02-12133. Medical Benefits Package; Copayments for Extended Care Services

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

This document amends VA's medical regulations by adding the following extended care services to the medical benefits package: noninstitutional adult day health care, noninstitutional geriatric evaluation, and noninstitutional respite care. Also, this document amends VA's medical regulations to establish provisions regarding copayments for extended care services. These actions implement provisions of the Veterans Millennium Health Care and Benefits Act.

DATES:

Effective Date: June 17, 2002.

FOR FURTHER INFORMATION CONTACT:

Daniel Schoeps, Geriatrics and Extended Care (114), at [phone] for issues regarding the medical benefits package, and Nancy Howard, Revenue Office (174), at [phone] for issues regarding copayments for extended care services. Both are officials in the Veterans Health Administration, 810 Vermont Avenue NW, Washington, DC 20420.

SUPPLEMENTARY INFORMATION:

In a document published in the Federal Register on October 4, 2001 (66 FR 50594), we proposed to amend VA's medical regulations at 38 CFR 17.38 by adding the following extended care services to the medical benefits package for veterans enrolled in the VA healthcare system: noninstitutional adult day health care, noninstitutional geriatric evaluation, and noninstitutional respite care. In the same document we also proposed to amend VA's medical regulations at 38 CFR 17.111 to establish provisions regarding copayments for extended care services.

We provided a 60-day comment period that ended December 3, 2001. We received five comments. The issues raised by the commenters are discussed below. Based on the rationale set forth in the proposed rule and this document, we are adopting the provisions of the proposed rule subject to clarifying changes and other changes discussed below.

Medical Benefits Package

One commenter indicated that the provisions regarding noninstitutional adult day health care and noninstitutional respite care should indicate that VA will pay for enrolled veterans through contract where services in VA facilities are not available. No changes are made based on this comment. VA's decisions whether to provide noninstitutional adult day health care and noninstitutional respite care by contract depend on many factors such as the availability of VA and contract services, the veteran's needs, and limitations in VA's statutory authority (38 U.S.C. 1703, 1720B, and 8153). Within these limitations, VA will attempt to provide this care by contract where it is not available in VA facilities.

Copayments for Extended Care Services

The Veterans Millennium Health Care and Benefits Act (Pub.L. 106-117) established provisions regarding copayments for extended care services provided to veterans by VA. These provisions are set forth at 38 U.S.C. 1710B.

The final rule states that, with certain exceptions, as a condition of receiving extended care services, a veteran must agree to pay VA a copayment. This restates statutory provisions at 38 U.S.C. 1710B. The final rule provides that the following extended care services are subject to the corresponding copayment amount per day:

(i) Adult day health care—$15.

(ii) Domiciliary care—$5.

(iii) Institutional respite care—$97.

(iv) Institutional geriatric evaluation—$97.

(v) Non-institutional geriatric evaluation—$15.

(vi) Non-institutional respite care—$15.

(vii) Nursing home care—$97.

One commenter asserted that the copayment for adult day health care should be $5 to $7 per day based on her conclusion that the $15 amount would be more than some would be able to pay. One commenter noted that domiciliary care “is restricted to veterans with very low incomes” and asserted that the proposal to charge $5 per day is too high. Three commenters expressed concern about whether low-income veterans would forgo nursing home care because of the $97 copayment amount per day. No changes are made based on these comments. Statutory provisions at 38 U.S.C. 1710B require that VA establish copayment amounts for extended care services. Under the final rule a veteran has no copayment obligation for the first 21 days of extended care services in any 12-month period from the date extended care services began. Further, for each day that extended care services are provided beyond the first 21 days, the veteran may not have to pay any copayment or may be required to pay only a portion of the copayment. As indicated in the regulatory text portion of this document, some veterans, including all veterans whose income is below $9,556, are exempt from the copayment requirements altogether. Those not exempted are obligated to pay a copayment for each day that extended care services are provided to the extent the veteran has “available resources”. We revised the regulatory text to clarify that “available resources” are calculated on a monthly basis.

If a veteran has been receiving extended care services for 180 days or less, “available resources” means the sum of the income of both the veteran and the veteran's spouse minus the sum of the veterans allowance and the spousal allowance. If the veteran has been receiving extended care services for 181 days or more, liquid assets and fixed assets would be included in “available resources”. Expenses are included in the veterans allowance if the veteran has been receiving extended care services for 180 days or less, the veteran is receiving only adult day health care or other noninstitutional care, or the veteran has a spouse or dependents residing in the community (not institutionalized).

