[Federal Register Volume 59, Number 190 (Monday, October 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24384]


  Federal Register / Vol. 59, No. 190 / Monday, October 3, 1994 /
  
[[Page Unknown]]

[Federal Register: October 3, 1994]


                                                   VOL. 59, NO. 190

                                            Monday, October 3, 1994

DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 272 and 273

[Amendment No. 359]
RIN 0584-AB78

 

Food Stamp Program; Medical Expense Deduction

AGENCY: Food and Nutrition Service, USDA.

ACTION: Interim rule.

-----------------------------------------------------------------------

SUMMARY: This action will change Food Stamp Program rules relating to 
the excess medical expense deduction. The changes will simplify the 
means by which households with elderly and disabled members claim 
deductions from income for verified, prospective, non-reimbursed 
medical expenses.

DATES: Effective Date: This rule is effective and must be implemented 
no later than October 1, 1994.
    Comments: Comments must be received on or before December 2, 1994 
to be assured of consideration.

ADDRESSES: Comments should be submitted to Judith M. Seymour, 
Eligibility and Certification Regulation Section, Certification Policy 
Branch, Program Development Division, Food and Nutrition Service, USDA, 
3101 Park Center Drive, Alexandria, Virginia, 22302. Comments may also 
be datafaxed to the attention of Ms. Seymour at (703) 305-2454. All 
written comments will be open for public inspection at the office of 
the Food and Nutrition Service during regular business hours (8:30 a.m. 
to 5 p.m., Monday through Friday) at 3101 Park Center Drive, 
Alexandria, Virginia, Room 720.

FOR FURTHER INFORMATION CONTACT: Questions regarding this rulemaking 
should be addressed to Ms. Seymour at the above address or by telephone 
at (703) 305-2496.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be significant and was reviewed by 
the Office of Management and Budget under Executive Order 12866.

Executive Order 12372

    The Food Stamp Program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.551. For the reasons set forth in the final 
rule in 7 CFR 3015, Subpart V and related Notice (48 FR 29115), this 
Program is excluded from the scope of Executive Order 12372 which 
requires intergovernmental consultation with State and local officials.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Ellen Haas, the 
Assistant Secretary for Food and Consumer Services, has certified that 
this interim rule will not have a significant economic impact on a 
substantial number of small entities. State and local welfare agencies 
will be the most affected to the extent that they administer the 
Program.

Paperwork Reduction Act

    This rule does not contain reporting or recordkeeping requirements 
subject to approval by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1980 (44 U.S.C. 3507).

Executive Order 12778

    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. This rule is intended to have preemptive effect with 
respect to any State or local laws, regulations or policies which 
conflict with its provisions or which would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the Effective Date paragraph of this preamble. 
Prior to any judicial challenge to the provisions of this rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted. In the Food Stamp Program the administrative 
procedures are as follows: (1) for Program benefit recipients--State 
administrative procedures issued pursuant to 7 U.S.C. 2020(e)(1) and 7 
CFR 273.15; (2) for State agencies--administrative procedures issued 
pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for rules related to 
non-quality control (QC) liabilities) or Part 284 (for rules related to 
QC liabilities); (3) for Program retailers and wholesalers--
administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7 
CFR 278.8.

Public Participation and Effective Date

    The amendment to section 5(e) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(e)) which is reflected in this rule was enacted in 1990 as 
section 1717 of the Mickey Leland Memorial Domestic Relief Act (1990 
Leland Act), Title XVII, Pub. L. 101-624 (104 Stat. 3783, Nov. 28, 
1990). This amendment was effective February 1, 1992. The provisions of 
this rule are required to be implemented not later than October 1, 
1994, in order to assure that all State agencies are in full compliance 
with the amendment as soon as possible. For this reason, Ellen Haas, 
Assistant Secretary for Food and Consumer Services, has determined 
pursuant to 5 U.S.C. 553 that public comment on this rule prior to 
implementation is impracticable and that good cause exists for making 
this rule effective less than 30 days after its publication. However, 
because we believe the administration of the rule may be improved by 
public comment, comments are solicited on this rule for 60 days after 
publication. All comments received within the comment period will be 
analyzed, and any appropriate changes will be incorporated in the 
subsequent publication of a final rule.

