In this issue......
SPECIAL MEDICAID ELIGIBILITY PROVISIONS FOR PERSONS WITH DISABILITIES
medicaid: the basics
using ssi as the conduit to medicaid eligibility
four provisions allow former ssi recipients to retain medicaid
obtaining medicaid through the “medically needy” or “spend down” program
home and community-based waivers
the medicaid buy-in program
SPECIAL FEATURES:
“bridges to better advocacy” conference
at court watch
administrative hearings

SPECIAL MEDICAID ELIGIBILITY PROVISIONS FOR PERSONS WITH DISABILITIES

INTRODUCTION

        Medicaid is the most important health care program for persons with disabilities served by Protection and Advocacy (P&A) programs. It can pay for many goods and services, and continues to be the most popular funding source for assistive technology (AT). Medicaid is also the most common category of case work handled by P&A advocates who specialize in AT advocacy.

        This article will not focus on using Medicaid to fund AT. Nor will it focus on strategies for winning hearings, succeeding in litigation, or changing AT-related policy. Instead, it will focus on how to establish or retain Medicaid eligibility. Our premise is that advocacy efforts which ensure Medicaid eligibility are just as important as hearing advocacy and litigation in getting AT into the hands of large numbers of individuals.

        Medicaid, also know as Medical Assistance, is a cooperative federal-state program authorized by Title XIX of the Social Security Act. 42 U.S.C. §§ 1396 et seq. It is designed to serve persons with limited income and resources. Administration will occur at the state level, with the state Medicaid agency often delegating decision making to other state agencies, to local Medicaid units, or to health maintenance organizations.

        Medicaid is often the only health insurance plan for persons with disabilities who have limited income. For those dually entitled to Medicaid and Medicare, Medicaid is usually the better of the two programs. An increasing number of individuals with disabilities are looking to Medicaid as their primary health insurance plan, notwithstanding higher levels of income. Medicaid may be available to those individuals through state-specific waivers, through optional buy-in programs, or through the 1619(b) provisions, all discussed below. A lack of adequate health insurance is often cited as a primary barrier to the ability to live in the community and the ability to succeed in employment.

        This will vary as states have great leeway on what categories of service to cover. Although participation in Medicaid is voluntary, once a state chooses to participate (and all states do) it must comply with federal requirements. A state must offer an extensive list of “required services” and may also choose to cover any number of “optional services.”

        The most important Medicaid-funded services, for individuals with disabilities, tend to be those that are expensive and those not typically covered through employer-funded health insurance. These include: inpatient hospital care; home health care services (which includes “medical supplies and equipment,” the category typically used to fund AT); prescription drugs; private duty nursing; physical therapy, occupational therapy, speech, hearing and language therapy (under each of these categories, funding is available for necessary equipment and supplies, providing potential funding for AT); prosthetic devices (this has also been used to fund AT); intermediate care facilities; personal care services; and clinic services. Many of these are optional services categories and will not be available in all states. All optional services must be available to children through the Early Prevention, Screening, Diagnosis and Treatment (EPSDT) program, a mandatory program for children under age 21.

        During the past 20 years, many new ways have been created to qualify for Medicaid. For example, the Medicaid provisions in Title XIX have been amended to create the optional waiver and buy-in programs. The Supplemental Security Income (SSI) provisions in Title XVI of the Social Security Act have been amended to make four separate classes of former SSI recipients eligible for continued Medicaid. Since these provisions are not well publicized or well understood, many individuals who could be eligible never obtain Medicaid. Without that eligibility, any arguments in favor of funding AT are purely academic.

        SSI is a cash benefit for individuals with disabilities who have limited income and resources. SSI recipients will automatically qualify for Medicaid in 39 states. 42 U.S.C. § 1396a(a)(10)(A)(i). If the SSI check is as little as $1, Medicaid eligibility is automatic. In 11 states, known as section 209(b) states, Medicaid eligibility is not automatic for SSI recipients. These states use their own Medicaid eligibility criteria which differs from SSI criteria. Id. § 1396a(f). The states which exercise the 209(b) option include: Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia. SSA Program Operations Manual System (POMS) SI 01715.020.

