[Federal Register Volume 64, Number 59 (Monday, March 29, 1999)]
[Notices]
[Pages 14931-14934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7078]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[HCFA-2032-N]
RIN 0938-AJ28


Medicaid Program; State Allotments for Payment of Medicare Part B 
Premiums for Qualifying Individuals: Federal Fiscal Year 1999

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: The Social Security Act provides for the Medicaid program to 
pay all or part of the Medicare Part B premiums for beneficiaries 
belonging to two specific eligibility groups of low-income Medicare 
beneficiaries, referred to as Qualifying Individuals (QIs). This notice 
announces the Federal fiscal year 1999 allotments that are available 
for State agencies to pay Medicare Part B premiums for these two 
eligibility groups.

EFFECTIVE DATE: This document is defined as a major rule under the 
congressional review provisions of 5 U.S.C. section 804(2). As 
indicated in the preamble of this notice, pursuant to section 5 U.S.C. 
section 808(2), for good cause we find that prior notice and comment 
procedures are unnecessary and impracticable. Pursuant to 5 U.S.C. 
section 808(2), this notice is effective October 1, 1998, for 
allotments for payment of Medicare Part B premiums for individuals in 
calendar year 1999 from the allocation for fiscal year 1999.

FOR FURTHER INFORMATION CONTACT: Miles McDermott, (410) 786-3722.

SUPPLEMENTARY INFORMATION:

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I. Background

    Section 1902 of the Social Security Act (the Act) sets forth the 
requirements for State plans to provide medical assistance. Prior to 
August 5, 1997, section 1902(a)(10)(E) of the Act specified that the 
State Medicaid plan must provide for Medicare cost-sharing for three 
eligibility groups of low-income Medicare beneficiaries. These three 
groups included qualified Medicare beneficiaries (QMBs), specified low-
income Medicare beneficiaries (SLMBs), and qualified disabled and 
working individuals (QDWIs).
    A QMB is an individual entitled to Medicare Part A with income at 
or below the Federal poverty level and resources below $4,000 for an 
individual and $6,000 for a couple. A SLMB is an individual who meets 
the QMB criteria, except that his or her income is between a State 
established level (at or below the Federal poverty level) and 120 
percent of the Federal poverty level. A QDWI is an individual who is 
entitled to enroll in Medicare Part A, whose income does not exceed 200 
percent of the Federal poverty level for a family of the size involved, 
whose resources do not exceed twice the amount allowed under the 
Supplementary Security Income (SSI) program, and who is not otherwise 
eligible for Medicaid. The definition of Medicare cost-sharing at 
section 1905(p)(3) of the Act includes payment for premiums for 
Medicare Part B.
    Section 1902(a)(10)(E) of the Act requires States to provide for 
Medicaid payment of the Medicare Part B premiums for two additional 
eligibility groups of low-income Medicare beneficiaries, referred to as 
qualifying individuals (QIs).
    Under section 1902(a)(10)(E)(iv)(I) of the Act, State agencies are 
required to pay the full amount of the Medicare Part B premium for 
selected QIs who would be QMBs except that their income level is at 
least 120 percent but less than 135 percent of the Federal poverty 
level for a family of the size involved. These individuals cannot 
otherwise be eligible for medical assistance under the approved State 
Medicaid plan.
    The second group of QIs, under section 1902(a)(10)(E)(iv)(II) of 
the Act, includes Medicare beneficiaries who would be QMBs except that 
their income is between 135 percent and 175 percent of the Federal 
poverty level for a family of the size involved. These QIs may not be 
otherwise eligible for Medicaid under the approved State plan, but are 
eligible for a portion of Medicare cost-sharing consisting only of a 
percentage of the increase in the Medicare Part B premium attributable 
to the shift of Medicare home health coverage from Part A to Part B (as 
provided in section 4611 of the Balanced Budget Act of 1997 (BBA).
    Section 1933(a) specifies that a State agency must provide, through 
a State plan amendment, for medical assistance to pay for the cost of 
Medicare cost-sharing on behalf of QIs who are selected to receive 
assistance.
    Section 1933(b) of the Act sets forth the rules that State agencies 
must follow in selecting QIs and providing payment for Medicare Part B 
premiums. Specifically, the State agency must permit all QIs to apply 
for assistance and must select individuals on a first-come, first-
served basis selecting QIs in the order in which they apply. Under 
section 1933(b)(2)(B) of the Act, when selecting persons who will 
receive assistance in the years after 1998, State agencies must give 
preference to those individuals who received assistance as QIs, QMBs, 
SLMBs, or QDWIs in the last month of the previous year and who continue 
to be (or become) QIs. Under section 1933(b)(4), persons selected to 
receive assistance in a calendar year are entitled to receive 
assistance for the remainder of the year, but not beyond, as long as 
they continue to qualify. The fact that an individual is selected to 
receive assistance at any time during the year does not entitle the 
individual to continued assistance for any succeeding year. Because the 
State's allotment is limited by law, section 1933(b)(3) of the Act 
provides that the State agency must limit the number of QIs so that the 
amount of assistance provided during

