[Federal Register Volume 67, Number 17 (Friday, January 25, 2002)]
[Notices]
[Pages 3713-3716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1304]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

CMS-2087-PN
RIN 0938-AK91


Medicaid Program; State Allotments for Payment of Medicare Part B 
Premiums for Qualifying Individuals: Federal Fiscal Year 2001

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed 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 months during the 
period beginning with January 1998, and ending with December 2002) for 
two specific eligibility groups of low-income Medicare beneficiaries, 
referred to as Qualifying Individuals. This notice announces the 
proposed allotments that would be available for State agencies to pay 
Medicare Part B premiums for these eligibility groups for Federal 
fiscal year 2001.

DATES: We will consider comments if we receive them at the appropriate 
address, as provided below, no later than 5 p.m. on March 26, 2002.
    If the proposed allotments are adopted as final, they will be 
available for expenditures made during the Federal fiscal year 2001 
(beginning October 1, 2000).

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address: Centers for Medicare & Medicaid Services, Department 
of Health and Human Services, Attention: CMS-2087-PN, PO Box 
8010,Baltimore, MD 21244-8010.
    To insure that mailed comments are received in time for us to 
consider them, please allow for possible delays in delivering them.
    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses: Room 443-G, Hubert H. 
Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, 
orRoom C5-16-03, 7500 Security Boulevard, Baltimore, MD 21244-8010.
    Comments mailed to the above addresses may be delayed and received 
too late for us to consider them.
    Because of staff and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code CMS-2087-PN. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, at 7500 Security 
Blvd, Baltimore, Maryland 21244, Monday through Friday of each week 
from 8:30 to 5 p.m. (phone: (410) 786-9994).

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

SUPPLEMENTARY INFORMATION:

I. Background

A. Before the Balanced Budget Act of 1997

    Before the enactment of the Balanced Budget Act of 1997 (BBA), 
section 1902(a)(10)(E) of the Social Security Act (the Act) specified 
that a Medicaid State 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. An 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 MedicarePart 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.

B. After the Balanced Budget Act of 1997

    Section 4732 of the BBA amended section 1902(a)(10)(E) of the Act 
to require States to provide for Medicaid payment of all or part of the 
Medicare Part B premiums, during the period beginning January 1998 and 
ending December 2002, for selected members of two 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 at least 135 percent but less than 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 BBA).
    Section 4732(c) of the BBA also added section 1933 of the Act, 
which specifies the provisions for State coverage of the Medicare cost-
sharing for additional low-income Medicare beneficiaries.
    Section 1933(a) of the Act 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 in the order in which they apply. Under section 
1933(b)(2)(B) of the Act, when selecting persons who will receive 
assistance in calendar 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

[[Page 3714]]

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 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 Proposed Notice

    This notice announces the proposed allotments to be made available 
to individual States for Federal fiscal year 2001 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 January 26, 
1998 Federal Register (63 FR 3752, 3754) and, except for the 
incorporation of the latest data, has been used here without changes.

                             FY 2001 State Allotments for Payment of Part B Premiums
                                      [Under Sec. 4732 of the BBA of 1997]
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                                                             (in thousands)                             State
                                                --------------------------------------- State share     FY2001
                     State                                                                 of (c)     allocation
                                                  (a) M1\1\    (b) M2\2\    (c) [2  x    (percent)   (dollars in
                                                                            (a)] + (b)                thousands)
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AK.............................................            1            4            6         0.10          340
AL.............................................           28           74          130         2.10        7,357
AR.............................................           21           46           88         1.42        4,980
AZ.............................................           21           66          108         1.75        6,112
CA.............................................          108          310          526         8.50       29,766
CO.............................................           10           27           47         0.76        2,660
CT.............................................            8           57           73         1.18        4,131
DC.............................................            2            5            9         0.15          509
DE.............................................            6           10           22         0.36        1,245
FL.............................................          113          282          508         8.21       28,747
GA.............................................           22           67          111         1.79        6,281
HI.............................................            4           14           22         0.36        1,245
IA.............................................           17           59           93         1.50        5,263
ID.............................................            6           19           31         0.50        1,754
IL.............................................           38          148          224         3.62       12,676
IN.............................................           41           80          162         2.62        9,167
KS.............................................           10           40           60         0.97        3,395
KY.............................................           20           65          105         1.70        5,942
LA.............................................           24           67          115         1.86        6,508
MA.............................................           34           79          147         2.38        8,319
MD.............................................           26           52          104         1.68        5,885
ME.............................................            7           16           30         0.49        1,698
MI.............................................           36          138          210         3.40       11,884
MN.............................................           23           46           92         1.49        5,206
MO.............................................           24           78          126         2.04        7,130
MS.............................................           15           44           74         1.20        4,188
MT.............................................            4           11           19         0.31        1,075
NC.............................................           46          111          203         3.28       11,487
ND.............................................            5           13           23         0.37        1,302
NE.............................................           10           34           54         0.87        3,056
NH.............................................            2           12           16         0.26          905
NJ.............................................           35          101          171         2.76        9,677
NM.............................................            7           25           39         0.63        2,207
NV.............................................            6           23           35         0.57        1,981
NY.............................................           94          236          424         6.86       23,994
OH.............................................           51          161          263         4.25       14,883
OK.............................................           23           61          107         1.73        6,055
OR.............................................            8           39           55         0.89        3,112

