[Federal Register Volume 59, Number 126 (Friday, July 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16050]
[[Page Unknown]]
[Federal Register: July 1, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Social Security Administration
RIN 0960-AB09
20 CFR Part 416
Supplemental Security Income for the Aged, Blind, and Disabled;
What Is Not Income
AGENCY: Social Security Administration, HHS.
ACTION: Final rules.
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SUMMARY: These final rules revise the regulations as to what is
considered not to be income under the supplemental security income
(SSI) program in the following instance. The final rules conform SSI
policy to a number of court rulings that have required the Social
Security Administration (SSA) to consider Department of Veterans
Affairs (DVA) payments resulting from unusual medical expenses not to
be income for SSI purposes. Previously, DVA payments resulting from
unusual medical expenses were considered needs-based pension or
compensation payments and, therefore, income for SSI purposes except in
the Ninth Circuit where SSA's Acquiescence Ruling 86-1(9) applies and
in the Eleventh Circuit and the State of Indiana where courts have
invalidated SSI policy. These regulations implement on a national basis
a treatment of DVA payments resulting from unusual medical expenses
that generally will be more advantageous to recipients than current
national policy.
EFFECTIVE DATE: July 1, 1994.
FOR FURTHER INFORMATION CONTACT: Duane Heaton, Legal Assistant, 3-B-1
Operations Building, 6401 Security Boulevard, Baltimore, MD 21235,
(410) 965-8470.
SUPPLEMENTARY INFORMATION: These regulations affect the SSI program
under title XVI of the Social Security Act (the Act), as amended and
the Medicaid program under title XIX of the Act to the extent that
Medicaid eligibility is based on title XVI eligibility. The purpose of
the SSI program is to provide a minimum income level for aged, blind,
and disabled people who do not have income or resources above levels
specified in the Act. The regulations change what is considered not to
be income under the SSI program.
The DVA considers veterans' unusual medical expenses by deducting
them from any countable income when computing some needs-based pension
and compensation payments. (Unusual medical expenses are unreimbursed
medical expenditures that exceed 5 percent of the applicable maximum
annual DVA basic payment rate. This rate does not include an aid and
attendance component.) Unusual medical expenses may result in a higher
monthly DVA payment, an extra payment, or an increase in a payment.
These DVA payments were treated as needs-based pension or compensation
payments and, under Sec. 416.1121(a), as income for SSI purposes.
In the case of Summy v. Schweiker, 688 F.2d 1233 (1982), the Ninth
Circuit Court of Appeals held that these additional DVA payments
represented reimbursement for medical expenses, and, therefore, were
not income for SSI purposes under Sec. 416.1109(a). This section, which
exempted third-party reimbursement for medical expenses from income,
was subsequently revised and now appears at Sec. 416.1103(a). We are
adding Sec. 416.1103(a)(7), which refers to DVA payments resulting from
unusual medical expenses, to the list of medical care or services that
are excluded from the definition of income. By doing this, we are
recognizing that the nature of such payments is analogous to that of
other forms of medical care or services that are currently not income
under Sec. 416.1103(a).
SSA published Acquiescence Ruling 86-1(9) to apply the Summy
holding within the Ninth Circuit. Upon publication of these
regulations, Acquiescence Ruling 86-1(9) will be withdrawn. While the
regulatory change will generally benefit SSI recipients, it may result
in reduced benefits or ineligibility for a small number of SSI
recipients. Under section 1614(f) of the Act, the income and resources
of spouses and parents who are not eligible for SSI are considered to
the extent determined by the Secretary as the income and resources of
their spouses and children who live with them and are eligible for SSI
benefits. This is known as deeming. We do not count any of the income
of an ineligible spouse or parent who receives payments from a needs-
based public income maintenance program because to do so would defeat
the purpose of such a program.
Presently, DVA payments resulting from unusual medical expenses are
considered needs-based public income maintenance payments, and we do
not count under SSI deeming rules any income of an ineligible spouse or
parent which was counted or excluded in figuring these payments (see
Sec. 416.1161(a)(2)). Under these final regulations, DVA payments
resulting from unusual medical expenses will be considered
reimbursement for medical expenses and not needs-based pension or
compensation payments. For an individual who receives only such
payments, receipt of such payments will no longer preclude our counting
as income to the SSI recipient part of the income of an ineligible
spouse or parent used in computing such payment.
Example: Jenny, a disabled child who is eligible for SSI benefits,
lives with her father, Mr. Morton, who received both a DVA pension
based on need and a title II Social Security benefit. In determining
how much income to deem to the child, none of Mr. Morton's title II
benefit was considered income deemable to Jenny because the DVA had
already counted Mr. Morton's title II benefit in figuring the amount of
his DVA needs-based pension payment. In January 1992, Mr. Morton
reported an increase in his title II benefit to the DVA and the amount
of the increase precluded him from receiving further DVA pension
payments. Because no DVA needs-based pension payment was being made,
Mr. Morton's title II benefit was deemable as income to Jenny,
resulting in a reduction of her SSI payment. In December 1992, Mr.
Morton filed an annual report with the DVA reflecting both his title II
income and evidence of his payment of unusual medical expenses. The DVA
recomputed his income for the period January 1992 through December 1992
based on the evidence of unusual medical expenses and issued him a one-
time payment. Under the prior policy, we would recalculate Jenny's SSI
payment for the period January 1992 through December 1992 in order not
to deem to Jenny any of Mr. Morton's title II benefit used by the DVA
in determining a needs-based pension payment. However, under these
final regulations, for deeming purposes, we will not recalculate
Jenny's SSI benefit and will continue to consider Mr. Morton's title II
benefit for the period January 1992 through December 1992 as income
available to Jenny. The DVA payment resulting from unusual medical
expenses will no longer be considered a public income-maintenance
payment so we will not exclude any income used in calculating it, but
instead we will consider the payment reimbursement for medical expenses
and not income.
