[Federal Register Volume 73, Number 101 (Friday, May 23, 2008)]
[Proposed Rules]
[Pages 30030-30038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11559]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

45 CFR Part 144

[ASPELTCI]
RIN 0991-AB44


Office of the Assistant Secretary for Planning and Evaluation; 
State Long-Term Care Partnership Program: Reporting Requirements for 
Insurers

AGENCY: Office of the Assistant Secretary for Planning and Evaluation 
(OASPE), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule sets forth proposed reporting requirements 
for private insurers that issue qualified long-term care insurance 
policies in States participating in the State Long-Term Care 
Partnership Program established under the Deficit Reduction Act (DRA) 
of 2005. Section 6021 of the Deficit Reduction Act of 2005 requires 
that the Secretary specify a set of reporting requirements and collect 
data from insurers on qualifying long-term care insurance policies 
issued under the program and the subsequent use of the benefits under 
these policies. Under a State Long-Term Care Partnership Program, an 
amount equal to the benefits received under of the long-term care 
insurance policy is disregarded in determining the assets of an 
individual for purposes of Medicaid eligibility and estate recovery.

[[Page 30031]]


DATES: To be assured consideration, comments must be received at the 
address provided below, no later than 5 p.m. on July 22, 2008.

ADDRESSES: In commenting, please refer to file code ASPE:LTCI. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to http://www.Regulations.gov. Click on the 
link ``Comment or Submission'' and enter the keyword ``ASPE:LTCI''. 
(Attachments should be in Microsoft Word, WordPerfect, or Excel; 
however, we prefer Microsoft Word.)
    2. By regular mail. You may mail written comments (one original and 
two copies) to the following address only: Office of Disability, Aging, 
and Long-Term Care, Office of the Assistant Secretary for Planning and 
Evaluation, Department of Health and Human Services, Attention: 
ASPE:LTCI, Hunter McKay, 200 Independence Avenue, SW., Room 424-E, 
Washington, DC 20201.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments (one 
original and two copies) to the following address only: Office of 
Disability, Aging, and Long-Term Care, Office of the Assistant 
Secretary for Planning and Evaluation, Department of Health and Human 
Services, Attention: ASPE:LTCI, Hunter McKay, 200 Independence Avenue, 
SW., Room 424-E, Washington, DC 20201.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to the following address: Room 424-E, 
Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, 
DC 20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal Government 
identification, commenters are encouraged to leave their comments in 
the mail drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain 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 received after the comment 
period.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by mailing your 
comments to the addresses provided at the end of the ``Collection of 
Information Requirements'' section in this document.
    Submitting Comments: We welcome comments from the public on all 
issues set forth in this proposed rule to assist us in fully 
considering issues and developing policies. You can assist us by 
referencing the file code ASPE:LTCI and the specific ``issue 
identifier'' that precedes the section on which you choose to comment.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.Regulations.gov. Click on the link ``Comment or Submission'' on 
that Web site to view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Department of Health and Human Services, 200 Independence Avenue, SW., 
Washington, DC 20201, Monday through Friday of each week from 8:30 a.m. 
to 4 p.m. To schedule an appointment to view public comments, phone 1-
800-XXX-XXXX.

Electronic Access

    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. Free public access is available on a Wide 
Area Information Server (WAIS) through the Internet and via 
asynchronous dial-in. Internet users can access the database by using 
the World Wide Web; the Superintendent of Documents' home page address 
is http://www.gpoaccess.gov/, by using local WAIS client software, or 
by telnet to swais.access.gpo.gov, then login as guest (no password 
required). Dial-in users should use communications software and modem 
to call (202) 512-1661; type swais, then login as guest (no password 
required).

FOR FURTHER INFORMATION CONTACT: Hunter McKay, (202) 205-8999.

SUPPLEMENTARY INFORMATION:

I. Scope of This Proposed Rule

    This proposed rule describes the reporting requirements that we are 
proposing to require of all insurers that issue qualified long-term 
care insurance policies under the State Long-Term Care Partnership 
Program. In addition to publishing these regulations, The Department 
anticipates taking other actions to further the implementation of the 
Partnership for Long Term Care. One such action is publication in the 
near future of a Federal Register Notice containing Partnership State 
Reciprocity Standards. This standard outlines an agreement whereby 
states can provide Medicaid asset disregards for Partnership policies 
purchased in other states.

II. Background

    (If you choose to comment on issues in this section, please include 
the caption ``History of Partnership Programs'' at the beginning of 
your comment.)

A. Historical Overview of State Long-Term Care Partnership Programs

1. Initial Development of Programs
    In the late 1980's, a number of State Medicaid programs began to 
work with private insurance companies to create a bridge between 
Medicaid and insurance for long-term care. The goal of these 
collaborations was to create private insurance policies that were more 
affordable and provide better financial protection to consumers against 
large liabilities for long-term care costs than the policies generally 
available at that time. The result of these collaborations was the 
establishment of State Long-Term Care Partnership Programs that 
provided for expanded access to Medicaid by allowing applicants who use 
long-term care insurance policies to have higher assets and still be 
eligible for Medicaid. The additional amount of assets that an 
individual is allowed to have is equivalent to the amount paid by the 
insurance policy on his or her behalf. These State partnerships 
provided an incentive for insurers to offer affordable, high quality 
benefits and for consumers to protect themselves against the high cost 
of long-term care through the purchase of insurance policies that can 
be used in conjunction with benefits provided under Medicaid.
    Four States (California, Connecticut, Indiana, and New York) 
initially implemented Partnership Programs in 1993. As part of the 
implementation process, each State outlined a set of data reporting 
requirements for participating insurers. The data that were to be 
collected were intended to allow each

