Medicaid Program; State Allotments for Payment of Medicare Part B Premiums for Qualifying Individuals: Federal Fiscal Year 1999

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2032-N]

RIN 0938-AJ28

Medicaid Program; State Allotments for Payment of Medicare Part B

Premiums for Qualifying Individuals: Federal Fiscal Year 1999

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: The Social Security Act provides for the Medicaid program to

pay all or part of the Medicare Part B premiums for beneficiaries

belonging to two specific eligibility groups of low-income Medicare

beneficiaries, referred to as Qualifying Individuals (QIs). This notice

announces the Federal fiscal year 1999 allotments that are available

for State agencies to pay Medicare Part B premiums for these two

eligibility groups.

EFFECTIVE DATE: This document is defined as a major rule under the

congressional review provisions of 5 U.S.C. section 804(2). As

indicated in the preamble of this notice, pursuant to section 5 U.S.C.

section 808(2), for good cause we find that prior notice and comment

procedures are unnecessary and impracticable. Pursuant to 5 U.S.C.

section 808(2), this notice is effective October 1, 1998, for

allotments for payment of Medicare Part B premiums for individuals in

calendar year 1999 from the allocation for fiscal year 1999.

FOR FURTHER INFORMATION CONTACT: Miles McDermott, (410) 786-3722.

SUPPLEMENTARY INFORMATION:

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I. Background

Section 1902 of the Social Security Act (the Act) sets forth the

requirements for State plans to provide medical assistance. Prior to

August 5, 1997, section 1902(a)(10)(E) of the Act specified that the

State Medicaid plan must provide for Medicare cost-sharing for three

eligibility groups of low-income Medicare beneficiaries. These three

groups included qualified Medicare beneficiaries (QMBs), specified low-

income Medicare beneficiaries (SLMBs), and qualified disabled and

working individuals (QDWIs).

A QMB is an individual entitled to Medicare Part A with income at

or below the Federal poverty level and resources below $4,000 for an

individual and $6,000 for a couple. A SLMB is an individual who meets

the QMB criteria, except that his or her income is between a State

established level (at or below the Federal poverty level) and 120

percent of the Federal poverty level. A QDWI is an individual who is

entitled to enroll in Medicare Part A, whose income does not exceed 200

percent of the Federal poverty level for a family of the size involved,

whose resources do not exceed twice the amount allowed under the

Supplementary Security Income (SSI) program, and who is not otherwise

eligible for Medicaid. The definition of Medicare cost-sharing at

section 1905(p)(3) of the Act includes payment for premiums for

Medicare Part B.

Section 1902(a)(10)(E) of the Act requires States to provide for

Medicaid payment of the Medicare Part B premiums for two additional

eligibility groups of low-income Medicare beneficiaries, referred to as

qualifying individuals (QIs).

Under section 1902(a)(10)(E)(iv)(I) of the Act, State agencies are

required to pay the full amount of the Medicare Part B premium for

selected QIs who would be QMBs except that their income level is at

least 120 percent but less than 135 percent of the Federal poverty

level for a family of the size involved. These individuals cannot

otherwise be eligible for medical assistance under the approved State

Medicaid plan.

The second group of QIs, under section 1902(a)(10)(E)(iv)(II) of

the Act, includes Medicare beneficiaries who would be QMBs except that

their income is between 135 percent and 175 percent of the Federal

poverty level for a family of the size involved. These QIs may not be

otherwise eligible for Medicaid under the approved State plan, but are

eligible for a portion of Medicare cost-sharing consisting only of a

percentage of the increase in the Medicare Part B premium attributable

to the shift of Medicare home health coverage from Part A to Part B (as

provided in section 4611 of the Balanced Budget Act of 1997 (BBA).

Section 1933(a) specifies that a State agency must provide, through

a State plan amendment, for medical assistance to pay for the cost of

Medicare cost-sharing on behalf of QIs who are selected to receive

assistance.

Section 1933(b) of the Act sets forth the rules that State agencies

must follow in selecting QIs and providing payment for Medicare Part B

premiums. Specifically, the State agency must permit all QIs to apply

for assistance and must select individuals on a first-come, first-

served basis selecting QIs in the order in which they apply. Under

section 1933(b)(2)(B) of the Act, when selecting persons who will

receive assistance in the years after 1998, State agencies must give

preference to those individuals who received assistance as QIs, QMBs,

SLMBs, or QDWIs in the last month of the previous year and who continue

to be (or become) QIs. Under section 1933(b)(4), persons selected to

receive assistance in a calendar year are entitled to receive

assistance for the remainder of the year, but not beyond, as long as

they continue to qualify. The fact that an individual is selected to

receive assistance at any time during the year does not entitle the

individual to continued assistance for any succeeding year. Because the

State's allotment is limited by law, section 1933(b)(3) of the Act

provides that the State agency must limit the number of QIs so that the

amount of assistance provided during

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the year is approximately equal to the State's allotment for that year.