Background

    Section 351 of the Hunger Prevention Act of 1988, Pub. L. 100-435 
(102 Stat. 1645, September 19, 1988) (HPA) amended Section 5(e) of the 
Food Stamp Act of 1977, as amended, 7 U.S.C. 2014(e), to require State 
agencies to offer eligible households with an elderly or disabled 
member a method for claiming a deduction for recurring medical expenses 
in place of provisions that had required households to report and 
verify expenses monthly. On June 7, 1989, the Department published an 
interim rulemaking at 54 FR 24518, which implemented Section 351 of 
Pub. L. 100-435. The interim rules are still in effect.
    The 1989 interim rule amended several provisions of the regulations 
pertaining to the medical deduction, particularly in the area of 
reporting and verification requirements for allowable medical expenses. 
Under the 1989 interim rule, households subject to monthly reporting 
are given the option of either reporting and verifying all medical 
expenses monthly, or of reporting and verifying changes in medical 
expenses in excess of $25 occurring during the certification period, 
but they cannot be required to report under both procedures. The 1989 
interim rule amended 7 CFR 273.21(h)(3) (i) and (ii), (i)(1), and 
(j)(3)(iii) to specify the household's options with regard to reporting 
and verifying medical expenses in a monthly reporting and retrospective 
budgeting (MRRB) system. In addition, 7 CFR 273.12(a)(1)(vi) and 7 CFR 
273.21(h)(3)(iii) were amended by the 1989 interim rule to simplify 
reporting changes in medical expenses. The 1989 interim rule required 
that changes in total medical expenses greater than $25 must be 
reported, as opposed to a $25 change in each individual allowable 
medical expense.
    Following publication of the 1989 interim rule, the 1990 Leland Act 
was enacted. Regulations published to implement provisions of that Act 
superseded some of the changes made in the 1989 interim rule. Section 
1724 of the 1990 Leland Act delegated to each State agency the 
responsibility for design of the monthly report form, including the 
determination of what information relevant to eligibility and benefits 
was to be included on that form. These provisions of section 1724 were 
implemented by the Monthly Reporting and Retrospective Budgeting 
Amendments and Mass Changes final rule, published on December 4, 1991 
at 56 FR 63597. Conforming amendments to verification requirements 
associated with the monthly report were also made at that time. The 
regulatory amendments in the December 4, 1991 final rule superseded the 
changes made to 7 CFR 273.21(h)(3) (i), (ii), and (iii), and (i)(1) by 
the 1989 interim rule, because the interim provisions concerned the 
information that the Department mandated be contained on the monthly 
report form.
    The amendments made to the regulations at 7 CFR 273.12(a)(vi) and 
273.21(j)(iii) (C) and (D) by the 1989 interim rule were neither 
finalized nor superseded by subsequent regulations. As explained below, 
however, the Department is now making new amendments to these sections.
    Section 1717 of the 1990 Leland Act amended section 5(e) of the 
Food Stamp Act to provide for a simplified means for eligible 
households to claim the excess medical expense deduction for recurring 
medical costs. Section 1717 requires State agencies to estimate at 
certification a recipient's recurring medical expenses for the 
certification period based upon the recipient's current verified 
medical expenses, as well as available information about the 
recipient's medical condition, and public or private medical insurance 
coverage. The household's medical deduction would be based on these 
estimates, and further verification would not be required. In a 
proposed rule entitled ``Miscellaneous Provisions of the Mickey Leland 
Memorial Domestic Hunger Relief Act and Food Stamp Certification 
Policy,'' published on June 28, 1991 (56 FR 29594), the Department 
stated that food stamp regulations at 7 CFR 273.2(f)(8) and 
273.12(a)(6) already reflected the intent of the statute and that, 
therefore, no change to the regulations was required. No comments 
disputing this position were received, and the position was reiterated 
in a final rule published on December 4, 1991 (56 FR 63594).
    It has come to the attention of the Department that some State 
agencies may not be properly applying section 1717. This may be due to 
confusion on the part of State agencies with regard to the Department's 
decision not to issue regulations in connection with section 1717. To 
ensure that State agencies are in compliance with section 1717, the 
Department issued three memoranda to FNS regional offices, dated 
February 3, 1994, April 1, 1994, and May 12, 1994. In the memoranda, 
the Department instructed the regional offices to remind State agencies 
that they must be in compliance with the provisions of section 1717. 
The Department also offered direction as to how the State agencies can 
implement the provisions of section 1717.
    In a further effort to insure that State agencies are implementing 
the provisions of section 1717, the Department is amending food stamp 
regulations that concern the medical expense deduction. These changes 
will clarify current regulations to better express the intent of 
section 1717. Accordingly, this rule amends 7 CFR 273.10(d)(1)(i), 
273.10(d)(4), 273.12(a)(vi), 273.21 (h), (i), and (j)(iii) (C) and (D).
    Under the amendments, the household will be required to report and 
verify all medical expenses at certification and recertification. The 
household's monthly medical deduction for its certification period will 
be based on the information reported and verified by the household, and 
any anticipated changes in the household's medical expenses that can be 
reasonably expected to occur during the certification period based on 
available information about the recipient's medical condition, public 
or private insurance coverage, and current verified medical expenses. 
If the household reports a medical expense at certification but cannot 
verify the expense at that time, and if the amount of the expense 
cannot be reasonably anticipated based on available information about 
the recipient's medical condition, public or private insurance 
coverage, and current verified medical expenses, the expense will be 
considered at the time the amount of the expense or reimbursement is 
reported and verified. The household will not be required to file 
reports about its medical expenses during the certification period. If 
the household voluntarily reports a change in its medical expenses, the 
State agency will act on the changes in accordance with current 
regulations at 7 CFR 273.12(c).
    The Department is also making a related amendment to the 
regulations at 7 CFR 273.12(c) for changes in medical expenses that are 
discovered from a source other than the household. Currently, those 
regulations require the State agency to act on all changes in a 
household's circumstances, including those it discovers from a source 
other than the household. Often times, however, the State agency must 
contact the household to verify such unreported changes. Since the 
intent of section 1717 is to avoid recurrent reporting and verification 
on the part of households receiving the medical expense deduction, the 
Department is amending 7 CFR 273.12(c) to require that the State agency 
act on those changes in medical expenses it learns of from a source 
other than the household only if it can act without contacting the 
household for further information or verification. The household will 
be informed about the changes in accordance with the notice 
requirements at 7 CFR 273.13. Those changes learned from a source other 
than the household which are not verified upon receipt and therefore 
necessitate contact with the household for verification purposes shall 
not be acted upon until the household is recertified.

