PROPOSED RULEMAKING
DEPARTMENT OF
PUBLIC WELFARE
[55 PA. CODE CHS. 140 AND 181]
Eligibility Provisions for the Healthy Horizons Program for the Elderly/Disabled; Medical Assistance Income
[28 Pa.B. 1531] Statutory Authority
The Department of Public Welfare (Department), under section 403(b) of the Public Welfare Code (62 P. S. § 403(b)), intends to amend its regulations to read as set forth in Annex A.
Purpose
The purpose of the proposed amendments is to change how the receipt of a lump sum is treated when determining eligibility for Medical Assistance (MA) in Chapters 140, Subchapter B and 181 (relating to eligibility provisions for the healthy horizons program for the elderly/disabled; and income provisions for categorically needy NMP-MA are MNO-MA). Current regulations state that a lump sum is treated as a resource unless it is beneficial to the client to treat it as income. This proposed change will require that when a lump sum has been treated as income in the month of receipt, any balance remaining in subsequent months will be treated as a resource. This proposed change applies to all categories of MA, including Healthy Horizons. This proposed change provides that a client who chooses to treat a lump sum as income is no worse off under this proposal than another client who chooses to treat lump sum as a resource from the time it was received.
Background
Effective November 1, 1988, the Department adopted final regulations patterned after the rules for the corresponding Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI) Cash Assistance Programs except for the treatment of lump sum. The AFDC Cash Assistance Program treats lump sum under a special lump sum rule which provides for a period of ineligibility. The SSI Cash Assistance Program treats a lump sum as a resource. The disparity of treatment of a lump sum in the cash assistance programs led to the flexibility in the treatment of a lump sum for the MA Program. The individual currently has the choice of treating a lump sum as a resource, unless it is more financially helpful to the individual to have it treated as income. If the lump sum is counted as income, any balance of the lump sum remaining in subsequent months is not considered a resource under existing regulations.
As a result of this flexibility, the regulations provide a special resource exclusion for the remaining lump sum. The exclusion enables an individual to continue to receive MA benefits even though resources, including funds remaining from the lump sum, may be substantially in excess of the resource limit. Due to the fact that individuals with substantial lump sum benefits are being determined eligible for MA, even if there is a balance of the lump sum remaining which exceeds the MA resource limits, the Department is proposing to revise the regulations to specify that lump sum payments retained beyond the month of receipt are treated as a resource. An individual still has the choice of deciding whether to have the lump sum treated as a resource or as income in the month of receipt. However, any portion remaining in subsequent months will be treated as a resource along with all other countable resources subject to the maximum MA resource limit.
Need for Amendments
These proposed amendments are needed to establish equitable treatment between clients who have excess resources because of a lump sum and clients who have excess resources for any other reason, by changing the requirements for the treatment of lump sum income in Chapters 140, Subchapter B and 181.
Summary
Treatment of lump sum payment (§§ 140.291(c), (d) and (d)(3))
The proposed revision to this section counts as a resource the balance of the lump sum remaining subsequent to the calendar month in which the lump sum is received and is counted as income for the applicant/ recipient of the Healthy Horizons Program. The content of subsection (d) is no longer applicable. The contents of the old subsection (d)(1) and (2) are moved to (c)(1) and (2). The old subsection (d)(3) is the revised subsection (d).
Treatment of lump sum payment (§ 181.31(d))
The proposed revision to this section counts as a resource the balance of the lump sum remaining subsequent to the calendar month in which the lump sum is received and is counted as income. This applies to an applicant/recipient of SSI-related and General Assistance (GA)-related categories of the Categorically Needy Nonmoney Payment (NMP) and Medically Needy Only (MNO) MA Programs.
Affected Persons and Organization
These proposed amendments affect all applicants and recipients of MA, living in the community or residing in an institution, who receive a lump sum.
Accomplishments/Benefits
These proposed amendments will change how the balance of a lump sum remaining subsequent to the month of receipt is treated. The proposed change would treat as a resource the balance of a lump sum remaining subsequent to the month it was received and treated as income for MA eligibility purposes. This proposed change denies MA eligibility for those individuals with a sizeable balance of a lump sum after only 1 month of MA ineligibility. These individuals could qualify for MA once their resources and income are within allowable limits.