This formula is designed to ensure that veterans institutionalized for 180 days or less will have the means to return home and that their resources are not depleted due to the requirement to make copayments.

One commenter particularly had concerns about veterans in nursing homes with incomes between $9,556 and $24,000. The commenter suggested that VA establish a sliding scale that would require full copayments for only those with income above $24,000. No changes are made based on these comments. VA statistics indicate that the average daily copayment for those receiving nursing home care provided by VA would be approximately $14. The average daily copayment for those in the income range mentioned by the commenter would be less than $14.

One commenter requested that we provide examples of copayment calculations for a single veteran and a veteran with a spouse. Accordingly, we offer the following examples:

A Veteran in a Nursing Home With no Spouse

There would be no copayment for the first 21 days of care. For the next 169 days the available resources used in determining the copayment would be the income of the veteran minus the veterans allowance. During this time period, the veterans allowance includes living expenses.

After 180 days of nursing home care, the available resources used in determining the copayment would be the sum of the veteran's income and liquid and fixed assets minus the veterans allowance. During this time period, the veterans allowance does not include living expenses. The veteran's fixed and liquid assets would be reduced each month by the amount of the copayment amount that is not covered by the veteran's income after the veterans allowance is subtracted.

A Veteran in a Nursing Home With a Spouse or Dependent Residing in the Community

There would be no copayment for the first 21 days of care. For the next 169 days the available resources used in determining the copayment would be the income of the veteran and spouse minus the veteran's and spouse's deductible expenses minus the veterans and spousal allowance. On the 181st day of nursing home care, the available resources used in determining the copayment would be the sum of the veteran and spousal income and the liquid and fixed assets (excluding the primary residence of the spouse and one vehicle) minus the veteran's and spouse's deductible expenses minus the veterans and spousal allowance. Thereafter, the fixed and liquid assets would be reduced each month by the copayment amount that is not covered by the veteran and spousal income after the allowances (which include expenses) are subtracted.

The final rule provides that veterans are not subject to the copayment requirements if their annual income (determined under 38 U.S.C. 1503) is less than the amount in effect under 38 U.S.C. 1521(b). One commenter asserted that this exemption should be changed to provide a different formula with an increased amount. No changes are made based on this comment. We have no authority to change the statutory formula.

As noted above, a veteran would be obligated to pay the copayment only to the extent the veteran and the veteran's spouse have “available resources.” As proposed, “available resources” include IRA's and 401K's. One commenter asserted that IRA's and 401K's should not be included if they are subject to penalty if withdrawn early. No changes are made based on this comment. We see no reason for treating IRA's and 401K's differently from other available assets of the veteran. In addition, just because VA considers these investments does not require veterans to withdraw the money and incur the penalty. Exempting assets that are subject to a penalty for early withdrawal would encourage veterans to shelter their assets in these investments. Further, treating IRA's and 401K's differently from other assets would create an undue administrative burden.

The final rule provides that “[a]dult day health care is a therapeutic outpatient care program that provides medical services, rehabilitation, therapeutic activities, socialization, nutrition and transportation services to disabled veterans in a congregate setting.” One commenter asserted that the word “provides” should be changed to “provides or makes available” to ensure that the reader would understand that VA may obtain such care by contract. No changes are made based on this comment. The final rule at § 17.111(a) already covers this matter by stating that the extended care services are to be provided to veterans by VA “either directly by VA or paid for by VA.” The commenter also asserted that the term “medical services” should be defined. No changes are made based on this comment. The definition of adult day health care was included merely to distinguish it from other types of extended care services and not to establish the parameters of medical services provided. The overall parameters of medical services provided by VA are specified in the Medical benefits package which is set forth at 38 CFR 17.38. The commenter further questioned whether transportation and rehabilitation services are included in VA contracts for adult day health care services. In response, we note that they are included.

The proposed rule provided that a veteran receiving extended care services must submit to VA, among other things, a report of a change in income within 10 days of the change. One commenter asserted that the 10-day period should be extended to 30 to 45 days based on the further assertion that the veteran would not know how much to report until the “increase shows in a check.” We intended that the 10-day period begin when the veteran received the income. Accordingly, we have clarified the final rule to reflect this concept.