[[Page 30032]]

State to monitor program activities and evaluate the impact of the 
Partnership Program on Medicaid long-term care expenditures. The 
insurers who participated in these partnerships recommended, as part of 
the design of the data collection requirements, that the participating 
States use a unified set of reporting requirements to streamline the 
reporting burden on the participating insurers. The participating 
insurers believed that if each State designed its own reporting 
requirements, the administrative costs for the program would be 
prohibitive. The four States agreed with the participating insurers and 
adopted a uniform set of reporting criteria.
    The four initial States launched their Partnership Programs using 
existing State authority through amendments to their State Medicaid 
plans. Each State requested a change in the treatment of assets in the 
Medicaid financial eligibility test. No other Federal authority was 
necessary at that time to operate the programs.
2. Omnibus Reconciliation Act of 1993
    The Omnibus Reconciliation Act of 1993 (OBRA 1993), Public Law 103-
66, contained language that changed the conditions under which Medicaid 
State plan amendments relating to asset disregards for private long-
term care insurance could be approved. OBRA 1993 allowed California, 
Connecticut, Indiana, and New York, as well as Iowa and Massachusetts, 
to continue their initial Long-Term Care Partnership Programs. However, 
OBRA 1993 specified a set of requirements for any additional States 
that chose to operate a Partnership Program. Any State, other than the 
initial four partnership States, that sought a Medicaid State plan 
amendment on or after May 14, 1993 was required to abide by the 
following additional conditions:
a. Estate Recovery
    States establishing Long-Term Care Partnership Programs on or after 
May 14, 1993, were required to recover from the estates of Medicaid 
recipients in States with partnership agreements expenses incurred for 
the provision of long-term health care under Medicaid. Assets that were 
disregarded in the initial financial eligibility process were also 
exempt from estate recovery in the initial four States with Partnership 
Programs. States establishing new Partnership Programs were only 
allowed to disregard assets in the initial eligibility process but not 
in the estate recovery process. After a Medicaid recipient who had a 
long-term care insurance policy issued under a State Long-Term 
Partnership Program died, the State was required to recover an amount 
equivalent to what Medicaid spent on his or her behalf from the 
deceased recipient's estate, including any protected assets under the 
State Long-Term Care Partnership Program.
b. No Waiver of Estate Recovery
    States establishing Long-Term Care Partnership Programs on or after 
May 14, 1993, were precluded from waiving the estate recovery 
requirement for Medicaid recipients who had obtained long-term care 
insurance policies under a State Long-Term Care Partnership Program.
c. Expanded Definition of Estate
    States establishing Long-Term Care Partnership Program on or after 
May 14, 1993, were also required to use a specific definition of 
``estate'' for recovery purposes when recovery of Medicaid expenditures 
was against the estates of Medicaid recipients who had obtained long-
term care insurance policies issued under a State Long-Term Care 
Partnership Program. This definition was more expansive than the 
definition that was generally used by States.
    While OBRA 1993 did not forbid additional States from attempting to 
establish new Long-Term Care Partnership Programs under the new 
conditions, the impact was essentially the same as a ban. A few States 
tried unsuccessfully to launch partnership programs under the new 
conditions. Other interested States passed enabling legislation with 
contingency language that allowed the State to proceed if the OBRA 1993 
partnership provisions were repealed. No subsequent Federal legislation 
related to Long-Term Care Partnership Programs was enacted until Public 
Law 109-171 (the DRA of 2005). As discussed in detail under section 
II.A.3. of this proposed rule, the DRA of 2005 included provisions that 
allow States to offer specific asset disregards for Medicaid 
eligibility purposes under a new set of conditions.
3. Deficit Reduction Act (DRA) of 2005
    Section 6021(a)(1) of the DRA of 2005 amended section 
1917(b)(1)(C)(i) and added new sections 1917(b)(1)(C)(iii) through (vi) 
to the Act that provide for an expansion of State long-term care 
insurance partnerships through a new set of conditions. Under this 
provision, States may establish qualified State long-term care 
insurance partnerships, defined in the Act as an approved Medicaid 
State plan amendment under Title XIX of the Act that provides for the 
disregard of any assets or resources in an amount equal to the 
insurance benefit payments that are made to or on behalf of an 
individual who is a beneficiary under a long-term care insurance policy 
if certain requirements specified in sections 1917(b)(1)(C)(iii)(I) 
through (VII) of the Act are met. In other words, States establishing 
Partnership Programs must offer a dollar of asset disregard for every 
dollar paid out under a long-term care insurance policy issued under a 
State Long-Term Care Partnership Program.
    Section 1917(b)(1)(C)(iii)(II) of the Act provides that the 
insurance policy must be a qualified long-term care insurance policy as 
defined in section 7702B(b) of the Internal Revenue Code of 1986, that 
is issued not earlier than the effective date of the State plan 
amendment. (If an individual has an existing long-term care insurance 
policy that does not qualify as a qualified partnership policy due to 
the issue date of the policy, and that policy is exchanged for another 
policy, the State insurance commissioner or other State authority must 
determine the issue date for the policy that is received in exchange. 
Under this provision, a long-term care insurance policy includes a 
certificate issued under a group insurance contract.)
    Among other requirements specified in the statute for qualified 
long-term care insurance partnerships--
     The long-term care insurance policy must (1) be issued to 
an insured individual who is a resident of the State in which coverage 
first became effective under the policy (sections 1917(b)(1)(C)(iii)(I) 
of the Act); (2) be certified by the State insurance commissioner or 
other appropriate authority that the policy meets specific provisions 
of the National Association of Insurance Commissioners (NAIC) October 
2000 Model Regulation and Model Act (sections 1917(b)(1)(C)(iii)(III) 
and 1917(b)(5)(B) of the Act); and (3) include certain protections 
against inflation on an annual basis (section 1917(b)(1)(C)(iii)(IV) of 
the Act).
     The State Medicaid agency must provide information and 
technical assistance to the State insurance department on the insurance 
department's role of assuring that any individual who sells a long-term 
care insurance policy under the partnership receives training and 
demonstrates evidence of an understanding of such policies and how they 
relate to other public and private coverage of long-term care (section 
1917(b)(1)(C)(iii)(V) of the Act).
     Issuers of long-term care insurance policies under a State 
qualified long-

