will explore the possibility of claiming a right to a hearing before the utilization review committee under these procedures. Also worth considering is the possiblity of claiming a right to judicial review of the superintendent's determination as final agency action under the Administrative Procedure Act, 5 U.S.C. §§701 et seq. C. Obligation to Plan for Needed Services and Provide Them by Specified Dates The Dixon consent order requires both the federal government and the District to undertake jointly a specified planning process to identify the existing unmet need for aftercare services and determine how to meet it. The governments must perform three major planning tasks. First, they must assess the needs of some 7,000 St. Elizabeths and CMHC patients on a sample basis, using a questionnaire designed to measure the functioning level and behavioral characteristics of the clients. Analysis of the resulting data will determine what mental health and support services will be required to develop community-living skills for persons at various functional levels. Second, the governments are to establish program standards and models setting minimum requirements for programs offering 22 defined services, ranging from crisis intervention to homemaker services and sheltered employment. The standards are to specify all factors that affect the cost as well as the quality of providing services, such as staffing ratios, program requirements and maximum-capacity standards. Finally, an inventory must be taken of existing city resources that are capable of providing services in accordance with the new standards to determine how much of the need disclosed through the questionnaire can be met by existing facilities and how much new capacity must be developed. After completion of these three planning tasks, the federal and District governments must develop and submit for the court's approval as an appendix to the plan a description of how they will create the needed services. The plan must disclose the full cost of providing those services and necessary funds must be sought from the United States Congress and the city council. The executive branches are obligated to use all available resources to execute the plan. D. The Implementation Monitoring Committee The Dixon consent order authorizes the plaintiffs to appoint an Implementation Monitoring Committee and obligates the defendants to pay its expenses up to $56,716 a year for five years. With these resources, plaintiffs expect to be able to obtain the expert advice and much of the staff time necessary to oversee the federal and District governments' implementation of the consent order. The committee will play a major role in ensuring that the defendants' planning activities are carried out competently and on schedule. In addition to receiving information periodically, under the terms of the consent order, the committee will advise plaintiffs about the performance of each task and will work with counsel to resolve differences in planning approaches through an agreed-upon negotiation process. The committee will not be an arm of the court, as is a special master. Rather, it is conceived as an agent of the plaintiffs, to protect their interest in the implementation phase of the case. The committee's first major task will be evaluation of the appendix to the plan which defendants are required to submit to the court. The committee will advise plaintiffs whether its addition constitutes a final plan that is adequate to meet the needs and protect the rights of the plaintiff class. Periodically thereafter, the committee and its staff will receive and analyze information from the defendants. It will also independently investigate complaints by patients, family members, service providers and others, with authority to demand and review medical records and evaluate patients directly. It will submit an annual report to the court. The committee is not expected to resolve individual complaints. However, it will play an important role in ensuring the provision of advocacy and grievance procedures as specified in the consent order. It will monitor the hospital's and the District's progress in notifying patients of their rights, training staff in rights protection and providing individual advocates. Because they are familiar with the government's obligations, have investigatory authority under the order, and will continue to receive complaints directly from patients and their representatives, the committee and its staff are in an excellent position to see that the Dixon agreement's promise of advocacy becomes an operative reality. And the committee will, of course, seek resolution of any systemic problems which individual complaints bring to its attention. The plaintiffs have designated five persons to serve on the Implementation Monitoring Committee: a current class member and consumer of mental health services, a nationally known psychiatric expert, the director of a state mental health system, a health planner, and the founder of a psychosocial day activities program for the chronically mentally ill. Representation of these various perspectives consumer, therapeutic, administrative, planning, social service - along with the legal perspective provided by plaintiffs' counsel should produce well-considered recommendations to which the defendants and the court will give considerable weight. Novelty of the Dixon Approach This approach to implementation of a major systemchanging court decree has not been tried in other deinstitutionalization cases. Usually, either the parties maintain their adversary positions and unilaterally propose plans and positions to the court or the court appoints a master or expert panel to arbitrate disputes between the parties. The Dixon consent order tries to institutionalize the negotiation process which produced the agreement itself. While it is too early to know whether it will be successful, there are several reasons for the order's focus on procedures as well as substance and its contemplation of a five-year implementation period. Plaintiffs recognize that the court's jurisdiction in this case must terminate eventually and that only to the extent that the defendant bureaucracies become