One commenter expressed concern regarding whether VA would provide assistance to those needing help in preparing forms and documentation under the final rule. No changes are made based on this comment. VA has individuals available at VA medical facilities to help veterans prepare such forms and documentation.

One commenter questioned whether VA has appeal procedures that would apply if a veteran were denied services. No changes are made based on this comment. We have established voluntary reconsideration procedures at 38 CFR 17.133. Further, veterans may appeal VA decisions regarding the provision of extended care services to the Board of Veterans' Appeals and the U.S. Court of Appeals for Veterans Claims.

Paperwork Reduction Act

The collection of information contained in the notice of the proposed rulemaking was submitted to the Office of Management and Budget (OMB) for review in accordance with the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Under the provisions of § 17.111(e), a veteran who wishes to receive extended care services must apply by submitting a completed VA Form 10-10EC and documentation requested by the Form to a VA medical facility. VA Form 10-10EC is set forth in full at § 17.111(g). Except for those exempted under § 17.111(f), this information is needed to determine whether the veteran's financial circumstances require a copayment, and, if so, the amount of that copayment obligation. Moreover, a veteran must submit certain updated information to a VA medical facility at specified times following the initial request for an episode of extended care services, such as after a break in provision of extended care services for more than 30 days or when changes in the veteran's financial circumstances might change the copayment obligation.

Interested parties were invited to submit comments on the collection of information. However, no comments were received. Nevertheless, changes to the VA Form 10-10EC published in the Federal Register on October 4, 2001 (66 FR 50594) are made in this document.

The portion of the form concerning fixed assets, liquid assets, expenses, and other income are changed for purposes of clarification. Also, the consent portion of the form has deleted the authorization language to release substance abuse/sickle cell anemia/HIV medical records because, under 38 U.S.C. 4132, another specific consent form is necessary to authorize release of such records.

OMB has approved this information collection under control number 2900-0629. VA is not authorized to impose a penalty on persons for failure to comply with information collection requirements which do not display a current OMB control number, if required.

Unfunded Mandates

The Unfunded Mandates Reform Act requires (in section 202) that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more in any given year. This rule would have no consequential effect on State, local, or tribal governments.

Executive Order 12866

This document has been reviewed by the Office of Management and Budget under Executive Order 12866. The projected cost estimate for this final rule is $25,425,282 for nursing home care, $3,397,862 for adult day health care, and $6,679,916 for home respite care, for a total annual cost of $35,503,060.

Regulatory Flexibility Act

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

Catalog of Federal Domestic Assistance Numbers

The Catalog of Federal Domestic Assistance numbers for the programs affected by this document are 64.005, 64.007, 64.008, 64,009, 64.010, 64.011, 64.012, 64.013, 64.014, 64.015, 64.016, 64.018, 64.019, 64.022, and 64.025.

List of Subjects in 38 CFR Part 17

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

Approved: March 14, 2002.

Anthony J. Principi,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR part 17 is amended as set forth below:

PART 17—MEDICAL

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

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

§ 17.36

[Amended]

2. Section 17.36 is amended by:

A. In paragraph (a)(1), removing “VA hospital and outpatient care” and adding, in its place, “the ‘medical benefits package’ set forth in § 17.38”.

B. In paragraphs (a)(2) and (a)(3), removing “hospital and outpatient”.

C. In paragraph (b)(3), removing “hospital and outpatient” and adding, in its place, “that”.

§ 17.37

[Amended]

3. Section 17.37 is amended by:

A. In paragraphs (a), (b), (c), (e), (g), (h), and (i), removing “hospital and outpatient”.

B. In paragraph (f), removing “VA hospital and outpatient care” and adding, in its place, “care provided for in the ‘medical benefits package ’.

4. Section 17.38 is amended by:

A. Revising paragraph (a) introductory text.

B. Revising paragraph (a)(1)(xi).

C. Revising the authority citation at the end of the section.

The revisions read as follows:

§ 17.38

Medical benefits package.