Section 1933(c) of the Act limits the total amount of Federal funds

available for payment of Part B premiums each fiscal year and specifies

the formula to be used to determine an allotment for each State from

this total amount. For State agencies that execute a State plan

amendment in accordance with section 1933(a) of the Act, a total of

$1.5 billion was allocated over 5 years as follows: $200 million in FY

1998; $250 million in FY 1999; $300 million in FY 2000; $350 million in

FY 2001; and $400 million in FY 2002.

The Federal matching rate for Medicaid payment of Medicare Part B

premiums for QIs is 100 percent for expenditures up to the amount of

the State's allotment. No Federal matching funds are available for

expenditures in excess of the State's allotment amount. Administrative

expenses associated with the payment of Medicare Part B premiums for

QIs remain at the 50 percent matching level and may not be taken from

the State's allotment.

The amount available for each fiscal year is to be allocated among

States according to the formula set forth in section 1933(c)(2) of the

Act. The formula provides for an amount to each State agency that is to

be based on each State's share of the Secretary's estimate of the ratio

of--

(1) An amount equal to the sum of the following:

(a) Twice the total number of individuals who meet all but the

income requirements for QMBs, whose incomes are at least 120 percent

but less than 135 percent of the Federal poverty level, and who are not

otherwise eligible for Medicaid; and

(b) The total number of individuals in the State who meet all but

the income requirements for QMBs, whose incomes are at least 135

percent but less than 175 percent of the Federal poverty level, and who

are not otherwise eligible for Medicaid; to

(2) The sum of all of these individuals under item (1) for all

eligible States.

II. Provisions of This Notice

This notice announces the availability of individual State

allotments for Federal fiscal year 1999 for the Medicaid payment of

Medicare Part B premiums for QIs identified under sections

1902(a)(10)(E)(iv)(I) and (II) of the Act. The formula used to

calculate these allotments was described in detail in the announcement

of the Federal fiscal year 1998 allotments (63 FR 3754, January 26,

1998), and, except for the incorporation of the latest data, has been

used here without changes.

FY 1999 State Allotments for Payment of Part B Premiums Under Sec. 4732 of the BBA of 1997

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State FY99

State (a) M11 (b) M2 2 (c) 2 x State share of allocation

(a)+(b) (c) (percent) ($000)

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AK.............................. 0 3 3 0.05 116

AL.............................. 33 75 141 2.18 5,548

AR.............................. 25 37 87 1.35 3,368

AZ.............................. 16 62 94 1.46 3,639

CA.............................. 93 309 495 7.66 19,162

CO.............................. 15 27 57 0.88 2,207

CT.............................. 8 60 76 1.18 2,942

DC.............................. 2 4 8 0.12 310

DE.............................. 4 10 18 0.28 697

FL.............................. 98 262 458 7.09 17,730

GA.............................. 41 96 178 2.76 6,891

HI.............................. 4 10 18 0.28 697

IA.............................. 17 47 81 1.25 3,136

ID.............................. 4 17 25 0.39 968

IL.............................. 70 173 313 4.85 12,117

IN.............................. 28 107 163 2.52 6,310

KS.............................. 14 50 78 1.21 3,020

LA.............................. 32 57 121 1.87 4,684

MA.............................. 35 82 152 2.35 5,884

MD.............................. 21 71 113 1.75 4,374

ME.............................. 8 29 45 0.70 1,742

MI.............................. 52 127 231 3.58 8,942

MN.............................. 25 54 104 1.61 4,026

MO.............................. 26 88 140 2.17 5,420

MS.............................. 27 39 93 1.44 3,600

MT.............................. 6 16 28 0.43 1,084

NC.............................. 51 122 224 3.47 8,671

ND.............................. 6 13 26 0.39 968

NE.............................. 11 29 51 0.79 1,974

NH.............................. 8 19 35 0.54 1,355

NJ.............................. 48 129 225 3.48 8,710

NM.............................. 9 22 40 0.62 1,548

NV.............................. 7 18 32 0.50 1,239

NY.............................. 94 241 429 6.64 16,607

OH.............................. 62 180 304 4.71 11,768

OK.............................. 27 52 106 1.64 4,103

OR.............................. 20 55 95 1.47 3,678

PA.............................. 80 202 362 5.61 14,014

RI.............................. 7 20 34 0.53 1,316

SC.............................. 26 67 119 1.84 4,607

SD.............................. 5 10 20 0.31 774

TN.............................. 36 55 127 1.97 4,916

TX.............................. 80 208 368 5.70 14,246

UT.............................. 5 21 31 0.48 1,200

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VA.............................. 12 73 97 1.50 3,755

VT.............................. 5 7 17 0.26 658

WA.............................. 12 54 78 1.21 3,020

WI.............................. 18 58 94 1.46 3,639

WV.............................. 20 40 80 1.24 3,097

WY.............................. 2 5 9 0.14 348

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Total....................... 1378 3702 6458 100.00 250,000

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1 Three-year average (1995-7) of number (000) of Medicare beneficiaries in State who are not enrolled in

Medicaid but whose incomes are at least 120% but less than 135% of FPL.

