Federal Register / Vol. 62, No. 5 / Wednesday, January 8, 1997 / Rules and Regulations 1053

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[FR Doc. 97–314 Filed 1–7–97; 8:45 am]

BILLING CODE 4910–13–M

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

[Regulations No. 16]

RIN 0960–AE61

Reduction in Supplemental Security

Income (SSI) Payable to

Institutionalized Children Whose

Medical Costs Are Covered by Private

Insurance

AGENCY: Social Security Administration.

ACTION: Interim final rules with request

for comments.

SUMMARY: These regulations implement

an amendment to section 1611(e)(1)(B)

of the Social Security Act (the Act)

made by section 214 of Public Law 104–

193, the Personal Responsibility and

Work Opportunity Reconciliation Act of

1996. Section 214 extends applicability

of the reduced SSI benefit rate

(currently $30.00 per month) to children

under age 18 in medical care facilities

receiving payments on their behalf

under a health insurance policy issued

by a private provider. With these rule

changes, children with private health

insurance coverage will be treated the

same as children with Medicaid

coverage in terms of the amount of

benefits for which they are eligible.

While the major impact of these

regulations will be to reduce benefits for

those children described above, some

children residing in public institutions,

which receive private health insurance

payments and which currently do not

receive any SSI benefits on their behalf,

will become eligible for SSI benefits up

to $30 per month.

DATES: These interim final rules are

effective beginning January 8, 1997. To

be sure that your comments are

considered, we must receive them no

later than March 10, 1997.

ADDRESSES: Comments should be

submitted in writing to the

Commissioner of Social Security, P.O.

Box 1585, Baltimore, MD 21235; sent by

telefax to (410) 966–2830; sent by E-mail

to ‘‘regulations@ssa.gov’’; or, delivered

to the Division of Regulations and

Rulings, Social Security Administration,

3–B–1 Operations Building, 6401

Security Boulevard, Baltimore, MD

21235, between 8:00 A.M. and 4:30 P.M.

on regular business days. Comments

may be inspected during these same

hours by making arrangements with the

contact person shown below.

FOR FURTHER INFORMATION CONTACT:

Daniel T. Bridgewater, Legal Assistant,

Division of Regulations and Rulings,

Social Security Administration, 6401

Security Boulevard, Baltimore, MD

21235, (410) 965–3298 for information

about these rules. For information on

eligibility or claiming benefits, call our

national toll-free number, 1–800–772–

1213.

SUPPLEMENTARY INFORMATION:

Background

Section 1611(e)(1)(A) of the Act

generally precludes eligibility for SSI

benefits when a claimant is a resident of

a public institution throughout a month.

Section 1611(e)(1)(B) provided an

exception to that bar. Under that

section, payments could be made at the

reduced Federal benefit rate to

individuals in institutions ‘‘receiving

payments (with respect to such

individual or spouse) under a State plan

approved under title XIX * * * .’’ This

language was implemented through

regulations to mean that individuals in

institutions would receive only the

reduced benefit amount when

‘‘Medicaid (title XIX of the Social

Security Act) pays a substantial part

(more than 50 percent) of the cost of’’

the claimant’s care (§ 416.211(b)).

Section 214 of Public Law 104–193,

effective for benefits beginning with the

month of December 1996, amends

section 1611(e)(1)(B) of the Act by

extending applicability of the reduced

SSI benefit rate to children under age 18

in medical care facilities receiving

payments on their behalf under a health

insurance policy issued by a private

provider (hereinafter referred to as

private health insurance). Prior to the

enactment of section 214, children

under the age of 18 in private

institutions with private health

insurance generally could be eligible for

a full SSI payment. Section 214 now

restricts the SSI payment for such

children to the Federal reduced benefit

rate. Also, as is noted above, prior to

this legislation, individuals in public

institutions not receiving substantial

Medicaid payments on their behalf

generally were ineligible for SSI.

However, as a result of this legislation,

children under age 18 in public

institutions receiving private health

insurance on their behalf now are

eligible for SSI payments at the reduced

Federal benefit amount.