(a) Subject to paragraphs (b) and (c) of this section, the following hospital, outpatient, and extended care services constitute the “medical benefits package” (basic care and preventive care):

(1) * * *

(xi)(A) Hospice care, palliative care, and institutional respite care; and

(B) Noninstitutional geriatric evaluation, noninstitutional adult day health care, and noninstitutional respite care.

* * * * *

(Authority: 38 U.S.C. 101, 501, 1701, 1705, 1710, 1710A, 1721, 1722)

5. Sections 17.112 through 17.115 including the undesignated center heading “REIMBURSEMENT FOR LOSS BY NATURAL DISASTER OF PERSONAL EFFECTS OF HOSPITALIZED OR NURSING HOME PATIENTS” are redesignated as §§ 17.113 through 17.116, respectively.

6. Section 17.111 is redesignated as § 17.112.

7. A new § 17.111 is added preceding the undesignated center heading “CEREMONIES” to read as follows:

§ 17.111

Copayments for Extended care services.

(a) General. This section sets forth requirements regarding copayments for extended care services provided to veterans by VA (either directly by VA or paid for by VA).

(b) Copayments. (1) Unless exempted under paragraph (f) of this section, as a condition of receiving extended care services from VA, a veteran must agree to pay VA and is obligated to pay VA a copayment as specified by this section. A veteran has no obligation to pay a copayment for the first 21 days of extended care services that VA provided the veteran in any 12-month period (the 12-month period begins on the date that VA first provided extended care services to the veteran). However, for each day that extended care services are provided beyond the first 21 days, a veteran is obligated to pay VA the copayment amount set forth below to the extent the veteran has available resources. Available resources are based on monthly calculations, as determined under paragraph (d) of this section. The following sets forth the extended care services provided by VA and the corresponding copayment amount per day:

(i) Adult day health care—$15.

(ii) Domiciliary care—$5.

(iii) Institutional respite care—$97.

(iv) Institutional geriatric evaluation—$97.

(v) Non-institutional geriatric evaluation—$15.

(vi) Non-institutional respite care—$15.

(vii) Nursing home care—$97.

(2) For purposes of counting the number of days for which a veteran is obligated to make a copayment under this section, VA will count each day that adult day health care, non-institutional geriatric evaluation, and non-institutional respite care are provided and will count each full day and partial day for each inpatient stay except for the day of discharge.

(c) Definitions. For purposes of this section:

(1) Adult day health care is a therapeutic outpatient care program that provides medical services, rehabilitation, therapeutic activities, socialization, nutrition and transportation services to disabled veterans in a congregate setting.

(2) Domiciliary care is defined in § 17.30(b).

(3) Extended care services means adult day health care, domiciliary care, institutional geriatric evaluation, noninstitutional geriatric evaluation, nursing home care, institutional respite care, and noninstitutional respite care.

(4) Geriatric evaluation is a specialized, diagnostic/consultative service provided by an interdisciplinary team that is for the purpose of providing a comprehensive assessment, care plan, and extended care service recommendations.

(5) Institutional means a setting in a hospital, domiciliary, or nursing home of overnight stays of one or more days.

(6) Noninstitutional means a service that does not include an overnight stay.

(7) Nursing home care means the accommodation of convalescents or other persons who are not acutely ill and not in need of hospital care, but who require nursing care and related medical services, if such nursing care and medical services are prescribed by, or are performed under the general direction of, persons duly licensed to provide such care (nursing services must be provided 24 hours a day). Such term includes services furnished in skilled nursing care facilities. Such term excludes hospice care.

(8) Respite care means care which is of limited duration, is furnished on an intermittent basis to a veteran who is suffering from a chronic illness and who resides primarily at home, and is furnished for the purpose of helping the veteran to continue residing primarily at home. (Respite providers temporarily replace the caregivers to provide services ranging from supervision to skilled care needs.)

(d) Effect of the veteran's financial resources on obligation to pay copayment. (1) A veteran is obligated to pay the copayment to the extent the veteran and the veteran's spouse have available resources. For purposes of this section, available resources means the sum of the value of the liquid assets, the fixed assets, and the income of the veteran and the veteran's spouse, minus the sum of the veterans allowance, and the spousal allowance. Liquid assets and fixed assets are included in available resources if the veteran has been receiving extended care services for 181 days or more.

