Appendix — Oklahoma Department of Human Services v. Trust Co. of Oklahoma

Supreme Court brief1992

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91-19 46

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1992

STATE OF OKLAHOMA ex rel.

DEPARTMENT OF HUMAN SERVICES

Petitioner,

Vv.

TRUST COMPANY OF OKLAHOMA, guardian

of the estate of Ellen Lee Barker,

a minor child,

Respondent.

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

Richard W. Freeman, Jr.

Howard J. Pallotta

Assistant General Counsel

Department of Human Services

P. O. Box 53025

Oklahoma City, OK 73152-3025

(405) 521-3630

Attorney for Petitioner State of

Oklahoma ex rel. Department of

Human Services

APPENDIX I

42 U.S.C. §1396a

MEDICAL ASSISTANCE

PROGRAMS

‘

$1396a. State plans for medical assistance

(a) Contents

A State plan for medical assistance

must--

(1) provide that it shall be in

effect in all political subdivisions

of the State, and, if administered by

them, be mandatory upon them;

(2) provide for financial

participation by the State equal to

not less than 40 per centum of the

non-Federal share of the expenditures

under the plan with respect to which

payments under section 1396b of this

title are authorized by this subchap-

ter; and, effective July 1, 1969,

provide for financial participation by

the State equal to all of such non-

Federal share or provide for

distribution of funds from Federal or

State sources, for carrying out the

State plan, on an equalization or

other basis which will assure that the

lack of adequate funds from local

sources will not result in lowering

the amount, duration, scope, or

quality of care and services available

under the plan;

(3) provide for granting an

opportunity for a fair hearing before

the State agency to any individual

whose claim for medical assistance

under the plan is denied or is not

acted upon with reasonable promptness;

(4) -provide (A) such methods of

administration (including methods

relating to the establishment and

maintenance of personnel standards on

& merit basis, except that’ the

Secretary shall exercise no authority

with respect to the selection, tenure

of office, and compensation of any

individual employed in accordance with

APP. 1

such methods, and including provision

for utilization of professional

medical personnel in the administra-

tion and, where administered locally,

supervision of administration of the

plan) as are found by the Secretary to

be necessary for the proper and

efficient operation of the plan, (B)

for the training and effective use of

paid subprofessional’_ staff, with

particular emphasis on the full-time

or part-time employment of recipients

and other persons of low income, as

community service aides, in the

administration of the plan and for the

use of nonpaid or partially paid

volunteers in a social service

volunteer program in providing

services to applicants and recipients

and in assisting any advisory

committees established by the State

agency, and (C) that each State or

local officer or employee who is

responsible for the expenditure of

substantial amounts of funds under the

State plan, each individual who

formerly was such an officer or

employee, and each partner of such an

officer or employee shall be

prohibited from committing any act, in

relation to any activity under the

plan, the commission of which, in

connection with any activity concern-

ing the United States Government, by

an officer or employee of the United

States Government, an individual who

was such an officer or employee, or a

partner of such an officer or employee

: ,

APP. 1

is prohibited by section 207 or 208 of

Title 18;

(5) either provide for’ the

establishment or designation of a

single State agency to administer or

to supervise the administration of the

plan; or provide for the establishment

or designation of a single State

agency to administer or to supervise

the administration of the plan, except

that the determination of eligibility

for medical assistance under the plan

shall be made by the State or local

agency administering the State plan

approved under subchapter I or XVI of

this chapter (insofar as it relates to

the aged) if the State is eligible to

participate in the State plan program

established under subchapter XVI of

this chapter, or by the agency or

agencies administering the

supplemental security income program

established under subchapter XVI or

the State plan approved under part A

of subchapter IV of this chapter if

the State is not eligible to

participate in the State plan program

established under subchapter XVI of

this chapter;

(6) provide that the State agency

wili make such reports, in such form

and containing such information, as

the Secretary may from time to time

require, and comply with such provi-

sions as the Secretary may from time

to time find necessary to assure the

correctness and verification of such

reports;

APP. 1

(7) provide safeguards which

restrict the use or disclosure of

information concerning applicants and

recipients to purposes directly

connected with the administration of

the plan;

(8) provide that all individuals

wishing to make application for

medical assistance under the plan

shall have opportunity to do so, and

that such assistance shall be

furnished with reasonable promptness

to all eligible individuals;

(9) provide--

(A) that the State health agency,

or other appropriate State

medical agency (whichever is

utilized by the Secretary for the

purpose specified in the first

sentence of section 1395aa(a) of

this title), shall be responsible

for establishing and maintaining

health standards for private or

public institutions in which

recipients of medical assistance

under the plan may receive care

or services,

(B) for the establishment or

designation of a State authority

or authorities which shall be

responsible for establishing and

maintaining standards, other than

those relating to health, for

such institutions, and

paid for under such plan must be

provided by a laboratory which

meets the applicable requirements

of section 1395x(e)(9) of this

APP. 1

title or paragraphs (13) and (14)

of section 1395x(s) of this

title, or, in the case of a

laboratory which is in a rural

health Clinic, of section

1395x(aa)(2)(G) of this title;

(10) provide--

(A) for making medical assistance

available, including at least the

care and services listed in

paragraphs (1) through (5), (17)

and (21) of section 1396d(a) of

this title, to--

(1) all individuals-

(I) who are receiving aid or

assistance under any plan of the

State approved under subchapter

I, X, XIV, or XVI of this

chapter, or part A or part E of

subchapter IV of this chapter

(including individuals eligible

under this subchapter by reason

of section 602(a)(37), 606(h), or

673(b) of this title, or

considered by the State to be

receiving such aid as authorized

under section 682(e)(6) of this

title),

(II) with respect to whom

supplemental security income

benefits are being paid under

subchapter XVI of this chapter or

who are qualified severely

impaired individuals (as defined

in section 1396d(q) of this

title),

(III) who are qualified pregnant

women or children as defined in

section 1396d(n) of this title,

APP. 1

(IV) who are described in

subparagraph (A) or (B) of

subsection (1)(1) of this section

and whose family income does not

exceed the minimum income level

the State is required to

establish under subsection

(1)(2)(A) of this section for

such a family;

(V) who are qualified family

members as defined in section

1396d(m)(1) of this title;

(VI) who are described in

subparagraph (C) of subsection

(1)(1) of this section and whose

family income does not exceed the

income level the State is

required to establish under

subsection (1)(2)(B) of this

section for such a family, or

(VII) who are described in

subparagraph (D) of subsection

(1)(1) of this section and whose

family income does not exceed the

income level the State is

required to establish under

subsection (1)(2)(C) of this

section for such a family;

(11) at the option of the State,

to any group or groups of

individuals described in section

1396d(a) of this title (or, in

the case of individuals described

in section 1396d(a)(i) of this

title, to any reasonable

categories of such individuals)

who are not individuals described

in clause (i) of this

subparagraph but--

————————————

APP. 1

(I) who meet the income and

resources requirements of the

appropriate State plan described

in clause (i) or the supplemental

security income program (as the

case may be),

(II) who would meet the income

and resources requirements of the

appropriate State plan described

in clause (i) if their work-

related child care costs were

paid from their earnings rather

than by a State agency as a

service expenditure,

(III) who would be eligible to

receive aid under the appropriate

State plan described in clause

(i) if coverage under such plan

was as broad as allowed under

Federal law,

(IV) with respect to whom there

is being paid, or who are

eligible, or would be eligible if

they were not in a medical

institution, to have paid with

respect to them, aid or

assistance under the appropriate

State plan described in clause

(i), supplemental security income

benefits under subchapter XVI of

this chapter, or a State

supplementary paymerit;

(V) who are in a- medical

institution for a period of not

less than 30 consecutive days

(with eligibility by reason of

this subclause beginning on the

first day of such period), who

meet the resource requirements of

APP. 1

the appropriate State plan

described in clause (i) or the

supplemental security income

program, and whose income does

not exceed a separate income

standard established by the State

which is consistent with the

limit established under section

1396b(f)(4)(C) of this title,

(VI) who would be eligible under

the State plan under this

subchapter if they were in a

medical institution, with respect

to whom there has been a

determination that but for the

provision of home or community-

based services described in

subsection (c), (d), or (e) of

section 1396n of this title they

would require the level of care

provided in a hospital, nursing

facility oor intermediate care

facility for the mentally

retarded the cost of which could

be reimbursed under the State

plan, and who will receive home

or community-based services

pursuant to a waiver granted by

the Secretary under subsection

(c), (d), or (e) of section 1396n

of this title,

(¥YII) who would be eligible under

the State plan under this

subchapter if they were in a

medical institution, who are

terminally ill, and who will

receive hospice care pursuant to

a voluntary election described in

section 1396d(o) of this title;

APP. 1

(VIII) who is a child described

in section 1396d(a)(i) of this

title--

(aa) for whom there is in effect

an adoption assistance agreement

(other than an agreement under

part E of subchapter IV of this

chapter) between the State and an

adoptive parent or parents,

(bb) who the State agency

responsible for adoption

assistance has determined cannot

be placed with adoptive parents

without medical assistance

because such child has special

needs for medical or

rehabilitative care, and

(cc) who was eligible for medical

assistance under the State plan

prior to the adoption assistance

agreement being entered into, or

who would have been eligible for

medical assistance at such time

if the eligibility standards and

methodologies of the State's

foster care program under part E

of subchapter IV of this chapter

were applied rather than the

eligibility standards and

methodologies of the State's aid

to families with dependent

children program under part A of

subchapter IV of this chapter;

(IX) who are described in

subsection (1)(1) of this section

and are not described in clause

(i)(IV), clause (i)(VI), or

clause (i)(VII);

APP. 1

(xX) who are described in

subsection (m) (1) of this

section; or

(XI) who receive only an optional

State supplementary payment based

on need and paid on a regular

basis, equal to the difference

between the individual's

countable income and the income

standard used to determine

eligibility for such sup-

plementary payment (with

countable income being the income

remaining after deductions as

established by the State pursuant

to standards that may be more

restrictive than the standards

for supplementary security income

benefits under subchapter XVI of

this chapter), which are

available to all individuals in

the State (but which may be based

on different income standards by

political subdivision according

to cost of living differences),

and which are paid by a State

that does not have an agreement

with the Secretary under section

1382e or 1383c of this title;

(B) that the medical assistance

made available to any individual

described in subparagraph (A)--

(1) shall not be less in amount,

duration, or scope than the

medical assistance made available

to any other such individual, and

(11) shall not be less in amount,

duration, or scope than the

medical assistance made available

APP. 1

to individuals not described in

subparagraph (A);

included for any group of

individuals described in section

1396d(a) of this title who are

not described in subparagraph (A)

or (E), then--

(i) the plan must include a

description of (I) the criteria

for determining eligibility of

individuals in the group for such

medical assistance, (II) the

amount, duration, and scope of

medical assistance made available

to individuals in the group, and

(III) the single standard to be

employed in determining income

and resource eligibility for all

such groups, and the methodology

to be employed in determining

such eligibility, which shall be

no more restrictive than _ the

methodology which would be

employed under the supplemental

security income program in the

case of groups consisting of

aged, blind, or disabled

individuals in a State in which

such program is in effect, and

which shall be no more

restrictive than the methodology

which would be employed under the

appropriate State plan (described

in subparagraph (A)(i)) to which

such group is most closely

categorically related in the case

of other groups;

APP. 1

(11) the plan must make available

medical assistance--

(I) to individuals under the age

of 18 who (but for income and

resources) would be eligible for

medical assistance as an

individual described in

subparagraph (A)(i), and

(II) to pregnant women, during

the course of their pregnancy,

who (but for income and re-

sources) would be eligible for

medical assistance as an

individual described in

subparagraph (A);

(111) such medical assistance

must include (I) with respect to

children under 18 and individuals

entitled to institutional

services, ambulatory services,

and (II) with respect to pregnant

women, prenatal care and delivery

services; and

(iv) if such medical assistance

includes services in institutions

for mental diseases or in an

intermediate care facility for

the mentally retarded (or both)

for any such group, it also must

include for all groups covered at

least the care and services

listed in paragraphs (1) through

(5) and (17) of section 1396d(a)

of this title or the care and

services listed in any 7 of the

paragraphs numbered (1) through

(21) of such section;

(D) for the inclusion of home

health services for any

APP. 1

individual who, under the State

plan, is entitled to nursing

facility services; and

(E)(1) for making medical

assistance available for medicare

cost-sharing (as defined in

section 1396d(p) (3) of this

title) for qualified medicare

beneficiaries described in sec-

tion 1396d(p)(1) of this title;

(11) for making medical

assistance available for payment

of medicare cost-sharing

described in section

1396d(p)(3)(A)(i) of this title

for qualified disabled and

working individual]s described in

section 1396d(s) of this title;

and

(iii) for making medical

assistance available for medicare

cost sharing described in section

1396(p)(3)(A)(ii) of this title

subject to section 1396d(p)(4) of

this title, for individuals who

would be qualified medicare

beneficiaries described in

section 1396(p)(1) of this title

but for the fact that their

income exceeds the income level

established by the State under

section 1396({p)(2) of this title

but is less than 110 percent in

1993 and 1994, and 120 percent in

1995 and years thereafter of the

official poverty line (referred

to in such section) for a family

of the size involved; and

APP. 1

(F) at the option of a State, for

making medical assistance

available for COBRA premiums (as

defined in subsection (u)(2) of

this section) for qualified COBRA

continuation beneficiaries

described in section 1396a(u) (1)

of this title;

except that (I) the making available of the

services described in paragraph (4), (14),

or (16) of section 1396d(a) of this title to

individuals meeting the age requirements

prescribed therein shall not, by reason of

this paragraph (10), require the making

available of any such services, or the

making available of such services of the

same amount, duration, and scope, to

individuals of any other ages, (II) the

making available of supplementary medical

insurance benefits under Part B of

subchapter XVIII of this chapter’ to

individuals eligible therefor (either

pursuant to an agreement entered into under

section 1395v of this title or by reason of

the payment of premiums under such

subchapter by the State agency on behalf of

such individuals), or provision for meeting

part or all of the cost of deductibles, cost

sharing, or similar charges under part B of

subchapter XVIII of this chapter for

individuals eligible for benefits under such

part, shall not, by reason of this paragraph

(10), require the making available of any

such benefits, or the making available of

services of the same amount, duration, and

scope, to any other individual]s, (III) the

making available of medical assistance equal

in amount, duration, and scope to the

medical assistance made available _ to

APP. 1

individuals described in clause (A) to any

Classification of individuals approved by

the Secretary with respect to whom there is

being paid, or who are eligible, or would be

eligible if they were not in a medical

institution, to have paid with respect to

them, a State supplementary payment shall

not, by reason of this paragraph (10),

require the making available of any such

assistance, or the making available of such

assistance of the same amount, duration, and

scope, to any other individuais not

described in clause (A), (IV) the imposition

of a deductible, cost sharing. or similar

charge for any item or service furnished to

an individual not eligible for the exemption

under section 13960(a)(2) or (b)(2) of this

title shall not require the imposition of a

deductible, cost sharing, or similar charge

for the same item or service furnished to an

individual who is eligible for. such

exemption. (V) the making available to

pregnant women covered under the plan of

services relating to pregnancy (including

prenatal, delivery, and postpartum services)

or to any other condition which may

complicate pregnancy shall not, by reeson of

this paragraph (10), require the making

available of such services, or the making

available of such services of the same

amount, duration, and scope, to any other

individuals, provided such services are made

available (in the same amount, duration, and

scope) to all pregnant women covered under

the State plan, (VI) with respect to the

making available of medical assistance for

hospice care to terminally ill individuals

who have made a voluntary election described

in section 1396d(0) of this title to receive

APP. 1

hospice care instead of medical assistance

for certain other services, such assistance

may not be made available in an amount,

duration, or scope less than that provided

under subchapter XVIII of this chapter, and

the making available of such assistance

shall not, by reason of this paragraph (10),

require the making available of medical

assistance for hospice care to other

individuals or the making available of

medical assistance for services waived by

such terminally ill individuals, (VII) the

medical assistance made available to an

individual described in subsection (1)(1) (A)

of this section who is eligible for medical

assistance only because of subparagraph

(A)(i)(IV) or (A)(ii)(IX) shall be limited

to medical assistance for services related

to pregnancy (including prenatal, delivery,

postpartum, and family planning services)

and to other conditions which may complicate

pregnancy, (VIII) the medical assistance

made available to a qualified medicare

beneficiary described in section 1396d(p) (1)

of this title who is only entitled to

medical assistance because the individual is

such a beneficiary shall be limited to

medical assistance for medicare cost-sharing

(described in section 1396d(p)(3) of this

title), subject to the provisions of

subsection (n) of this section and section

13960(b) of this title, (IX) the making

available of respiratory care services in

accordance with subsection (e)(9) of this

section shall not, by reason of this

paragraph (10), require the making available

of such services, or the making available of

such services of the same amount, duration,

and scope, to any individuals not included

APP. 1

under subsection (e)(9)(A) of this section,

provided such serves are made available (in

the same amount, duration, and scope) to all

individuals described in such subsection,

(X) if the plan provides for any fixed

durational limit on medical assistance for

inpatient hospital services (whether or not

such a limit varies by medical condition or

diagnosis), the plan must establish

exceptions to such a limit for medically

necessary inpatient hospital services

furnished with respect to individuals under

one year of age in a hospital defined under

the State plan, pursuant to section 1396r-

4(a)(1) (A) of this titie, as a

disproportionate share hospital and

subparagraph (B) (relating to comparability)

shall not be construed as requiring such an

exception for other individuals, services,

or hospitals and (XI) the making available

of medical assistance to cover the costs of

premiums, deductibles, coinsurance, and

other cost-sharing obligations for certain

individuals for private health coverage as

described in section 1396e of this title

shall not, by reason of paragraph (10),

require the making available of any such

benefits or the making available of services

of the same amount, duration, and scope of

such private coverage to any other

individuals, and (XI) the medical assistance

made available to an individual described in

subsection (u)(1) of this section who is

eligible for medical assistance only because

of subparagraph (F) shall be limited to

medical assistance for COBRA continuation

premiums (as defined in subsection (u)(2) of

this section);