Section 214 could be interpreted as

requiring application of the reduced

benefit amount where any amount of

private health insurance payments is

being made on behalf of an

institutionalized child for the cost of the

child’s care in the institution. However,

if the private health insurance is not

paying for a significant amount of the

cost of care, we believe that application

of the reduced SSI payment would be at

odds with the intent of the SSI program

to help provide for the basic needs of

the child for food, clothing, and shelter.

Moreover, the legislative history

indicates that ‘‘[c]hildren in medical

institutions whose medical costs are

covered by private insurance would be

treated the same as children whose bills

are currently paid by Medicaid (that is,

their monthly SSI cash benefit would be

reduced to $30 per month).’’ H.R. Conf.

Rep. No. 725, 104th Cong., 2d Sess. 333

(1996). In addition, the legislative

history references children whose costs

are ‘‘covered,’’ not children for whom

any private insurance payments are

being made. Since Congress used the

same phrase, ‘‘receiving payments,’’ in

referring to cases where Medicaid is

paying towards the cost of care and to

cases where private health insurance is

paying towards the cost of care, we

believe that the extent of the medical

coverage which would reduce the SSI

payment to $30 should be the same.

Therefore, we have decided that the

more equitable approach is to apply the

reduced benefit amount to children

under age 18 with private health

insurance when it pays a substantial

part (more than 50 percent) of the cost

of their care in the institution. Similarly,

since Congress apparently wanted to

treat all children with significant

medical coverage in the same manner,

we also have decided that the reduced

benefit amount will apply in those cases

where children under age 18 are in

medical care facilities receiving a

combination of Medicaid and private

health insurance payments which

combined pay a substantial part (more

than 50 percent) of the cost of their care.

Regulatory Changes

Section 416.211 explains the general

prohibition against SSI eligibility for

residents of public institutions, as well

as the statutory exceptions to that

prohibition. We have revised

§ 416.211(b) to include a reference to

private health insurance as a factor in

applying the exception that permits SSI

payments at a reduced rate for certain

individuals in medical care facilities.

The introductory text of paragraph (b)
1054 Federal Register / Vol. 62, No. 5 / Wednesday, January 8, 1997 / Rules and Regulations

refers to § 416.414, where the reduced

benefits are described and the

requirements are explained more

thoroughly.

Section 416.212 explains the two

statutory provisions that permit

continuation of full benefits in certain

cases of medical confinement. Under

section 1611(e)(1)(E) of the Act, as

originally implemented, a recipient

whose SSI eligibility is based on section

1619(a) or (b) of the Act for the month

preceding the first full month of

residence in (1) a public medical or

psychiatric institution or (2) a public or

private institution where Medicaid is

paying more than 50 percent of the cost

of care can remain eligible for an SSI

benefit for up to 2 full months after

entering the institution, if the recipient

is allowed, under agreement with the

medical institution, to retain any SSI

benefits. Also, under 1611(e)(1)(G) of

the Act, a recipient is eligible for

continuation of full SSI benefits for up

to 3 full months after entering certain

medical or psychiatric institutions if a

physician certifies, within certain time

restrictions, that the recipient’s stay in

the facility is likely not to exceed 3

months and if the recipient needs to

continue to maintain and provide for

the expenses of the home to which he

or she may return.

To include the provisions of section

214, we have revised § 416.212(a) to

include children under age 18 whose

benefits are reduced because of

residence in a public or private

institution where private health

insurance, or a combination of Medicaid

and private health insurance, is paying

a substantial part (more than 50 percent)

of the cost of their care. We have also

revised § 416.212(b) to extend

applicability of the continued benefits

to children under age 18 whose SSI

benefits otherwise would be reduced

because of residence in a public

institution where private health

insurance, or a combination of Medicaid

and private health insurance, is paying

a substantial part (more than 50 percent)

of the cost of care.

Section 1611(e)(1)(G) specifies that

the recipient must be ‘‘* * * an inmate

of a public institution the primary

purpose of which is the provision of

medical or psychiatric care, or which is

a hospital, extended care facility,

nursing home, or intermediate care

facility receiving payments * * * under

a State plan approved under title XIX

* * * .’’ Because Public Law 104–193

did not amend this section of the Act,

SSI payments to children in private

medical care facilities for whom private

health insurance, or a combination of

Medicaid and private health insurance,

is paying more than 50 percent of the

cost of care, will be limited to the

reduced benefit amount beginning with

their first full month of

institutionalization.

