[Federal Register Volume 68, Number 200 (Thursday, October 16, 2003)]
[Proposed Rules]
[Pages 59557-59563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26184]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AL49


Copayments for Extended Care Services

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: We propose to amend VA's medical regulations by modifying 
provisions regarding the methodology of computing copayments for 
extended care services provided to veterans. This proposal enhances the 
protection of veterans' spouses by not counting certain assets as 
available resources for computing these copayments. Other non-
substantive changes are proposed for purposes of clarification.

DATES: Comments must be received on or before December 15, 2003.

ADDRESSES: Mail or hand-deliver written comments to: Director, 
Regulations Management (00REG1), Department of Veterans Affairs, 810 
Vermont Ave., NW., Room 1068, Washington, DC 20420; or fax comments to 
(202) 273-9026; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AL49.'' All comments received will be available for public 
inspection in the Office of Regulation Policy and Management, Room 
1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday 
(except holidays). Please call (202) 273-9515 for an appointment.

FOR FURTHER INFORMATION CONTACT: Donna Canada, Chief Business Office 
(161), at (202) 254-0324 and Daniel Schoeps, Geriatrics and Extended 
Care (114), at (202) 273-8540. Both are officials in the Veterans 
Health Administration, 810 Vermont Avenue NW., Washington, DC 20420. 
(These are not toll free numbers.)

SUPPLEMENTARY INFORMATION: We propose to amend VA's medical regulations 
at 38 CFR 17.111 concerning the computation of copayments for extended 
care services provided to veterans either directly by VA or obtained by 
contract. These copayments were established under the Veterans 
Millennium Health Care and Benefits Act (Pub. L. 106-117) and codified 
at 38 U.S.C. 1710B(c).
    This proposed rule enhances and clarifies the mechanism for 
calculating the copayment amount. The statute set forth at 38 U.S.C. 
1710B(d)(2) provides:

    The Secretary shall develop a methodology for establishing the 
amount of the copayment for which a veteran [receiving extended care 
services] is liable. That methodology shall provide for--
    (A) establishing a maximum monthly copayment (based on all 
income and assets of the veteran and the spouse of such veteran);
    (B) protecting the spouse of a veteran from financial hardship 
by not counting all of the income and assets of the veteran and 
spouse (in the case of a spouse who resides in the community) as 
available for determining the copayment obligation; and
    (C) allowing the veteran to retain a monthly personal allowance.

    Under the current rule, a veteran is obligated to pay the copayment 
only if the veteran and the veteran's spouse have available resources. 
Available resources means the sum of the value of the liquid assets, 
fixed assets, and income of the veteran and the veteran's spouse minus 
the sum of the veteran allowance and the spousal allowance. Liquid 
assets and fixed assets are included in the calculations only if the 
veteran has been receiving extended care services for 181 days or more. 
Expenses are included in the veterans allowance calculations only if 
the veteran has been receiving extended care services for 180 days or 
less, the veteran is receiving only adult day health care or other 
noninstitutional care, or the veteran has a spouse or dependent 
residing in the community who is not institutionalized. These formulas 
are designed to allow the veteran, the veteran's spouse, and the 
veteran's dependents minimum amenities while allowing them to retain 
some of their possessions to help them maintain, to a degree, their 
standard of living. Also, these formulas are intended to help ensure 
that veterans institutionalized for 180 days or less would have the 
means to return home if their medical condition permits.
    The current regulation has different provisions on what is included 
in ``available resources'' depending on whether or not the veteran has 
been receiving extended care services for more than 180 days. We 
propose to clarify the provisions by which we

