[Federal Register Volume 67, Number 52 (Monday, March 18, 2002)]
[Notices]
[Pages 12020-12021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6349]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare and Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of West 
Virginia State Plan Amendment (SPA) 01-05

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing to reconsider 
our decision to disapprove West Virginia SPA (01-05), on April 25, 2002 
at 10 a.m.; Room 339; the Public Ledger Building; 150 SouthIndependence 
Mall West; Philadelphia, PA 19106-3499.
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by April 2, 2002.

FOR FURTHER INFORMATION CONTACT: Kathleen Scully-HayesOffice of 
Hearings, Centers for Medicare & Medicaid Services, Suite L 2520 Lord 
Baltimore Drive, Baltimore, Maryland 21244-2670, Telephone: (410) 786-
2055.

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider our decision to disapprove West Virginia SPA (01-
05).
    Section 1116 of the Social Security Act (the Act) and 42 CFR part 
430 establish HHS procedures that provide an administrative hearing for 
reconsideration of a disapproval of a State plan or plan amendment. The 
Centers for Medicare & Medicaid Services (CMS) is required to publish a 
copy of the notice to a State Medicaid agency that informs the agency 
of the time and place of the hearing and the issues to be considered. 
If we subsequently notify the agency of additional issues that will be 
considered at the hearing, we will also publish that notice. Any 
individual or group that wants to participate in the hearing as a party 
must petition the presiding officer within 15 days after publication of 
this notice, in accordance with the requirements contained at 42 CFR 
430.76(b)(2). Any interested person or organization that wants to 
participate as amicus curiae must petition the presiding officer before 
the hearing begins in accordance with the requirements contained at 42 
CFR 430.76(c). If the hearing is later rescheduled, the presiding 
officer will notify all participants.
    The primary issue in the hearing is whether West Virginia's SPA 01-
05 complies with the requirement of section 1917(b)(3) of the Act 
governing criteria for establishing an undue hardship under which the 
provisions governing mandatory estate recovery will be waived. That 
provision requires the State to use criteria established by the 
Secretary for determining whether estate recovery constitutes an undue 
hardship: 1. In resolving this issue, the hearing will consider whether 
publication in the State Medicaid Manual meets the requirements for 
adopting standards governing a homestead of modest value for purposes 
of qualifying for the undue hardship exception section 1917(b)(3); 2. 
The hearing will also consider if properly adopted, whether the 
Secretary appropriately applied these standards in disapproving the 
amendment.
    West Virginia initially submitted SPA 01-05 on March 13, 2001. 
Section 1917 (b)(3) of the Act requires the state agency to establish 
procedures and standards to waive estate recoveries when such 
recoveries would cause an undue hardship as determined on the basis of 
criteria established by the Secretary. The State Medicaid Manual (SMM) 
defines one basis for an undue hardship as ``a homestead of modest 
value.''
    The SPA proposes to exempt homestead property based on a statewide 
arithmetic mean appraised value of a home that is to be updated yearly 
by the West Virginia Department of Tax and Revenue.
    The CMS has informed West Virginia that it has provided standards 
for determining the maximum amount which can be excluded from estate 
recovery as a ``homestead of modest value.'' Section 3810.C1 provides 
that states may not set the threshold for the market value of a 
homestead of modest value so high as to negate the intent of the estate 
recovery program. It specifically notes that ``a homestead of ``modest 
value'' can be defined as 50 percent or less of the average price of 
homes in the county where the homestead is located, as of the date of 
the beneficiary's death.'' Under West Virginia's amendment, in many 
counties, the $50,735 homestead of modest value exemption is greater 
than 100 percent of the average appraised value of homes in the county. 
In others it is twice that amount. Accordingly, CMS found the amendment 
did not comport with the standards for defining a homestead of modest 
value, which a state may exempt as part of its undue hardship 
exemption.
    The CMS has noted that West Virginia's statewide homestead 
exemption was not included in the amendment as part of its ``undue 
hardship'' waiver of the mandatory estate recovery. The State included 
this exemption in the State plan as a separate item. Any homestead 
exempted must be excluded either on the basis of ``undue hardship'' or 
that it is not cost-effective for the State to recover.
    The notice to West Virginia announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Nancy V. Atkins, MSN, RNC, NP, Commissioner, State of West Virginia, 
Department of Health and Human Services, Bureau for Medical 
Services, 350 Capitol Street, Room 251, Charleston, West Virginia 
25301-3706
Dear Ms. Atkins:
    I am responding to your request for reconsideration of the 
decision to disapprove West Virginia State Plan Amendment (SPA) 01-
05.
    The primary issue in the hearing is whether West Virginia's SPA 
01-05 complies with the requirement of section 1917 (b)(3) of the 
Social Security Act (the Act) governing criteria for establishing an 
undue hardship