Section 416.414 explains that reduced

benefits are payable where Medicaid

paid more than 50 percent of the cost of

care, or where Medicaid would have

paid more than 50 percent of the cost of

care but for the application of section

1917(c) of the Act due to a transfer of

assets for less than fair market value. To

include the provisions of section 214,

we have revised § 416.414(a) to explain

that for children under age 18, the

reduced benefits also apply where

private health insurance, or a

combination of Medicaid and private

health insurance is paying a substantial

part (more than 50 percent) of the cost

of care in the medical facility.

Section 416.1149 explains what is a

temporary absence from a living

arrangement and explains how we value

in-kind support and maintenance (ISM)

received by an eligible individual

during a temporary absence. In general,

during a temporary absence we continue

to value ISM the same way that we did

in the permanent residence. Currently,

paragraph (a)(1) of § 416.1149 states that

a temporary absence from the

permanent living arrangement exists if

the eligible individual (or eligible

individual and eligible spouse) becomes

a resident of a public or private medical

care facility where over 50 percent of

the cost of care is paid by Medicaid, and

who is eligible for the continuation of

benefits payable under § 416.212.

During this temporary absence we

continue to value the eligible

individual’s support and maintenance

the same way that we did in the

permanent living arrangement.

We are changing paragraph (a)(1) of

§ 416.1149 to conform to the changes we

are making in § 416.212 and § 416.414.

For purposes of determining ISM, we

also will consider as temporarily absent

from the permanent living arrangement

a child under 18, who receives a

reduced benefit because of residence in

a public or private medical facility

where private health insurance (or a

combination of Medicaid and private

health insurance) pays a substantial part

(more than 50 percent) of the cost of

care and who is eligible for the

continuation of benefits under

§ 416.212. For such a child, during the

temporary absence we continue to value

the ISM the same way that we did in the

permanent living arrangement.

The existing paragraph (c) of

§ 416.1149 describes an exception to the

general rule for temporary absences

described in paragraph (b). In paragraph

(c), an eligible individual is considered

temporarily absent from the permanent

living arrangement regardless of the

length of stay, if he or she enters a

medical care facility in which Medicaid

pays over 50 percent of the cost of care,

is eligible for a reduced payment under

§ 416.414, and is not eligible under

§ 416.212. In this situation, ISM is

valued using the rules that apply to the

permanent living arrangement for the

month the individual enters the facility

and the month the individual leaves the

facility. No ISM is chargeable for the full

months the individual is in the facility

and receives a reduced payment under

§ 416.414.

We are changing paragraph (c) of

§ 416.1149 to conform to the changes we

are making in § 416.212 and § 416.414.

Thus, we will also consider as

temporarily absent from the permanent

living arrangement a child under 18,

who is not eligible under § 416.212, and

who receives a reduced payment under

§ 416.414 because of residence in a

public or private medical facility where

private health insurance (or a

combination of Medicaid and private

health insurance) pays a substantial part

(more than 50 percent) of the cost of

care. ISM will be valued for these

children as it is for the eligible

individuals described in the preceding

paragraph.

We are also revising § 416.1165(i)(1)

and § 416.1202(b)(2)(i) so that those

rules conform with the revised rules in

§ 416.414. Section 416.1165 describes

how we deem income to a child from

the child’s ineligible parent(s).

Subsection (i) describes a situation

when we do not deem income to a

child. Paragraph (1) is revised so that it

conforms with the revised rules in

§ 416.414.

Subsection 416.1202(b) describes how

we deem resources to a child from the

child’s ineligible parent(s). Paragraph

(b)(2) describes a situation when we do

not deem resources to a child. Paragraph

(b)(2)(i) is revised so that it conforms

with the revised rules in § 416.414.

Electronic Version

The electronic file of this document is

available on the Federal Bulletin Board

(FBB) at 9:00 a.m. on the date of

publication in the Federal Register. To

download the file, modem dial (202)

512–1387. The FBB instructions will

explain how to download the file and

the fee. This file is in WordPerfect and

will remain on the FBB during the

comment period.