[[Page 30033]]

term care insurance partnership must provide regular reports to the 
Secretary, in accordance with regulations of the Secretary, that 
include notification regarding when benefits provided under the policy 
have been paid and the amount of such benefits paid, notification 
regarding when the policy otherwise terminates, and such other 
information as the Secretary determines may be appropriate to the 
administration of State long-term care insurance partnerships (section 
1917(b)(1)(C)(iii)(VI) of the Act). Section 1917(b)(1)(C)(v) of the Act 
provides that the regulations required under section 
1917(b)(1)(C)(iii)(VI) of the Act shall be promulgated after 
consultation with the NAIC, issuers of long-term care insurance 
policies, States with experience with long-term care insurance 
partnership plans, other States, and representatives of consumers of 
long-term care insurance policies, and shall specify the type and 
format of the data to be reported and the frequency with which such 
reports are to be made. In addition, the Secretary, as appropriate, 
shall provide copies of the reports provided in accordance with that 
clause to the State involved.
     The State may not impose any requirement affecting the 
terms of benefits of a policy under the partnership program unless the 
State imposes such requirement on long-term care insurance policies 
without regard to whether the policy is covered under the partnership 
or is offered in connection with such a partnership (section 
1917(b)(1)(C)(iii)(VII) of the Act).
    Section 1917(b)(1)(C)(iv) of the Act provides that a State that had 
a State plan amendment approved as of May 14, 1993, satisfies the 
requirements of the statute under clause (II) and may continue as a 
qualified partnership program if the Secretary determines that the 
State plan amendment provides for consumer protection standards that 
are no less stringent than the consumer protection standards that 
applied under such a State plan amendment as of December 31, 2005.

B. Implementing Regulations

    Currently, there are no Federal regulations directly related to 
State operation of State Long-Term Care Partnership Programs. In areas 
in which the program coordinates benefits with Medicaid coverage of 
long-term care, the existing Medicaid regulations at 42 CFR Chapter IV, 
Subchapter C, are applicable. In 2006, States were provided with 
guidance on the implementation of State Long-Term Care Partnership 
Programs under the DRA of 2005.
    To implement section 1917(b)(1)(C)(iii)(VI) and 1917(b)(1)(C)(iv) 
of the Act, as directed by the statute, we are proposing to set forth 
in regulations the requirements for reporting information and data on 
qualified long-term care insurance policies issued under State Long-
Term Care Partnership Programs under an approved State plan amendment.

C. States Currently Operating Long-Term Care Partnership Programs

    California, Connecticut, Indiana, Iowa, Massachusetts, and New York 
had approved State Long-Term Partnership Programs under an approved 
State plan amendment as of May 14, 1993. They were ``grandfathered'' as 
satisfying the statutorily imposed requirements when pursuant to 
section 1917(b)(1)(C)(iv) of the Act, the Secretary determined that the 
State plan amendments of these States provide protection no less 
stringent than that applied under their State plan amendments as of 
December 31, 2005.
    As of December 2007, seven other States offer State Long-Term Care 
Partnership policies for sale under the DRA provisions: Florida, Idaho, 
Kansas, Minnesota, Nebraska, South Dakota, and Virginia. Nine States 
have approved State plan amendments for qualified State Long-Term Care 
Partnership Programs although policies had not yet been issued pursuant 
to those programs: Colorado, Florida, Georgia, Iowa, Minnesota, 
Missouri, North Dakota, Nevada, Ohio, and Oregon. Four States have 
submitted State plan amendments for which approval is pending: Arizona, 
New Hampshire, Oklahoma, and Pennsylvania. Ten other States are in the 
process of developing Partnership Programs: Illinois, Maine, Maryland, 
Michigan, Montana, New Jersey, Rhode Island, Texas, Vermont, and 
Wisconsin.

III. Provisions of This Proposed Rule

A. Legislative Authority

    As stated earlier, the DRA of 2005 requires insurers participating 
in State Long-Term Care Partnership Programs to provide regular reports 
to the Secretary in a manner in accordance with regulations of the 
Secretary. The reports must include notification regarding when 
benefits provided under the policy have been paid and the amount of the 
benefits paid, notification regarding when the policy otherwise 
terminates, and any other information as the Secretary determines may 
be appropriate to the administration of State long-term care insurance 
partnerships. Section 1917(b)(1)(C )(iv) of the Act provides that the 
regulations required under section 1917(b)(1)(C)(iii)(VI) must be 
promulgated after consultation with the NAIC, issuers of long-term care 
insurance policies, States with experience with long-term care 
insurance partnership plans, other States, and representatives of 
consumers of long-term care insurance policies, and must specify the 
type and format of the data to be reported and the frequency with which 
the reports are to be made. In addition, the Secretary, as appropriate, 
must provide copies of the reports provided in accordance with that 
clause to the State involved.