[[Page 14932]]

the year is approximately equal to the State's allotment for that year.
    Section 1933(c) of the Act limits the total amount of Federal funds 
available for payment of Part B premiums each fiscal year and specifies 
the formula to be used to determine an allotment for each State from 
this total amount. For State agencies that execute a State plan 
amendment in accordance with section 1933(a) of the Act, a total of 
$1.5 billion was allocated over 5 years as follows: $200 million in FY 
1998; $250 million in FY 1999; $300 million in FY 2000; $350 million in 
FY 2001; and $400 million in FY 2002.
    The Federal matching rate for Medicaid payment of Medicare Part B 
premiums for QIs is 100 percent for expenditures up to the amount of 
the State's allotment. No Federal matching funds are available for 
expenditures in excess of the State's allotment amount. Administrative 
expenses associated with the payment of Medicare Part B premiums for 
QIs remain at the 50 percent matching level and may not be taken from 
the State's allotment.
    The amount available for each fiscal year is to be allocated among 
States according to the formula set forth in section 1933(c)(2) of the 
Act. The formula provides for an amount to each State agency that is to 
be based on each State's share of the Secretary's estimate of the ratio 
of--
    (1) An amount equal to the sum of the following:
    (a) Twice the total number of individuals who meet all but the 
income requirements for QMBs, whose incomes are at least 120 percent 
but less than 135 percent of the Federal poverty level, and who are not 
otherwise eligible for Medicaid; and
    (b) The total number of individuals in the State who meet all but 
the income requirements for QMBs, whose incomes are at least 135 
percent but less than 175 percent of the Federal poverty level, and who 
are not otherwise eligible for Medicaid; to
    (2) The sum of all of these individuals under item (1) for all 
eligible States.

II. Provisions of This Notice

    This notice announces the availability of individual State 
allotments for Federal fiscal year 1999 for the Medicaid payment of 
Medicare Part B premiums for QIs identified under sections 
1902(a)(10)(E)(iv)(I) and (II) of the Act. The formula used to 
calculate these allotments was described in detail in the announcement 
of the Federal fiscal year 1998 allotments (63 FR 3754, January 26, 
1998), and, except for the incorporation of the latest data, has been 
used here without changes.

           FY 1999 State Allotments for Payment of Part B Premiums Under Sec. 4732 of the BBA of 1997
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                                                                                                    State FY99
              State                  (a)  M11        (b)  M2 2       (c)  2 x     State share of    allocation
                                                                      (a)+(b)      (c) (percent)      ($000)
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AK..............................               0               3               3            0.05             116
AL..............................              33              75             141            2.18           5,548
AR..............................              25              37              87            1.35           3,368
AZ..............................              16              62              94            1.46           3,639
CA..............................              93             309             495            7.66          19,162
CO..............................              15              27              57            0.88           2,207
CT..............................               8              60              76            1.18           2,942
DC..............................               2               4               8            0.12             310
DE..............................               4              10              18            0.28             697
FL..............................              98             262             458            7.09          17,730
GA..............................              41              96             178            2.76           6,891
HI..............................               4              10              18            0.28             697
IA..............................              17              47              81            1.25           3,136
ID..............................               4              17              25            0.39             968
IL..............................              70             173             313            4.85          12,117
IN..............................              28             107             163            2.52           6,310
KS..............................              14              50              78            1.21           3,020
LA..............................              32              57             121            1.87           4,684
MA..............................              35              82             152            2.35           5,884
MD..............................              21              71             113            1.75           4,374
ME..............................               8              29              45            0.70           1,742
MI..............................              52             127             231            3.58           8,942
MN..............................              25              54             104            1.61           4,026
MO..............................              26              88             140            2.17           5,420
MS..............................              27              39              93            1.44           3,600
MT..............................               6              16              28            0.43           1,084
NC..............................              51             122             224            3.47           8,671
ND..............................               6              13              26            0.39             968
NE..............................              11              29              51            0.79           1,974
NH..............................               8              19              35            0.54           1,355
NJ..............................              48             129             225            3.48           8,710
NM..............................               9              22              40            0.62           1,548
NV..............................               7              18              32            0.50           1,239
NY..............................              94             241             429            6.64          16,607
OH..............................              62             180             304            4.71          11,768
OK..............................              27              52             106            1.64           4,103
OR..............................              20              55              95            1.47           3,678
PA..............................              80             202             362            5.61          14,014
RI..............................               7              20              34            0.53           1,316
SC..............................              26              67             119            1.84           4,607
SD..............................               5              10              20            0.31             774
TN..............................              36              55             127            1.97           4,916
TX..............................              80             208             368            5.70          14,246
UT..............................               5              21              31            0.48           1,200

[[Page 14933]]

 
VA..............................              12              73              97            1.50           3,755
VT..............................               5               7              17            0.26             658
WA..............................              12              54              78            1.21           3,020
WI..............................              18              58              94            1.46           3,639
WV..............................              20              40              80            1.24           3,097
WY..............................               2               5               9            0.14             348
                                 -------------------------------------------------------------------------------
    Total.......................            1378            3702            6458          100.00         250,000
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1 Three-year average (1995-7) of number (000) of Medicare beneficiaries in State who are not enrolled in
  Medicaid but whose incomes are at least 120% but less than 135% of FPL.
2 Three-year average (1995-7) of number (000) of Medicare beneficiaries in State who are not enrolled in
  Medicaid but whose incomes are least 135% but less than 175% of FPL.