Implementation

    This rule is effective and must be implemented no later than 
October 1, 1994. For quality control purposes, any variances resulting 
from the implementation of the rule shall be excluded from error 
analysis for 120 days from the required implementation date, in 
accordance with 7 CFR 275.12(d)(2)(vii). The provision must be 
implemented for all households that newly apply for Program benefits on 
or after the required implementation date. The current caseload shall 
be converted to these provisions at the household's request, at the 
time of recertification, or when the case is next reviewed, whichever 
occurs first. The State agency must provide restored benefits to such 
households back to the required implementation date or the date of 
application whichever is later. If for any reason a State agency fails 
to implement on the required implementation date, restored benefits 
shall be provided, if appropriate, back to the required implementation 
date or the date of application whichever is later.

List of Subjects

7 CFR Part 272

    Alaska, Civil rights, Food stamps, Grant programs--social programs, 
Reporting and recordkeeping requirements.

7 CFR Part 273

    Administrative practice and procedure, Aliens, Claims, Food stamps, 
Fraud, Grant programs--social programs, Penalties, Records, Reporting 
and recordkeeping requirements, Social Security.

    Accordingly, 7 CFR parts 272 and 273 are amended as follows:
    1. The authority citation for 7 CFR parts 272 and 273 continues to 
read as follows:

    Authority: 7 U.S.C. 2011-2032.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

    2. In Sec. 272.1, paragraph (g)(138) is added to read as follows:


Sec. 272.1  General terms and conditions.