(2) For purposes of determining available resources under this section:

(i) Income means current income (including, but not limited to, wages and income from a business (minus business expenses), bonuses, tips, severance pay, accrued benefits, cash gifts, inheritance amounts, interest income, standard dividend income from non tax deferred annuities, retirement income, pension income, unemployment payments, worker's compensation payments, black lung payments, tort settlement payments, social security payments, court mandated payments, payments from VA or any other Federal programs, and any other income). The amount of current income will be stated in frequency of receipt, e.g., per week, per month.

(ii) Expenses means basic subsistence expenses, including current expenses for the following: rent/mortgage for primary residence; vehicle payment for one vehicle; food for veteran, veteran's spouse, and veteran's dependents; education for veteran, veteran's spouse, and veteran's dependents; court-ordered payments of veteran or veteran's spouse (e.g., alimony, child-support); and including the average monthly expenses during the past year for the following: utilities and insurance for the primary residence; out-of-pocket medical care costs not otherwise covered by insurance and medical insurance for the veteran, veteran's spouse, and veteran's dependents; and taxes paid on income.

(iii) Fixed Assets means:

(A) Real property and other non-liquid assets; except that this does not include—

(1) Burial plots,

(2) A residence if the residence is:

(i) The primary residence of the veteran and the veteran is receiving only noninstitutional extended care service, or

(ii) The primary residence of the veteran's spouse or the veteran's dependents (if the veteran does not have a spouse) if the veteran is receiving institutional extended care service.

(3) A vehicle if the vehicle is:

(i) The vehicle of the veteran and the veteran is receiving only noninstitutional extended care service, or

(ii) The vehicle of the veteran's spouse or the veteran's dependents (if the veteran does not have a spouse) if the veteran is receiving institutional extended care service.

(iv) Liquid assets means cash, stocks, dividends received from IRA, 401K's and other tax deferred annuities, bonds, mutual funds, and retirement accounts (e.g., IRA, 401Ks, annuities), household furniture, household goods, clothing, jewelry, personal items.

(v) Spousal allowance is an allowance of $20 per day that is included only if the spouse resides in the community (not institutionalized).

(vi) Veterans allowance is an allowance of $20 per day and includes expenses if the veteran has been receiving extended care services for 180 days or less, the veteran is receiving only adult day health care or other noninstitutional care, or the veteran has a spouse or dependents residing in the community (not institutionalized).

(3) The maximum amount of a copayment for any month equals the copayment amount specified in paragraph (b)(1) of this section multiplied by the number of days in the month. The copayment for any month may be less than the amount specified in paragraph (b)(1) of this section if the veteran provides information in accordance with this section to establish that the copayment should be reduced or eliminated.

(e) Requirement to submit information. (1) Unless exempted under paragraph (f) of this section, a veteran must submit to a VA medical facility a completed VA Form 10-10EC and documentation requested by the Form at the following times:

(i) At the time of initial request for an episode of extended care services,

(ii) At the time of request for extended care services after a break in provision of extended care services for more than 30 days, and

(iii) Each year at the time of submission to VA of VA Form 10-10EZ.

(2) When there are changes that might change the copayment obligation (i.e., changes regarding fixed assets, liquid assets, expenses, income (when received), or whether the veteran has a spouse or dependents residing in the community), the veteran must report those changes to a VA medical facility within 10 days of the change.

(f) Veterans and care that are not subject to the copayment requirements. The following veterans and care are not subject to the copayment requirements of this section:

(1) A veteran with a compensable service-connected disability,

(2) A veteran whose annual income (determined under 38 U.S.C. 1503) is less than the amount in effect under 38 U.S.C. 1521(b),

(3) Care for a veteran's noncompensable zero percent service-connected disability,

(4) An episode of extended care services that began on or before November 30, 1999,

(5) Care authorized under 38 U.S.C. 1710(e) for Vietnam-era herbicide-exposed veterans, radiation-exposed veterans, Persian Gulf War veterans, or post-Persian Gulf War combat-exposed veterans,

(6) Care for treatment of sexual trauma as authorized under 38 U.S.C. 1720D, or

(7) Care or services authorized under 38 U.S.C. 1720E for certain veterans regarding cancer of the head or neck.

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

(g) VA Form 10-10EC.

(The Office of Management and Budget has approved the information collection requirements in this section under control number 2900-0629.) (Authority: 38 U.S.C. 501, 1710B)