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compute ``available resources.'' So, for veterans who have been 
receiving extended care services for 180 days or less, we propose to 
determine their available resources by adding their income and the 
income of their spouse and then subtracting from that the sum of the 
veterans allowance, the spousal allowance, and expenses. For veterans 
who have been receiving extended care services for 181 days or more, we 
propose to determine their available resources by adding the value of 
their liquid assets, their fixed assets, and their income and the 
income of their spouse, minus the sum of the veterans allowance, the 
spousal allowance, the spousal resource protection amount, and (but 
only if the veteran is receiving noninstitutional care or the veteran 
has a spouse or a dependent residing in the community who is not 
institutionalized) expenses. We believe this will clarify what 
resources veterans have available for purposes of determining the 
appropriate copayment.
    We also propose to clarify in the definition of ``expenses'' that 
expenses include (1) insurance premiums of the veteran and the 
veteran's spouse and dependents, and (2) personal property taxes, not 
just income taxes.
    Further, in the definition of ``liquid assets,'' we propose to 
exclude household and personal items such as furniture, clothing, and 
jewelry when the veteran's spouse or the veteran's dependents are 
living in the community or the veteran is receiving noninstitutional 
extended care services. Currently, household and personal items are 
included in liquid assets even if the veteran's spouse or dependents 
are living in the community or the veteran is receiving 
noninstitutional extended care services. This will further protect the 
veteran, spouse and dependents from financial hardship if they are 
living in the community.
    VA Form 10-10EC, set forth in 38 CFR 17.111(g), currently requires 
including art, rare coins, stamp collections, and collectibles in 
liquid assets. We propose to refer to this requirement in the 
definition also.
    Third, we propose to add at paragraph (d)(2)(vi) of Sec.  17.111 a 
definition of ``spousal resource protection amount'' to permit a spouse 
to maintain some liquid assets while she lives in the community. This 
amount would equal the total value of the veteran and spouse's liquid 
assets up to $89,280 if the spouse resides in the community (i.e., is 
not institutionalized). We propose using this amount because at least 
23 State Medicaid Programs use it to protect spouses' assets for 
Medicaid purposes. This amount would be deducted from ``available 
resources'' if the veteran has been receiving extended care services 
for more than 180 days. This amount would not be deducted from 
``available resources'' if the veteran has been receiving extended care 
services for 180 days or less because ``liquid assets'' are not 
included in ``available resources'' in that case.
    Fourth, we propose to remove from the definition of ``veterans 
allowance'' the inclusion of expenses in certain situations because, as 
discussed above, we propose to include expenses in the computation of 
``available resources'' contained in paragraph (d)(1) of Sec.  17.111. 
We propose this change to simplify the methodology in determining 
``available resources.''
    Further, we propose to clarify in paragraph (d)(1) of Sec.  17.111 
that the income, assets, expenses and allowance of legally separated 
spouses are excluded from ``available resources.''
    The current rule provides that, unless exempted, a veteran must 
report changes to the veteran or spouse's situation that would change 
the copayment obligation (i.e., changes regarding fixed assets, liquid 
assets, expenses, income, or whether the veteran has a spouse or 
dependents residing in the community) to a VA medical facility within 
10 days of the change. We propose to add a change in marital status to 
the list of items, which, if changed, would require the veteran to 
report to VA the change. A change in marital status might affect the 
copayment obligation and thus must be reported.

Paperwork Reduction Act

    The Office of Management and Budget have approved the collections 
of information requirements related to this rulemaking proceeding under 
OMB control number 2900-0629.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any given year. This proposed rule would have 
no such effect on State, local, or tribal governments, or the private 
sector.

Executive Order 12866

    This regulatory amendment has been reviewed by the Office of 
Management and Budget under the provisions of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993.

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-612. This amendment would not affect any small entities. 
Only individuals could be directly affected. Therefore, pursuant to 5 
U.S.C. 605(b), this amendment is exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers for the programs 
affected by this document are 64.005, 64.007, 64.008, 64.009, 64.010, 
64.011, 64.012, 64.013, 64.014, 64.015, 64.016, 64.018, 64.019, 64.022, 
and 64.025.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs-health, Grant programs-veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Approved: July 9, 2003.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, VA proposes to amend 38 
CFR part 17 as set forth below:

PART 17--MEDICAL

    1. The authority citation for part 17 continues to read as follows:

    Authority: 38 U.S.C. 501, 1721, unless otherwise noted.

    2. In Sec.  17.111, paragraphs (d) through (g) and the authority 
citation at the end of the section are revised to read as follows:


Sec.  17.111  Copayments for extended care services.

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    (d) Effect of the veteran's financial resources on obligation to 
pay copayment. (1) A veteran is obligated to pay the copayment to the 
extent the veteran and the veteran's spouse have available resources. 
For veterans who have been receiving extended care services for 180 
days or less, their