APP. .1

(11)(A) provide for entering into

cooperative arrangements with the State

agencies responsible for administering or

supervising the administration of health

services and vocational rehabilitation

services in the State looking toward maximum

utilization of such services in the

provision of medical assistance under the

plan, (B) effective July 1, 1969, provide,

to the extent prescribed by the Secretary,

for entering into agreements, with any

agency, institution, or organization

receiving payments under (or through an

allotment under) subchapter V of this

chapter, (i) providing for utilizing such

agency, institution, or organization in

furnishing care and services which are

available under such subchapter or allotment

and which are included in the State Plan

approved under this section and (ii) making

such provision as may be appropriate for

reimbursing such agency, institution, or

organization for the cost of any such care

and services furnished any individual for

which payment would otherwise be made to the

State with respect to him under section

1396b of this title, and (C) provide for

coordination of the operations under this

subchapter with the State's operations under

the special supplemental food program for

women, infants, and children under section

1786 of this title;

(12) provide that, in determining

whether an individual is blind, there shall

be an examination by a physician skilled in

the diseases of the eye or by an

optometrist, whichever the individual may

select;

(13) provide--

APP. 1

(A) for payment (except where the

State agency is subject to an order

under section 1396m of this title) of

the hospital services, nursing

- facility services, and services in an

intermediate care facility for the

mentally retarded provided under the

plan through the use of rates

(determined in accordance with methods

and standards developed by the State

which, in the case of wnursing

facilities, take into account’ the

costs (including the costs of services

required to attain or maintain the

highest practicable physical, mental,

and psychosocial well-being of each

resident eligible for benefits under

this subchapter) of complying with

subsections (b) (other than paragraph

(3)(F) thereof), (c), and (d) of

section 1396r of this title and

provide (in the case of a nursing

facility with a waiver under section

1396r(b)(4)(C)(ii) of this title) for

an appropriate reduction to take into

account the lower costs (if any) of

the facility for nursing care, and

which, in the case of hospitals, taxe

into account the situation of

hospitals which serve a dispro-

portionate number of low income

patients with special needs_ and

provide, in the case of hospital

patients receiving services at an

inappropriate level of care (under

conditions similar to those described

in section 1395x(v)(1)(G) of this

title), for lower reimbursement rates

reflecting the level of care actually

APP. 1

received (in a manner consistent with

section 1395x(v)(1)(G) of this title) )

which the State finds, and makes

assurances satisfactory to the

Secretary, are reasonable and adequate

to meet the costs which must be in-

curred by efficiently and economically

operated facilities in order’ to

provide care and services in

conformity with applicable State and

Federal laws, regulations, and quality

and safety standards and to assure

that individuals eligible for medical

assistance have reasonable access

(taking into account geographic

location and reasonable travel time)

to inpatient hospital services of

adequate quality; and such State makes

further assurances, satisfactory to

the Secretary, for the filing of

uniform cost reports by each hospital,

nursing facility, and intermediate

care facility for the mentaliy

retarded and periodic audits by the

State of such reports;

(B) that the State shall provide

assurances satisfactory to the

Secretary that the payment methodology

utilized by the State for payments to

hospitals can reasonably be expected

not to increase such payments, solely

as a result of a change of ownership,

in excess of the increase which would

result from the application of section

1395x(v)(1)(0) of this title;

assurances satisfactory to the

Secretary that the valuation of

capital assets, for purposes of

APP. 1

determining payment rates for nursing

facilities and for intermediate care

facilities for the mentally retarded,

will not be increased (as measured

from the date of acquisition by the

seller to the date of the change of

ownership), solely as a result of a

change of ownership, by more than the

lesser of--

(i) one-half of the percentage

increase (as measured over the same

period of time, or, if necessary, as

extrapolated retrospectively by the

Secretary) in the Dodge Construction

Systems Costs for Nursing Homes,

applied in the aggregate with respect

to those facilities which have

undergone a change of ownership during

the fiscal year, or

(11) one-half of the percentage

increase (as measured over the same

period of time) in the Consumer Price

Index for All Urban Consumers (United

States city average);

(D) for pavment for hospice care in

amounts no lower than the amounts,

using the same methodology, used under

part A of subchapter XVIII of this

chapter and for payment of amounts

under section 1396d(0)(3) of this

title; except that in the case of

hospice care which is furnished to an

individual who is a resident of a

nursing facility or intermediate care

facility for the mentally retarded,

and who would be eligible under the

plan for nursing facility services or

services in an intermediate care

facility for the mentally retarded if

APP. 1

he had not elected to receive hospice

care, there shall be paid an

additional amount, to take into

account the room and board furnished

by the facility, equal to at least 95

percent of the rate that would have

been paid by the State under the plan

for facility services in that facility

for that individual; for payment

(E) for payment for services described

in clause (B) or (C) of section

1396d(a)(2) of this title under the

plan of 100 percent of costs which are

reasonable and related to the cost of

furnishing such services or based on

such other tests of reasonableness, as

the Secretary prescribes in

regulations under section 13951l(a)(3)

of this title, or, in the case of

services to which those regulations do

not apply, on the same methodology

used under section 13951l(a)(3) of this

title; and

(F) for payment for home and community

care (as defined in section 1396t(a)

of this title and provided under such

section) through rates which are

reasonable and adequate to meet the

costs of providing care, efficiently

and economically, in conformity with

applicable State and Federal laws,

regulations, and quality and safety

standards;

(14) provide that enrollment fees,

premiums, or similar charges, and

deductions, cost sharing, or similar

charges, may be imposed only as provided in

section 13960 of this title;

APP. 1

(15) Repealed. Pub.L. 100-360, Title

III, § 301(e)(2)(C), as added by Pub.L. 100-

485, Title VI, § 608(d)(14)(I)(iii), Oct.

13, 1988, 102 Stat. 2416.

(16) provide for inclusion, to the

extent required by regulations prescribed by

the Secretary, of provisions (conforming to

such regulations) with respect to the

furnishing of medical assistance under the

plan to individuals who are residents of the

State but are absent therefrom;

(17) except as provided in subsections

(1)(3), (m)(3), and (m)(4) of this section,

include reasonable standards (which shall be

comparable for all groups and may, in

accordance with standards prescribed by the

Secretary, differ with respect to income

levels, but only in the case of applicants

or recipients of assistance under the plan

who are not receiving aid or assistance

under any plan of the State approved under

subchapter I, X, XIV, or XVI, or part A of

subchapter IV of this chapter, and with

respect to whom supplemental security income

benefits are not being paid under subchapter

XVI of this chapter, based on the variations

between shelter costs in urban areas and in

rural areas) for determining eligibility for

and the extent of medical assistance under

the plan which (A) are consistent with the

objectives of this subchapter, (B) provide

for taking into account only such income and

resources as are, as determined in

accordance with standards prescribed by the

Secretary, available to the applicant or

recipient and (in the case of any applicant

or recipient who would, except for income

and resources, be eligible for aid or

assistance in the form of money payments

APP. 1

under any plan of the State approved under

subchapter I, X, XIV, or XVI, or part A of

subchapter IV, or to have paid with respect

to him supplemental security income benefits

under subchapter XVI of this chapter) as

would not be disregarded (or set aside for

future needs) in determining his eligibility

for such aid, assistance, or benefits, (C)

provide for reasonable evaluation of any

such income or resources, and (D) do not

take into account the financial

responsibility of any individual for any

applicant or recipient of assistance under

the plan unless such applicant or recipient

is such individual's spouse or such

individual's child who is under age 21 or

(with respect to States eligible to

participate in the State program established

under subchapter XVI of this chapter), is

blind or permanently and totally disabled,

or is blind or disabled as defined in

section 1382c of this title (with respect to

States which are not eligible to participate

in such program) ; and provide for

flexibility in the application of such

standards with respect to income by taking

into account, except to the extent

prescribed by the Secretary, the costs

(whether in the form of insurance premiums,

payments made to the State under section

1396b(f)(2)(B) of this title, or other wise

and regardless of_whether such costs are

reimbursed under another public program of

the State or political subdivision thereof)

incurred for medical care or for any other

type of remedial care recognized under State

law;

(18) comply with the provisions of

section 1396p of this title with respect to

eect

APP. 1

liens, adjustments and recoveries of medical

assistance correctly paid, and transfers of

assets;

(19) provide such safeguards as may be

necessary to assure that eligibility for

care and services under the plan will be

determined, and such care and services will

be provided, in a manner consistent -with

simplicity of administration and the best

interests of the recipients;

(20) if the State plan includes medical

assistance in behalf of individuals 65 years

of age or older who are patients in institu-

tions for mental diseases---

(A) provide for having in effect such

agreements or other arrangements with

State authorities concerned with

mental diseases, and, where

appropriate, with such institutions,

as maybe necessary for carrying out

the State plan, including arrangements

for joint planning and for development

of alternate methods of care,

arrangements providing assurance of

immediate readmittance to institutions

where needed for individuals under

alternate plans of care, and

arrangements providing for access to

patients and facilities for furnishing

information, and for making reports;

(B) provide for an individual plan for

each such patient to assure that the

institutional care provided to him is

in his best interests, including, to

that end, assurances that there will

be initial and periodic review of his

medical and other needs, that he will

be given appropriate medical treatment

within the institution, and that there

APP. 1

will be a periodic determination of

his need for continued treatment in

the institution; and

alternate plans of care, making

maximum utilization of available

resources, for recipients 65 years of

age or older who would otherwise need

care in such institutions, including

appropriate medical treatment and

other aid or assistance; for services

referred to in section 303(a)(4)(A)(i)

and (ii) or section 1383(a)(4)(A)(i)

and (ii) of this title which are

appropriate for such recipients and

for such patients; and for methods of

administration necessary to assure

that the responsibilities of the State

agency under the State plan with

respect to such recipients and such

patients will be effectively carried

out;

(21) if the State Plan includes medical

assistance in behalf of individuals 65 years

of age or older who are patients in public

institutions for mental diseases, show that

the State is making satisfactory progress

toward developing and implementing a

comprehensive mental health program,

including provision for utilization of

community mental health centers, nursing

facilities, and other alternatives to care

in public institutions for mental diseases;

(22) include descriptions of (A) the

kinds and numbers of professional medical

personnel and supporting staff that will be

used in the administration of the plan and

of the responsibilities they will have, (B)

the standards, for private or public

APP. 1

institutions in which recipients of medical

assistance under the plan may receive care

or services, that will be utilized by the

State authority or authorities responsible

for establishing and maintaining such

standards, (C) the cooperative arrangements

with State health agencies and State

vocational rehabilitation agencies entered

into with a view to maximum utilization of

and coordination of the provision of medical

assistance with the services administered or

supervised by such agencies, and (D) other

standards and methods that the State will

use to assure that medical or remedial care

and services provided to recipients of

medical assistance are of high quality;

(23) except as provided in subsection

(g) of this section and in section 1396n of

this title and except in the case of Puerto

Rico, the Virgin Islands, and Guam, provide

that (A) any individual eligible for medical

assistance (including drugs) may obtain such

assistance from any institution, agency,

community pharmacy, or person, qualified to

perform the service or services required

(including an organization which provides

such services, or arranges for their

availability, on a prepayment basis), who

undertakes to provide him such services, and

(B) an enrollment of an individual eligible

for medical assistance in a primary care

case-management system (described in section

1396n(b)(1) of this title), a health

maintenance organization, or a similar

entity shall not restrict the choice of the

qualified person from whom the individual

may receive services under section

1396d(a)(4)(C) of this title;

APP. 1

(24) effective July 1, 1969, provide

for consultative services by health agencies

and other appropriate agencies of the State

to hospitals, nursing facilities, home

health agencies, clinics, laboratories, and

such other institutions as the Secretary may

specify in order to assist them (A) to

qualify for payments under this chapter, (B)

to establish and maintain such fiscal

records as maybe necessary for the proper

and efficient administration of this

chapter, and (C) to provide information

needed to determine payments due under this

chapter on account of care and services

furnished to individuals;

(25) provide--

(A) that the State or local agency

administering such plan will take ali

reasonable measures to ascertain the

legal liability of third parties

(including health insurers) to pay for

care and services available under the

plan, including--

(1) the collection of sufficient

information (as specified by the

Secretary in regulations) to enable

the State to pursue claims against

such third parties, with such

information being collected at the

time of any determination or

redetermination of eligibility for

medical assistance, and

(11) the submission to the Secretary

of a plan (subject to approval by the

Secretary) for pursuing claims against

such third parties, which plan shall--

(I) be integrated with, and be

monitored as a part of the Secretary's

review of the State's mechanized

————

APP. 1

claims processing and information

retrieval system under section

1396b(r) of this title, and

(II) be subject to the provisions of

section 1396b(r)(4) of this title

relating to reductions in Federal

payments for failure to meet

conditions cf approval, but shall not

be subject to any other financial

penalty as a result of any other

monitoring, quality control, or

auditing requirements;

(B) that in any case where such a

legal liability is found to exist

after medical assistance has been made

available on behalf of the individual

and where the amount of reimbursement

the State can reasonably expect to

recover exceeds the costs of such

recovery, the State or local agency

will seek reimbursement for. such

assistance to the extent of such legal

liability;

who is entitled to medical assistance

under the State plan with respect to a

service for which a third party is

liable for payment, the person

furnishing the service may not seek to

collect from the individual (or any

financially responsible relative or

representative of that individual)

payment of an amount for that service

(i) if the total of the amount of the

liabilities of third parties for that

service is at least equal to the

amount payable for that service under

the plan (disregarding section 13960

of this title), or (ii) in an amount

APP. 1

which exceeds the lesser of (I) the

amount which may be collected under

section 13960 of this title, or (II)

the amount by which the amount payable

for that service under the plan

(disregarding section 13960 of this

title), exceeds the total of the

amount of the liabilities of third

parties for that service;

