[Federal Register Volume 67, Number 169 (Friday, August 30, 2002)]
[Notices]
[Pages 55851-55854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22228]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2136-PN]


Medicaid Program; State Allotments for Payment of Medicare Part B 
Premiums for Qualifying Individuals: Federal Fiscal Year 2002

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

ACTION: Proposed notice.

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SUMMARY: In this proposed notice, we publish our annual update on the 
proposed allotment we will make available to participating State 
agencies to pay all, or some portion of, Medicare Part B premium costs 
for a specified category of eligible low-income Medicare beneficiaries 
called qualifying individuals (QIs). These proposed expenditures, if 
adopted, will be made available during Federal fiscal year 2002 
(beginning October 1, 2001).

DATES: We will consider comments if we receive them at the appropriate 
address, as provided below, no later than 5 p.m. on October 29, 2002.

ADDRESSES: In commenting, please refer to file code CMS-2136-PN. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Mail written comments (one original and three copies) to the 
following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-2136-PN, P.O. 
Box 8010, Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery delays. If you prefer, you may 
deliver (by hand or courier) your written comments (one original and 
three copies) to one of the following addresses: Room 443-G, Hubert H. 
Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, 
or Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244.

(Because access to the interior of the HHH Building is not readily 
available to persons without Federal Government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for commenters wishing to retain a proof of filing by 
stamping in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and could be considered late.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Robert Nakielny, (410) 786-4466.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments

    Comments received timely will be available for public inspection as 
they are received, generally beginning approximately 3 weeks after 
publication at the Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, Maryland, 21244, Monday through Friday 
of each week from 8:30 a.m. to 4 p.m. Members of the public who are 
interested in reviewing timely public comments are asked to schedule an 
appointment by calling (410) 786-9994.

I. Background

A. Before the Balanced Budget Act of 1997

    Before enactment of the Balanced Budget Act of 1997 (BBA), section 
1902(a)(10)(E) of the Social Security Act (the Act) specified that 
State Medicaid plans must provide Medicare cost-sharing for three 
groups of eligible low-income Medicare beneficiaries. These three 
groups include: 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 (Hospital 
Insurance) with an income that falls 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

[[Page 55852]]

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 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 Medicare premiums, although QDWIs only 
qualify to have Medicaid pay their Medicare part A premiums.

B. After Enactment of the Balanced Budget Act of 1997

    Section 4732 of the BBA amended section 1902(a)(10)(E) of the Act 
to require that States provide for Medicaid payment of all, or a 
portion of, Medicare Part B (Supplementary Medical Insurance) premiums, 
during the period beginning January 1998 through 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 QIs, or become QIs. Under section 1933(b)(4) of the Act, 
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 allotment to the States 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 a 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 
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;
    (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 2002 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 2002 State Allotments for Payment of Part B Premiums Under Sec. 4732 of the BBA of 1997
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                                                                                        State share    State FY
                     State                       (a)  M1 \1\  (b)  M2 \2\    (c)  2 x      of (c)    2002 ($000)
                                                                            (a) + (b)    (percent)    allocation
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AK.............................................            1            3            5         0.08         $321
AL.............................................           25           68          118         1.90        7,584
AR.............................................           23           46           92         1.48        5,913
AZ.............................................           20           63          103         1.65        6,620

[[Page 55853]]