Regulatory Procedures

Pursuant to section 702(a)(5) of the

Act, 42 U.S.C. 902(a)(5), as amended by
Federal Register / Vol. 62, No. 5 / Wednesday, January 8, 1997 / Rules and Regulations 1055

section 102 of Public Law 103–296, the

Social Security Administration follows

the Administrative Procedure Act (APA)

rulemaking procedures specified in 5

U.S.C. 553 in the development of its

regulations. The APA provides

exceptions to its prior notice and public

comment procedures when an agency

finds that there is good cause for

dispensing with such procedures on the

basis that they are impracticable,

unnecessary, or contrary to the public

interest. In the case of these interim

final rules, we have determined that

under 5 U.S.C. 553(b)(B), good cause

exists for waiving the prior notice

procedures.

Public Law 104–193 was signed into

law on August 22, 1996. As noted

above, section 214 of Public Law 104–

193, which is the subject of these

interim final rules, was made effective

December 1, 1996. Moreover, section

215 requires the Commissioner to issue

regulations necessary to carry out the

amendments made by section 214

within 3 months after the date of

enactment (i.e., by November 22, 1996).

Accordingly, to issue these rules as an

NPRM would have delayed issuance of

final rules until well past the statutorily

mandated deadlines.

In light of the above statutory

deadlines, we believe that, under the

APA, good cause exists for waiver of the

prior notice procedures since issuance

of proposed rules would be

impracticable. While we are issuing

these rules as interim final regulations,

we are interested in receiving public

comments regarding the substance of

these interim rules.

In addition, we find good cause for

dispensing with the 30-day delay in the

effective date of a substantive rule,

provided for by 5 U.S.C. 553(d). As

explained above, these regulations

reflect and implement statutory

provisions effective December 1, 1996

for which publication of implementing

regulations is required by November 22,

1996. In order for these regulations to be

effective as close as possible to the

mandated dates, we find that it is in the

public interest to make these rules

effective upon publication.

Executive Order 12866

These interim final rules reflect and

implement the provisions of section 214

of Public Law 104–193. The Office of

Management and Budget (OMB) has

reviewed these interim final rules and

determined that they meet the criteria

for a significant regulatory action under

Executive Order 12866. Therefore, we

prepared and submitted to OMB,

separately from these interim final rules,

an assessment of the potential costs and

benefits of this regulatory action. This

document also contains an analysis of

alternative policies we considered and

chose not to adopt. This assessment is

available for review by members of the

public.

Regulatory Flexibility Act

We certify that these interim final

rules will not have a significant

economic impact on a substantial

number of small entities since these

rules affect only individuals. Therefore,

a regulatory flexibility analysis as

provided in Public Law 96–354, the

Regulatory Flexibility Act, is not

required.

Paperwork Reduction Act

These interim final rules impose no

additional reporting or recordkeeping

requirements subject to Office of

Management and Budget clearance.

(Catalog of Federal Domestic Assistance:

Program No. 96.006–Supplemental Security

Income.)

List of Subjects in 20 CFR Part 416:

Administrative practice and

procedure, Aged, Blind, Disability

benefits, Public assistance programs,

Reporting and recordkeeping

requirements, Supplemental Security

Income (SSI).

Dated: December 6, 1996.

Shirley S. Chater,

Commissioner of Social Security.

For the reasons set out in the

preamble, subparts B, D, K, and L of part

416 of chapter III of title 20 of the Code

of Federal Regulations are amended as

follows:

PART 416—SUPPLEMENTAL

SECURITY INCOME FOR THE AGED,

BLIND, AND DISABLED

Subpart B—[Amended]

1. The authority citation for subpart B

of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1110(b), 1602,

1611, 1614, 1615(c), 1619(a), 1631, and 1634

of the Social Security Act (42 U.S.C.

902(a)(5), 1310(b), 1381a, 1382, 1382c,

1382d(c), 1382h(a), 1383, and 1383c); secs.

211 and 212, Pub. L. 93–66, 87 Stat. 154 and

155 (42 U.S.C. 1382 note); sec. 502(a), Pub.

