses include:
(1) Unpaid medical expenses, including those reasonably expected to be incurred, which meet the requirements in this paragraph. The unpaid medical expenses:
* * * * * (v) Have been incurred on or after the first calendar day of the third month preceding the month of application.
* * * * * TREATMENT OF INCOME COMMON TO ALL CATEGORIES OF MA § 181.21. Treatment of actual and anticipated income and expenses.
* * * * * (b) In determining continuing eligibility for MA, [except NMP-MA spend-down,] either the anticipated or actual income, or both, and work, personal and dependent care expenses to be received beginning with the first day of the calendar month containing the effective date of the application or reapplication are used, or the actual income and work, personal and dependent care expenses received 30 days before the calendar month of application or reapplication for MA may be projected to determine anticipated income and work, personal and dependent care expenses.
[(c) A combination of actual and anticipated income and expenses are considered to determine NMP-MA spend-down eligibility for MA. Actual income and expenses are used from the beginning of the calendar month to the day of the calendar month in which eligibility for NMP-MA spend-down is established. Anticipated income and work, personal and dependent care expenses are used for the remainder of the calendar month.]
[Pa.B. Doc. No. 02-1736. Filed for public inspection October 4, 2002, 9:00 a.m.]
