01-3132. Supplemental Security Income for the Aged, Blind and Disabled (SSI) Program Demonstration Project; Treatment of Cash Received and Conserved To Pay for Medical or Social Services

AGENCY:

Social Security Administration (SSA).

ACTION:

Notice.

SUMMARY:

The Commissioner of Social Security is extending the application of an existing SSA demonstration project which tests how certain altered resources counting rules might apply in the SSI program. The SSI program is authorized by title XVI of the Social Security Act (the Act). The rules to be tested apply to the treatment of cash received and conserved to pay for medical or social services.

Cash received to pay for medical or social services is not counted as income to the beneficiary when received. Conserved cash received for medical or social services (which is not a reimbursement for these services already paid for by the beneficiary) is not counted as a resource for the calendar month after the month of receipt, so long as it remains separately identifiable from other resources. Beginning with the second calendar month following the month of receipt, cash received for the payment of medical or social services becomes a countable resource used in the determination of SSI eligibility.

On November 2, 1998, the Commissioner of Social Security published a Notice in the Federal Register (63 FR 58802), which waives the rules for counting as resources conserved cash received for medical or social services for Cash and Counseling demonstration participants for five years. All participants in Arkansas, Florida and New Jersey who are members of a test group receive personal assistance services. Personal assistance services are help with the basic activities of daily living, including bathing, dressing, transferring, toileting, and eating, and/or instrumental activities of daily living such as housekeeping, meal preparation, shopping, laundry, money management and medication management. Consumers of personal assistance services who participate in the demonstration are empowered by purchasing the services they require (including medical and social services) to perform the activities of daily living. In order to accomplish the objective of the demonstration project, cash allowances and information services are provided directly to persons with disabilities to enable them to choose and purchase services from providers that they feel would best meet their needs. Participants are also free to engage a fiscal intermediary to assist with proper disbursement of these cash allowances.

This Notice extends the temporary resources counting rules for Cash and Counseling participants to participants in Oregon's similar Independent Choices demonstration project. All participants in the Independent Choices demonstration project are consumers of personal assistance services.

Medicaid is the predominant source of public financing for personal assistance services programs for the aged, blind and disabled. The Secretary of the Department of Health and Human Services (DHHS) will exercise her authority under section 1115 of the Act to waive certain Medicaid provisions to permit the State of Oregon to exercise its Independent Choices demonstration. Medicaid beneficiaries who participate in this demonstration will be given cash to purchase the services they need from traditional and nontraditional providers, as they deem appropriate. Assistance will be available to help these beneficiaries effectively use funds allotted for personal assistance services.

Many of the Medicaid beneficiaries who will participate in the Independent Choices demonstration are SSI beneficiaries or belong to coverage groups using eligibility methodologies related to those of the SSI program under title XIX of the Act. Under the Cash and Counseling demonstration project, the Commissioner of Social Security is testing the appropriateness of current SSI rules which require counting cash received for the purchase of medical or social services as resources if retained for more than one month after the month of receipt. This extension of the waiver of these SSI resources counting rules will help SSA obtain a larger test group of beneficiaries making provider hiring and payment decisions without a fiscal intermediary. Oregon will encourage participants to make their own fiscal decisions about providers. SSA will use these additional data for the evaluation of its policies on excluding cash received to purchase medical or social services. This SSA test will also assist the Secretary of DHHS in testing the possibility of providing greater autonomy to the consumers of personal assistance services by empowering them to purchase the services they require (including medical and social services) to perform their activities of daily living. In order to do so, the Commissioner has exercised his authority under section 1110(b) of the Act and waived SSI resources counting of cash received and conserved for future purchases of medical and social services.

The extension of this waiver of SSI resources counting rules will apply to participants in Oregon's Independent Choices demonstration project for the duration of their participation. Cash provided to participants for purchase of medical or social services must be conserved in a form that is separately identifiable from other resources that may be countable or excludable under title XVI of the Act. The cash received for medical or social services and conserved towards payment for those services by SSI beneficiaries who participate in this demonstration will not be included in SSI countable resources only for so long as the individual continues to participate in the Independent Choices demonstration project.

Existing SSI resource-counting rules are suspended only where application of such rules would adversely affect participation by SSI beneficiaries in the Independent Choices demonstration project.

This notice is published in accordance with the requirement in 20 CFR 416.250(e).