        Individuals, spouses and parents can often organize their finances to ensure SSI and Medicaid eligibility. See, Using SSI and its Income and Resource Rules to Leverage Money for AT (AT Advocate, February-March 1997). For example, in a state that pays the 2000 SSI federal benefit rate of $512, with no state supplement, a single parent living with two children including one with  a disability would be able to maintain SSI eligibility for the child with a disability until the parent’s gross monthly income reaches $2,430 ($29,160 per year). If Medicaid is critical to the child, the parent may wish to work with his or her employer to keep their income below $2,430. This could be done by accepting extra health benefits in lieu of cash; putting money into a cafeteria plan or flexible spending account, if available; or by going to a part-time schedule.

        Parents may also use creative divorce or child support settlements to obtain or retain SSI and Medicaid. See our booklet, SUPPLEMENTAL SECURITY INCOME AND THE FAMILY LAW ATTORNEY : Using Creative Alimony, Child Support and Property Settlements to Maximize SSI, Medicaid and Create Funding for Assistive Technology (August 1999 ) and a shorter newsletter article by the same title (AT Advocate, June-July 1999). With more of our clients working for higher wages despite severe disabilities, they will look to a variety of SSI work incentives to continue SSI and Medicaid. See our booklet, FUNDING OF ASSISTIVE TECHNOLOGY : Work Incentives for Persons with Disabilities Under the Social Security and SSI Programs - Using the Work Incentives to Fund AT and Make Work a Reality (December 1999) and a shorter newsletter with a similar title (AT Advocate, February-March 1997).

        If a person loses SSI when he or she becomes entitled to Social Security widows or widowers benefits, the person remains automatically eligible for Medicaid if SSI eligibility would continue in the absence of the widow’s or widower’s benefits. Eligibility continues only for so long as the person remains ineligible for Medicare, a period of 24 months following the first month of Social Security eligibility. 42 U.S.C. § 1383c(d).

Recipients of Social Security DAC Benefits

        A recipient of Social Security Child's Insurance Benefits, often referred to as Disabled Adult Child's (DAC) benefits, can continue eligibility for automatic Medicaid if, after July 1, 1987, the person lost SSI due to entitlement to or an increase in DAC benefits. 42 U.S.C. § 1383c(c). This provision has been the subject of two lawsuits -- one in West Virginia, Carter v. Willis-Miller, and one in New York, McMahon v. Dowling. Both lawsuits addressed the failure by the state's Medicaid agency to properly implement this 1987 law. In New York, the interim settlement incorporated new regulations and policies to provide guidance to the county Medicaid agencies responsible for implementation. It is likely that many states have failed to properly implement this law. [See Munger, J., Categorical Medicaid Eligibility for Recipients of Disabled Adult Child Social Security Disability Benefits, 29 CLEARINGHOUSE REV. 1044 (March 1996). Our Project has all the key documents from McMahon.]

        This protects certain persons who lost SSI because of cost of living increases in Social Security benefits. Automatic eligibility for Medicaid continues if the person would be presently eligible for SSI if Social Security cost of living increases since April 1977 are disregarded. 42 U.S.C. § 1396a(note); 42 C.F.R. § 435.135. For a more detailed explanation, see Bonnyman, G. Medicaid Eligibility in a time Warp, 22 Clearinghouse Rev. 120 (June 1988) and A Quick and Easy Method of Screening for Medicaid Eligibility under the Pickle Amendment, 31 Clearinghouse Rev. 634 (March-April 1998).

        This may be the most important of all Social Security and SSI work incentives. It provides Medicaid for individuals who lose SSI benefits when earnings are too high. 42 U.S.C. § 1382h; 20 C.F.R. §§ 416.264 et seq.; POMS SI 02302.010 B. Under 1619(b), which is available in all states, automatic Medicaid continues if the person would continue to be eligible for SSI if the wages were ignored and if annual income is less than a specified income threshold.