(D) that a person who furnishes

services and is participating under

the plan may not refuse to furnish

services to an individual (who is

entitled to have payment made under

the plan for the services the person

furnishes) because of a third party's

potential liability for payment for

the service;

(EZ) that in the case of prenatal or

preventive pediatric care (including

early and periodic screening and

diagnosis services under’ section

1396d(a)(4)(B) of this title) covered

under the State plan, the State shall-

(1) make payment for such service in

accordance with the usual payment

schedule under such plan for such

services without regard to the

liability of a third party for payment

for such services; and

(11) seek reimbursement from. such

third party in accordance with

subparagraph (B);

(F) that in the case of any services

covered under such plan which are

provided to an individual on whose

behalf child support enforcement is

being carried out by the State agency

APP. 1

under part D of subchapter IV of this

chapter, the State shall--

(4) make payment for such service in

accordance with the usual payment

schedule under such plan for _ such

services without regard to any third

party liability for payment for such

services, if such third-party

liability is derived (through

insurance or otherwise) from the

parent whose obligation to pay support

is being enforced by such agency, if

payment has not been made by such

third party within 30 days after such

services are furnished; and

(144) seek reimbursement from _ such

third party in accordance with

subparagraph (B); and

(G) that the State plan shall meet the

requirements of section 1396e of this

title (relating to enrollment of

individuals under group health plans

in certain cases);

(26) if the State plan includes medical

assistance for inpatient mental hospital

services, provide--

(A) with respect to each patient

receiving such services, for a regular

program of medical review (including

medical evaluation) of his need for

such services, and for a written plan

of care;

(B) for periodic inspections to be

made in all mental institutions within

the State by one or more medical

review teams (composed of physicians

and other appropriate health and

social service personnel) of the care

being provided to each person

APP. 1

receiving medical assistance,

including (i) the adequacy of the

services available to meet his current

health needs and promote his maximum

physical well-being, (ii) the

necessity and desirability of his

continued placement in the

institution, and (iii) the feasibility

of meeting his health care needs

through alternative institutional or

noninstitutional services; and

agency by each medical review team of

the findings of each inspection under

subparagraph (B), together with any

recommendations;

(27) provide for agreements with every

person or institution providing services

under the State plan under which such person

or institution agrees (A) to keep such

records as are necessary fully to disclose

the extent of the services provided to

individuals receiving assistance under the

State plan, and (B) to furnish the State

agency or the Secretary with such

information, regarding any payments claimed

by such person or institution for providing

services under the State plan, as the State

agency or the Secretary may from time to

time request;

(28) provide--

(A) that any nursing facility

receiving payments under such plan

must satisfy all the requirements of

subsections (b) through (d) of section

1396r of this title as they apply to

such facilities;

(B) for including in "nursing facility

services" at least the items and

4 :

APP. 1

services specified (or deemed to be

specified) by the Secretary under

section 1396r(f)(7) of this title and

making available upon request a

description of the items and services

so included;

to the public the data and methodology

used in establishing payment rates for

nursing facilities under this

subchapter; and

(D) for compliance (by the _ date

specified in the respective sections)

with the requirements of--

(1) section 1396r(e) of this title;

(44) section 1396r(g) of this title

(relating to responsibility for survey

and certification of nursing

facilities); and

(444) sections 1396r(h)(2)(B) and

1396r(h)(2)(D) of this title (relating

to establishment and application of

remedies) ;

(29) include a State program which

meets the requirements set forth in section

1396g of this title, for the licensing of

administrators of nursing homes;

(30)(A) provide such methods and

procedures relating to the utilization of

and the payment for, care and services

available under the plan (including but not

limited to utilization review plans as

provided for in section 1396b(i)(4) of this

title) as may be necessary to safeguard

against unnecessary utilization of such care

and services and to assure that payments are

consistent with efficiency, economy, and

quality of care and are sufficient to enlist

enough providers so that care and services

APP. 1

are available under the plan at least to the

extent that such care and services are

available to the general population in the

geographic area;

(B) provide, under the program

described in subparagraph (A), that--

(1) each admission to a hospital,

intermediate care facility for the

mentally retarded, or hospital for

mental diseases is reviewed oor

screened in accordance with criteria

established by medical and other

professional personnel who are not

themselves directly responsible for

the care of the patient involved, and

who do not have a significant

financial interest in any such

institution and are not. except in the

case of a hospital, employed by the

institution providing the care

involved, and

(11) the information developed from

such review or screening, along with

the data obtained from prior reviews

of the necessity for admission and

continued stay of patients by such

professional personnel, shall be used

as the basis for establishing the size

and composition of the sample of

admissions to be subject to review and

evaluation by such personnel, and any

such sample maybe of any size up to

100 percent of all admissions and must

be of sufficient size to serve the

purpose of (I) identifying the

patterns of care being provided and

the changes occurring over time in

such patterns so that the need for

modification may be ascertained, and

APP. 1

(II) subjecting admissions to early or

more extensive review where

information indicates that such

consideration is warranted to a

hospital, intermediate care facility

for the mentally retarded, or hospital

for mental diseases; and

control peer review organization (under part

B of subchapter XI of this chapter), an

entity which meets the requirements of

section 1320c-1 of this title, as determined

by the Secretary, or a private accreditation

body to conduct (on an annual basis) an

independent, external review of the quality

of services furnished under each contract

under section 1396b(m) of this title, with

the results of such review made available to

the State and, upon request, to the

Secretary, the Inspector General in the

Department of Health and Human Services, and

the Comptroller General;

(31) with respect to services in an

intermediate care facility for the mentally

retarded (where the State plan includes

medical assistance for such’ services)

provide--

(A) with respect to each patient

receiving such services, for a written

plan of care, prior to admission to or

authorization of benefits in such

facility, in accordance with

regulations of the Secretary, and for

a regular program of independent

professional review (including medical

evaluation) which shall periodically

review his need for such services;

(B) with respect to each intermediate

care facility for the mentally

APP. 1

retarded within’ the State, for

periodic onsite inspections of the

care being provided to each person

receiving medical assistance, by one

or more independent professional

review teams (composed of a physician

or registered nurse and other

appropriate health and social service

personnel), including with respect to

each such person (i) the adequacy of

the services available to meet his

current health needs and promote his

maximum physical well-being, (ii) the

necessity and desirability of his

continued placement in the facility,

and (iii) the feasibility of meeting

his health care needs through

alternative institutional or

noninstitutional services; and

agency by each independent

professional review team of the

findings of each inspection under

subparagraph (B), together with any

recommendations;

(32) provide that no paynient under the

plan for any care or service provided to an

individual shall be made to anyone other

than such individual or the person or

institution providing such care or service,

under an assignment or power of attorney or

otherwise; except that--

(A) in the case of any care or service

provided by a physician, dentist, or

other individual practitioner, such

payment may be made (i) to the

employer of such physician, dentist,

or other practitioner if such

physician, dentist, or practitioner is

APP. 1

required as a condition of his

employment to turn over his fee for

such care or service to his employer,

or (ii) (where the care or service was

provided in a hospital, clinic, or

other facility) to the facility in

which the care or service was provided

if there is a contractual arrangement

between such physician, dentist, or

practitioner and such facility under

which such facility submits the bill

for such care or service;

(B) nothing in this paragraph shall be

construed (i) to prevent the making of

such a payment in accordance with an

assignment from the person or

institution providing the care or

service involved if such assignment is

made to a governmental agency or

entity or is established by or

pursuant to the order of a court of

competent jurisdiction, or (ii) to

preclude an agent of such person or

institution from receiving any such

payment if (but only if such agent

does so0 pursuant to an agency

agreement under which the compensation

to be paid to the agent for his

services for or in connection with the

billing or collection of payments due

such person or institution under the

plan is unrelated (directly or

indirectly) to the amount of such

payments or the billings therefor, and

is not cependent upon the actual

collection of any such payment; and

(during a period that does not exceed

14 continuous days in the case of an

APP. 1

informal reciprocal arrangement or 90

continuous days (or such longer period

as the Secretary may provide) in the

case of an arrangement involving per

diem or other fee-for-time

compensation) by, or incident to the

services of, one physician to the

patients of another physician who

submits the claim for such services,

payment shall be made to the physician

submitting the claim (as if the

services were furnished . by, or

incident to, the physician's

services), but only if the claim

identifies (in a manner specified by

the Secretary) the physician who

furnished the services.

- (33) provide-- .

(A) that the State health agency, or

other appropriate State medical

agency, shall be responsible for

establishing a plan, consistent with

regulations prescribed by the Secre-

tary, for the review by appropriate

professional health personnel of the

appropriateness and quality of care

and services furnished to recipients

of medical assistance under the plan

in order to provide guidance with

respect thereto in the administration

of the plan to the State agency estab-

lished or designated pursuant’ to

paragraph (5) and, where applicable,

to the State agency described in the

second sentence of this subsection;

and

(B) that, except as provided in

section i396r(g) of this title, the

State or local agency utilized by the

“38

- a SS La NB PA NET REN int Citi ter | 8 mens hae

APP. 1

Secretary for the purpose specified in

the first sentence of section

1395aa(a) of this title, or, if such

agency is not the State agency which

is responsible for licensing health

institutions, the State agency

responsible for such licensing, will

perform for the State agency

administering or supervising’ the

administration of the plan approved

under this subchapter the function of

determining whether institutions and

agencies meet the requirements for

participation in the program under

such plan, except that, if the

Secretary has cause to question the

adequacy of such determinations, the

Secretary is authorized to validate

State determinations and, on that

basis, make independent and binding

determinations concerning the extent

to which individual institutions and

agencies meet the requirements for

participation;

A (34) provide that in the case of any

individual who has been determined to be

eligible for medical assistance under the

plan, such assistance will be made available

to him for care and services included under

the plan and furnished in or after the third

month before the month in which he made

application (or application was made on his

behalf in the case of a deceased individual)

for such assistance if such individual was

(or upon application would have been)

eligible for such assistance at the time

such care and services were furnished;

(35) provide that any disclosing entity

(as defined in section 1320a-3(a)(2) of this

APP. 1

title) receiving payments under such plan

complies with the requirements of section

1320a.3 of this title;

(36) provide that within 90 days

following the completion of each survey of

any health care facility, laboratory,

agency, clinic, or organization, by the

appropriate State agency described in

paragraph (9), such agency shall (in

accordance with regulations of the

Secretary) make public in readily available

form and place the pertinent findings of

each such survey relating to the compliance

of each such health care facility,

laboratory, clinic, agency, or organization

with (A) the statutory conditions of

participation imposed under this subchapter,

and (B) the major additional conditions

which the Secretary finds necessary in the

interest of health and safety of individuals

who are furnished care or services by any

such facility, laboratory, clinic, agency,

or organization;

(37) provide for claims payment

procedures which (A) ensure’ that 90 per

centum of claims for payment (for which no

further written information or

substantiation is required in order to make

payment) made for services covered under the

plan and furnished by health care

practitioners through individual or group

practices or through shared health

facilities are paid within 30 days of the

date of receipt of such claims and that 99

per centum of such claims are paid within 90

days of the date of receipt of such claims,

and (B) provide for procedures of prepayment

and postpayment claims review, including

review of appropriate data with respect to

SLAP A. Binh

APP. 1

the recipient and provider of a service and

the nature of the service for which payment

is claimed, to ensure the proper and

efficient payment of claims and management

of the program;

(38) require that an entity (other than

an individual practitioner or a group of

practitioners) that furnishes, or arranges

for the furnishing of items or services

under the plan, shall supply (within such

period as may be specified in regulations by

the Secretary or by the single State agency

which administers or supervises the

administration of the plan) upon request

specifically addressed to such entity by the

Secretary or such State agency, the

information described in section 1320a-

7(b)(9) of this title;

(39) provide that the State agency

shall exclude any specified individual or

entity from participation in the program

under the State plan for the _ period

specified by the Secretary, when required by

him to do so pursuant to section 1320a-7 of

this title or section 1320a-7a of this

title, and provide that no payment may be

made under the plan with respect to any item

or service furnished by such individual or

entity during such period;

(40) require each health services

facility or organization which receives

payments under the plan and of a type for

which a uniform reporting system has been

established under section 1320a(a) of this

title to make reports to the Secretary of

information described in such section in

accordance with the uniform reporting system

(established under such section) for that

type of facility or organization;

APP. 1

(41) provide that whenever a provider

of services or any other person is

terminated, suspended, or otherwise

sanctioned or prohibited from participating

under the State plan, the State agency shall

promptly notify the Secretary and, in the

case of a physician and notwithstanding

paragraph (7),the State medical licensing

board of such action;

(42) provide that the records of any

entity participating in the plan and

providing services reimbursable on a cost-

related basis will be audited as_ the

Secretary determines to be necessary to

insure that proper payments are made under

the plan;

(43) provide for--

(A) informing all persons in the State

who are under the age of 21 and who

have been determined to be eligible

for medical assistance including

services described in section

1396d(a)(4)(B) of this title, of the

availability of early and periodic

screening, diagnostic, and treatment

services as described in section

1396d(r) of this title,

(B) providing or arranging for the

provision of such screening services

in all cases where they are requested,

referral to appropriate agencies,

organizations, or individuals)

corrective treatment the need for

which is disclosed by such child

health screening services, and

(D) reporting to the Secretary (in a

uniform form and manner established by

the Secretary, by age group and by

ee ee eee es

a OT ate Bade S ahha Neo BOS te see Bone

DIE ene ee

APP. 1

basis of eligibility for medical

assistance, and by not later than

April 1 after the end of each fiscal

year, beginning with fiscal year 1990)

the following information relating to

early and periodic screening,

diagnostic, and treatment services

provided under the plan during each

fiscal year,

(1) the number of children provided

child health screening services,

(44) the number of children referred

for corrective treatment (the need for

which is disclosed by such child

health screening services),

(111) the number of children receiving

dental services, and

(iv) the State's results in attaining

the participation goals set for the

State under section 1396d(r) of this

title;

(44) in each case for which payment for

inpatient hospital services, services in an

intermediate care facility for the mentally

retarded, or inpatient mental hospital

services is made under the State plan--

(A) a physician (or, in the case of

skilled nursing facility services or

intermediate care facility services, a

physician, or a nurse practitioner or

clinical nurse specialist who is not

an employee of the facility but is

working in collaboration with a

physician) certifies at the time of

admission, or, if later, the time the

individual applies for medical

assistance under the State plan (and a

physician, a physician assistant under

the supervision of a physician, or, in

APP. 1

the case of skilled nursing facility

services or intermediate care facility

services, a physician, or a nurse

practitioner- or clinical nurse

specialist who is not an employee of

the facility but is working in

collaboration with a physician,

recertified, where such services are

furnished over a period of time, in

such cases, at least as often as

required under section 1396b(g)(6) of

this title (or, in the case of

services that are services provided in

an intermediate care facility for the

mentally retarded, every year), and

accompanied by such supporting

material, appropriate to the case

involved, as may be provided in

regulations of the Secretary), that

such services are or were required to

be given on an inpatient basis because

the individual needs or needed such

services, and J

(B) such services were furnished under

a plan established and periodically

reviewed and evaluated by a physician,

or, in the case of skilled nursing

facility services or intermediate care

facility services, a physician, or a

nurse practitioner or clinical nurse

specialist who is not an employee of

the facility but is working in

collaboration with a physician;

(45) provide for mandatory assignment

of rights of payment for medical support and

other medical care owed to recipients, in

accordance with section 1396k of this title;

(46) provide that information is

requested and exchanged for purposes of

APP. 1

income and eligibility verification in

accordance with a State system which meets

the requirements of section 1320b-7 of this

title;

(47) at the option of the State,

provide for making ambulatory prenatal care

available to pregnant women during a pre-

sumptive eligibility period in accordance

with section 1396r-1 of this title;