EFFECTIVE DATES:

This project will be effective for the period authorized by the Secretary of DHHS for Oregon's Independent Choices demonstration project. The date anticipated by the Secretary for the Independent Choices demonstration to begin is on or after January 1, 2001. According to the demonstration's plan, beneficiaries may participate throughout the period of the demonstration, up to five years. Thus, if the demonstration begins on January 2, 2001, the anticipated ending date for all participants will be no later than December 31, 2005.

Any cash for medical or social services received after an SSI beneficiary's participation in the demonstration has ended which has been conserved for more than one month will be counted as resources. Any cash for medical or social services that is received during participation in the demonstration and conserved subsequent to participation in the demonstration will be subject to regular SSI resources rules.

FOR FURTHER INFORMATION CONTACT:

Craig Streett, Office of Program Benefits, 3-M-1 Operations Building, 6401 Security Boulevard, Baltimore, MD 21235-0001, [phone], or through the Internet at [e-mail].

SUPPLEMENTARY INFORMATION:

Section 1612(a) of the Act defines what is income for purposes of the SSI program; section 1612(b) of the Act specifies exclusions from income. As explained in the regulation located at 20 CFR 416.1102, income counted for the purposes of the SSI program includes anything an individual receives in cash or in kind that can be used to meet basic needs, such as food and shelter. Regulations at 20 CFR 416.1103(a)(3) and (b)(1) explain that assistance provided in cash or in kind under a Federal, State, or local government program whose purpose is to provide medical care or services or social services, including vocational rehabilitation, is not income. Cash provided by any nongovernmental medical care or medical services program or under a health insurance policy or by a nongovernmental social services program (except cash to cover food, clothing or shelter) is not income if it is either repayment for program-approved services for which the individual has already paid or a payment restricted to the future purchase of a program-approved service. This is explained by regulations at 20 CFR 416.1103(a)(5) and (b)(3).

As explained in regulations at 20 CFR 416.1201(a), resources are cash or other liquid assets or any real or personal property that an individual (or spouse) owns and could convert to cash to be used for support and maintenance. Regulations at 20 CFR 416.1207(d) explain that items received in cash or in kind during a month are evaluated first under the income counting rules. If they are retained until the first moment of the following month, they then are subject to the rules for counting resources.

Section 1613 of the Act addresses the exclusions from resources for purposes of the SSI program. Regulations at 20 CFR 416.1201(a)(3) also explain the temporary exclusion from resources for most conserved cash received for medical or social services that is separately identifiable from other resources. Cash received for medical or social services that is retained after the temporary exclusion period is a countable resource whether or not it is separately identifiable from other resources.

SSI regulations recognize that cash payments made specifically to enable people to pay for medical or social services are not income for SSI purposes, because they are assumed not to be available for support and maintenance. Those regulations recognize that the recipient is not always able to use the cash for payment for medical or social services in the month of receipt. Therefore, SSI regulations provide for not counting as resources any cash received to pay for medical and social services which is retained one full calendar month following the month of receipt, so long as it is separately identifiable from other resources. The rule permitting not counting such cash as resources does not encompass cash received as reimbursement for medical or social service bills the individual has already paid. Counting conserved cash as resources if retained after the month following the month of receipt is consistent with the purpose of the SSI program, which is to meet the current needs of beneficiaries such as the needs for food and shelter.

The Independent Choices demonstration project is designed to provide greater autonomy to the consumers of personal assistance services by empowering them to purchase the services they require (including medical and social services) to perform their activities of daily living. In order to accomplish the objectives of the demonstration project, cash allowances and information services will be provided directly to persons with disabilities to enable them to choose and purchase services from providers that they feel would best meet their needs.

Many of the consumers of personal assistance services are SSI beneficiaries. Under current SSI regulations, some SSI beneficiaries would not be able to participate in the Independent Choices demonstration project without risk to their continuing SSI eligibility due to the possibility that participants may receive cash to be conserved towards the future purchase of services. Section 1110(b) of the Act grants the Commissioner authority to waive certain requirements, conditions, or limitations of title XVI of the Act necessary to conduct experimental, pilot or demonstration projects. Unless the Commissioner exercises this authority, the remainder of cash received for future purchases of services by SSI beneficiaries who choose to participate in the demonstration will become countable resources two months following the month of receipt.