L. 94–241, 90 Stat. 268 (48 U.S.C. 1681 note);

sec. 2, Pub. L. 99–643, 100 Stat. 3574 (42

U.S.C. 1382h note).

2. Section 416.211 is amended by

revising paragraph (b)(1) to read as

follows:

§ 416.211 You are a resident of a public

institution.

* * * * *

(b) * * *

(1)(i) You reside throughout a month

in a public institution that is a medical

care facility where Medicaid (title XIX

of the Social Security Act) pays a

substantial part (more than 50 percent)

of the cost of your care; you are a child

under the age of 18 residing throughout

a month in a public institution that is

a medical care facility where a

substantial part (more than 50 percent)

of the cost of your care is paid under a

health insurance policy issued by a

private provider of such insurance; or,

you are a child under the age of 18

residing throughout a month in a public

institution that is a medical care facility

where a substantial part (more than 50

percent) of the cost of your care is paid

by a combination of Medicaid payments

and payments made under a health

insurance policy issued by a private

provider of such insurance; or

(ii) You reside for part of a month in

a public institution and the rest of the

month in a public institution or private

medical facility where Medicaid pays a

substantial part (more than 50 percent)

of the cost of your care; you are a child

under the age of 18 residing for part of

a month in a public institution and the

rest of the month in a public institution

or private medical facility where a

substantial part (more than 50 percent)

of the cost of your care is paid under a

health insurance policy issued by a

private provider of such insurance; or

you are a child under the age of 18

residing for part of a month in a public

institution and the rest of the month in

a public institution or private medical

facility where a substantial part (more

than 50 percent) of the cost of your care

is paid by a combination of Medicaid

payments and payments made under a

health insurance policy issued by a

private provider; and

* * * * *

3. Section 416.212 is amended by

revising paragraphs (a) introductory text

and (b)(1) introductory text to read as

follows:

§ 416.212 Continuation of full benefits in

certain cases of medical confinement.

(a) Benefits payable under section

1611(e)(1)(E) of the Social Security Act.

Subject to eligibility and regular

computation rules (see subparts B and D

of this part), you are eligible for the

benefits payable under section

1611(e)(1)(E) of the Social Security Act

for up to 2 full months of medical

confinement during which your benefits

would otherwise be suspended because

of residence in a public institution or

reduced because of residence in a public

or private institution where Medicaid

pays a substantial part (more than 50

percent) of the cost of your care or, if
1056 Federal Register / Vol. 62, No. 5 / Wednesday, January 8, 1997 / Rules and Regulations

you are a child under age 18, reduced

because of residence in a public or

private institution which receives

payments under a health insurance

policy issued by a private provider, or

a combination of Medicaid and a health

insurance policy issued by a private

provider, pay a substantial part (more

than 50 percent) of the cost of your care

if—

* * * * *

(b) Benefits payable under section

1611(e)(1)(G) of the Social Security Act.

(1) Subject to eligibility and regular

computation rules (see subparts B and D

of this part), you are eligible for the

benefits payable under section

1611(e)(1)(G) of the Social Security Act

for up to 3 full months of medical

confinement during which your benefits

would otherwise be suspended because

of residence in a public institution or

reduced because of residence in a public

or private institution where Medicaid

pays a substantial part (more than 50

percent) of the cost of your care or, if

you are a child under age 18, reduced

because of residence in a public

institution which receives payments

under a health insurance policy issued

by a private provider, or a combination

of Medicaid and a health insurance

policy issued by a private provider, pay

a substantial part (more than 50 percent)

of the cost of your care if—

* * * * *

Subpart D—[Amended]

4. The authority citation for subpart D

of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1611 (a), (b), (c),

and (e), 1612, 1617, and 1631 of the Social

Security Act (42 U.S.C. 902(a)(5), 1382(a), (b),

(c), and (e), 1382a, 1382f, and 1383).

5. Section 416.414 is amended by

revising paragraph (a) to read as follows:

§ 416.414 Amount of benefits; eligible

individual or eligible couple in a medical

care facility.

