03-26184. Copayments for Extended Care Services

AGENCY:

Department of Veterans Affairs.

ACTION:

Proposed rule.

SUMMARY:

We propose to amend VA's medical regulations by modifying provisions regarding the methodology of computing copayments for extended care services provided to veterans. This proposal enhances the protection of veterans' spouses by not counting certain assets as available resources for computing these copayments. Other non-substantive changes are proposed for purposes of clarification.

DATES:

Comments must be received on or before December 15, 2003.

ADDRESSES:

Mail or hand-deliver written comments to: Director, Regulations Management (00REG1), Department of Veterans Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; or fax comments to [phone]; or e-mail comments to [e-mail]. Comments should indicate that they are submitted in response to “RIN 2900-AL49.” All comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call [phone] for an appointment.

FOR FURTHER INFORMATION CONTACT:

Donna Canada, Chief Business Office (161), at [phone] and Daniel Schoeps, Geriatrics and Extended Care (114), at [phone]. Both are officials in the Veterans Health Administration, 810 Vermont Avenue NW., Washington, DC 20420. (These are not toll free numbers.)

SUPPLEMENTARY INFORMATION:

We propose to amend VA's medical regulations at 38 CFR 17.111 concerning the computation of copayments for extended care services provided to veterans either directly by VA or obtained by contract. These copayments were established under the Veterans Millennium Health Care and Benefits Act (Pub. L. 106-117) and codified at 38 U.S.C. 1710B(c).

This proposed rule enhances and clarifies the mechanism for calculating the copayment amount. The statute set forth at 38 U.S.C. 1710B(d)(2) provides:

The Secretary shall develop a methodology for establishing the amount of the copayment for which a veteran [receiving extended care services] is liable. That methodology shall provide for—

(A) establishing a maximum monthly copayment (based on all income and assets of the veteran and the spouse of such veteran);

(B) protecting the spouse of a veteran from financial hardship by not counting all of the income and assets of the veteran and spouse (in the case of a spouse who resides in the community) as available for determining the copayment obligation; and

(C) allowing the veteran to retain a monthly personal allowance.

Under the current rule, a veteran is obligated to pay the copayment only if the veteran and the veteran's spouse have available resources. Available resources means the sum of the value of the liquid assets, fixed assets, and income of the veteran and the veteran's spouse minus the sum of the veteran allowance and the spousal allowance. Liquid assets and fixed assets are included in the calculations only if the veteran has been receiving extended care services for 181 days or more. Expenses are included in the veterans allowance calculations only 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 dependent residing in the community who is not institutionalized. These formulas are designed to allow the veteran, the veteran's spouse, and the veteran's dependents minimum amenities while allowing them to retain some of their possessions to help them maintain, to a degree, their standard of living. Also, these formulas are intended to help ensure that veterans institutionalized for 180 days or less would have the means to return home if their medical condition permits.

The current regulation has different provisions on what is included in “available resources” depending on whether or not the veteran has been receiving extended care services for more than 180 days. We propose to clarify the provisions by which we compute “available resources.” So, for veterans who have been receiving extended care services for 180 days or less, we propose to determine their available resources by adding their income and the income of their spouse and then subtracting from that the sum of the veterans allowance, the spousal allowance, and expenses. For veterans who have been receiving extended care services for 181 days or more, we propose to determine their available resources by adding the value of their liquid assets, their fixed assets, and their income and the income of their spouse, minus the sum of the veterans allowance, the spousal allowance, the spousal resource protection amount, and (but only if the veteran is receiving noninstitutional care or the veteran has a spouse or a dependent residing in the community who is not institutionalized) expenses. We believe this will clarify what resources veterans have available for purposes of determining the appropriate copayment.

We also propose to clarify in the definition of “expenses” that expenses include (1) insurance premiums of the veteran and the veteran's spouse and dependents, and (2) personal property taxes, not just income taxes.