B. Collaboration With States, Insurers, Insurance Regulators, and 
Consumers in the Development of Reporting Requirements

    (If you choose to comment on issues in this section, please include 
the caption ``Consultations with Stakeholders'' at the beginning of 
your comment.)
    In accordance with section 1917(b)(1)(C)(iv) of the Act, as added 
by the DRA of 2005, we have consulted with numerous stakeholders in the 
development of the reporting requirements presented in this proposed 
rule. In addition to one-on-one consultations with stakeholders 
representing States, insurers, consumers, and regulators, we have 
established a Technical Expert Panel to provide a forum for the 
exchange of ideas, perspectives, and expertise regarding the 
specification of individual data items. The Technical Expert Panel 
consists of approximately 25 members representing insurers, States, 
consumer organizations, the NAIC, the Federal Government, and the 
policy research community. The panel members were selected in January 
2007, from responses to invitations sent by HHS along with an initial 
draft of the reporting requirements. We held numerous meetings and 
teleconferences with the panel members to discuss and further develop 
the draft reporting requirements and to obtain further input on 
partnership implementation. The reporting requirements presented in 
this proposed rule represent the product of this ongoing stakeholder 
input process. We plan to work on an ongoing basis with the Technical 
Expert Panel.

C. Specific Proposed Reporting Requirements

    (If you choose to comment on issues in this section, please include 
the caption ``Types of Data to be Reported'' at the beginning of your 
comment.)

[[Page 30034]]

    In consultation with stakeholders and the Technical Expert Panel, 
we have developed proposed requirements for insurers for reporting data 
under the State Long-Term Care Partnership Program under two 
categories: (1) Registry data; and (2) claims data. These two 
categories would require the submission of data in four distinct file 
types. Generally, participating long-term care insurers would report 
under only two of these files. For all four file types, we are 
proposing to require insurers to report on only those insured 
individuals, policyholders, and claimants who have active qualified 
long-term care insurance partnership policies or certificates. The 
proposed reporting requirements would not apply to insurance policies 
or certificates that are not partnership qualified.
    Insurer reporting specifications would be detailed in an HHS 
document entitled ``State Long-Term Care Partnership Insurer Reporting 
Requirements'' which we expect will be available from http://aspe.hhs.gov/daltcp/reports/2008/PartRepReq.pdf no later than June 1, 
2008. We are in the process of developing an integrated database 
through which insurers would submit these data. We are proposing that 
data would be submitted through a secure Web site that meets all 
current Health Insurance Portability and Accountability Act 
requirements for security of personal health information.
1. Registry Data
    We are proposing to require insurers to report data, on a 
semiannual basis, on all insured individuals who have been issued 
qualified long-term care insurance policies or certificates under 
qualified State Long-Term Care Partnership Programs; that is, for the 
6-month reporting periods of January 1 through June 30 and July 1 
through December 31 of each year. The reports must include data on 
qualified long-term care insurance partnership policies sold on either 
an individual basis or a group basis, as long as individual-level data 
are available to the insurer. These data include, but are not limited 
to, the following:
     Current identifying information on each insured 
individual.
     The name of the insurance company and the issuing State.
     The effective date and terms of coverage under the policy.
     The coverage period and benefits.
     The annual premium.
     Other information as specified by the Secretary in ``State 
Long-Term Care Insurance Partnership Insurer Reporting Instructions.''
2. Claims Data
    We are proposing to require insurers to report data, for each 
quarter of the calendar year, on all benefit claims paid for all 
insured individuals who have been issued qualified long-term care 
insurance policies or certificates (individual policies or under group 
coverage plans) under qualified State Long-Term Care Partnership 
Programs. These data include, but are not limited to, the following:
     Current identifying information on the insured individual.
     The type and cash amount of the benefits paid during the 
reporting period and lifetime to date.
     Remaining lifetime benefits.
     Other information as specified by the Secretary in ``State 
Long-Term Care Insurance Partnership Insurer Reporting Instructions.''
3. Frequency of Reports and Deadlines for Submission
    (If you choose to comment on issues in this section, please include 
the caption ``Frequency and Deadlines for Reports'' at the beginning of 
your comment.)
    We are proposing to require insurers to submit data for different 
reporting periods, depending upon the file type.
    We are proposing to require insurers to submit the required 
registry data to the Secretary on a semiannual basis; that is, for the 
6-month reporting period of January 1 through June 30 and July 1 
through December 31 of each year. The proposed deadline for submittal 
of registry data reports is 30 days after the end of the reporting 
period.
4. Transition Provision
    For insurers who have issued or exchanged a qualified Partnership 
policy prior to the effective date of the final regulations we issue, 
we are proposing a transition provision. We are proposing that the 
first reports required for these insurers will be the reports that 
pertain to the reporting period that begins no more than 120 days after 
the effective date of the final regulations.
5. Format and Manner of Reporting Data
    (If you choose to comment on issues in this section, please include 
the caption ``Format for Reports'' at the beginning of your comment.)
    We are proposing to require that insurers submit the required data 
in the format and manner specified by the Secretary in the HHS-issued 
insurer reporting specifications document, ``State Long-Term Care 
Insurance Partnership Insurer Reporting Instructions.'' As we mentioned 
earlier, we are in the process of developing an integrated database 
that would be accessible through a secure Web site, and we plan to 
issue instructions as to how insurers would access and input the 
required data into the HHS reporting system.
6. Use of Submitted Reports
    (If you choose to comment on issues in this section, please include 
the caption ``Use of Reports'' at the beginning of your comment.)
    The overall purpose of the data is twofold, first to be used in 
efforts to monitor program performance at both the state and federal 
level, and second to provide data for a longer-term evaluation of the 
effectiveness of the Partnership program. HHS and the States 
participating in the State Long-Term Care Partnership Program would use 
the information provided by insurers in compliance with the proposed 
reporting requirements for analytical studies and for program 
monitoring. The data provided by each insurer would reflect the 
combined experience of all State Long-Term Care Partnership Programs in 
terms of policies sold and benefits used. We plan to use the data to 
produce reports for Congress and other interested stakeholders on the 
implementation of the State Long-Term Care Partnership Program. In 
addition, we plan to use the data to generate individual State-level 
reports that would be used by the States to track the implementation of 
the Partnership Program at the State level.
    HHS does not intend to use the data to determine asset disregard 
levels for individuals who participate in the State Long-Term Care 
Partnership Program and eventually apply for Medicaid coverage. We 
would not collect data on ``point in time'' information regarding the 
amount of insurance benefits used by claimants, nor exact information 
on when private insurance benefits may be exhausted, which clearly 
would depend upon how claimants use benefits to purchase long-term care 
services. The computation of asset disregard levels and the 
determination of Medicaid eligibility coverage are matters that will be 
dealt with among the insurer, the insured individual, and the State 
Medicaid eligibility office. We expect that when insured individuals 
exhaust their insurance coverage (or otherwise become eligible for 
Medicaid prior to the exhaustion of benefits), insurers will provide 
them with documentation of their participation in the State Long-Term 
Care Partnership Program and of the amount of benefits that the insured 
received. This documentation will become part of the entire 
documentation provided by the insured individual at