        The income threshold changes every calendar year and will be different in each state, based on the state’s unique SSI rate and Medicaid expenditures. You can find the 1619(b) eligibility thresholds for your state by consulting SSA’s POMS manual, at SI 02303.200N. These thresholds range from $13,000 to $33,000 per year. A higher, "individualized threshold" can be established if medical or other expenses are high enough. POMS SI 02302.050. A more comprehensive discussion of 1619(b) is contained our work incentives booklet, referenced above.

        Medically needy individuals are those who would qualify for Medicaid, including individuals who are disabled, but have income or resources above limits set by their state. 42 U.S.C. § 1396a(a)(10)(C). Since Medicaid agencies often do not explain the spend down (or “share of cost”) program to applicants or recipients, you should find out if your state offers this option and take steps to educate yourself and your clients on how it works.

        Each state sets its medically needy income levels based on family size. For example, New York has set its 2000 level at $600 per month for a household of one. All individuals meeting the federal (i.e., SSI) definition of disability, who have income and resources below the medically needy level, automatically qualify for Medicaid. A state must establish a uniform set of income and resource rules for determining income for the medically needy. The state’s methodology employed in determining income and resource eligibility “shall be no more restrictive than the methodology which would be employed under the [SSI] program in the case of ... blind, or disabled individuals ....” 42 U.S.C. § 1396a(a)(10)(C)(i)(III); see Addis v. Whitburn, 153 F.2d 836 (7th Cir. 1998); Camacho v. Perales, 786 F.2d 32 (2d Cir. 1986).

        Individuals with income above the medically needy level do not automatically qualify for Medicaid. They must first meet a “spend down” or “share of cost” test. The spend down is the amount by which income exceeds the medically needy level after subtracting allowable deductions.

        For example, in New York, a single adult with a disability receives a monthly SSDI check of $720, which exceeds the state’s medically needy level of $600. The Medicaid agency will disregard the first $20 as an unearned income exclusion and the individual will face a $100 spend down (i.e., countable income exceeds the medically needy level by $100). The spend down acts like a deductible or insurance premium that must be paid or incurred before coverage begins.

        Nearly any medical expense that is paid or incurred can be used to meet a spend down requirement, even if it is for goods or services not covered by your state plan. The following is a list of typical expenses that may be used: health insurance premiums and co-payments; doctor bills; mental health bills (i.e., bills for a psychiatrist’s services and mental health counseling services); dental bills; home health care; prescriptions drugs; eyeglasses and optometry bills; and over-the-counter drugs or purchases related to health care.

        As noted above, the rules (or “methodologies”) used by medically needy programs in determining Medicaid eligibility for persons who are blind or disabled can be no more restrictive than those employed by the SSI program. 42 U.S.C. § 1396a(a)(10)(C)(i)(III). This means that SSI’s income and resource rules will serve to limit how restrictive a state may be in counting income and resources for Medicaid purposes.

        The SSI program has several work incentive provisions that govern how income and resources are counted each month. For example, if a person works the SSI program will disregard: the first $65 (or $85 if the $20 general income exclusion has not been used to reduce unearned income); an additional exclusion of up to $400 per month for students under age 22 (increasing to $1,290 in January 2001); impairment related work expenses; 50 percent of remaining wages; blind work expenses; and income specifically set aside under an approved Plan for Achieving Self Support (PASS). 20 C.F.R. § 416.1112. In measuring resources against SSI’s $2,000 resource limit, the program will not count money in accounts created under an approved PASS; nor will it count property considered essential for self support. 20 C.F.R. § 416.1210.

        Does this mean that a state with a medically needy program must allow for deductions similar to SSI’s work incentive provisions? The answer would appear to be yes. Several courts have mandated that states follow specific SSI income provisions in their medically needy programs. See, e.g., Addis and Camacho decisions, cited above. However, we are not aware of any case law that has addressed whether a state must follow the work incentive provisions.