The consent of an SSI beneficiary to participate in this demonstration project is required under section 1110(b) of the Act. Oregon will obtain written consent from every participant who is an SSI beneficiary. That consent will stipulate that his or her participation is voluntary, and that he or she can revoke participation at any time. SSA will waive existing SSI rules for counting conserved cash received for the purchase of medical or social services as resources only where the application of existing rules would adversely affect the individual's SSI eligibility. Accordingly, an individual's participation in the Independent Choices project will not affect participants' eligibility for SSI or benefit amounts.

The objectives of SSA in conducting this demonstration project are to:

• Test the appropriateness of current SSI rules which require counting cash received for the purchase of medical or social services as resources if retained for more than one month after the month of receipt;
• Test alternative SSI rules for counting conserved cash received for the purchase of medical or social services when beneficiaries make their own provider hiring and payment decisions without a fiscal intermediary;
• Facilitate the ability of the Secretary, DHHS and the State of Oregon to engage in the Independent Choices demonstration project;
• Permit the Secretary, DHHS, and the State of Oregon to determine if cost savings can be realized from the Independent Choices demonstration project; and
• Empower participants in the Independent Choices demonstration project to demonstrate greater autonomy by allowing them to purchase their own personal assistance services.

The Secretary, DHHS and the State of Oregon will obtain measurements involving these objectives for the Social Security Administration.

The Commissioner's demonstration project will involve no or minimal new or additional program costs to the Federal government under title XVI of the Act or to the State of Oregon under section 1616 of the Act. SSI beneficiaries who choose to participate in this demonstration will purchase services which would ordinarily be provided by Medicaid and other Federal and State services programs at a potentially greater cost. If the Commissioner did not exercise his authority under section 1110(b) of the Act to waive certain resources rules for participants in the Independent Choices demonstration, SSI beneficiaries could choose not to participate in Oregon's demonstration and continue to receive services directly, rather than through the beneficiary's purchase. Continued SSI eligibility for beneficiaries who choose to participate in the demonstration project is not a new or additional cost related to the Commissioner's demonstration project.

SSI beneficiary participation in the Independent Choices demonstration should not affect SSI benefit amounts even if the beneficiary employs an ineligible spouse or ineligible parent as a provider of services, unless the beneficiary is an alien who employs the sponsor to provide these services. Generally, the income and resources of an eligible spouse or eligible child is deemed to include a portion of the income and resources of the ineligible spouse or parent under sections 1614(f)(1) and (2) of the Act. However, the Commissioner has exercised his discretion under those provisions. As a result, SSA does not deem the income of an ineligible spouse or ineligible parent paid under a Federal, State or local government program who provides an eligible spouse or eligible child with chore, attendant or homemaker services (described in regulations at 20 CFR 416.1161(a)(16)). The Commissioner has no similar discretionary authority for deeming from a sponsor to an alien.

If an SSI beneficiary employs his or her ineligible spouse or ineligible parent as a service provider, and the ineligible spouse or parent conserves all or part of those funds, the retained portion of those funds will become deemable resources the month after the month of receipt. (This is described in regulations at 20 CFR 416.1202.) SSA routinely explains the SSI resources limits and the rules concerning the deeming of resources to affected SSI beneficiaries. Instructions to SSA field offices in Oregon will reinforce the need to explain how payment to the ineligible spouse or ineligible parent could lead to an increase in deemable resources.

The State of Oregon will experience no or minimal new or additional costs under section 1616 of the Act for SSI beneficiaries who participate in the Independent Choices demonstration project. The demonstration project will not add new beneficiaries to either the SSI or State supplementary payments rolls, or artificially extend the eligibility of beneficiaries, or increase payment amounts of SSI or State supplementary payments to participants.

Statutory and Regulatory Provisions Waived: The Commissioner waives certain SSI resources counting rules for the duration of an individual's participation in Oregon's Independent Choices demonstration project where application of those rules would otherwise affect the eligibility of an individual for SSI. The specific statutory and regulatory provisions waived are those described in the preceding section.

Authority: Section 1110(b) of the Social Security Act.

(Catalog of Federal Domestic Assistance Programs No. 96.006-Supplemental Security Income)

Dated: January 18, 2001.

Kenneth S. Apfel,

Commissioner of Social Security.