[[Page 12021]]

under which the provisions governing mandatory estate recovery will 
be waived. That provision requires the State to use criteria 
established by the Secretary for determining whether estate recovery 
constitutes an undue hardship: 1. In resolving this issue, the 
hearing will consider whether publication in the State Medicaid 
Manual meets the requirements for adopting standards governing a 
homestead of modest value for purposes of qualifying for the undue 
hardship exception Section 1917(b)(3); 2. The hearing will also 
consider if properly adopted, whether the Secretary appropriately 
applied these standards in disapproving the amendment.
    West Virginia initially submitted SPA 01-05 on March 13, 2001. 
Section 1917 (b)(3) of the Act requires the State agency to 
establish procedures and standards to waive estate recoveries when 
such recoveries would cause an undue hardship as determined on the 
basis of criteria established by the Secretary. The State Medicaid 
Manual (SMM) defines one basis for an undue hardship as ``a 
homestead of modest value.''
    The SPA proposes to exempt homestead property based on a 
statewide arithmetic mean appraised value of a home that is to be 
updated yearly by the West Virginia Department of Tax and Revenue.
    The Centers for Medicare & Medicaid Services (CMS) has informed 
West Virginia that it has provided standards for determining the 
maximum amount which can be excluded from estate recovery as a 
``homestead of modest value.'' Section 3810.C1 provides that states 
may not set the threshold for the market value of a homestead of 
modest value so high as to negate the intent of the estate recovery 
program. It specifically notes that ``a homestead of `modest value' 
can be defined as 50 percent or less of the average price of homes 
in the county where the homestead is located, as of the date of the 
beneficiary's death.'' Under West Virginia's amendment, in many 
counties, the $50,735 homestead of modest value exemption is greater 
than 100 percent of the average appraised value of homes in the 
county. In others it is twice that amount. Accordingly, CMS found 
the amendment did not comport with the standards for defining a 
homestead of modest value, which a state may exempt as part of its 
undue hardship exemption.
    The CMS has noted that West Virginia's statewide homestead 
exemption was not included in the amendment as part of its ``undue 
hardship'' waiver of the mandatory estate recovery. The State 
included this exemption in the State plan as a separate item. Any 
homestead exempted must be excluded either on the basis of ``undue 
hardship'' or that it is not cost-effective for the State to 
recover.
    I am scheduling a hearing on your request for reconsideration to 
be held on April 25, 2002, at 10 a.m.; Room 339; The Public Ledger 
Building; 150 South Independence Mall West; Philadelphia, 
Pennsylvania 19106-3499.
    If this date is not acceptable, we would be glad to set another 
date that is mutually agreeable to the parties. The hearing will be 
governed by the procedures prescribed at 42 CFR, part 430.
    I am designating Ms. Kathleen Scully-Hayes as the presiding 
officer. If these arrangements present any problems, please contact 
the presiding officer. In order to facilitate any communication 
which may be necessary between the parties to the hearing, please 
notify the presiding officer to indicate acceptability of the 
hearing date that has been scheduled and provide names of the 
individuals who will represent the State at the hearing. The 
presiding officer may be reached at (410) 786-2055.
   Sincerely,
Thomas A. Scully.

(Sect. 1116 of the Social Security Act (42 U.S.C. 1316); 42 CFR 
430.18)

(Catalog of Federal Domestic Assistance Program No. 13.714, Medicaid 
Assistance Program)

    Dated: March 7, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-6349 Filed 3-15-02; 8:45 am]
BILLING CODE 4160-18-U