(48) provide a method of making cards

evidencing eligibility for medical

assistance available to an eligible

individual who does not reside in a

permanent dwelling or does not have a fixed

home or mailing address;

(49) provide that the State will

provide information and access to certain

information respecting sanctions’ taken

against health care practitioners and

providers by State licensing authorities in

accordance with section 1396r-2 of this

title;

(50) provide, in accordance with

subsection (q) of this section, for a

monthly personal needs allowance for certain

institutionalized individuals and couples;

(51)(A) meet the requirements of.

section 1396r-5 of this title (relating to

protection of community spouses), and (B)

meet the requirement of section 1396p(c) of

this title (relating to transfer of assets);

(52) meet the requirements of section

1396r-6 of this title (relating to extension

of eligibility for medical assistance);

(53) provide--

(A) for notifying in a timely manner

all individuals in the State who are

determined to be eligible for medical

assistance and who are pregnant women,

APP. 1

breastfeeding or postpartum women (as

defined in section 1786 of this

title), or children below the age of

5, Of the availability of benefits

furnished by the special supplemental

food program under such section, and

(B) for referring any such individual

to the State agency responsible for

administering such program;

(54)(A) provide that, any formulary or

similar restriction (except as provided in

section 1396r-8(d) of this title) on the

coverage of covered outpatient drugs under

the plan shall permit the coverage of

covered outpatient drugs of any manufacturer

which has entered into and complies with an

agreement under section 1396r-8(a) of this

title, which are prescribed for-a medically

accepted indication (as defined in

subsection 13961-8(k)(6) of this title), and

(B) comply with the reporting

requirements of section 1396r-

8(b)(2)(A) of this’ title and the

requirements of subsections (d) and

(g) of section 1396r-8 of this title:

and

(55) provide for receipt and initial

processing of applications of individuals

for medical assistance under subsection

(a)(10)(A)(1i) (IV), (a) (10)(A)(i) (VI),

(a) (10) (A) (1) (VII), or (a) (10) (A) (ii) (IX) of

this section--

(A) at locations which are other than

those used for the receipt and

processing of applications for aid

under part A of subchapter IV of this

chapter and which include : facilities

defined as disproportionate share

hospitals under section 1396r-

46 -

ee tae a i Sl Malt le

na oo

APP, 1

4(a)(1)(A) of this title and

Federally-qualified health centers

described in section 1396d(1)(2)(B) of

this title, and

(B) using applications which are other

than those used for applicatjons for

aid under such part.

(55) . provide, in accordance with

subsection (s) of this section, for adjusted

payments for certain inpatient hospital

services.

(57) provide that each hospital,

nursing facility, provider of home health

care or personal care services, hospice

program, or health maintenance organization

(as defined in section 1396b(m)(1)(A) of

this title) receiving funds under the plan

shall comply with the requirements of

subsection (w) of this section;

~ (58) provide that the State, acting

through a State agency, association, or

other private nonprofit entity, develop a

written description of the law of the State

(whether statutory or as recognized by the

courts of the State) concerning advance

directives that would be distributed by

providers. ‘or organizations under’ the

requirements of subsection (w) of this

section; and

(58) maintain a list (updated not less

often than monthly, and containing each

physician's unique identifier provided under

the system established under subsection (v)

of this section) of all physicians who are

certified to participate under the State

plan. -

Notwithstanding paragraph (5), if-on January

1, 1965, and on the date on which a State

submits its pjan for approval under this

APP. 1

subchapter, the State agency which

administered or supervised the

administration of the plan of such State

approved under subchapter X of this chapter

(or subchapter XVI of this chapter, insofar

as it relates to the blind) was different

from the State agency which administered or

supervised the administration of the State

plan approved under subchapter I of this

chapter (or subchapter XVI of this chapter,

insofar as it relates to the aged), the

State agency which administered or

supervised the administration of such plan

approved under subchapter X of this chapter

(or subchapter XVI of this chapter, insofar

as it relates to the blind) may be

designated to administer or supervise the

administration of the portion of the State

plan for medical assistance which relates to

blind individuals and a different State

agency may be established or designated to

administer or supervise the administration

of the rest of the State plan for medical

assistance; and in such case the part of the

plan which each such agency administers, or

the administration of which each such agency

supervises, shall be regarded as a separate

plan for purposes of this subchapter (except

for purposes of paragraph(10)). The

provisions of paragraphs(9)(A),(31), and

(33) and of section 1396b(i)(4) of this

title shall not apply to a Christian Science

sanatorium operated, or listed and

certified, by the First Church of Christ,

Scientist, Boston, Massachusetts.

For purposes of paragraph (10) any

individual who, for the month of August

1972, was eligible for or receiving aid or

assistance under a State pjan approved under

POE Ae wate OED eM BAN vO

ee ee ae oe

APP. 1

subchapter I, X, XIV, or XVI of this

chapter, or part A of subchapter IV of this

chapter and who for such month was entitled

to monthly insurance benefits under

subchapter II of this chapter shall for

purposes of this subchapter only be deemed

to be eligible for financial aid or

assistance for any month thereafter if such

individual would have been eligible for

financial aid or assistance for such month

had the increase in monthly insurance

benefits under subchapter II of this chapter

resulting from enactment of Public Law 92-

336 not been applicable to such individual.

The requirement of clause (A) of

paragraph (37) with respect to a State plan

maybe waived by the Secretary if he finds~

that the State has exercised good faith in

trying to meet such requirement. For

purposes of this subchapter, any child who

meets the requirements of paragraph(1) or(2)

of section 673(b) of this title shall be

deemed to be a dependent child as defined in

section 606 of this title and shall be

deemed to be a recipient of aid to families

with dependent children under part A of

subchapter IV of this chapter in tho State

where such child resides. Notwithstanding

paragraph (10)(B) or any other provision of

this subsection, a State plan shall provide

medical assistance with respect to an alien

who is not lawfully admitted for permanent

residence or otherwise permanently residing

in the United States under color of law only

in accordance with section 1396b(v) of this

title.

(b) Approval by Secretary

APP. 1

The Secretary shall approve any plan

which fulfills the conditions specified in

subsection (a) of this section, except that

he shall not approve any plan which imposes,

as a condition of eligibility for medical

assistance under the plan--

(1) an age requirement of more

than 65 years; or

(2) any residence requirement

which excludes any individual who

resides in the State, regardless

of whether or not the residence

is maintained permanently or at a

fixed address; or

(3) any citizenship requirement

which excludes any citizen of the

United States.

for benefits as condition of

applying ' § for, or receiving, medical

assistance

Notwithstanding subsection (b) of this

section, the Secretary shall not approve any

State plan for medical assistance if--

(1) the State has in effect,

under its plan established under

part A of subchapter IV of this

chapter, payment levels that are

less than the payment levels in

effect under such plan on May l,

1988; or

(2) the State requires

individuals described in

subsection (1)(1) of this section

to apply for benefits under such

part as a condition of applying

for, or receiving, medical

assistance under this subchapter.

APP. 1

(da) Performance of medical or

utilization review functions.

If a State contracts with an entity

which meets the requirements for section

1320c-1 of this title, as determined by the

Secretary, for the performance of the

quality review functions described in

subsection (a)(30)(C) of this section, or a

utilization and quality control peer review

organization having a contract with the

Secretary under part B of subchapter XI of

this chapter for the performance of medical

or utilization review function (including

quality review functions described in

subsection (a)(30)(C) of this section)

required under this subchapter of a State

plan with respect to specific services or

providers (or services or providers in a

geographic area of the State), such

requirements shall be deemed to be met for

those services or providers (or services or

providers in that area) by delegation to an

entity or organization under the contract of

the State's authority to conduct such review

activities if the contract provides for the

performance of activities not inconsistent

with part B of subthapter XI of this chapter

and provides for such assurances of

satisfactory performance by an entity or

organization as the Secretary may prescribe.

(e) Continued eligibility of families

determined ineligible because of income and

resources or hours of work limitations of

plan; individuals enrolled with health

maintenance organizations; persons deemed

recipients of supplemental security income

or State supplemental payments; entitlement

for certain newborns; postpartum eligibility

for pregnant women

APP. 1

(1) (A) Notwithstanding any other

provision of this subchapter, effective

January 1, 1974, subject to subparagraph (B)

each State plan approved under this

subchapter must provide that each family

which was receiving aid pursuant to a plan

of the State approved under part A of

subchapter IV of this chapter in at least 3

of the 6 months immediately preceding the

month in which such family became ineligible

for such aid because of increased hours of,

or increased income from, employment, shall,

while a member of such family is employed,

remain eligible for assistance under the

plan approved under this subchapter (as

though the family was receiving aid under

the plan approved under part A of subchapter

Iv of this chapter) for 4 calendar months

beginning with the month in which such

family became ineligible for aid under the

plan approved under part A of subchapter IV

of this chapter because of income and

resources or hours of work limitations

contained in such plan.

(B) Subparagraph (A) shall net apply

with respect to families that cease to be

eligible for aid under part A of subchapter

Iv of this chapter during the period

beginning on April 1, 1990, and ending 6n

September 30, 1998. During such period, for

provisions relating to extension of

eligibility for medical assistance for

certain families who have received aid

pursuant to a State plan approved underpart

A of subchapter IV of this chapter and have

earned income, see section 1396r-6 of this

title.

(2)(A) In the case of an individual who

is enrolled with a qualified health

i :

APP. 1

maintenance organization (as defined in

Title XIII of the Public Health Service Act

[42 U.S.C.A. § 300e et seq.]) or with an

entity described in paragraph (2)(B)(iii),

(2)(E), (2)(G), or (6) of section 1396b(m)

of this title under a contract described in

section 1396b(m)(2)(A) of this title or with

an eligible organization with a contract

under section 1395mm of this title and who

would (but for this paragraph) lose

eligibility for benefits under this

subchapter before the end of the minimum

enrollment period (defined in

subparagraph(B)), the State plan may

provide, notwithstanding any other provision

of this subchapter, that the individual

shall be deemed to continue to be eligible

for such benefits until the end of such

minimum period, but, except for benefits

furnished under section 1396d(a)(4)(C) of

this title, only with respect to such bene-

fits provided to the individual as an

enrolle of such organization or entity.

(B) For purposes of subparagraph (A),

the term "minimum enrollment period" means,

with respect to an individual's enrollment

with an organization or entity under a State

plan, a period, established by the State, of

“not more than six months beginning on the

date the individual's enrollment with the

organization or entity becomes effective.

(3) At the option of the State, any

individual who--

(A) is 18 years of age or younger and

qualifies as a disabled individual

under section 1382c(a) of this title;

(B) with respect to whom there has

been a determination by the State

that--

APP. 1

(1) the individual requires a level of

care provided in a hospital, nursing

facility, or intermediate care

facility for the mentally retarded,

(11) it is appropriate to provide such

care for the individual outside such

an institution, and

(111) the estimated amount which would

be expended for medical assistance for

the individual for such care outside

an institution is not greater than the

estimated amount which would otherwise

be expended for medical assistance for

the individual within an appropriate

institution; and

institution, would be eligible for medical

assistance under the State plan under this

subchapter, shall be deemed, for purposes of

this subchapter only, to be an individual

with respect to whom a supplemental security

income payment, or State supplemental

payment, respectively,is being paid under

subchapter XVI of this chapter.

(4) A child born to a woman eligible

for and receiving medical assistance under

a State plan on the date of the child's

birth shall be deemed to have applied for

medical assistance and to have been found

eligible for such assistance under such plan

on the date of such birth and to remain

eligible for such assistance for a period of

one year so long as the child is a member of

the woman's household and the woman remains

(or would remain if pregnant) eligible for

such assistance. During the period in which

a child is deemed under the preceding

sentence to be eligible for medical

assistance, the medical assistance

—

APP. 1

eligibility identification number of the

mother shall also serve as the

identification number of the child, and all

Claims shall be submitted and paid under

such number (unless the State issues a

separate identification number for the child

before such period expires).

(5) A woman who, while pregnant, is

eligible for, has applied for, and has

received medical assistance under the State

plan, shall continue to be eligible under

the plan, as though she were pregnant, for

all pregnancy-related and postpartum medical

assistance under the plan, through the end

of the month in which the 60-day period

(beginning on the last day of her pregnancy)

ends.

(6) In the case of a pregnant woman

described in subsection (a)(10) of this

section who, because of a change in income

of the family of which she is a member,

would not otherwise continue to be described

in such subsection, the woman shall be

deemed to continue to be an individual

described in subsection (a)(10)(A)(i)(IV) of

this section and subsection (1)(1)(A) of

this section without regard to such change

of income through the end of the month in

which the 60-day period (beginning on the

last day of her pregnancy) ends. The

preceding sentence shall not apply in the

case of a woman who has been provided

ambulatory prenatal care pursuant to section

1396r-l of this title during a presumptive

eligibility period and is_~ then, in

accordance with such section, determined to

be ineligible for medical assistance under

the State plan.

APP. 1

(7) In the case of an infant or child

described in subparagraph (B), (C), or (D)

of subsection (1)(1) of this section or

paragraph (2) of section 1396d(n) of this

title--

(A) who is receiving inpatient

services for which medical assistance

is provided on the date the infant or

child attains the maximum age with

respect to which coverage is provided

under the State plan for _ such

individuals, and

(B) who, but for attaining such age,

would remain eligible for medical

assistance under such subsection, the

infant or child shall continue to be

treated as an individual described in

such respective provision until the

end of the stay for which the

inpatient services are furnished.

(8) If an individual is determined to

be a qualified medicare beneficiary (as

defined in section 1396d(p)(1) of this

title), such determination shall apply to

services furnished after the end of the

month in which the determination first

occurs. For purposes of payment to a State

under section 1396b(a) of this title, such

determination shall be considered to be

valid for an individual for a period of 12

months, except that a State may provide for

such determinations more frequently, but not

more frequently than once every 6 months for

an individual.

(9)(A) At the option of the State, the

plan may include as medical assistance

respiratory care services for any individual

who--

APP. 1

(1) is medically dependent on a

ventilator for life support at least

six hours per day;

(11) has been so dependent for at

least 30 consecutive days (or the

maximum number of days authorized

under the State plan, whichever is

less) as an inpatient;

(441) but for the availability of

respiratory care services, would

require respiratory care as an

inpatient in a hospital, nursing

facility, or intermediate care

facility for the mentally retarded and

would be eligible to have payment made

for such inpatient care under the

State plan;

(iv) has adequate social support

services to be cared for at home; and

(v) wishes to be cared for at home.

(B) The requirements of subparagraph

(A)(ii) may be satisfied by a continuous

stay in one or more hospitals, nursing

facilities, or intermediate care facilities

for the mentally retarded.

respiratory care services means services

provided on a part-time basis in the home of

the individual by a respiratory therapist or

other health care professional trained in

respiratory therapy (as determined by the

State), payment for which is not otherwise

included within other items and services

furnished to such individual as medical

assistance under the plan.

(10)(A) The fact that an individual,

child, or pregnant woman may be denied aid

under part A of subchapter IV of this

chapter pursuant to section 602(a)(43) of

APP. 1

this title shall not be construed as denying

(or permitting a State to deny) medical

assistance under this subchapter to such

individual, child, or woman who is eligible

for assistance under this subchapter on a

basis other than the receipt of aid under

such part.

(B) If an individual, child, or

pregnant woman is receiving aid under part

A of subchapter IV of this chapter and such

aid is terminated pursuant to. section

602(a)(43) of this title, the State may not

discontinue medical assistance under this

subchapter for the individual, child, or

woman until the State has determined that

the individual, child, or woman is not

eligible for assistance under this

subchapter on a basis other than the receipt

of aid under such part.

(11)(A) In the case of an individual

who is enrolled with a group health plan

under section 1396e of this title and who

would (but for this paragraph) lose

eligibility for benefits under’ this

subchapter before the end of the minimum

enrollment period (defined in subparagraph

(B)),the State plan may provide,

notwithstanding any other provision of this

subchapter, that the individual shall be

deemed to continue to be eligible for such

benefits until the end of such minimum

period, but only with respect to such

benefits provided to the individual as an

enrolle of such plan.