III. Waiver of Advance Public Comment and 30-Day Delay in Effective 
Date

    We ordinarily publish an advance notice in the Federal Register for 
a notice containing substantive determinations to provide a period for 
public comment. However, we may waive that procedure if we find good 
cause that notice and comment are impractical, unnecessary, or contrary 
to the public interest. In addition, we also normally provide a delay 
of 30 days in the effective date. However, if adherence to this 
procedure would be impractical, unnecessary, or contrary to public 
interest, we may waive the delay in the effective date.
    We find good cause to waive notice and comment procedure for this 
final notice. The law sets out in detail the specific amounts available 
for each Federal fiscal year for Medicare Part B premiums for QIs and 
the formula that is used to determine individual State allotments. No 
public comments were received as a result of the January 26, 1998, 
Federal Register Notice of the FY 1998 State allotments. (63 FR 3754). 
In addition, the latest data from the U.S. Census Bureau on the number 
of possible QIs in the States used in the statutory formula, as 
discussed in section V. of this notice, is not available until too late 
in the calendar year. Therefore, it would be impracticable, 
unnecessary, and contrary to the public interest to submit this notice 
to the public for a notice and comment procedure.
    Also, because States can begin making payments for Medicare Part B 
premiums for QIs as early January 1, 1999, we are not making the 
effective date of the notice the usual 30 days after publication. For 
the reasons discussed above, we find good cause to waive the usual 30-
day delay.

IV. Effect of the Contract With America Advancement Act

    Normally, under 5 U.S.C. section 801, as added by section 251 of 
Public Law 104-121, the effective date of a major rule is delayed 60 
days for congressional review. This notice has been determined to be a 
major rule under 5 U.S.C. section 804(2) for purposes of congressional 
review. However, as indicated in section III of this notice, we have 
found that good cause exists to dispense with prior notice and comment 
procedures since they are unnecessary and impracticable under the 
circumstances. Pursuant to 5 U.S.C. section 808(2), a rule shall take 
effect at such time as the Federal agency promulgating the rule 
determines, if it finds, for good cause, that prior notice and comment 
procedures are unnecessary or impracticable. Accordingly, under the 
exemption provided in 5 U.S.C. section 808(2), this notice is effective 
January 1, 1999, for allotments for payments of Medicare Part B 
premiums for individuals in calendar year 1999 from the allotment for 
fiscal year 1999.

V. Regulatory Impact Statement

    We have examined the impact of this notice as required by Executive 
Order 12866 and the Regulatory Flexibility Act (RFA) (Public Law 96-
354). Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects; distributive impacts; and equity). The RFA requires agencies 
to analyze options for regulatory relief for small businesses. For 
purposes of the RFA, States and individuals are not considered to be 
small entities.
    This notice allocates, among the States, Federal funds to provide 
Medicaid payment for Medicare Part B premiums for two additional groups 
of low-income Medicare beneficiaries. The total amount of Federal funds 
available during a Federal fiscal year and the formula for determining 
individual State allotments are specified in the law. We have applied 
the statutory formula for the State allotments except for the use of 
specified data. Because the data specified in the law were not 
currently available, we have used comparable data from the U.S. Census 
Bureau on the number of possible QIs in the States, as described in 
detail in the January 26, 1998, Federal Register Notice of the FY 1998 
State allotments. (63 FR 3754). These new allotments for FY 1999 
incorporate the latest data from the Census Bureau covering 1995 
through 1997, as specified in the footnote to the table above.
    We believe the statutory provisions implemented in this notice will 
have a positive effect on States and individuals. Federal funding at 
the 100 percent matching rate is available for Medicare cost-sharing 
for Medicare Part B premium payments for QIs and a greater number of 
low-income Medicare beneficiaries will be eligible to have their 
Medicare Part B premiums paid under Medicaid.
    Section 1102(b) of the Social Security Act requires us to prepare a 
regulatory impact analysis for any notice that may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. Such an analysis must conform to the provisions of section 
603 of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that is located outside a 
Metropolitan Statistical Area and has fewer than 50 beds.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act, because we have determined and certify that this notice 
will not have a significant economic impact on a

[[Page 14934]]

substantial number of small entities, or a significant impact on the 
operations of a substantial number of small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

    Authority: Sections 1902(a)(10)(E) and 1933 of the Social 
Security Act (42 U.S.C. 1396a(a)(10)(E) and 1396x), and section 4732 
of Public Law 105-33.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)

    Dated: October 16, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

    Dated: December 10, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 99-7078 Filed 3-26-99; 8:45 am]
BILLING CODE 4120-01-P