Fiscal Impact
Commonwealth
It is anticipated that implementation of these proposed amendments will result in savings to the Commonwealth during Fiscal Year 1997-1998 of approximately $0.182 million ($0.086 million in State funds). Annual savings for Fiscal Year 1998-1999 are estimated in the amount of $0.276 million ($0.130 million in State funds).
Private Sector
There are no anticipated costs for the private sector.
Paperwork Requirements
These proposed amendments do not require additional forms or reports.
Effective Date
These proposed amendments will be effective upon publication in the Pennsylvania Bulletin as final-form rulemaking.
Sunset Date
No sunset date is applicable. The Department continuously reviews the MA Program and regulations through the Federally monitored Quality Control process. Also, the Federal Health Care Financing Administration staff conducts audits periodically on specific aspects of the MA Program.
Public Comment Period
Interested persons are invited to submit written comments, suggestions or objections regarding the proposed amendments to the Department of Public Welfare, Patricia H. O'Neal, Director, Bureau of Policy, Room 431, Health and Welfare Building, Harrisburg, PA 17120, (717)787-4081 within 30-calendar days of the date of publication of this notice in the Pennsylvania Bulletin. All comments received within 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 any subsequent revision of these proposed amendments.
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 March 17, 1998, the Department submitted a copy of these proposed amendments 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 the proposal, 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 amendments, 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 publication of the regulation of objections raised, by the Department, the General Assembly and the Governor.
FEATHER O. HOUSTOUN,
SecretaryFiscal Note: 14-421. No fiscal impact; (8) recommends adoption. These changes are expected to result in savings of $31,000 to MA--Inpatient and $54,000 to MA--Outpatient in 1997--1998 when implemented.
Annex A
TITLE 55. PUBLIC WELFARE
PART II. PUBLIC ASSISTANCE MANUAL
Subpart C. ELIGIBILITY REQUIREMENTS
CHAPTER 140. SPECIAL MA ELIGIBILITY PROVISIONS
Subchapter B. ELIGIBILITY PROVISIONS FOR THE HEALTHY HORIZONS PROGRAM FOR THE ELDERLY/DISABLED
TREATMENT OF LUMP SUM [PAYMENTS] PAYMENT § 140.291. Treatment of lump sum [payments] payment.
* * * * * (c) If the lump sum is treated as income, it is counted as income in the calendar month received.
[(d) A balance remaining of the lump sum payment subsequent to the calendar month the lump sum payment was received and counted as income is not considered a resource to the applicant/recipient.]
(1) [Earned] An earned lump sum [payments] such as delayed wages, bonuses and EITC [are] is treated as earned income and [are] is added to other earned income received in the calendar month. The deductions listed under § 140.282 (relating to deductions from earned income) are applied to determine countable net earned income.
(2) [Unearned] An unearned lump sum [payments] such as cash prizes, cash lottery winnings, life insurance benefits, cash inheritances and personal injury [are] is treated as unearned income and [are] is added to other unearned income received in the calendar month. The deductions listed under § 140.281 (relating to deductions from unearned income) are applied to determine countable net unearned income.
[(3)] (d) The balance [remaining] of the lump sum [payment] remaining subsequent to the calendar month the lump sum [payment] was received and counted as [earned income or unearned] income as described in subsection (c) is [not] considered a resource to the applicant/recipient or the spouse of the applicant/recipient.
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
TREATMENT OF LUMP SUM PAYMENT COMMON TO ALL CATEGORIES OF MA § 181.31. Treatment of lump sum payment.
* * * * * (d) The balance [remaining] of the lump sum [payment] remaining subsequent to the calendar month the lump sum [payment] was received and counted as [earned or unearned] income as described in subsection (c) is [not] considered a resource to the applicant/recipient.
[Pa.B. Doc. No. 98-483. Filed for public inspection March 27, 1998, 9:00 a.m.]
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