2 Three-year average (1995-7) of number (000) of Medicare beneficiaries in State who are not enrolled in

Medicaid but whose incomes are least 135% but less than 175% of FPL.

III. Waiver of Advance Public Comment and 30-Day Delay in Effective

Date

We ordinarily publish an advance notice in the Federal Register for

a notice containing substantive determinations to provide a period for

public comment. However, we may waive that procedure if we find good

cause that notice and comment are impractical, unnecessary, or contrary

to the public interest. In addition, we also normally provide a delay

of 30 days in the effective date. However, if adherence to this

procedure would be impractical, unnecessary, or contrary to public

interest, we may waive the delay in the effective date.

We find good cause to waive notice and comment procedure for this

final notice. The law sets out in detail the specific amounts available

for each Federal fiscal year for Medicare Part B premiums for QIs and

the formula that is used to determine individual State allotments. No

public comments were received as a result of the January 26, 1998,

Federal Register Notice of the FY 1998 State allotments. (63 FR 3754).

In addition, the latest data from the U.S. Census Bureau on the number

of possible QIs in the States used in the statutory formula, as

discussed in section V. of this notice, is not available until too late

in the calendar year. Therefore, it would be impracticable,

unnecessary, and contrary to the public interest to submit this notice

to the public for a notice and comment procedure.

Also, because States can begin making payments for Medicare Part B

premiums for QIs as early January 1, 1999, we are not making the

effective date of the notice the usual 30 days after publication. For

the reasons discussed above, we find good cause to waive the usual 30-

day delay.

IV. Effect of the Contract With America Advancement Act

Normally, under 5 U.S.C. section 801, as added by section 251 of

Public Law 104-121, the effective date of a major rule is delayed 60

days for congressional review. This notice has been determined to be a

major rule under 5 U.S.C. section 804(2) for purposes of congressional

review. However, as indicated in section III of this notice, we have

found that good cause exists to dispense with prior notice and comment

procedures since they are unnecessary and impracticable under the

circumstances. Pursuant to 5 U.S.C. section 808(2), a rule shall take

effect at such time as the Federal agency promulgating the rule

determines, if it finds, for good cause, that prior notice and comment

procedures are unnecessary or impracticable. Accordingly, under the

exemption provided in 5 U.S.C. section 808(2), this notice is effective

January 1, 1999, for allotments for payments of Medicare Part B

premiums for individuals in calendar year 1999 from the allotment for

fiscal year 1999.

V. Regulatory Impact Statement

We have examined the impact of this notice as required by Executive

Order 12866 and the Regulatory Flexibility Act (RFA) (Public Law 96-

354). Executive Order 12866 directs agencies to assess all costs and

benefits of available regulatory alternatives and, when regulation is

necessary, to select regulatory approaches that maximize net benefits

(including potential economic, environmental, public health and safety

effects; distributive impacts; and equity). The RFA requires agencies

to analyze options for regulatory relief for small businesses. For

purposes of the RFA, States and individuals are not considered to be

small entities.

This notice allocates, among the States, Federal funds to provide

Medicaid payment for Medicare Part B premiums for two additional groups

of low-income Medicare beneficiaries. The total amount of Federal funds

available during a Federal fiscal year and the formula for determining

individual State allotments are specified in the law. We have applied

the statutory formula for the State allotments except for the use of

specified data. Because the data specified in the law were not

currently available, we have used comparable data from the U.S. Census

Bureau on the number of possible QIs in the States, as described in

detail in the January 26, 1998, Federal Register Notice of the FY 1998

State allotments. (63 FR 3754). These new allotments for FY 1999

incorporate the latest data from the Census Bureau covering 1995

through 1997, as specified in the footnote to the table above.

We believe the statutory provisions implemented in this notice will

have a positive effect on States and individuals. Federal funding at

the 100 percent matching rate is available for Medicare cost-sharing

for Medicare Part B premium payments for QIs and a greater number of

low-income Medicare beneficiaries will be eligible to have their

Medicare Part B premiums paid under Medicaid.

Section 1102(b) of the Social Security Act requires us to prepare a

regulatory impact analysis for any notice that may have a significant

impact on the operations of a substantial number of small rural

hospitals. Such an analysis must conform to the provisions of section

603 of the RFA. For purposes of section 1102(b) of the Act, we define a

small rural hospital as a hospital that is located outside a

Metropolitan Statistical Area and has fewer than 50 beds.

We are not preparing analyses for either the RFA or section 1102(b)

of the Act, because we have determined and certify that this notice

will not have a significant economic impact on a

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substantial number of small entities, or a significant impact on the

operations of a substantial number of small rural hospitals.

In accordance with the provisions of Executive Order 12866, this

notice was reviewed by the Office of Management and Budget.

Authority: Sections 1902(a)(10)(E) and 1933 of the Social

Security Act (42 U.S.C. 1396a(a)(10)(E) and 1396x), and section 4732

of Public Law 105-33.

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

Assistance Program)

Dated: October 16, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing Administration.

Dated: December 10, 1998.

Donna E. Shalala,

Secretary.

[FR Doc. 99-7078 Filed 3-26-99; 8:45 am]

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