(B) For purposes of subparagraph (A),

the term "minimum enrollment period"

means, with respect to an individual's

enrollment with a group health plan, a

period established by the State, of

aera)

APP. 1

not more than 6 months beginning on

the date the individual's enrollment

under the plan becomes effective.

(f) Effective date of State plan as

determinative of duty of State to provide

medical assistance to aged, blind, or

disabled individuals

Notwithstanding any other provision of

this subchapter, except as provided in

subsection (e) of this section and section

1382h(b)(3) of this title and section 1396r-

5 of this title, except with respect to

qualified disabled and working individuals

(described in section 1396d(s) of this

title), and except with respect to qualified

medicare beneficiaries, qualified severely

impaired individuals, and individuals

described in subsection (m)(1) of this

section, no State not eligible to

participate in the State plan program

established under subchapter XVI of this

chapter shall be required to provide medical

assistance to any aged, blind, or disabled

individual (within the meaning of subchapter

XVI of this chapter) for any month unless

such State would be (or would have been)

required to provide medical assistance to

such individual for such month had its plan

for medical assistance approved under this

subchapter and in effect on January 1, 1972,

been in effect in such month, except that

for this purpose any such individual shall

be deemed eligible for medical assistance

under such State plan if (in addition to

meeting such other requirements as are or

may be imposed under the State plan) the

income of any such individual as determined

in accordance with section 1396b(f) of this

APP. 1

title (after deducting any supplemental

security income payment and State

supplementary payment made with respect to

such individual, and incurred expenses for

medical care as recognized under State law

regardless of whether such expenses are

reimbursed under another public program of

the State or political subdivision thereof)

is not in excess of the standard for medical

assistance established under the State plan

as in effect on January 1, 1972. In States

which provide medical assistance to

individuals pursuant to paragraph (10)(C) of

subsection (a) of this section, an

individual who is eligible for medical

assistance by reason of the requirements of

this section concerning the deduction of

incurred medical expenses from income shali

be considered an individual eligible for

medical assistance under paragraph (10) (A)

of that subsection if that individual is, or

is eligible to be (1) an individual with

respect to whom there is payable a State

supplementary payment on the basis of which

similarly situated individuals are eligible

to receive medical assistance equal in

amount, duration, and scope to that provided

to individuals eligible under paragraph

(10)(A), or (2) an eligible individual or

eligible spouse, as defined in subchapter

XVI of this chapter, with respect to whom

supplemental security income benefits are

payable; otherwise that individual shall be

considered to be an individual eligible for

medical assistance under paragraph (10) (C)

of that subsection. In States which do not

provide medical assistance to individuals

pursuant to paragraph (10)(C) of that

subsection, an individual who is eligible

APP. 1

for medical assistance by reason of the

requirements of this section concerning the

deduction of incurred medical expenses from

income shall be considered an individual

eligible for medical assistance under

paragraph (10)(A) of that subsection.

(g) Reduction of aid or assistance to

providers of services attempting to collect

from beneficiary in violation of third-party

provisions

In addition to any other sanction

available to a State, a State may provide

for a reduction of any payment amount

otherwise due with respect to a person who

furnishes services under the plan in an

amount equal to up to three times the amount

of any payment sought to be collected by

that person in violation of subsection

(a)(25)(C) of this section.

(h) Payment adjustments with respect to

hospitals serving disproportionate number of

low-income patients with special needs and

for home and community care

Nothing in this subchapter (including

subsections (a)(13) and (a)(30) of this

section) shall be construed as authorizing

the Secretary to limit the amount of payment

adjustments that may be made under a plan

under this subchapter with respect to

hospitals that serve a disproportionate

number of low-income patients with special

needs or to limit the amount of payment that

may be made under a plan under this

subchapter for home and community care.

APP. 1

(1) Termination of certification for

participation of and suspension of State

payments to intermediate care facilities

for mentally retarded

(1) In addition to any other authority under

State law, where a State determines that a

intermediate care facility for the mentally

retarded which is certified for

participation under its plan no longer

substantially meets the requirements for

such a facility under this subchapter and

further determines that the facility's

deficiencies--

(A) immediately jeopardize the health and

safety of its patients, the State shail

provide for the termination of the facili-

ty's certification for participation under

the plan and may provide, or

(B) do not immediately jeopardize the health

and safety of its patients the State may, in

lieu of providing for terminating the

facility's certification for participation

under the plan, provide

that no payment will be made under the State

pian with respect to any individual admitted

to such facility after a date specified by

the State.

(2) The State shall not make such a decision

with respect to a facility until the

facility has had a reasonable opportunity,

following the initial determination that it

no longer substantially meets the

requirements for such a facility under this

subchapter, to correct its deficiencies,

and, following this period, has been given

reasonable notice and opportunity for a

hearing.

APP. 1

(3) The State's decision to deny payment may

be made effective only after such notice to

the public and to the facility as may be

provided for by the State, and its

effectiveness shall terminate (A) when the

State finds that the facility is in

substantial compliance (or is making good

faith efforts to achieve’ substantial

compliance) with the requirements for such

a facility under this subchapter, or (B) in

the case described in paragraph (1)(B), with

the end of the eleventh month following the

month such decision is made effective,

whichever occurs first. If a facility to

which clause (B) of the previous sentence

applies still fails to substantially meet

the provisions of the respective section on

the date specified in such clause, the State

shall terminate such facility's

certification for participation under the

plan effective with the first day of the

first month following the month specified in

such clause.

(j) Waiver or modification of subchapter

requirements with respect to medical

assistance program in American Samoa

Notwithstanding any other requirement

of this subchapter, the Secretary may waive

or modify any requirement of this subchapter

with respect to the medical assistayce

program in American Samoa and the Northern

Mariana Islands, other than a waiver of the

Federal medical assistance percentage, the

limitation in section 1308(c) of this title,

or the requirement that payment may be made

for medical assistance only with respect to

amounts expended by American Samoa or the

———————

APP. 1

Northern Mariana Islands for care and

services described in paragraphs (1) through

(22) of section 1396d(a) of this title.

(k) Treatment of potential payments from

medicaid qualifying trusts

(1) In the case of a medicaid qualifying

trust (described in paragraph (2)), the

amounts from the trust deemed available to

a grantor, for purposes of subsection

(a)(17) of this section, is the maximum

amount of payments that may be permitted

under the terms of the trust to be

distributed to the grantor, assuming the

full exercise of discretion by the trustee

or trustees for the distribution of the

maximum amount to the grantor. For purposes

of the previous sentence, the term "grantor"

means the individual referred to in

paragraph (2).

(2) For purposes of this subsection, a

“medicaid qualifying trust" is a trust, or

Similar legal device, established (other

than by will) by an individual (or an

individual's spouse) under which’ the

individual may be the beneficiary of all or

part of the payments from the trust and the

distribution of such payments is determined

by one or more trustees who are permitted to

exercise any discretion with respect to the

distribution to the individual.

(3) This subsection shall apply without

regard to--

(A) whether or not the medicaid

qualifying trust is irrevocable or is

established for purposes other than to

enable a grantor to qualify for

APP. 1

medical assistance under this

subchapter; or

(B) whether or not the discretion

described in paragraph (2) is actually

exercised.

(4) The State may waive the application of

this subsection with respect to an

individual where the State determines that

such application would work an _ undue

hardship.

(1) Description of group

(1) Individuals described in this paragraph

are---

(A) women during pregnancy (and during

the 60-day period beginning on the

last day of the pregnancy),

(B) infants under one year of age,

year of age but have not attained 6

years of age, and

(D) children born after September 30,

1983, who have attained 6 years of age

but have not attained 19 years of age,

who are not described in any of

subclauses (I) through (III) of

subsection (a) (10) (A) (i) of this

section and whose family income does

not exceed the income level

established by the State under

paragraph (2) for a family size equal

to the size of the family, including

the woman, infant, or child. »

(2)(A)(1) For purposes of paragraph (1) with

respect to individuals described in

subparagraph (A) or (B) of that paragraph,

the State shall establish an income level

which is a percentage (not less than the

APP. 1

percentage provided under clause (ii) and

not more than 185 percent) of the income

official poverty line (as defined by the

Office of Management and Budget, and revised

annually in accordance with section 9$02(2)

of this title) applicable to a family of the

size involved.

(11) The percentage provided under this

Clause, with respect to eligibility for

medical assistance on or after---

(I) July 1, 1989, is 75 percent, or,

if greater, the percentage provided

under clause (iii), and

(II) April 1, 1990, 133 percent, or,

if greater, the percentage provided

under clause (iv).

(111) In the case of a State which, as

of July 1, 1988, has elected to provide, and

provides, medical assistance to individuals

described in this subsection or has enacted

legislation authorizing, or appropriating

funds, to provide such assistance to such

individuals before July 1, 1989, the

percentage provided under clause (ii)(I)

shall not be less than--

(I) the percentage specified by the

State in an amendment to its State

plan (whether approved or not) as of

July 1, 1988, or

(II) if no such percentage is

specified as of July 1, 1988, the

percentage established under- the

State's authorizing legislation or

provided for under the State's

appropriations;

— in no case shall this clause require the

percentage provided under clause (ii)(I) to

exceed 100 percent.

APP. 1

(iv) In the case of a State which, as

of December 19, 1989, has established under

Clause (i), or has enacted legislation

authorizing, or appropriating funds, to

provide for, a percentage (of the income

official poverty line) that is greater than

133 percent, the percentage provided under

Clause (ii) for medical assistance on or

after April 1, 1990, shall not be less than-

(I) the percentage specified by the

State in an amendment to its State

plan (whether approved or not) as of

December 19, 1989, or

(II) if no such percentage is

specified as of December 19, 1989, the

percentage established under_- the

State's authorizing legislation or

provided for under the State's

appropriations.

(B) For purposes o[ paragraph (1) with

respect to individuals described in

subparagraph (C) of such paragraph, the

State shall establish an income level which

is equal to 133 percent of the income

official poverty iine described in

subparagraph (A) applicable to a famify of

the size involved.

respect to individuals described in

subparagraph (D) of that paragraph, the

State shall establish an income level which

is equal to 100 percent of the income

official poverty line described in

subparagraph (A) applicable to a family of

the size involved.

(3) Notwithstanding subsection (a) (17)

of this section, for individuals who are

eligible for medical assistance because of

subsection (a) (10)(A)(i)(1IV),

APP. 1

(€)(10)(A)(i)(VI), (a)(10)(A)(L)(VII), or

(a)(10)(A)(ii)(IX) of this section.-

(A) application of a resource standard

shall be at the option of the State;

(B) any resource standard or

methodology that is applied with respect to

an individual described in subparagraph (A)

of paragraph (1) may not be more restrictive

than the resource standard or methodology

that is applied under subchapter XVI of this

chapter:

methodology that is applied with respect to

an individual described in subparagraph (B),

(C), or (D) of paragraph (1) may not be more

restrictive than the corresponding

methodology that is applied under the State

plan under part A of subchapter IV of this

chapter:

(D) the income standard to be applied

is the appropriate income standard

. established under paragraph (2): and

(EZ) family income shall be determined

in accordance with the methodology employed

under the State plan under part A or E of

subchapter IV of this chapter (except to the

extent such methodology is inconsistent with

Clause (D) of subsection (a)(17) of this

section), and costs incurred for medical

care or for any other type of remedial care

shall not be taken into account.

Any different treatment provided under this

paragraph for such individuals shall not,

because of subsection (a)(17) of this

section, require or permit such treatment

for other individuals.

(4)(A) In the case of any State which

is providing medical assistance to its

APP. 1

residents under a waiver granted under

section 1315 of this title, the Secretary

shall require the State to provide medical

assistance for pregnant women and infants

under age 1 described in subsection

(a)(10)(A)(i)(IV) of this section and for

children described in subsection

(a)(10)(A)(i) (VI) or subsection

(a)(10)(A)(i)(VII) of this section in the

same manner as the State would be required

to provide such assistance for such

individuals if the State had in effect a

plan approved under this subchapter.

(B) In the case of a State which is not

one of the 50 States or the District of

Columbia, the State need not meet the

requirement of subsection (a)(10)(A)(i)(IV),

(a)(10)(A)(i)(VI), or (a)(10)(A)(1) (VII) of

this section and, for purposes of paragraph

(2)(A), the State may substitute for the

percentage provided under clause (ii) of

such paragraph any percentage.

(m) Description of individuals

(1) Individuals described in this paragraph

are individuals--

(A) who are 65 years of age or older

or are disabled individuals (as

determined under section 1382c(a)(3)

of this title),

(B) whose income (as determined under

section 1382a of this title for

purposes of the supplemental security

income program, except as provided in

paragraph 2(C)) does not exceed an

income level established by the State

consistent with paragraph (2)(A), and

APP. 1

under section 1382b of this title for

purposes of the supplemental security

income program) do not exceed (except

as provided in paragraph (2)(B)) the

maximum amount of resources that an

individual may have and obtain

benefits under that program.

(2)(A) The income level established

under paragraph (1I)(B) may not exceed a

percentage (not more than 100 percent) of

the official poverty line (as defined by the

Office of Management and Budget, and revised

annually in accordance with section 9902(2)

of this title) applicable to a family of the

size involved.

(B) In the case of a State that

provides medical assistance to

individuals not described in

subsection (a)(10)(A) of this section

and at the State's option, the State

may use under paragraph (I)(C) such

resource level (which is higher than

the level described in that paragraph)

as may be applicable with respect to

individuals described in paragraph

(1)(A) who are not described in

subsection (a)(10)(A) of this section.

1396d(p)(2)(D) of this title shall

apply to determinations of income

- under this subsection in the same

manner as they apply to determinations

of income under section 1396d(p) of

this title.

(3) Notwithstanding subsection (a)(17)

of this section, for individuals described

in paragraph (1) who are covered under the

| |

ee ee

APP. 1

plan by virtue of subsection

(a)(10)(A)(ii)(X) of this section--

(A) the income standard to be applied

is the income standard described in

paragraph (I)(B). and

(B) except as provided in section

1382a(b)(4)(B)(ii) of this title,

costs incurred for medical care or for

any other type of remedial care shall

not be taken into account in

determining income.

Any different treatment provided under

this paragraph for such individuals

shall not, because of subsection

(a)(17) of this section require or

permit such treatment for other

individuals.

(4) Notwithstanding subsection (a)(17)

of this section, for qualified medicare

beneficiaries described in section

1396d(p)(1) of this title---

(A) the income standard to be applied

is the income standard described in

section 1396d(p)(1)(B) of this title,

and

(B) except as provided in section

1382a(b)(4)(B)(ii) of this title,

costs incurred for medical care or for

any other type of remedial care shall

not be taken into account in

determining income.

‘ Any different treatment provided under

this paragraph for such individuals

shall not, because of subsection

(a)(17) of this section, require or

permit such treatment for other

individuals.

APP. 1

(n) Payment amounts

In the case of medical assistance

furnished under this subchapter for medicare

cost-sharing respecting the furnishing of a

service or item to a qualified medicare

beneficiary,the State plan may provide

payment in an amount with respect to the

service or item that results in the sum of

such payment amount and any amount of

Payment made under subchapter XVIII of this

chapter with respect to the service or item

exceeding the amount that is otherwise

payable under the State plan for the item or

service for eligible individuals who are not

qualified medicare beneficiaries.

(o) Certain benefits disregarded for

purposes of determining post-

eligibility contributions

Notwithstanding any provision of

subsection (a) of this section to the

contrary, a State plan under this subchapter

shall provide that any supplemental security

income benefits paid by reason of sub-

paragraph (E) or (G) of section 1382(e)(1)

of this title to an individual who--

(1) is eligible for medical assistance

under the plan, and

(2) is in a hospital, skilled nursing

facility, or intermediate care

facility at the time such benefits are

paid, will be disregarded for purposes

of determining the amount of any post-

eligibility contribution by the

individual to the cost of the care and

services provided by the hospital,

eee

APP. 1

skilled nursing facility, or

intermediate care facility.