committed to the negotiated plan can they expect to see it implemented in the long run. The continuing negotiation process seems to permit the defendants to in corporate the goals of the lawsuit into their own systems gradually; whether that will actually happen remains to be seen. The five-year implementation period should help all parties to learn from their early experiences in this relatively new endeavor, and the negotiation process should allow consequent changes to be made in defendants' obligations when appropriate. Finally, the order's provision of funds for expenses of the Implementation Monitoring Committee recognizes that the plaintiffs represented by public interest lawyers cannot continue unassisted to devote on an equal basis with the federal and District governments the resources necessary to monitor defendants' activities and to engage in continuing negotiations. It therefore includes defendants' obligation to provide plaintiffs with the resources necessary to monitor the effectuation of plaintiffs' judicially declared rights. Margaret F. Ewing NATIONAL HEALTH LAW PROGRAM 2639 S. La Cienega Blvd., Los Angeles, CA 90034, (213) 2046010 Checking the Legality of Your State's Medically Needy Spend-Down Program Part II 1. OVERVIEW Spend-down extends Medical Assistance to categorically related persons whose incomes are too high to qualify for Medicaid but whose expenses are sufficiently large that when they are subtracted from income, the remaining income falls below the medically needy level. Spend-down is a component of the optional medically needy program in "1634" and "SSI" states. Spend-down for the aged, blind and disabled is mandatory in "209(b)" states. 42 U.S.C. 1396(a)(f); Hayes v. Stanton, 512 F.2d 133 (7th Cir. 1975). A 1634 or SSI state without a medically needy program cannot be compelled to adopt spend-down. Fullington v. Shea, 320 F. Supp. 500 (D. Colo. 1970); Hayman v. Idaho, CCH Medicare-Medicaid Guide, ¶30,148 (Idaho Sup. Ct. 1980). Spend-down is very desirable because it protects the working poor and the elderly and disabled who are living on fixed incomes from large medical expenses. Spend-down eliminates the arbitrary income eligibility cutoff points, which divide the working poor from the welfare poor and the SSI poor from those entirely dependent on OASDI payments. It is the only large-scale federal program that provides protection from catastrophic medical expenses. The easiest way to visualize spend-down is as an insurance deductible, which varies on a sliding fee scale depending on income. Determining an individual's spend-down eligibility takes into account five factors: (1) categorical relatedness, (2) the medically needy income levels and resource standards, (3) the income disregards, (4) the medical expenses of the individual and other family members, and (5) the accounting periods. $1396(a)(10Xc); 42 C.F.R. §§435.310 and .320. An individual or family can also be eligible if he or she possesses the characteristics of an optional categorically eligible group (such as AFDC-UP or Ribicoff children or unborn children) which the state has chosen to cover. 42 C.F.R. §§435.310 and .320. All 209(b) states must provide spend-down coverage to the aged, blind and disabled who meet the more restrictive income, resource and disability criteria used in those states. If they choose to have a medically needy program, they may apply the same restrictive disability criteria for the medically needy who are SSI-related as they apply to SSI recipients. 42 C.F.R. §435.321. Medically Needy Income Levels (MNILS) and These were extensively discussed in prior columns.' MNILS are the amount of money reserved for the maintenance needs of the individual or family for food, shelter, utilities and the like. In general, MNILS must be set as a minimum at the highest categorical eligibility standard, and as a maximum at four thirds of the AFDC levels. 42 C.F.R. §§435.812, .814 and .816. Resource standards must be at the highest categorical eligibility standards for each resource type, and must increase by family size. 42 C.F.R. §435.840. Income Disregards In general, the income disregards of the SSI-related must be the SSI disregards — that is, the first $20 of income, whatever its source, the next $65 of earned income, and one half of the remainder of earned income. 42 C.F.R. §435.831.2 For families and children, the income disregards must be the same as those used in determining initial eligibility for AFDC that is, all reasonable and necessary work-related expenses, including the costs of childcare.' 42 C.F.R. §435.831. 1. 2. 3. Increasing Your State's Medically Needy Income Levels, 13 CLEARINGHOUSE REV. 755 (Feb. 1980); and Medically Needy Levels for the Aged, Blind and Disabled Are Often Illogically Low, 13 CLEARINGHOUSE REV. 599 (Dec. 1979). In 209(b) states, the income disregards of the medically needy must be at least as high as those for the categorically needy. Schultz v. Noot, No. 4-79-334 (D. Minn., Nov. 20, 1979), Clearinghouse No. 28,106. Greklek v. Toia, 565 F.2d 1265 (2nd Cir. 1977). CLEARINGHOUSE REVIEW Pamphlets [N]o State has developed simple instructional materials for distribution to spend-downers to tell them exactly how to fulfill their spend-down liability. . . . .... States varied in their specific public information efforts, but shared a basically laissez-faire attitude toward them. . . Whether the general public was informed specifically of the spend-down program was not considered an important issue ... For this reason, in none of the public information materials or activities is there any specific mention or explanation of the spenddown program. ... [I]n no State is specific information regarding spend-down distributed to any groups other than the spend-downers themselves. Therefore, should a medically needy recipient's circumstances change, he or she would not automatically be aware of the possibility of continued Medicaid coverage under the spend-down program.. [In the explantory materials for providers] [I]ittle or no explanation of eligibility requirements is given. . . [A]s a result, providers (especially community providers) are often unaware of the spend-down eligibility process; the