Further, in the definition of “liquid assets,” we propose to exclude household and personal items such as furniture, clothing, and jewelry when the veteran's spouse or the veteran's dependents are living in the community or the veteran is receiving noninstitutional extended care services. Currently, household and personal items are included in liquid assets even if the veteran's spouse or dependents are living in the community or the veteran is receiving noninstitutional extended care services. This will further protect the veteran, spouse and dependents from financial hardship if they are living in the community.

VA Form 10-10EC, set forth in 38 CFR 17.111(g), currently requires including art, rare coins, stamp collections, and collectibles in liquid assets. We propose to refer to this requirement in the definition also.

Third, we propose to add at paragraph (d)(2)(vi) of § 17.111 a definition of “spousal resource protection amount” to permit a spouse to maintain some liquid assets while she lives in the community. This amount would equal the total value of the veteran and spouse's liquid assets up to $89,280 if the spouse resides in the community (i.e., is not institutionalized). We propose using this amount because at least 23 State Medicaid Programs use it to protect spouses' assets for Medicaid purposes. This amount would be deducted from “available resources” if the veteran has been receiving extended care services for more than 180 days. This amount would not be deducted from “available resources” if the veteran has been receiving extended care services for 180 days or less because “liquid assets” are not included in “available resources” in that case.

Fourth, we propose to remove from the definition of “veterans allowance” the inclusion of expenses in certain situations because, as discussed above, we propose to include expenses in the computation of “available resources” contained in paragraph (d)(1) of § 17.111. We propose this change to simplify the methodology in determining “available resources.”

Further, we propose to clarify in paragraph (d)(1) of § 17.111 that the income, assets, expenses and allowance of legally separated spouses are excluded from “available resources.”

The current rule provides that, unless exempted, a veteran must report changes to the veteran or spouse's situation that would change the copayment obligation (i.e., changes regarding fixed assets, liquid assets, expenses, income, or whether the veteran has a spouse or dependents residing in the community) to a VA medical facility within 10 days of the change. We propose to add a change in marital status to the list of items, which, if changed, would require the veteran to report to VA the change. A change in marital status might affect the copayment obligation and thus must be reported.

Paperwork Reduction Act

The Office of Management and Budget have approved the collections of information requirements related to this rulemaking proceeding under OMB control number 2900-0629.

Unfunded Mandates

The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, 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 proposed rule would have no such effect on State, local, or tribal governments, or the private sector.

Executive Order 12866

This regulatory amendment has been reviewed by the Office of Management and Budget under the provisions of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993.

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 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: July 9, 2003.

Anthony J. Principi,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, VA proposes to amend 38 CFR part 17 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.

2. In § 17.111, paragraphs (d) through (g) and the authority citation at the end of the section are revised to read as follows:

§ 17.111

Copayments for extended care services.

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(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 veterans who have been receiving extended care services for 180 days or less, their available resources are the sum of the income of the veteran and the veteran's spouse, minus the sum of the veterans allowance, the spousal allowance, and expenses. For veterans who have been receiving extended care services for 181 days or more, their available resources are 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, the spousal allowance, the spousal resource protection amount, and (but only if the veteran is receiving noninstitutional care or the veteran has a spouse or a dependent residing in the community who is not institutionalized) expenses. When a veteran is legally separated from a spouse, available resources do not include spousal income, expenses, and assets or a spousal allowance.

(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 health insurance; health insurance premiums for the veteran, veteran's spouse, and veteran's dependents; and taxes paid on income and personal property.

(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, retirement accounts (e.g., IRA, 401Ks, annuities), art, rare coins, stamp collections, and collectibles of the veteran, spouse, and dependents. This includes household and personal items (e.g., furniture, clothing, and jewelry) except when the veteran's spouse or dependents are living in the community.

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

(vi) Spousal resource protection amount means the value of liquid assets but not to exceed $89,280 if the spouse is residing in the community (not institutionalized).

(vii) Veterans allowance is an allowance of $20 per day.

(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 marital status, 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.

(g) VA Form 10-10EC.

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