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available resources are the sum of the income of the veteran and the 
veteran's spouse, minus the sum of the veterans allowance, the spousal 
allowance, and expenses. For veterans who have been receiving extended 
care services for 181 days or more, their available resources are the 
sum of the value of the liquid assets, the fixed assets, and the income 
of the veteran and the veteran's spouse, minus the sum of the veterans 
allowance, the spousal allowance, the spousal resource protection 
amount, and (but only if the veteran is receiving noninstitutional care 
or the veteran has a spouse or a dependent residing in the community 
who is not institutionalized) expenses. When a veteran is legally 
separated from a spouse, available resources do not include spousal 
income, expenses, and assets or a spousal allowance.
    (2) For purposes of determining available resources under this 
section:
    (i) Income means current income (including, but not limited to, 
wages and income from a business (minus business expenses), bonuses, 
tips, severance pay, accrued benefits, cash gifts, inheritance amounts, 
interest income, standard dividend income from non tax deferred 
annuities, retirement income, pension income, unemployment payments, 
worker's compensation payments, black lung payments, tort settlement 
payments, social security payments, court mandated payments, payments 
from VA or any other Federal programs, and any other income). The 
amount of current income will be stated in frequency of receipt, e.g., 
per week, per month.
    (ii) Expenses means basic subsistence expenses, including current 
expenses for the following: rent/mortgage for primary residence; 
vehicle payment for one vehicle; food for veteran, veteran's spouse, 
and veteran's dependents; education for veteran, veteran's spouse, and 
veteran's dependents; court-ordered payments of veteran or veteran's 
spouse (e.g., alimony, child-support); and including the average 
monthly expenses during the past year for the following: utilities and 
insurance for the primary residence; out-of-pocket medical care costs 
not otherwise covered by health insurance; health insurance premiums 
for the veteran, veteran's spouse, and veteran's dependents; and taxes 
paid on income and personal property.
    (iii) Fixed Assets means:
    (A) Real property and other non-liquid assets; except that this 
does not include--
    (1) Burial plots;
    (2) A residence if the residence is:
    (i) The primary residence of the veteran and the veteran is 
receiving only noninstitutional extended care service; or
    (ii) The primary residence of the veteran's spouse or the veteran's 
dependents (if the veteran does not have a spouse) if the veteran is 
receiving institutional extended care service.
    (3) A vehicle if the vehicle is:
    (i) The vehicle of the veteran and the veteran is receiving only 
noninstitutional extended care service; or
    (ii) The vehicle of the veteran's spouse or the veteran's 
dependents (if the veteran does not have a spouse) if the veteran is 
receiving institutional extended care service.
    (iv) Liquid assets means cash, stocks, dividends received from IRA, 
401K's and other tax deferred annuities, bonds, mutual funds, 
retirement accounts (e.g., IRA, 401Ks, annuities), art, rare coins, 
stamp collections, and collectibles of the veteran, spouse, and 
dependents. This includes household and personal items (e.g., 
furniture, clothing, and jewelry) except when the veteran's spouse or 
dependents are living in the community.
    (v) Spousal allowance is an allowance of $20 per day that is 
included only if the spouse resides in the community (not 
institutionalized).
    (vi) Spousal resource protection amount means the value of liquid 
assets but not to exceed $89,280 if the spouse is residing in the 
community (not institutionalized).
    (vii) Veterans allowance is an allowance of $20 per day.
    (3) The maximum amount of a copayment for any month equals the 
copayment amount specified in paragraph (b)(1) of this section 
multiplied by the number of days in the month. The copayment for any 
month may be less than the amount specified in paragraph (b)(1) of this 
section if the veteran provides information in accordance with this 
section to establish that the copayment should be reduced or 
eliminated.
    (e) Requirement to submit information. (1) Unless exempted under 
paragraph (f) of this section, a veteran must submit to a VA medical 
facility a completed VA Form 10-10EC and documentation requested by the 
Form at the following times:
    (i) At the time of initial request for an episode of extended care 
services;
    (ii) At the time of request for extended care services after a 
break in provision of extended care services for more than 30 days; and
    (iii) Each year at the time of submission to VA of VA Form 10-10EZ.
    (2) When there are changes that might change the copayment 
obligation (i.e., changes regarding marital status, fixed assets, 
liquid assets, expenses, income (when received), or whether the veteran 
has a spouse or dependents residing in the community), the veteran must 
report those changes to a VA medical facility within 10 days of the 
change.
    (f) Veterans and care that are not subject to the copayment 
requirements. The following veterans and care are not subject to the 
copayment requirements of this section:
    (1) A veteran with a compensable service-connected disability;
    (2) A veteran whose annual income (determined under 38 U.S.C. 1503) 
is less than the amount in effect under 38 U.S.C. 1521(b);
    (3) Care for a veteran's noncompensable zero percent service-
connected disability;
    (4) An episode of extended care services that began on or before 
November 30, 1999;
    (5) Care authorized under 38 U.S.C. 1710(e) for Vietnam-era 
herbicide-exposed veterans, radiation-exposed veterans, Persian Gulf 
War veterans, or post-Persian Gulf War combat-exposed veterans;
    (6) Care for treatment of sexual trauma as authorized under 38 
U.S.C. 1720D; or
    (7) Care or services authorized under 38 U.S.C. 1720E for certain 
veterans regarding cancer of the head or neck.
    (g) VA Form 10-10EC.

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    (Authority: 38 U.S.C. 101(28), 501, 1701(7), 1710, 1710B, 1720B, 
1720D, 1722A)

BILLING CODE 8320-01-P
[FR Doc. 03-26184 Filed 10-15-03; 8:45 am]
BILLING CODE 8320-01-C