[[Page 30035]]

the time he or she applies for Medicaid. The Medicaid eligibility 
office will then determine, based upon the documentation provided by 
the applicant, the asset disregard level that will be applied.
    It is possible that State Medicaid programs may wish to access the 
collected data for monitoring purposes, to help them anticipate the 
number of insured individuals who may become eligible for Medicaid 
asset disregards over a projected time period. For example, through 
reports provided to each State from the integrated database, States 
would know how many partnership policyholders are ``in claim'' during 
any 3-month reporting period. States would also know, approximately, to 
what extent policyholders who are in claim have utilized the insurance 
benefits for which they are eligible and the amount of benefits 
remaining under their policy maximums. However, once an insured 
individual exhausts his or her insurance benefits under the policy, his 
or her eligibility for Medicaid would still depend upon the amount of 
available assets he or she retains, relative to his or her asset 
disregard, as well as other Medicaid eligibility criteria. For example, 
an insured individual may be eligible for an asset disregard of 
$150,000, but still retains $250,000 in countable assets. In this case, 
he or she would have to spend down $100,000 of his or her available 
assets before applying for Medicaid coverage. Thus, in general terms, 
States would be able to use the data to project future applications for 
Medicaid (and their potential budgetary impacts) but, at the individual 
level, the specific financial circumstances of each insured individual 
would determine his or her eligibility for Medicaid coverage.

D. Additional State-Mandated Reporting Requirements

    (If you choose to comment on issues in this section, please include 
the caption ``Additional State Reporting'' at the beginning of your 
comment.)
    The DRA explicitly states that there is nothing in the statute that 
prohibits States from imposing additional reporting requirements on 
insurers participating in the Long-Term Care Partnership Program, 
beyond the Federal reporting requirements that we are proposing in this 
proposed rule. However, we believe that the information that would be 
made available to the Secretary and to the States participating in the 
Long-Term Care Partnership Program through these proposed mandated 
reporting requirements would be sufficient to meet the policy analysis 
and program monitoring needs of the States. We, as well as the 
stakeholders participating in the development of these proposed 
reporting requirements, attempted to achieve a proper balance between 
the legitimate needs of the Federal Government and State governments to 
monitor the implementation and operation of the State Long-Term Care 
Partnership Program, and the desire not to impose undue cost burdens on 
participating insurers, to the point where they may consider it not 
economically beneficial to participate in the Partnership Program.

E. Confidentiality of Information

    (If you choose to comment on issues in this section, please include 
the caption ``Confidentiality'' at the beginning of your comment.)
    We are proposing to provide in the regulations that the data 
collected and reported under the requirements of the regulations in 
this proposed rule would be subject to the confidentiality of 
information requirements specified in regulations under 42 CFR Part 
401, Subpart B, and 45 CFR Part 5, Subpart F and any other applicable 
confidentiality statute or regulation.

F. Provision of Reports to Partnership States

    (If you choose to comment on issues in this section, please include 
the caption ``Furnishing Reports to States'' at the beginning of your 
comment.)
    Section 1917(b)(1)(C)(v) of the Act provides that the Secretary, as 
appropriate, must provide copies of the reports provided by insurers to 
the State involved. We plan to make reports containing the reported 
data available to States in a timely and efficient manner.