spend-downer can be hindered in his attempts to incur expenses in fulfillment of his liability. This was found to occur in rural areas in North Carolina and in Baltimore County, Maryland. . . . Id. at 58, 101, 102. States not infrequently use accounting periods as a way of reducing their Medicaid expenditures. (Spitz and Holahan, Modifying Medicaid Eligibility and Benefits (Urban Institute, Washington, D.C., 1977)) 18-20. The advantages of a long spend-down period to a state are that it reduces the frequency of redetermination from monthly to semi-annually and silently cuts off four classes of potential beneficiaries: (1) those who cannot incur six months of medical expenses because providers will not extend credit for their services, (2) those deterred from spending down by the size of their liability, (3) those with fluctuating medical bills, and (4) those with fluctuating income.' The Credit Problem ... In all States, it was acknowledged that potential spend-downers sometimes experience difficulty in obtaining credit for medical expenses, particularly from physicians, druggists, and other non-institutional health providers. A recent court case vividly illustrates the possible dilemma. In the case of Brazil v. Minter in the U.S. District Court (Civil Action No. 73-1600-C), the following case was argued. Ms. Brazil (a disabled applicant) had a monthly income of $294, while the State's monthly protected income level for her category was $199. Her excess income, or spend-down, was determined to be $570 for a six month period. Ms. Brazil had a chronic drug need for vivonex, an artificial nutrient which she required because she was not able to retain ordinary food. For Ms. Brazil to purchase her monthly prescription of vivonex would cost her $360. Since her spenddown was set at $570, she needed to obtain just over a one-and-a-half months' supply of the nutrient before Medicaid eligiblity would commence. Ms. Brazil could not find a druggist willing to allow her to incur that great an expense; consequently, she could not spenddown because she did not have $570 available in cash...." 10 Anticipated Medical Expenses One obvious solution would be to give a deduction for anticipated medical expenses; however the Department of Health and Human Services (HHS) has taken the position that for a state to allow a deduction for anticipated medical expenses to a non-institutionalized applicant would violate the statutory requirements of 42 U.S.C. §1396a(a)(17) that the state can only give credit for "the costs... incurred for medical care.' ." Although HHS's policy guidelines allow a 9. See USRE, Comprehensive Review of Medicaid Eligibility (Cambridge, Mass., 1977) 3-21 to 3-25. 10. Evaluation of the Medicaid Spend-Down, 63-64. A temporary injunction was issued for Ms. Brazil which required that she be allowed to spend down on a monthly basis; however, the case was dismissed for mootness after her death several years later. 11. See Letters between and among HEW Central Office, Regional Office and Bill Simon of the Legal Services Institute, Boston, dated Feb. 27, 1980, Mar. 24, 1979, and Sept. 6, 1978. CLEARINGHOUSE REVIEW deduction for anticipated medical expenses, HHS has recently opposed both state legislation" and litigation to give credit for anticipated medical expenses. See Medical Assistance Manual (MAM)-4-30-30(B)(1)(d)(2). HHS is engaged in a comprehensive review of these policies; legal services advocacy could have a substantial effect on the outcome. Litigation on these issues has had a checkered pattern of success and failure. In Williams v. St. Clair13 the Fifth Circuit held that Mississippi, a 209(b) state without a medically needy program, need not give credit for anticipated medical expenses or use a one-month accounting period. The dicta limit the holding to 209(b) states without medically needy programs and require credit for anticipated medical expenses in states with medically needy programs. In Heucker v. Clifton's the court ordered the Medicaid agency to give a chronically ill couple credit for their anticipated medical expenses. Reductions in the Accounting Period 14 Requiring the Spend-Down to Be Paid to the State Several states (Utah, New York, Illinois) have devised a different spend-down; they require that the spend-down be paid directly to the state as an insurance premium in order to receive a Medicaid card. The disadvantage of the approach is that it introduces a new and worse cash-flow problem paying the spend-down to the state as distinct from incurring medical bills. Recipients with large spend-downs and catastrophic medical needs lack the available cash to pay the spend-down amount immediately to the state, while they can afford to pay a spend-down liability over time to a hospital. Its advantage to the state is simplicity of administration. Elderly recipients with chronic medical needs who would otherwise be deterred from incurring large six-month liabilities to qualify for Medicaid find it easier to pay a small monthly premium to the state. Because that procedure violates the federally mandated "incurment" principle, HHS has listed Illinois and Utah as out of compliance for the policy, and Illinois has responded by seeking section 1115 waiver to continue its current policy. The states have significant variations. In New York the applicant may choose either to pay the spend-down to the state or to incur the spend-down liability from providers (who in some cases will not extend services on credit). In Utah, the penalty for missing the spend-down payment in a given month is no Medicaid card, while in Illinois more traditional collection procedures are used. The New York approach appears to best meet the needs of the state and both groups of recipients. 12. Mass. S.B. No. 682 (1980). 13. Williams v. St. Clair, 610 F.2d 1244 (5th Cir. 1980). 14. Id. at 1248. 15. CCH MEDicare/Medicaid GUIDE 926,802 (Ky. Ct. App. 1973). 16. Ill. H.B. 3449 art. 4 sec. 4-104 (83rd Gen. Assembly) would reduce the accounting period from six to three months whenever such a change would benefit the recipient. Cost estimates for such a change are available from NHELP or Dean Jost, Legal Assistance Foundation of Chicago. NOVEMBER 1980 |