(Pp) Exclusion power of State; exclusion as

prerequisite; for medical assistance

payments; “exclude” defined

(1) In addition to any other authority,

a State may exclude any individual or entity

for purposes of participating under the

State plan under this subchapter for any

reason for which the Secretary could exclude

the individual or entity from participation

in a program under subchapter XVIII of this

chapter under section 1320a-7, 1320a-7a, or

1395cc(b)(2) of this title.

(2) In order for a State to receive

payments for medical assistance under

section 1396b(a) of this title, with respect

to payments the State makes to a health

maintenance organization (as defined in

section 1396b(m) of this tit[e) or to an

entity furnishing services under a waiver

approved under section 1396n(b)(1) of this

title, the State must provide that it will

exclude from participation, as such an

organization or entity, any organization or

entity that--

(A) could be excluded under section

1320a.7(b)(8) of this title (relating

to owners and managing employees who

have been convicted of certain crimes

or received other sanctions),

(B) has, directly or indirectly, a

substantial contractual relationship

(as defined by the Secretary) with an

individual or entity that is described

in section 1320a-7(b)(8)(B) of this

title, or

APP. 1

individual or entity that is excluded

from participation under this

subchapter under section 1320a-7 or

1320a.7a of this title for’ the

provision of health care, utilization

review, medical social work, or

administrative services or employs or

contracts with any entity for the

provision (directly or indirectly)

through such an excluded individual or

entity of such services.

(3) As used in this subsection, the

term "exclude" includes the refusal to enter

into or renew a participation agreement or

the termination of such an agreement.

(q) Minimum monthly personal needs

allowance deduction;

"institutionalized individual or

couple” defined

(1)(A) In order to meet the requirement of

subsection (a)(50) of this section, the

State plan must provide that, in the case of

an institutionalized individual or couple

described in subparagraph (B), in

determining the amount of the individual's

or couple's income to be applied monthly to

payment for the cost of care in an

institution, there shall be deducted from

the monthly income (in addition to other

allowances otherwise provided under the

State plan) a monthly personal needs

allowance--

(1) which is reasonable in amount for

clothing and other personal needs of

the individual (or couple) while in an

institution, and

APP. 1

(141) which is not less (and may be

greater) than the minimum monthly

personal needs allowance described in

paragraph (2).

(B) In this subsection, the term

"institutionalized individual or couple"

means an individual or married couple--

(1) who is an inpatient (or who are

inpatients) in a medical institution

or nursing facility for which payments

are made under this subchapter

throughout a month, and

(141) who is or are determined to be

eligible for medical assistance under

the State plan.

(2) The minimum monthly personal needs

allowance described in this Paragraph is $30

for an institutionalized individual and $60

for an institutionalized couple (if both are

aged, blind, or disabled, and their incomes

are considered available to each other in

determining eligibility).

(r) Disregarding payments for certain

medical expenses by institutionalized

individuals

(1) For purposes of sections

1396a(a)(17) and 1396r-5(d)(1)(D) of this

title and for purposes of a waiver under

section 1396n of this title, with respect to

the post-eligibility treatment of income of

individuals who are institutionalized or

receiving home or community-based services

under such a waiver there shall be

disregarded reparation payments made by the

Federal Republic of Germany and, there shall

be taken into account amounts for incurred

expenses for medical or remedial care that

APP. 1

are not subject to payment by a third party,

including--

(1) medicare and other health

insurance premiums, deductibles, or

coinsurance, and

(11) necessary medical or remedial

care recognized under State law but

not covered under the State plan under

this subchapter, subject to reasonable

limits the State may establish on the

amount of these expenses.

(2)(A) The methodology to be employed

in determining income and resource

eligibility for individuals under

subsection (a)(10)(A)(i)(III),

(a)(10)(A)(i)(IV), (a)(10)(A)(i) (VI), |

(a)(10)(A)(1)(VIT), (a)(10)(A)(i1), |

(a)(10)(C)(i)(III), or (ff) of this |

section or under section 1396d(p) of

this title may be less restrictive,

and shall be no more restrictive, than

the methodology--

(1) in the case of groups consisting

of aged, blind, or disabled

individuals, under the supplemental

under subchapter XVI of this chapter,

(11) in the case of other groups,

under the State plan most closely

categorically related.

(B) For purposes of this subsection and

subsection (a) (10) of this section,

methodology is considered to be "no more

restrictive" if, using the methodology,

additional individuals may be eligible for

medical assistance and no individuals who

are otherwise eligible are made ineligible

for such assistance.

APP. 1

(8) Adjustment in payment for hospital

services furnished to low-income

children under age of 6 years

In order to meet the requirements of

subsection (a)(55) of this section, the

State plan must provide that payments to

hospitals under the plan for inpatient

hospital services furnished to infants who

have not attained the age of 1 year and to

children who have not attained the age of 6

years and who receive such services in a

disproportionate share hospital

described in section 1396r of this

title shall--

(1) if made on a prospective basis

(whether per diem, per case, or otherwise)

provide for an outlier adjustment in payment

amounts for medically necessary inpatient

hospital services involving exceptionally

high costs or exceptionally long lengths of

stay,

(2) not be limited by the imposition of

day limits with respect to the delivery of

such services to such individuals, and

(3) not be limited by the imposition of

dollar limits (other than such limits

resulting from prospective payments as

adjusted pursuant to paragraph (1)) with

respect to the delivery of guch services to

any such individual who has not attained

their first birthday (or in the case of such

an individual who is an inpatient on his

first birthday until such individual is dis-

charged).

(t) Authority of Secretary; limitations

APP. 1

Except as provided in section 1396b(i)

of this title, nothing in this subchapter

(including sections 1396b(1) and 1396d(a) of

this title) shall be construed as

authorizing the Secretary to deny or limit

payments to a State for expenditures, for

medical assistance for items or services,

attributable to taxes (whether or not of

general applicability) imposed with respect

to the provision of such items or services.

(u) Qualified COBRA continuation

beneficiaries

(1) Individuals described in this

paragraph are individuals--

(A) who are entitled to elect COBRA

continuation coverage (as defined in

Paragraph (3)).

(B) whose income (as determined under

section 1382a of this title for purposes of

the supplemental security income program)

does not exceed 100 percent of the official

poverty line (as defined by the Office of

Management and Budget, and revised annually

in accordance with section 9902(2) of this

title) applicable to a family of the size

involved,

under section 1382b of this title for

purposes of the supplemental security income

program) do not exceed twice the maximum

amount of resources that an individual may

have and obtain benefits under that program,

and

(D) with respect to whose enrollment

for COBRA continuation coverage the State

has determined that the savings in

expenditures under this subchapter resulting

‘ iia tala

APP. 1

from such enrollment is likely to exceed the

amount of payments for COBRA premiums made.

(2) For purposes of subsection

(a) (10) (F) of this section and this

subsection, the term "COBRA premiums" means

the applicable premium imposed with respect

to COBRA continuation coverage.

(3) In this subsection, the term "COBRA

continuation coverage" means coverage under

€& group health plan provided by an employer

with 75 or more employees provided pursuant

to title XXII of the Public Health Service

Act [42 U.S.C.A. §300bb-1 et seq. ] section

4980B of Title 26, or title VI of the

Empioyee Retirement Income Security Act of

1974 [29 U.S.C.A. §1161 et seq. ]

(4) Notwithstanding subsection (a) (17)

of this section, for individuals described

in paragraph (1) who are covered under the

State plan by virtue 0of subsection

(a)(10)(A)(ii)(XI) of this section--

(A) the income standard to be applied

is the income standard described in

paragraph (I)(B), and

(B) except as provided in section

1382a(b)(4)(B)(ii) of this title,

costs incurred for medical care or for

any other type of remedial care shall

not be taken into account in

determining income.

Any different treatment provided under

this paragraph for such individuals

shall not, because of subsection

(a)(10)(B) or (a)(17) of this section,

require or permit such treatment for

other individuals.

APP. 1

(v) State agency determination of

disability and blindness and provision

of medical assistance prior to final

determination by Administration

(1) A State plan may provide for the

making of determinations of disability or

blindness for the purpose of determining

eligibility for medical assistance under the

State plan by the single State agency or its

designee, and make medical assistance

available to individuals whom it finds to be

blind or disabled and who are determined

otherwise eligible for such assistance

during the period of time prior to which a

final determination of disability or blind-

ness is made by the Social Security

Administration with respect to such an

individual. In making such

determinations,the State must apply the

definitions of disability and blindness

found in section 1382c(a) of this title.

(w) Maintenance of written policies and

procedures respecting advance

directives

(1) For purposes of subsection (a) (57)

of this section and sections 1396b(m) (1) (A)

and 1396n(c)(2)(E) of this title, the

requirement of this subsection is that a

provider or organization (as the case may

be) maintain written policies and procedures

with respect to all adult individuals

receiving medical care by or through the

provider or organization--

(A) to provide written information to

each such individual concerning--

Neel On. eA aetna oe ial M eh

PALM DE IAA OE me 0 LN BORO SM he 108 po? 6 IP tne

APP. 1

(1) an individual's rights under State

law (whether statutory or as recognized by

the courts of the State) to make decisions

concerning such medical care, including the

right to accept or refuse medical or

surgical treatment and the right’ to

formulate advance directives (as defined in

paragraph (3)), and

(11) the provider's or organization's

written policies respecting the

implementation of such rights:

(B) to document in the individual's

medical record whether or not the individual

has executed an advance directive;

care or otherwise discriminate against an

individual based on whether or not the

individual has executed an advance

directive;

(D) to ensure compliance with

requirements of State law (whether statutory

or as recognized by the courts of the State)

respecting advance directives; and

(E) to provide (individually or with

others) for education for staff and the

community on issues concerning advance

directives.

Subparagraph (C) shall not be construed as

requiring the provision of care which

conflicts with an advance directive.

(2) The written information described

in paragraph (1)(A) shall be provided to an

adult individual--

(A) in the case of a hospital, at the

time of the individual's admission as an

inpatient,

APP. 1

(B) in the case of a nursing facility,

at the time of the individual's admission as

a resident,

health care or personal care services, in

advance of the individual coming under the

care of the provider,

(D) in the case of a hospice program,

at the time of initial receipt of hospice

care by the individual from the program, and

(EZ) in the case of a health maintenance

organization, at the time of enrollment of

the individual with the organization.

(3) Nothing in this section shall be

construed to prohibit the application of a

State law which allows for an objection on

the basis of conscience for any health care

provider or any agent of such provider which

as a matter of conscience cannot implement

an advance directive.

(4) In this subsection, the term

“advance directive" means a written

instruction, such as a living will or

durable power of attorney for health care,

recognized under State law (whether

statutory or as recognized by the courts of

the State) and relating to the provision of

such care when the individual is

incapacitated.

(x) Physician Identifier system;

establishment

The Secretary shall establish a system,

for implementation by not later than July l,

1991, which provides for a unique identifier

for each physician who furnishes services

for which payment may be made under a State

plan approved under this subchapter.

APP. 1

(y) Intermediate sanctions for psychiatric

hospitals

(1) In addition to any other authority

under State law, where a State determines

that a psychiatric hospital which is

certified for participation under its plan

no longer meets the requirements for a

psychiatric hospital (referred to in section

1396d(h) of this title) and further finds

that the hospital's deficiencies--

and safety of its patients, the State shall

terminate the hospital's participation under

the State plan; or

(B) do not immediately jeopardize the

health and safety of its patients, the State

may terminate the hospital's participation

under the State plan, or provide that no

payment will be made under the State plan

with respect to any individual admitted to

such hospital after the effective date of

the finding, or both.

(2) Except as provided in paragraph

(3), if a psychiatric hospital described in

paragraph (1)(B) has not complied with the

requirements for a psychiatric hospital

under this subchapter---

(A) within 3 months after the date the

hospital is found to be out of compliance

with such requirements, the State shall

provide that no payment will be made under

the State plan with respect to any

individual admitted to such hospital after

the end of such 3-month period, or

(B) within 6 months after the date the

hospital is found to be out of compliance

with such requirements, no Federal financial

participation shall be provided under

APP. 1

section 1396b(a) of this title with respect

to further services provided in the hospital

until the State finds that the hospital is

in compliance with the requirements of this

subchapter.

(3) The Secretary may continue

payments, over a period of not longer than

6 months from the date the hospital is found

to be out of compliance with such

requirements, if--

(A) the State finds that it is more

appropriate to take alternative action to

assure compliance of the hospital with the

requirements than to terminate the

certification of the hospital,

(B) the State has submitted a plan and

timetable for corrective action to the

Secretary for approval and the Secretary

approves the plan of corrective action, and

Federal Government payments received under

this Paragraph if the corrective action is

not taken in accordance with the approved

plan and timetable.

APPENDIX II

DEPARTMENT OF HUMAN SERVICES

MANUAL §1062.9-1063.211

MEDICAL SERVICES FOR PERSONS

UNDER 21 YEARS OF AGE

425 SORE RE é

MEDICAL SERVICES FOR PERSONS UNDER 21 YEARS

OF AGE 1062.9-1063.211

1063 Eligibility.

1063.1 Determination of Eligibility.

Children who are categorically

needy and receiving a money

payment, children included in

AFDC Foster Care, and children

receiving a State Supplemental

Payment (B or D), are pre-

determined financially eligible

for the Crippled Children's

Program (CCP). Those children

determined categorically needy

under Title XIX and not receiving

a money payment are also

financially eligible for CCP.

For all other children, the

worker reviews Forms PS-1 and MS-

MA-CC-VR-MA-1 to verify financial

eligibility for CCP. Financial

eligibility is first determined

using Title XIX income’ and

resource standards. (see Section

1020). If the child is not Title

XIX eligible, then CCP income and

resource standards are applied.

If the child is determined

medically needy, using Title XIx

income and resource standards,

CCP income standards must then be

used to determine eligibility for

CCP services.

Documentation of income and

resources and any other

conditions which might effect the

eligibility of this child to

receive CCP services must be

included in the case record.

1-63.2

1063.21

1063.211

APP. 2

A determination of medical

eligibility for CCP must be made

for all children.

Conditions of Eligibility.

Financial Eligibility. A child

is considered financially

eligible for CCP if gross income

does not exceed the CCP income

standard (see Appendix-C-2-b).

Consideration of Income for CCP

Eligibility. All available

income is considered in

determining CCP eligibility.

Available income is defined as

all income "in hand" or under the

control of the individual for the

period of certification. If

gross income exceeds the CCP

income standard, the child is not

income eligible for CCP. If

gross income does not exceed the

CCP income standard, the child is

considered income eligible for

CCP. Computation for

determination of CCP income

eligibility is made on Form MA-2.

Consideration of Resources for

CCP Eligibility. Appendix C-2 is

used to determine resource

eligibility for CCP.

Eligibility for CCP is determined

only after categorically and

medically needy maximum reserves

are exceeded. The same

APP. 2

procedures for determining

resources are used for both Title

XIX and CCP (see Section 1020).

Only liquid resources in hand

during the month(s) of services

are considered in determining CCP

eligibility. Non-liquid

resources are disregarded for CCP

eligibility purposes.

Liguid resources are defined as

those resources that can be

readily converted to cash. The

following are considered liquid

resources:

Cash, savings accounts,

checking accounts

Savingscertificates (C.D.'s)

Stocks, bonds

Trust funds

Gifts, inheritances

Insurance settlements

If liquid resources exceed the

resource standard, any amount

above the standard must _. be

considered as a "spenddown" and

must be applied toward an

incurred medical expense before

certification can be made for

CCP. The client is notified of

the spenddown amount by Form CCP-

1, Notice for CCP Spenddown, and

is advised that spenddown must be

applied within thirty (30) days

of the date of the notice. The

case is ineligible for any month

APP. 2

that liquid resources exceed the

standard and client fails or

refuses to apply the spenddown.