 
CA.............................................          114          307          535         8.60       34,383
CO.............................................           11           37           59         0.95        3,792
CT.............................................           11           55           77         1.24        4,949
DC.............................................            3            5           11         0.18          707
DE.............................................            5           10           20         0.32        1,285
FL.............................................          114          249          477         7.66       30,656
GA.............................................           31           69          131         2.10        8,419
HI.............................................            3           13           19         0.31        1,221
IA.............................................           20           49           89         1.43        5,720
ID.............................................            7           18           32         0.51        2,057
IL.............................................           38          138          214         3.44       13,753
IN.............................................           46           88          180         2.89       11,568
KS.............................................           12           33           57         0.92        3,663
KY.............................................           19           65          103         1.65        6,620
LA.............................................           27           57          111         1.78        7,134
MA.............................................           40           85          165         2.65       10,604
MD.............................................           26           49          101         1.62        6,491
ME.............................................            7           23           37         0.59        2,378
MI.............................................           42          127          211         3.39       13,560
MN.............................................           27           46          100         1.61        6,427
MO.............................................           29           60          118         1.90        7,584
MS.............................................           17           44           78         1.25        5,013
MT.............................................            5           11           21         0.34        1,350
NC.............................................           49           89          187         3.00       12,018
ND.............................................            5           13           23         0.37        1,478
NE.............................................            9           34           52         0.84        3,342
NH.............................................            3           14           20         0.32        1,285
NJ.............................................           35          109          179         2.88       11,504
NM.............................................           11           28           50         0.80        3,213
NV.............................................            7           23           37         0.59        2,378
NY.............................................           92          233          417         6.70       26,799
OH.............................................           52          167          271         4.35       17,416
OK.............................................           14           65           93         1.49        5,977
OR.............................................           15           32           62         1.00        3,985
PA.............................................           81          187          349         5.61       22,429
RI.............................................            7           13           27         0.43        1,735
SC.............................................           34           58          126         2.02        8,098
SD.............................................            4           13           21         0.34        1,350
TN.............................................           37           61          135         2.17        8,676
TX.............................................           82          218          382         6.14       24,550
UT.............................................            7           16           30         0.48        1,928
VA.............................................           45           83          173         2.78       11,118
VT.............................................            3            8           14         0.22          900
WA.............................................           21           56           98         1.57        6,298
WI.............................................           24           87          135         2.17        8,676
WV.............................................           11           44           66         1.06        4,242
WY.............................................            3            7           13         0.21          835
                                                ----------------------------------------------------------------
    Total......................................         1374         3476         6224       100.00      400,000
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\1\ Three-year average (1999-2001) 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 the Federal Poverty Level (FPL).
\2\ Three-year average (1999-2001) of number (000) of Medicare beneficiaries in State who are not enrolled in
  Medicaid but whose incomes are at least 135% but less than 175% of the Federal Poverty Level (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 proposed notice, and, if we proceed with a subsequent 
document, we will respond to the comments in that document.

IV. Regulatory Impact Statement

    We have examined the impact of this proposed notice as required by 
Executive Order 12866 (September 1993, Regulatory planning and review), 
the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-
354), section 1102(b) of the Act, the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4), and Executive Order 13132.
    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

[[Page 55854]]

and safety effects; distributive impacts; and equity). A regulatory 
impact analysis (RIA) must be prepared for major rules with economic 
effects of $100 million or more annually. We have determined this to be 
a major rule. It provides $400 million to a specialized category of 
low-income Medicare beneficiaries.
    The RFA requires agencies to analyze options for regulatory relief 
for small entities. For purposes of the RFA, States and individuals are 
not considered 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 no 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 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. Since the statutory formula calls for an estimate of 
individuals who could qualify for QI status rather than the number of 
individuals who actually have that status, the exact numbers of those 
individuals will always be uncertain. These new allotments for FY 2002 
incorporate the latest data from the U.S. Census Bureau from 1999 to 
2001, 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.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act, because we have determined and certify that this proposed 
notice would not have a significant economic impact on a substantial 
number of small entities or a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates 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 on the governments mentioned or on the private 
sector.
    We have reviewed this notice under the threshold criteria of 
Executive Order 13132, Federalism. Because this proposed notice would 
simply provide notice of funding ceilings, as determined under the 
statute, we have determined that this proposed notice would not 
significantly affect the rights, roles, and responsibilities of States.
    In accordance with the provisions of Executive Order 12866, this 
proposed notice with comment period was reviewed by the Office of 
Management and Budget (OMB).

    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: April 28, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: August 26, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-22228 Filed 8-29-02; 8:45 am]
BILLING CODE 4120-01-P