The above example describes how we will apply the Summy decision
nationwide under the SSI program. This change in the treatment of DVA
payments for unusual medical expenses also affects how income is
determined under the Medicaid program under title XIX of the Act.
We published a notice of proposed rulemaking (NPRM) on August 24,
1988 (53 FR 32252). That NPRM included proposed SSA and Health Care
Financing Administration (HCFA) regulations on the treatment of DVA
payments for unusual medical expenses under the SSI program as well as
under the Medicaid program under title XIX of the Act. SSA coordinated
and combined the NPRM with HCFA because, generally, the Medicaid
statute uses the methodologies and treatment of income of the cash
assistance programs such as SSI as the baseline for determining
eligibility for Medicaid. Thus, in defining income for Medicaid
eligibility purposes, the SSI treatment of DVA payments for unusual
medical expenses would usually be applied.
Based on the public comments and subsequent court decisions, the
Medicaid portion of the final regulations required further
consideration. As a result, SSA decided to proceed separately with the
SSI portion of the final regulations. We based this decision on the
need to provide uniform national policy in this area. These changes in
SSI income rules will affect the Medicaid program in those States which
use SSI income rules in their Medicaid program.
Comments Received Following Publication of the NPRM
When these regulations were published as an NPRM, interested
parties were given 60 days to submit comments. We received 13 letters:
3 from State or local governmental entities, 4 from special interest
organizations, and 6 from individuals. Several commenters wrote merely
to support the proposed regulations; one indicated that the proposed
regulations are unnecessary; and others, while supporting the proposed
regulations, suggested changes. Many of the commenters addressed issues
regarding the Medicaid aspects of the NPRM. The issues raised by those
commenters are not within the purview of these final SSI regulations
and have been referred to HCFA for appropriate response. We have
summarized the SSI issues raised by the commenters and responded to
these comments below.
Comment: One commenter suggested that the phrase ``pension or
compensation payments'' is more appropriate than the phrase ``pension
payments'' which we used in the preamble to the NPRM, because DVA
Dependency and Indemnity Compensation payments are also increased for
unusual medical expenses.
Response: We agree that the phrase ``pension payments'' should be
clarified to more accurately describe DVA payments. In addition, we
have emphasized that these payments are based on need by replacing the
word ``pension'' with the phrase ``needs-based pension or
compensation'' in the description of the rule change in this preamble.
Comment: One commenter stated that the Medicaid regulations would
defeat the purpose of the DVA payments. In support of this statement
the commenter referred to a September 14, 1978, Federal Register
document which provides:
``Where the SSI program reduces its payments to take into
account assistance of this type (medical or social) furnished under
other governmental programs, SSI is, in effect, nullifying or
frustrating achievement of those other programs' purposes.''
In referring to the above Federal Register statement, the commenter
stated that ``this longstanding principle prohibiting the nullification
of other benefits available to a recipient would be violated (for
Medicaid purposes) if the DVA reimbursement for unusual medical
expenses were to be included as income in the post-eligibility
determination of the recipients' contribution to cost of care.''
Response: The Federal Register statement to which the commenter has
referred was made in the context of the SSI program and not the
Medicaid program. In the context of the SSI program, the SSI program
provides funds to meet an individual's food, clothing, and shelter
needs, not medical or social service needs. One of the express purposes
of these final rules is to revise SSI regulations so as not to count
certain DVA payments in determining eligibility for and the amount of
the SSI payments. To the extent the commenter is referencing the
Medicaid program, this comment has been referred to HCFA for
appropriate response. Other than the change explained above to the
preamble to the regulations, we are adopting these SSI regulations as
proposed.
Regulatory Procedures
Executive Order 12866
The Office of Management and Budget has reviewed these rules and
determined they do not meet the criteria for a significant regulatory
action under E.O. 12866.
Regulatory Flexibility Act
We certify that these regulations will not have a significant
economic impact on a substantial number of small entities because they
affect only individuals. Therefore, a regulatory flexibility analysis
as provided in Pub. L. 96-354, the Regulatory Flexibility Act, is not
required.
Paperwork Reduction Act of 1980
These regulations impose no additional reporting and recordkeeping
requirements necessitating clearance by the Office of Management and
Budget.
(Catalog of Federal Domestic Assistance: Program No. 93.807,
Supplemental Security Income)
List of Subjects in 20 CFR Part 416
Administrative practice and procedure, Aged, Blind, Disability
benefits, Public assistance programs, Reporting and recordkeeping
requirements, Supplemental security income.
Dated: August 18, 1993.
Lawrence H. Thompson,
Principal Deputy Commissioner of Social Security.
Approved: August 30, 1993.
Dona E. Shalala,
Secretary of Health and Human Services.
Note: This document was received by the Office of the Federal
Register on June 28, 1994.
For the reasons set out in the preamble, part 416 of Title 20 of
the Code of Federal Regulations is amended as follows:
1. The authority citation for subpart K of part 416 continues to
read as follows:
Authority: Secs. 1102, 1602, 1611, 1612, 1613, 1614(f), 1621,
and 1631 of the Social Security Act; 42 U.S.C. 1302, 1381a, 1382,
1382a, 1382b, 1382c(f), 1382j, and 1383; sec. 211 of Pub. L. 93-66,
87 Stat. 154.
2. In Sec. 416.1103, a new paragraph (a)(7) is added to read as
follows:
Sec. 416.1103 What is not income.
* * * * *
(a) * * *
(7) Payments from the Department of Veterans Affairs resulting from
unusual medical expenses.
* * * * *
[FR Doc. 94-16050 Filed 6-30-94; 8:45 am]
BILLING CODE 4190-29-P