Okla. DHS Issued 11-1-86

SRS OA Bens

APPENDIX III

TIMING, METHOD AND MANNER OF

RAISING FEDERAL QUESTION

TIMING, METHOD AND MANNER OF

RAISING FEDERAL QUESTION

After the state district trial court |

issued its decision finding that DHS was

estopped to find the trust assets as

“available resources" DHS appealed the case

to the Supreme Court. In DHS's Exhibit "C"

to its Petition In Error, DHS asserted the

following error:

"The trial court erroneously

found Ellen Barker's trust assets

did not constitute a resource for

purposes of eligibility for

medical benefits."

In DHS's Brief In Chief to the Oklahoma

Supreme Court, DHS raised the issue of

Medicaid Qualifying Trusts arguing the MQT

statute illustrated the intent of Congress

to make discretionary trusts fully

available. DHS also made this argument to

demonstrate that the complexity of the

program prohibited any DHS official from

making a promise of continued eligibility as

. APP. 3

had been argued by the Trust Company. In

its Brief at pages 16 and 17, DHS stated:

Under both approved plans,

Medicaid and CCP, the

certification period for benefits

in 1981 was for six (6) months.

This is a maximum period of time

a person could be eligible before

recertification. At each

recertification, the resource

issue is again examined by DHS.

Additionally, in 1981, appendix

C-2 was used in both Medicaid and

CCP (then CCU) programs to

establish a resource limit. In

1981, the resource limit for both

programs was $1,500.00. The

monies Ellen Barker received in

1981, $818,000.00, were clearly a

‘ resource which would have

immediately made Ellen Barker

ineligible for assistance. Using

these fairly simple rules of

eligibility for all clients, it

is impossible for any employee of

DHS to guarantee eligibility or

make an agreement to waive the

regulations.

To further illustrate the

impossibility of the agreement

Herbert Hyde sought to make, the

Court should consider the

provisions of 42 U.S.C.

§$1396(a)(K). This provision,

known as the Medicaid qualifying

trust provision, was passed by

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APP. 3

Congress on April 7, 1986. This

provision, although passed

approximately five years after

the alleged agreement,

demonstrates the complexities of

these government programs and how

they change over time. Section

(k) of 42 U.S.C. §1396a provides

that if a trust is discretionary

then the full amount of

discretion is used against the

beneficiary in determining

eligibility. This statute

applies to Medicaid eligibility

when a trust is at issue whether

or not the discretion is

exercised. Thus, ae 36 is

possible in the trustee's

discretion to pay one million

dollars to the beneficiary, then

this is assumed in accordance

with the Medicaid Act in

determining the client's

eligibility.

Because of the above cited

regulations and the changes in

the law, Herbert Hyde was

powerless to make the type of

agreemert the Court suggests he

made. DHS administered federal-

state programs simply do not

allow those with assets of close

to one million dollars to be

welfare eligible.

DHS's Brief In Chief before the Supreme

Court of Oklahoma, Case No. 74,000, filed

APP. 3

February 14, 1990, pgs. 16-17 (footnote

omitted).

After the case was assigned from the

Oklahoma Supreme Court on October 26, 1990,

pursuant to Rule 1.204(I1I) of the Rules for

the Management of Workload in the Supreme

Court, the Oklahoma Court of Appeals,

Division III, issued a memorandum opinion on

April 30, 1991. The decision reversed the

ruling of the trial court finding DHS was

not estopped to consider trust assets as

resources. The Oklahoma Court of Appeals

stated:

An agreement by a _ DHS

employee to accept two hundred

thousand dollars ($200,000.00)

for all past and future medical

expenses of Ellen was ultra

vires, or, outside the scope of

his authority. We are unaware of

any authority for such a

contract, and none has been cited

to us. The doctrine of estoppel

has no application where a state

employee's acts are beyond the

scope of his employment. Ashland

Oil, Inc. Vv. Corporation

APP. 3

Commission, 595 P.2d 423 (Okl.

1979); State ex rel.,

Commissioners of the Land Office

v. Phillips Petroleum Co., 258

P.2d 1193 (Okl. 1953); State ex

rel. Commissioners of the Land

Office v. Lamascus, 263 P.2d 426

(Okl. 1953). Those dealing with

public officials are charged with

notice of the limitations of the

officials' powers. Gamill v.

Shackelford, 480 P.2d 920 (Okl.

1970).

Trust Company, as guardian

of Ellen's estate, may not be

heard to complain of detrimental

reliance upon the State's acts,

as Trust Company and its

predecessors knew, or should have

known, that the agreement entered

into by a DHS employee

purportedly waiving any future

consideration of Ellen's

settlement funds as an "available

resource" was illegal and

therefore ultra vires.

Evidence was introduced to

show an estate for Ellen in

excess of one million dollars

($1,000,000.00) at the time of

denial of benefits. The funds

used by DHS to pay Ellen's

medical claims contemplate an

indigent person. We find the

trial court to have erred when it

entered an order holding DHS to

be estopped from asserting that

APP. 3

the trust was an "available

resource" to Ellen.

Trust Company of Oklahoma v. State of

Oklahoma ex rel. DHS, Oklahoma Supreme Court

Case No. 74,000, Decision of Oklahoma Court

of Appeals p. 3 (April 13, 1991).

After the decision by the Oklahoma

Court of Appeals, the Trust Company filed an

application for certiorari with the Oklahoma

Supreme Court on July 22, 1991. In the

Petition for Certiorari, the Trust Company

raised the estoppel issue and stated:

"b. The memorandum opinion has

‘ decided a question of substance

not heretofore determined by this

Court. The Court of Appeals has

in effect found that a

discretionary trust for

nonmedical purposes is an

“available resource" which can be

invaded by the beneficiary for

payment of her medical expenses.

Other jurisdictions have held

that a discretionary trust is not

an "available resource."

Thus, in its application for certiorari, the

Trust Company raised the core issue of

whether the trust constituted an available

——————————

APP. 3

resource. On September 17, 1991, the

Supreme Court accepted certiorari stating:

"This order is entered subject to

the inherent right of this Court,

in its discretion, to order the

filing of additional briefs if

deemed necessary by the Court."

No other briefs were filed by the parties.

On December 17, 1991, the Oklahoma

Supreme Court squarely ruled upon the issues

presented for review to this Court. First,

the Oklahoma Supreme Court ruled DHS had

waived any argument regarding the payment of

income from the trust. The Court did so by

footnote after framing the issue in the

case:

A single issue of first

impression is presented aioe

whether a trust, created for the

primary purpose of providing

nonmedical support and containing

a provision allowing the trustee

discretion to provide medical

care if the beneficiary ceases to

qualify for medical assistance

programs, is an available

resource for medical assistance

APP. 3

eligibility purposes. We find

that a trust, created for the

primary purpose of providing

nonmedical support and containing

a provision allowing the trustee

discretion to provide medical

care if the beneficiary ceases to

qualify for medical assistance

programs, is not an "available

resource" under 42 U.S.C.

§1396a(a)(17)(B)(Supp. 1990) ora

“liquid resource in hand" within

the meaning of DHS Manual

§1063.212(11/1/86) for medical

eligibility purposes.

l. The Department of Human

Services does not allege on

oe £:%.4:02:a £ & that

distributions paid to

Barker's mother rendered the

minor child ineligible for

medical benefits. Failure

to raise the issue in the

petition for certiorari is

fatal to its consideration.

Bayly, Martin & Fay, Inc. v.

Pickard, 780 P.2d 1168, 1170

(Okla. 1989).

Trust Company of Oklahoma v. State ex rel.

DHS, 825 P.2d 1295, 1296-97 (OKla. 1991).

The Oklahoma Supreme Court also ruled

that the Ellen Barker Trust was not a

Medicaid Qualifying Trust. This issue was

APP. 3

ruled upon in footnote 31. The Court found

that because the settlor was the Ganado

School District (the tortfeasor) that the

settlor was not the beneficiary. The Court

stated:

Two jurisdictions find that

a trust fund is an available

resource for medical eligibility

purposes. Matter of Welfare of

K.S., 427 N.W.2d 653, 659-60

(Minn. 1988); Arkansas Dept. of

Human Services v. Donis, 280 Ark.

169, 655 S.W.2d 452, 454 (1983).

Other cases in which courts have

found that a trust is an

available resource are

distinguishable from the facts

presented here. In 42 U.S.C.

$1396a(k) (Supp. 1990), Congress

has prohibited the creation of

medicaid qualifying trusts for

the purpose of meeting medical

eligibility requirements.

Section 1396a(k) defines a

medicaid qualifying trust as a

non-testamentary trust created by

an individual or the individual's

Spouse under which the individual

is the beneficiary of all or part

of the trust payments. Here, the

settlor is not the beneficiary,

Barker, but the tortfeasor,

Ganado School District.

5 APP. 3

Trust Company of Oklahoma, supra 825 P.2d at

1302 (Okla. 1991).

Finally, the Court ruled upon the core

issue of whether the trust was 4 resource.

The Court found that it agreed with the

reasoning of the majority of jurisdictions

stating:

The courts holdings that a

trust is not an available

resource give effect to the

settlor's intent, expressed

through the trust instrument.

They recognize that a settlor may

want to supplement rather than to

supplant public financial

assistance. They reason that

settlors attempting to provide

for a handicapped person should

not be required to either

bankrupt estates or leave the

disadvantaged party to the

vagaries of public assistance

programs. Additionally, these

courts have not been willing to

find that trust assets are

available resources for medical

assistance purposes when to do so

would authorize a rapid and total

dissipation of a trust estate

intended to provide only

supplementary benefits.

APP. 3

Because, absent a conflict

with a principle of law,

interpretation of a trust's terms

are controlled by the settlor's

intent, we find the reasoning of

the majority persuasive. Here,

the trust instrument provides

that its primary purpose is to

furnish Barker with "nonmedical

equipment, care, education,

training, rehabilitation,

entertainment, transportation, or

assistance needed to assure her

of as natural and pleasant a life

as is possible in her condition."

The trustee is authorized to

provide for medical expenses only

if Barker ceases to qualify for

public assistance. Trust

instruments are generally

construed in favor of their

beneficiaries. If declarations

of trust are clear and

Susceptible of only one meaning,

the provisions of tthe trust

govern its construction.

The trust instrument clearly

indicates that its primary

purpose is for nonmedical

Support. The trust was formed to

provide those supplementary

benefits not provided by public

assistance. Requiring use of the

trust assets until the income is

depleted and the principal is

reduced to $1,800.00 benefits the

State, not Barker, and would

nullify the settlor's intent. We

APP. 3

find that a trust, created for

the primary purpose of providing

nonmedical support and containing

a provision allowing the trustee

discretion to provide medical

care if the beneficiary ceases to

qualify for medical assistance

programs, is not an “available

resource" under vy) U.S.C.

§1396a(a)(17)(B) (Supp. 1990) or

a “liquid resource in hand"

within the meaning of DHS Manual

§$1063.212 (11/1/86) for medical

assistance eligibility purposes.

Trust Company cf Oklahoma v. State ex

rel.

DHS,

825 P.2d at 1303-1304 (Okla.

{citations omitted).

1991)

DHS then filed a Petition for Rehearing

with the Oklahoma Supreme Court which raised

a supremacy clause argument stating:

Under the Supremacy Clause

State Law Must Yield To The

Intent of the Medicaid Act

DHS requests this Court to

reconsider its opinion because

implicit in the Court's ruling is

the fundamental proposition that

a private person, through a

trust, can shelter resources by

simply stating that as their

intent. While this is

APP. 3

permissible in solely private

transactions, DHS asserts that

when applying the purpose of the

Medicaid Act against the state

law on trusts, the federal law

must prevail.

Using the plain wording of

the statute, and its

congressional intent, the state

law must do major damage to clear

and substantial federal

interests. The federal share of

the Medicaid program has risen

from roughly 60% to 70% (of every

dollar spent) in the last five

years in Oklahoma. Congress's

intent was to prevent those who

are affluent from using trusts to

qualify for assistance because of

the scarce monetary resources of

states to fund the Medicaid

program. This Court's holding

that in state law the settlor's

intent governs even when the

intent is clearly (sic) shelter

monies, which would be considered

available resources, does

substantial harm to the federal

interest. The message sent by

this holding is that if a settlor

intends that resources are

unavailable, they simply can make

them unavailable. This is the

result of allowing state law to

control the definition of

“available resources."

APP. 3

DHS' Petition for Rehearing And Brief In

Support of Petition for Rehearing, pgs. 7,

8 and 10 (filed January 27, 1992).

Finally, in its Petition for Rehearing,

DHS requested the Court reconsider its

decision regarding whether the trust was a

Medicaid Qualifying Trust. DHS stated in

its brief:

Based upon this’ ruling,

(Barham v. Rubin, 816 P.2d 965

(Haw. 1991)), DHS respectfully

requests that this Court grant

rehearing to reconsider its

decision whether the trust at

issue is an MQT and therefore the

assets are available resources.

The record reflects that in this

case all of the assets of the

trust do go to the beneficiaries

of Ellen Barker. Also, despite

the fact that the grantor is not

Ellen Barker, in every personal

injury settlement or award, this

device attempts to shield the

very real fact that these monies

were Ellen Barker's and through

the trust are Ellen Barker's.

Ellen Barker and her mother were

the named plaintiffs in the

personal injury action and should

be considered to be in

constructive receipt of the funds

- awarded. Ellen Barker, through

iit cere

APP. 3

her mother acting as her

guardian, should be considered

the "de facto" grantor for

purposes of determining whether

this trust is a (sic) MQT. To

construe this trust otherwise

permits Medicaid applicants to

manipulate the federal law,

shelter otherwise available

resources and force the taxpayers

of this country to pay for their

. medical care while other needy

applicants must be turned away.

DHS' Petition for Rehearing and Brief In

Support of Petition for Rehearing, page 8

(filed January 27, 1992) (citation added).

tg em ete gehen

The Petition for Rehearing was denied

by the Oklahoma Supreme Court on March 4,

1992.

PE Nene s Bet CE Aa AO ce ty Pl hi ete ey

APPENDIX IV

OPINION

CERTIORARI TO THE COURT

OF APPEALS, DIVISION III

STATE OF OKLAHOMA

IN THE SUPREME COURT

OF THE STATE OF OKLAHOMA

OFFICIAL PUBLICATION

TRUST COMPANY OF

OKLAHOMA, Guardian

of the Estate of

ELLEN LEA BARKER,

a minor child,

Appellee,

)

Vv. ) No. 74,000

)

STATE OF OKLAHOMA, )

ex rel. DEPARTMENT )

OF HUMAN SERVICES, )

)

Appellant.

CERTIORARI TO THE COURT OF APPEALS,

DIVISION III

Honorable Charles H. Headrick, Trial Judge

The appellant, Oklahoma Department of Human

Services (Department of Human Services),

denied medical benefits based on the

existence of a trust overseen by the

appellee, Trust Company of Oklahoma (Trust

Company/trustee). The trial court ruled in

favor of the Trust Company. Although the

Court of Appeals recognized that a

settlement agreement entered by the Parties

was meant to require payment of medical

expenses by the Department of Human Services

and to exclude the trust as an available

resource, it reversed the trial court. It

found that because the Department of Human

Services' counsel was without authority to

agree to the settlement agreement, it could

APP. 4

not be estopped by its agent's actions. -We

find that a trust, created for the primary

purpose of providing nonmedical support and

containing a provision allowing the trustee

discretion to provide medical care if the

beneficiary ceases to qualify for medical

assistance programs, is not an "available

resource" under 42 U.S.C. §1396a(17)(B)

(Supp. 199()) or a "liquid resource in hand"

within the meaning of DHS Manual §1063.212

(11/1/86) for medical assistance eligibility

purposes. The medical assistance case is

reinstated from the date of termination

subject to recertification as provided by

the applicable program regulations.