* * * * *
    (g) Implementation * * *
    (138) Amendment No. 359 The provision of Amendment No. 359 
regarding the medical expense deduction is effective and must be 
implemented no later than October 1, 1994. Any variances resulting from 
implementation of the provisions of this amendment shall be excluded 
from error analysis for 120 days from this required implementation date 
in accordance with 7 CFR 275.12(d)(2)(vii). The provision must be 
implemented for all households that newly apply for Program benefits on 
or after the required implementation date. The current caseload shall 
be converted to these provisions at the household's request, at the 
time of recertification, or when the case is next reviewed, whichever 
occurs first. The State agency must provide restored benefits to such 
households back to the required implementation date or the date of 
application whichever is later. If for any reason a State agency fails 
to implement on the required implementation date, restored benefits 
shall be provided, if appropriate, back to the required implementation 
date or the date of application whichever is later.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

    3. In 273.10:
    a. The fifth sentence of paragraph (d)(1)(i) is revised;
    b. Four sentences are added to the end of paragraph (d)(4).
    The revisions and additions read as follows:


Sec. 273.10  Determining household eligibility and benefit levels.

* * * * *
    (d) Determining deductions. * * *
    (1) Disallowed expenses.
    (i) * * * If the household reports an allowable medical expense at 
the time of certification but cannot provide verification at that time, 
and if the amount of the expense cannot be reasonably anticipated based 
upon available information about the recipient's medical condition and 
public or private medical insurance coverage, the household shall have 
the nonreimbursable portion of the medical expense considered at the 
time the amount of the expense or reimbursement is reported and 
verified. * * *
* * * * *
    (4) Anticipating expenses. * * * At certification and 
recertification, the household shall report and verify all medical 
expenses. The household's monthly medical deduction for the 
certification period shall be based on the information reported and 
verified by the household, and any anticipated changes in the 
household's medical expenses that can be reasonably expected to occur 
during the certification period based on available information about 
the recipient's medical condition, public or private insurance 
coverage, and current verified medical expenses. The household shall 
not be required to file reports about its medical expenses during the 
certification period. If the household voluntarily reports a change in 
its medical expenses, the State agency shall verify the change in 
accordance with Sec. 273.2(f)(8) and act on the change in accordance 
with current regulations at Sec. 273.12(c).
* * * * *
    4. In 273.12:
    a. Paragraph (a)(1)(vi) is removed;
    b. Paragraph (c) introductory text is amended by adding two 
sentences after the first sentence to read as follows:


Sec. 273.12  Reporting changes.

* * * * *
    (c) State agency action on changes. * * * However, during the 
certification period, the State agency shall not act on changes in the 
medical expenses of households eligible for the medical expense 
deduction which it learns of from a source other than the household and 
which, in order to take action, require the State agency to contact the 
household for verification. The State agency shall only act on those 
changes in medical expenses that it learns about from a source other 
than the household if those changes are verified upon receipt and do 
not necessitate contact with the household. * * *
* * * * *
    5. In Sec. 273.21:
    a. Paragraph (h)(3) is revised.
    b. A third sentence is added to paragraph (i).
    c. Paragraph (j)(3)(iii)(C) is revised.
    d. Paragraph (j)(3)(iii)(D) is removed and paragraph (j)(3)(iii)(E) 
is redesignated as paragraph (j)(3)(iii)(D).
    The revisions read as follows:


Sec. 273.21  Monthly Reporting and Retrospective Budgeting (MRRB)

* * * * *
    (h) The monthly report form. * * *
    (3) Reported information. The State agency may determine the 
information relevant to eligibility and benefit determination to be 
included on the monthly report form except that the State agency shall 
not require households to monthly report medical expenses. Medical 
expenses may be reported in accordance with Sec. 273.10(d)(4).
* * * * *
    (i) Verification. * * * Medical expenses shall be verified in 
accordance with Sec. 273.2(f).
    (j) State agency action on reports. * * *
    (3) Incomplete filing. * * *
    (iii) * * *
    (C) If a household fails to verify changes in reported medical 
expenses in accordance with Sec. 273.2(f)(8), the State agency shall 
not make the change.
* * * * *
    Dated: September 27, 1994.
Ellen Haas,
Assistant Secretary for Food and Consumer Services.
[FR Doc. 94-24384 Filed 9-30-94; 8:45 am]
BILLING CODE 3410-30-P