G. Incorporation of Reporting Requirements in the Code of Federal 
Regulations

    (If you choose to comment on issues in this section, please include 
the caption ``Regulation Text'' at the beginning of your comment.)
    We are proposing to establish under Title 45, Subtitle A, 
Subchapter B, Part 144 of the Code of Federal Regulations a new Subpart 
B to incorporate the requirements for the reporting of data by insurers 
on qualified long-term care insurance policies issued under State Long-
Term Care Partnership Programs that are established under an approved 
Medicaid State plan amendment.
    Specifically--
    Proposed Sec.  144.200 contains the basis for the regulations.
    Proposed Sec.  144.202 includes definitions used throughout the 
subpart.
    Proposed Sec.  144.204 specifies the applicability of the 
regulations under the subpart.
    Proposed Sec.  144.206 specifies the requirements for reporting of 
long-term care partnership program data and the frequency with which 
insurers must report the data.
    Proposed Sec.  144.208 specifies the deadlines for submission of 
reports.
    Proposed Sec.  144.210 specifies the format and manner in which the 
data are to be reported.
    Proposed Sec.  144.212 specifies the confidentiality of information 
requirements that will be applied.
    Proposed Sec.  144.214 specifies the action that the Secretary will 
take if an insurer fails to report the required data by the specified 
deadlines.

IV. Response to Public Comments

    Because of the large number of public comments that we normally 
receive on Federal Register documents, 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 the 
preamble of this proposed rule, and, when we proceed with a subsequent 
document, we will respond to the comments in the preamble to that 
document.

V. Collection of Information Requirements

    The Department of Health and Human Services has determined that 
this notice of proposed rulemaking contains information collections 
that are subject to review by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520). 
In compliance with the requirement of section 3506(c)(2)(A) of the PRA, 
the Office of the Secretary (OS), Department of Health and Human 
Services, is publishing the following summary of a proposed information 
collection request for public comment. Further, the Department 
acknowledges that this regulation is covered under the Privacy Act and 
that this collection of data constitutes a System of Records. The 
Department anticipates publishing a System of Records Notice. 
Interested persons are invited to send comments regarding this burden 
estimate or any other aspect of this collection of information, 
including any of the following subjects: (1) The necessity and utility 
of the proposed information collection for the proper performance of 
the agency's functions; (2) the accuracy of the estimated burden; (3) 
ways to enhance the quality, utility, and clarity of the information to 
be collected; and (4) the use of automated collection

[[Page 30036]]

techniques or other forms of information technology to minimize the 
information collection burden.
    To obtain copies of the supporting statement and any related forms 
for the proposed paperwork collections described below, e-mail your 
request, including your name, address, phone number, as well as the 
caption ``Collection of Information Requirements'' at the beginning of 
your comment, to [email protected], or call the Reports 
Clearance Office on (202) 690-6162. Written comments and 
recommendations for the proposed information collections must be 
received with 60 days.
    Title: Partnership for Long-Term Care Insurer Reporting 
Requirements.
    Description: This information collected under the proposed rule is 
intended for insurers participating in the Partnership for Long-Term 
Care as authorized by the Deficit Reduction Act of 2005. Insurers will 
provide data in the proscribed format to the Department on Partnership 
certified long-term care insurance policies. The requirements include 
the identity of the policy holder, the type of coverage purchased and 
the amount of insurance benefits used. Data from this submission will 
be provided to state Medicaid agencies to assist in determining the 
amount of asset protection earned by program participants.
    It is estimated that insurers participating in the Partnership will 
be able to provide the necessary reports from data currently within 
their insurance operations systems. Fulfilling the reporting 
requirements will require that they write programs to extract the data 
in the manner specified by the Department. There are no costs to the 
respondents, other than their time.

                                                   Estimated Annualized Burden Hours and Burden Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Average
                                                                                         Number of        Number of       response per     Total burden
                   CFR section                            Type of respondent            respondents     responses per    respondent (in       hours
                                                                                                         respondents         hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45 CFR 144.206..................................  Insurers..........................              30                6            45/60              135
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Public comments addressed as a result of this notice will be taken 
into account in the formal OMB request for clearance for this data 
collection. Prior to the effective date of this final rule, HHS will 
publish a notice in the Federal Register announcing OMB's decision to 
approve, modify, or disapprove the new information collection 
provisions in the final rule. An agency may not conduct or sponsor, and 
a person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number.

VI. Regulatory Impact Analysis

    (If you choose to comment on issues in this section, please include 
the caption ``Impact'' at the beginning of your comment.)

A. Overall Impact

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

B. Executive Order 12866

    Executive Order 12866 (as amended by Executive Order 13258, which 
merely reassigns responsibility of duties) directs agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
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 analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year).
    While we have determined that this proposed rule is not 
economically significant, it is however a significant regulatory 
action. We estimate that the aggregate cost to participating private 
insurers of implementing the reporting requirements in this proposed 
rule would be approximately $1,500,000.