CERTIORARI PREVIOUSLY GRANTED;

OPINION OF THE COURT OF APPEALS VACATED:

TRIAL COURT AFFIRMED.

Charles Lee Waters For Appellant,

General Counsel

Howard J. Pallotta

Assistant General Counsel

Department of Human Services

Oklahoma City, Oklahoma

Roland Tague For Appellee.

Groves & Tague

Oklahoma City, Oklahoma

KAUGER, J.

APP. 4

A single issue of first impression is

presented’ -- whether a trust, created for

the primary purpose of providing nonmedical

i Support and containing a provision allowing

the trustee discretion to provide medical

care if the beneficiary ceases to qualify

7 for medical assistance programs,? is an

*The Department of Human Services does

not allege on certiorari that distributions

paid to Barker's mother rendered the minor

child ineligible for medical benefits.

Failure to raise the issue in the petition

for certiorari is fatal to its

consideration. Bayly, Martin & Fay, Inc. v.

Pickard, 780 P.2d 1168, 1170 (Okla. 1989).

a dneteigeattan «

“The trust agreement provides in

pertinent part:

". .« « A. Purposes: Grantor is

) creating this trust, and will

transfer certain assets to the

trust for the primary benefit of

.@ five year old girl named Ellen

Barker ('Ellen'), who was

severely injured in an automobile

accident in which an employee of

grantor was allegedly at fault.

As a result of the accident,

Ellen's spinal cord was damaged,

leaving her permanently paralyzed

APP. 4

available resource for medical assistance

from the neck down and unable to

breath (sic) without the

assistance of a respirator.

Ellen has been hospitalized since

the accident and will continue to

be hospitalized or

institutionalized in Oklahoma

City for an indefinite period of

time. Ellen (sic) medical needs

have been provided for by the

Oklahoma Department of Human

Services; however, in addition to

her medical needs, Ellen will

need special care throughout her

lifetime, in order for her to

live as normal and productive a

, life as possible under’. these

circumstances. The primary

purpose of this trust, therefore,

is to furnish Ellen, during her

lifetime, with the nonmedical

equipment, care, education,

training, rehabilitation,

entertainment, transportation, or

assistance which she will need to

assure her of as natural and

pleasant a life as is possible in

her condition. If, for any

reason, Ellen ceases to qualify

for medical assistance, then the

trustee may in its discretion,

also provide any medical

assistance which Ellen may

require. ...”"

oA cnt octonalaag

APP. 4

eligibility purposes.? We find that a

°*From 1981 to March, 1986, Barker

received medicaid benefits through Title

XIX--Grants to States for Medical Assistance

Programs, 42 U.S.C. §1396 et seq. (1984).

Medical benefits were provided through the

Oklahoma Crippled Children's Act (Crippled

Children's Act/Program), 10 0.S. 1981

$175.1, et seq. From March 1986 until June

30, 1987. Under both programs, an applicant

may hold a maximum of $1,800.00 in available

resources to qualify for medical services.

DHS Manual §1022.22 (Reissued 11/1/86)

provides in pertinent part:

"Maximum Capital Resources ‘

Appendix C-2 shows the maximum

capital resources for the

medically needy and is used in

determining eligibility for Title

Bae. 4-0, 6"

DHS Manual §1963.212 (11/1/86) provides

in pertinent part:

"Consideration of Resources for

CCP Eligibility Appendix C-2 is

used to determine resource

eligibility for CCP. Eligibility

for CCP is determined only after

categorically and medically needy

maximum reserves are exceeded.

The same procedures for

determining resources are used

for both Title XIX and CCP (see

Section 1020).

APP. 4

trust, created for the primary purpose of

Only liquid resources in hand

during the month(s) of services

are considered in determining CCP

eligibility. Non-liquid

resources are disregarded for CCP

eligibility purposes.

Liquid sources are defined as

those resources that can be

readily converted to cash. The

following are considered liquid

resources:

Cash, savings accounts,

checking accounts

Savings certificates (C.D.'s)

Stocks, bonds

Trust funds

Gifts, inheritances

Insurance settlements ..."

Medical Assistance Standards -

Medically Needy - Appendix C-2 provides in

pertinent part:

° II. Capital Resources

Maximum allowable in available

capital resources according to

family size:

Size of Family

1 person (either $1800.00 cash

adult or child) resources or

equivalent ..."

APP. 4

providing nonmedical support and containing

a provision allowing the trustee discretion

to provide medical care if the beneficiary

ceases to qualify for medical assistance

programs, is not an “available resource"

under 42 U.S.C. $1396a(17)(B) (Supp.

1990)* or a "liquid resource in hand"

within the meaning of DHS Manual §1063.212

(11/1/86)* for medical eligibility

“Title 42 U..S.C. §1396a (Supp. 1990)

provides in pertinent part:

"(a) Contents

A state plan for medical assistance must--

os « « (27) « « « (€B)

provide for taking into

account only such

income and resources as

are, as determined in

accordance with

standards prescribed by

the Secretary,

available to the

applicant or recipient

“DHS Manual §1063/212 (11/1/86), see

note 3, supra.

APP. 4

purposes. The medical assistance case is

reinstated from the date of termination

subject to recertification as provided by

the applicable program regulations.

FACTS

Ellen Lea Barker (Barker/ beneficiary/

minor child), is an Oklahoma resident. On

September 20, 1980, she and her family were

visiting in Arizona when their car was

struck by a bus operated by the Ganado

Public School District No. 19 (Ganado School

District/settlor). Barker's injuries caused

permanent paralysis from the neck down. In

1981, the minor child was transferred to

Oklahoma Children's Memorial Hospital where

she remained until June, 1986. Upon her

dismissal, she moved home. Barker continues

to use a ventilator, and she requires

nursing assistance and other specialized

medical equipment.

APP. 4

Barker's mother filed suit against the

Ganado School District in Arizona (Arizona

suit/action) on the minor child's behalf.

During the first six months that Barker was

hospitalized in Oklahoma, she incurred

approximately $160,000 in medical expenses.

In an effort to obtain reimbursement, the

appellant, Oklahoma Department of Human

Services (Department of Human Services),

filed a lien against any proceeds which

might be collected in the Arizona suit.®

“Title 56 0.S. 1981 §200 provides in

pertinent part:

"(a) Whenever the Department of

Human Services pays medical

expenses for or on behalf of a

person who has been injured, or

who has suffered a disease, as a

result of the negligence or act

of another person, the Department

shall, if such injured or

diseased person asserts or

maintains a claim against such

other person or tort feasor for

damages on account of such injury

or disease, have a lien to the

APP. 4

On May 18, 1981, the Arizona court entered

an order approving the settlement of

Barker's claim. Pursuant to the settlement,

$818,940.00 were paid to the appellee, Trust

Company of Oklahoma (Trust Company/

trustee)” to be held pursuant to a trust

extent of the amount sc paid upon

that part going or belonging to

such injured or diseased person

of any recovery or sum had or

collected or to be collected by

such injured or diseased person,

or by his heirs, personal

representative or next of kin in

case of his death, whether by

judgment or by settlement or

compromise .. ."

Section 200 was amended in 1986. The quoted

portion of §200 now appears in subsections

(A) and (D) of the revised statute.

However, the language remains substantially

similar to that found in the 1981 version.

"Title 12 0.S. 1981 §83 provides in

pertinent Part:

"Monies recovered in any court

proceeding by a next friend or

guardian ad litem for or on

behalf of a person who is less

than eighteen (18) years of age

APP. 4

agreement reviewed and approved by the

Arizona court. On May 22, 1981, the Trust

Company filed an application to approve

inventory, disbursement and the trust

agreement in Oklahoma County. The

application provided that: 1) the trustee

in excess of One Thousand Dollars

($1,000.00) over sums sufficient

for paying costs and expenses

including medical bills and

attorney's fees shall, by order

of the court, be deposited in a

banking or savings and _ loan

institution -approved by the

court. Until the person becomes

eighteen (18). years of age,

withdrawals of monies from such

account or accounts’ shall be

solely pursuant to order of the

court made in the case in which

recovery was had. When an

application for the order is made

by a person who is not

represented by an attorney-at-

law, the judge of the court shall

prepare the order."

Section 83 was amended in 1984 to allow

the use of annuities and _ structured

settlements. The language of the 1981

version of §83 remains intact in the revised

statute.

APP. 4

had received $818,940.00 to be held for

Barker: and 2) the settlement was subject to

a lien in favor of the Department of Human

Services. The Trust Company requested an

order allowing disbursement of $200,000.00

to the Department of Human Services in

return for a full and sonssiiin disclaimer of

any further or future interest in the trust

estate. On the same date, the district

court entered an order signed by the

Department of Human Services' counsel

approving the inventory of the trust and the

trust agreement. The order also approved

the disbursement to the Department of Human

Services “in full and complete satisfaction

and accord as to any lienable interest held

APP. 4

by said Department in the funds arising from

the litigation in Arizona."®

From 1981 to March, 1986, Barker

received medicaid benefits through Title

XIX--Grants to States for Medical Assistance

Programs (Medicaid), 42 U.S.C. §1396 (1984)

“Because the Barker trust fund is not

an available resource for medical

eligibility purposes, we need not determine

whether the facts and circumstances--

Department of Human Services' participation

in the settlement process--implicate a

prevailing public interest which will except

it from the general rule precluding the use

of estoppel against the government. Spencer

Dev. Co. v. Independent School Dist. No. =

89, 741 P.2d 477, 481 (Okla. 1987); Burdick

v. Independent School Dist. No. 52, 702 P.2d

48, 53 (Okla. 1985). Noting that the

doctrine of estoppel against the government

has been decisively eroded in recent years,

a federal district court found that estoppel

would apply against the government in a

situation in which an applicant for benefits

was given wrong information for the purpose

of filing an application. Coty v. Harris,

495 F.Supp. 452, 454 (W.D.Va. 1980). See

also, Annot., "Modern Status of

Applicability of Doctrine of Estoppel

Against Federal Government & Its Agencies,"

27 A.L.R.Fed. 702, 719-722 (1976).

APP. 4

et seq. Medical benefits were provided

through the Oklahoma Crippled Children's Act

(Crippled Children's Act/Program), 10 O.S.

i$8i $175.1, et seq. from March 1986 until

June 30, 1987. Under both programs, an

applicant may hold a maximum of $1,800.00 in

available resources to qualify for medical

services.® When Barker's mother filed a

re-application for benefits on March 14,

1985, she reported the existence of the

trust. Medical coverage was switched from

Title XIX to the Crippled Children's Program

because of a belief that the trust made

Barker ineligible for Medicaid. In 1985,

the trust contained approximately

$1,000,000.00. By June 30, 1987, the trust

*DHS Manual §1022.22 (Reissued

11/1/86), see note 3, supra; DHS Manual

§1063.212 (11/1/86), see note 3, supra;

Medical Assistance Standards - Medically

Needy - Appendix C-2, see note 3, supra.

APP. 4

corpus consisted of approximately 1.2

million dollars.

On May 29, 1987, the Department of

Human Services notified the Trust Company

that Barker's medical assistance benefits

would be terminated effective June 30.?°

The basis for termination was a

determination that the trust fund

constituted an available resource for

purposes of the Crippled Children's Act.??

The Trust Company requested an

administrative hearing before the Appeals

Unit to review the denial of benefits on

June 29, 1987. A hearing was conducted

before an administrative law judge on

*°Some of Barker's expenses were paid

from the Crippled Children's Program from

August 28, 1986 to January 1, 1987 pursuant

to an agreement between the Trust Company

and Human Services.

**DHS Manual §1063.212 (11/1/86), see

note 3, supra.

APP. 4

September 10, 1987. On February 12, 1988,

the administrative law judge sustained the

Department of Human Services' termination of

benefits.*?

The Trust Company received the decision

of the appeals unit on February 19 and filed

a petition with the district court on March

14 pursuant to 56 O.S. Supp. 1985

§$168(D).*° After hearing argument and

*2The delay in the issuance of a

decision was predicated on a request by the

Trust Company for the Department of Human

Services' records concerning the 1981

settlement negotiations. No record of these

negotiations was ever located by the

Department of Human Services.

*2Title 56 O.S. Supp. 1985 §168(D)

provides:

"Any Person aggrieved by any

final decision of the Department

may petition the district court

in which the recipient resides

for a judicial review of the

decision pursuant to the

provisions of Sections 318

through 323 of Title 75 of the

Oklahoma Statutes. A copy of the

APP. 4

considering the parties' brief, the trial

court ruled from the bench in the Trust

Company's favor.** The trial court found

that the decision of the Appeals Unit was

clearly erroneous in light of the evidence

On estoppel and ordered the reinstatement of

medical benefits. The Department of Human

Services appealed pursuant to 75 0.S. 1981

$323.** Although the Court of Appeals

petition shall be served by mail

upon the General Counsel of the

Department."

**The trial court's decision is also

found in the journal entry of judgment dated

August 22, 1989, and filed on October Se

1989.

*°Title 75 0.S. 1981 $323 provides:

"An aggrieved party, or the

agency, without any motion for a

new trial, may secure a review of

any final judgment of a district

Or superior court under this act

by appeal to the Supreme Court.

Such appeal shall be taken in the

manner and time provided by law

for appeal to the Supreme Court

APP. 4

recognized that the 1981 settlement

agreement was meant to require payment of

medical expenses by the Department of Human

Services and to exclude the trust as an

available resource, it reversed the trial

court. The Court of Appeals found that

because the Department of Human Services'

counsel was without authority to enter the

settlement agreement, it could not be

estopped by its agent's actions. On

September 17, 1991, we granted certiorari to

address a question of first impression in

Oklahoma--whether a trust, created for the

primary purpose of providing nonmedical

support and containing a provision allowing

the trustee discretion to provide medical

care if the beneficiary ceases to qualify

from the district court in civil

actions. An agency taking an

appeal shall not be required to

give bond."

APP. 4

for medical assistance programs, is an

available resource for medical eligibility

purposes.

A_TRUST, CREATED FOR THE PRIMARY

PURPOSE OF PROVIDING NONMEDICAL

SUPPORT AND CONTAINING A

PROVISION ALLOWING THE TRUSTEE

DISCRETION TO PROVIDE MEDICAL

CARE IF THE BENEFICIARY

CEASES TO QUALIFY FOR MEDICAL

ASSISTANCE PROGRAMS, IS NOT

AN “AVAILABLE RESOURCE” UNDER

U.8s.C. A B

(Supp. 1590) or "LIQUID

RESOURCE IN HAND" WITHIN

THE MEANING OF DHS MANUAL

_$1063.212 (1171/86) FOR

MEDICAL ELIGIBILITY PURPOSES.

The Trust Company asserts that the

trust is not an available resource for

medical assistance eligibility purposes.

The Department of Human Services

characterizes this issue as "interesting"

but argues that a finding that it is not

bound by estoppel moots. the question.

Without deciding the estoppel issue, we

disagree. If the Department of Human

APP. 4

Services was not estopped by the actions of

its agent in the settlement proceedings, ’**

Barker may still qualify for assistance if

she meets the resource requirements under

either Medicaid or the Crippled Childrens'

Act.

Medicaid was enacted in 1965 as a

cooperative federal-state endeavor designed

to provide health care to needy

individuals.*” States are not required to

**See, Spencer Dev. Co. v. Independent

School Dist. No. I-89, see note 8, supra;

Burdick v. Independent School Dist. No. 52,

- see note 8. See also, Coty v. Harris, note

8, supra; Annot., “Modern Status of

: Applicability of Doctrine of Estoppel

Ageinst Federal Government & Its Agencies,"

note 8, supra and accompanying discussion.

*7Atkins v. Rivera, 477 U.S. 154, 156,

106 S.Ct. 2456, 2458, 91 L.Ed.2d 131, 137

(1986); Schweiker v. Gray Panthers, 45

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