[[Page 3715]]

 
PA.............................................           81          195          357         5.77       20,202
RI.............................................            9           18           36         0.58        2,037
SC.............................................           28           61          117         1.89        6,621
SD.............................................            5           13           23         0.37        1,302
TN.............................................           36           58          130         2.10        7,357
TX.............................................           81          223          385         6.22       21,787
UT.............................................            7           18           32         0.52        1,811
VA.............................................           31           87          149         2.41        8,432
VT.............................................            3            8           14         0.23          792
WA.............................................           22           48           92         1.49        5,206
WI.............................................           21           95          137         2.22        7,753
WV.............................................           13           42           68         1.10        3,848
WY.............................................            3            7           13         0.21          736
                                                ----------------------------------------------------------------
    Total......................................         1296         3593         6185       100.00      350,000
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\1\ Three-year average (1998-2000) of number 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 (1998-2000) of number of Medicare beneficiaries in State who are not enrolled in Medicaid
  but whose incomes are at least 135% but less than 175% of FPL

III. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this notice, and, if we proceed with a subsequent document, 
we will respond to the major comments in that document.

IV. Regulatory Impact Statement

    We have examined the impact of this proposed notice as required by 
Executive Order 12866 and the Regulatory Flexibility Act (RFA) (Pub. L. 
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). A regulatory impact 
statement (RIA) must be prepared for major rules with economic effects 
of $100 million or more annually. Under 5 U.S.C. 804, we have 
determined this to be a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
for small entities. For purposes of the RFA, States and individuals are 
notconsidered to be small entities.
    This proposed notice would allocate, among the States, Federal 
funds to provide Medicaid payment for Medicare Part B premiums for QIs. 
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. Because the formula for determination of State 
allotments is specified in the statute, there were not other options to 
be considered. Therefore, 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. These new allotments for FY 2001 incorporate the 
latest data from the Census Bureau covering 1998 through 2000, as 
specified in the footnotes to the preceding table.
    We believe the statutory provisions that would be implemented in 
this proposed notice would 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 selected QIs, and a greater number of low-income Medicare 
beneficiaries would be eligible to have their Medicare Part B premiums 
paid under Medicaid.
    Section 1102(b) of the 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 100 beds.
    Section 605(b) of the RFA states that preparing an impact analysis 
is not necessary if the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Because this proposed notice would simply provide notice of funding 
ceilings, as determined under the statute, and is not proposing any new 
requirements, it would not have a significant impact on small entities 
or on the operations of a substantial number of small rural hospitals. 
Therefore, we are not preparing analyses for either the RFA or section 
1102(b) of the Act.
    Section 202 of the Unfunded Mandate Reform Act of 1995, Public Law 
104-4, also requires that agencies assess anticipated costs and 
benefits before issuing any proposed rule and a final rule preceded by 
a proposed rule that may result in an expenditure in any one year by 
State, local or tribal governments, in the aggregate, or any the 
private sector, or $110 million or more. This notice would have no 
consequential effect of the governments mentioned or on the private 
sector.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.
    We have reviewed this notice under the threshold criteria of 
Executive Order

[[Page 3716]]

13132, Federalism. Because this proposed notice would simply provide 
notice of funding ceilings, as determined under the statute, and is not 
proposing any new requirements, we have determined that this proposed 
notice would not significantly affect the rights, roles, and 
responsibilities of States.

    Authority: Sections 1902(a)(10)(E) and 1933 of the Social 
Security Act (42 U.S.C. 1396a(a)(10)(E) and 1396x).

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

    Dated: January 14, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid, Services.
[FR Doc. 02-1304 Filed 1-24-02; 8:45 am]
BILLING CODE 4120-01-P