C. Regulatory Flexibility Act (RFA)

    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most insurance companies are not considered to be small entities 
because they generally have revenues of more than $29 million in any 1 
year. (For details, see the Small Business Administration's final rule 
that sets forth size standards for industries at 65 FR 69432, November 
17, 2000.) For purposes of the RFA, all insurance companies are not 
considered to be small entities. Individuals and States are not 
included in the definition of a small entity. However, we are 
soliciting comments on our estimates and analysis of the impact of this 
proposed rule on insurers.
    There are approximately 100 insurance companies located nationwide 
that issue long-term care insurance policies. We expect that, of these 
100 companies, approximately 30 insurance companies will participate in 
qualified State Long-Term Care Partnership Programs. Currently, there 
are 15 to 20 companies operating in States that are selling or have 
issued qualified long-term care insurance policies under the State 
Long-Term Care Partnership Programs. As of December 2007, approximately 
300,000 policies have been sold. We believe this represents 
approximately 80 percent of the policies that might be sold when the 
Partnership Programs are established nationwide. We anticipate that the 
number of insurance companies selling qualified long-term care 
insurance partnership policies might increase by about 10 as more 
States obtain approved State plan amendments to operate State Long-Term 
Care Partnership Programs.
    As we stated earlier, insurers participating in the original four 
Partnership Programs have been reporting data on policies sold and 
benefits used in the program for more than a decade. The proposed 
reporting requirements in this proposed rule were designed to take 
advantage of data already available in insurer data sets. Insurers 
would not be asked to collect new data, but simply to recode existing 
data into a common format for submission to the Secretary. It is 
estimated that participating insurers would have to make a one-time 
investment to produce the computer programs necessary to compile the 
reports. Should the reporting requirement change in the future there 
will also be a cost to make the necessary changes. We are estimating 
that the

[[Page 30037]]

programming would require 400 hours of labor on average (this number 
will vary widely by company depending the type of systems used) to 
create the necessary changes. We also estimate an average cost per hour 
of programming time of $125. The cost per company is estimated at 
$50,000 and the total estimate for all companies is estimated at $1.5 
million.
    Subsequently, there would be a much smaller investment to run the 
quarterly and semi-annually reports. The data submissions were designed 
to be primarily snapshots of data elements in the insurers' files with 
very little tabulation or summary reporting. We note that all of the 
currently participating insurers participated in the development of the 
proposed reporting requirements in this proposed rule and have given 
their consensus to the proposed requirements.

D. Small Rural Hospitals

    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis for any proposed rule (and subsequent final 
rule) that may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 603 of the RFA. This proposed rule does 
not affect small rural hospitals.

E. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4) also requires that agencies assess anticipated costs and 
benefits before issuing any rule whose mandates require spending in any 
1 year of $100 million in 1995 dollars, updated annually for inflation. 
That threshold level is currently approximately $120 million. This 
proposed rule would not mandate any requirements for State, local, or 
tribal governments. However, it would affect private sector costs to 
insurance companies who sell qualified long-term care insurance 
partnership policies. We note that participation by insurers in the 
Partnership Program is voluntary. We have also determined that the 
costs of reporting the required data are not significant.

F. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. As stated above, this proposed rule would not have a 
substantial effect on State and local governments.

List of Subjects in 45 CFR Part 144

    Health care, Health insurance, Reporting and recordkeeping.

    For the reasons stated in the preamble of this proposed rule, we 
are proposing to amend 45 CFR subtitle A, subchapter B, part 144 as set 
forth below:

Subchapter B--Requirements Relating to Health Care Access

PART 144--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE

    1. The authority citation for part 144 is revised to read as 
follows:

    Authority: Secs. 2701 through 2763, 2791, and 2792 of the Public 
Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, 
300gg-92 as amended by HIPAA (Pub. L. 104-191, 110 Stat. 1936), MHPA 
(Pub. L. 104-204, 110 Stat. 2944, as amended by Pub. L. 107-116, 115 
Stat. 2177), NMHPA (Pub. L. 104-204, 110 Stat. 2935), WHCRA (Pub. L. 
105-227, 112 Stat. 2681-436)) and section 103(c)(4) of HIPAA; and 
secs. 1102 and 1917(b)(1)(C)(iii)(VI) of the Social Security Act (42 
U.S.C. 1302 and 1396p(b)(1)(C)(iii)(VI)).

    2. A new subpart B is added to read as follows:
Subpart B--Qualified State Long-Term Care Insurance Partnerships: 
Reporting Requirements for Insurers
Sec.
144.200 Basis.
144.202 Definitions.
144.204 Applicability of regulations.
144.206 Reporting requirements.
144.208 Deadlines for submission of reports.
144.210 Form and manner of reports.
144.212 Confidentiality of information.
144.214 Actions for noncompliance with reporting requirements.

Subpart B--Qualified State Long-Term Care Insurance Partnerships: 
Reporting Requirements for Insurers


Sec.  144.200  Basis.

    This subpart implements--
    (a) Section 1917(b)(1)(C) (iii)(VI) of the Social Security Act, 
(Act) which requires the issuer of a long-term care insurance policy 
issued under a qualified State long-term care insurance partnership to 
provide specified regular reports to the Secretary. (b) Section 
1917(b)(1)(C)(v) of the Act, which specifies that the regulations of 
the Secretary under section 1917(b)(1)(C) (iii)(VI) of the Act shall be 
promulgated after consultation with the National Association of 
Insurance Commissioners, issuers of long-term care insurance policies, 
States with experience with long-term care insurance partnership plans, 
other States, and representative of consumers of long-term care 
insurance policies, and shall specify the type and format of the data 
to be reported and the frequency with which such reports are to be 
made. This section of the statute also provides that the Secretary 
provide copies of the reports to the States involved.


Sec.  144.202  Definitions.