(a) General rule. Except where the

§ 416.212 provisions provide for

payment of benefits at the rates

specified under §§ 416.410 and 416.412,

reduced SSI benefits are payable to

persons and couples who are in medical

care facilities where a substantial part

(more than 50 percent) of the cost of

their care is paid by a State plan under

title XIX of the Social Security Act

(Medicaid). This reduced SSI benefit

rate applies to persons who are in

medical care facilities where a

substantial part (more than 50 percent)

of the cost would have been paid by an

approved Medicaid State plan but for

the application of section 1917(c) of the

Social Security Act due to a transfer of

assets for less than fair market value.

This reduced SSI benefit rate also

applies to children under age 18 who

are in medical care facilities where a

substantial part (more than 50 percent)

of the cost of their care is paid by a

health insurance policy issued by a

private provider of such insurance, or

where a substantial part (more than 50

percent) of the cost of their care is paid

for by a combination of Medicaid

payments and payments made under a

health insurance policy issued by a

private provider of such insurance.

Persons and couples to whom these

reduced benefits apply are—

(1) Those who are otherwise eligible

and who are in the medical care facility

throughout a month. (By throughout a

month we mean that you are in the

medical care facility as of the beginning

of the month and stay the entire month.

If you are in a medical care facility you

will be considered to have continuously

been staying there if you are transferred

from one medical facility to another or

if you are temporarily absent for a

period of not more than 14 consecutive

days.); and

(2) Those who reside for part of a

month in a public institution and for the

rest of the month are in a public or

private medical care facility where

Medicaid pays or would have paid (but

for the application of section 1917(c) of

the Act) a substantial part (more than 50

percent) of the cost of their care; and

(3) Children under age 18 who reside

for part of a month in a public

institution and for the rest of the month

are in a public or private medical care

facility where a substantial part (more

than 50 percent) of the cost of their care

is being paid under a health insurance

policy issued by a private provider or by

a combination of Medicaid and

payments under a health insurance

policy issued by a private provider.

* * * * *

Subpart K—[Amended]

6. The authority citation for subpart K

of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1602, 1611,

1612, 1613, 1614(f), 1621, and 1631 of the

Social Security Act (42 U.S.C. 902(a)(5),

1381a, 1382, 1382a, 1382b, 1382c(f), 1382j,

and 1383); sec. 211, Pub. L. 93–66, 87 Stat.

154 (42 U.S.C. 1382 note).

7. Section 416.1149 is amended by

revising paragraph (a)(1) and the first

sentence of paragraph (c)(1)(i) to read as

follows:

§ 416.1149 What is a temporary absence

from your living arrangement.

(a) * * *

(1) Become a resident of a public

institution, or a public or private

medical care facility where you

otherwise would be subject to the

reduced benefit rate described in

§ 416.414, and you are eligible for the

benefits payable under § 416.212; or

* * * * *

(c) Rules for temporary absence in

certain circumstances. (1)(i) If you enter

a medical care facility where you are

eligible for the reduced benefits payable

under § 416.414 for full months in the

facility, and you are not eligible for

either benefit payable under § 416.212

(and you have not received such

benefits during your current period of

confinement) and you intend to return

to your prior living arrangement, we

consider this a temporary absence

regardless of the length of your stay in

the facility. * * *

* * * * *

8. Section 416.1165 is amended by

revising paragraph (i)(1) to read as

follows:

§ 416.1165 How we deem income to you

from your ineligible parent(s).

* * * * *

(i) * * *

(1) You previously received a reduced

SSI benefit while a resident of a medical

facility, as described in § 416.414;

* * * * *

Subpart L—[Amended]

9. The authority citation for subpart L

of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1602, 1611,

1612, 1613, 1614(f), 1621, and 1631 of the

Social Security Act (42 U.S.C. 902(a)(5),

1381a, 1382, 1382a, 1382b, 1382c(f), 1382j,

and 1383); sec. 211, Pub. L. 93–66, 87 Stat.

154 (42 U.S.C. 1382 note).

10. Section 416.1202 is amended by

revising paragraph (b)(2)(i) to read as

follows:

§ 416.1202 Deeming of resources.

* * * * *

(b) * * *

(2) * * *

(i) Previously received a reduced SSI

benefit while a resident of a medical

facility, as described in § 416.414;

* * * * *

[FR Doc. 97–247 Filed 1–7–97; 8:45 am]

BILLING CODE 4190–29–P