    As used in this subpart--
    Partnership qualified policy refers to a qualified long-term 
insurance policy issued under a qualified State long-term care 
insurance partnership.
    Qualified long-term insurance care policy means an insurance policy 
that has been determined by a state insurance commissioner to meet the 
requirements of sections 1917(b)(1)(C)(iii)(I) through (IV) and 
1917(b)(5) of the Act. It includes a certificate issued under a group 
insurance contract.
    Qualified State long-term care insurance partnership means an 
approved Medicaid State plan amendment that provides for the disregard 
of any assets or resources in an amount equal to the insurance benefit 
payments that are made to or on behalf of an individual who is a 
beneficiary under a long-term care insurance policy that has been 
determined by a state insurance commissioner to meet the requirements 
of section 1917(b)(a)(C)(iii) of the Act. It includes any Medicaid 
State plan amendment approved as of May 4, 1993, that meets the 
requirements of section 1917(b)(1)(C)(iii) of the Act and for which the 
Secretary determines that the State plan amendment provides for 
consumer protection standards that are no less stringent than the 
consumer protection standards that applied under the State plan 
amendment as of December 31, 2005.


Sec.  144.204  Applicability of regulations.

    The regulations contained in this subpart for reporting data apply 
only to those insurers that have issued qualified long-term care 
insurance policies to individuals under a qualified State long-term 
care insurance partnership.


Sec.  144.206  Reporting requirements.

    (a) General requirement. Any insurer that sells a qualified long-
term care insurance policy under a qualified State long-term care 
insurance partnership must submit, in accordance with the requirements 
of this section, data on insured individuals, policyholders, and 
claimants who have active partnership

[[Page 30038]]

qualified policies or certificates for a reporting period.
    (b) Specific requirements. Insurers of qualified long-term care 
insurance policies must submit the following data to the Secretary by 
the deadlines specified in paragraph (c) of this section:
    (1) Registry of active individual and group partnership qualified 
policies or certificates. (i) Insurers must submit data on--
    (A) Any insured individual who held an active partnership qualified 
policy or certificate at any point during a reporting period, even if 
the policy or certificate was subsequently cancelled, lost partnership 
qualified status, or otherwise terminated during the reporting period; 
and
    (B) All active group long-term care partnership qualified insurance 
policies, even if the identity of the individual policy/certificate 
holder is unavailable.
    (ii) The data required under paragraph (b)(1)(i) of this section 
must cover a 6-month reporting period of January through June 30 or 
July 1 through December 31 of each year; and
    (iii) The data must include, but are not limited to--
    (A) Current identifying information on the insured individual;
    (B) The name of the insurance company and issuing State;
    (C) The effective date and terms of coverage under the policy.
    (D) The annual premium.
    (E) The coverage period.
    (F) Other information, as specified by the Secretary in ``State 
Long-Term Care Partnership Insurer Reporting Instructions.''
    (2) Claims paid under partnership qualified policies or 
certificates. Insurers must submit data on all partnership qualified 
policies or certificates for which the insurer paid at least one claim 
during the reporting period. This includes data for employer-paid core 
plans and buy-up plans without individual insured data. The data must--
    (i) Cover a quarterly reporting period of 3 months;
    (ii) Include, but are not limited to--
    (A) Current identifying information on the insured individual;
    (B) The type and cash amount of the benefits paid during the 
reporting period and lifetime to date;
    (C) Remaining lifetime benefits;
    (D) Other information, as specified by the Secretary in ``State 
Long-Term Care Partnership Insurer Reporting Instructions.''


Sec.  144.208  Deadlines for submission of reports.

    (a) Transition provision for insurers who have issued or exchanged 
a qualified partnership policy prior to the effective date of these 
regulations. The first reports required for these insurers will be the 
reports that pertain to the reporting period that begins no more than 
120 days after the effective date of the final regulations.
    (b) All reports on the registry of qualified long-term care 
insurance policies issued to individual and individuals under group 
coverage specified in Sec.  144.206(b)(1)(ii) must be submitted within 
30 days of the end of the 6-month reporting period.
    (c) All reports on the claims paid under qualified long-term care 
insurance policies issued to individual and individuals under group 
coverage specified in Sec.  144.206(b)(2)(i) must be submitted within 
30 days of the end of the 3-month quarterly reporting period.


Sec.  144.210  Form and manner of reports.

    All reports specified in Sec.  144.206 must be submitted in the 
form and manner specified by the Secretary in insurer reporting 
instructions.


Sec.  144.212  Confidentiality of information.

    Data collected and reported under the requirements of this subpart 
are subject to the confidentiality of information requirements 
specified in regulations under 42 CFR part 401, subpart B, and 45 CFR 
part 5, subpart F.


Sec.  144.214  Notifications of noncompliance with reporting 
requirements.

    If an insurer of a qualified long-term care insurance policy does 
not submit the required reports by the due dates specified in this 
subpart, the Secretary notifies the appropriate State insurance 
commissioner within 45 days after the deadline for submission of the 
information and data specified in Sec.  144.208.

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

    Dated: February 12, 2008.
Ben Sasse,
Assistant Secretary for Planning and Evaluation.
    Dated: February 12, 2008.
Michael O. Leavitt,
Secretary.

    Editorial Note: The Office of the Federal Register received this 
document on May 20, 2008.]
 [FR Doc. E8-11559 Filed 5-22-08; 8:45 am]
BILLING CODE 4120-01-P