        On the assumption that medically needy programs must apply the SSI-based work incentive rules, two examples, using New York’s rules, will demonstrate how application of these rules could greatly benefit a Medicaid recipient. Consider Mary, age 32, who is spinal cord injured and uses a wheelchair. She receives $820 in Social Security benefits. New York’s Medicaid program, after applying a $20 unearned income exclusion, will count $800 against her. She will have a $200 spend down as she is $200 above New York’s one-person income limit of $600. She uses Medicaid, with the spend down, as it allows her to access Medicaid-funded personal care services (i.e., home health aides) and other services.

        Assume Mary works, earns $665 gross per month, and pays $200 per month for a wheelchair van service. If it uses rules similar to SSI’s, the Medicaid program will disregard the first $65, deduct another $200 for the transportation cost as an impairment related work expense, and deduct 50 percent of her remaining wages, reducing this income to $200. Combined with her Social Security, Mary’s total countable income is $1,000 and her spend down goes up $200 to $400 per month.

        Using a Medicaid PASS: Mary wants to purchase a van, specially modified to allow her to travel with her wheelchair, with monthly payments of $500. The van will allow Mary to pursue her vocational goal. She proposes to Medicaid that she will use a Plan for Achieving Self Support (PASS), like SSI’s PASS, to set aside income each month to make these payments. Assuming the state must allow for these deductions in its medically needy program, these expenditures will be deductions from income if the PASS is approved by the Medicaid agency. Mary uses $200 of Social Security in the PASS, reducing her countable unearned income to $600. She uses $300 of her wages in the PASS, reducing her countable wages to $0 per month PASS, reducing her countable unearned income to $600. She uses $300 of her wages in the PASS, reducing her countable wages to $0 per month [$665 - 65 = $600 - 300 = $300 - 300 (PASS exclusion) = $0]. Since total countable income is now $600, Mary has eliminated her Medicaid spend down and has $500 available to meet the monthly van payments. [See New York’s Medicaid regulations,18 N.Y. Codes, Rules & Regs. § 360-4.6(a)(2), allowing for the deductions used in these examples.]

        These provisions allow states, with approval of the federal Health Care Financing Administration, to waive specific requirements of the Medicaid Act. 42 U.S.C. § 1396n(c)(often referenced as “section 1915(c) waivers”). All states participate in these optional waivers to varying degrees.

        Waiver of Statewidedness: Ordinarily, the state’s Medicaid plan must offer comparable coverage in all regions of a state. 42 U.S.C. § 1396a(a)(1). A waiver can be approved to offer a level of Medicaid coverage in one or more sections of the state that is not available statewide.

        Waiver of Comparability: Ordinarily, the state’s Medicaid plan must treat all similarly situated recipients equally. 42 U.S.C. § 1396a(a)(10)(B). A waiver could select a targeted group of recipients (such as persons with traumatic brain injury) and offer them a scope of services not available to persons who have different disabilities but similar needs.

        Waiver of Certain Income and Resource Rules: A waiver can be implemented which exempts certain populations from the general income and resource requirements. For example, the Katie Becket waiver allows a Medicaid program to disregard parental income and resources for certain children.

        These waiver programs are structured to provide an alternative to institutional care and often provide greater access to AT than available under other covered services within the state plan. A number of other services may be available under your state’s unique waiver program or programs, such as case management, homemaker services, home health aide services, adult day health, habilitation, respite, home modifications, partial hospitalization and psycho-social rehabilitation for persons with psychiatric diagnoses. Some of these are optional services that a state may not cover in its regular state plan. Others are services that are not otherwise available as either required or optional services.

        This optional program, created by the Balanced Budget Act amendments of 1997, is designed to provide health insurance to working people with disabilities who, because of relatively high earnings, cannot qualify for Medicaid under another provision. Subject to federal criteria, a state can structure the buy-in as it sees fit.

        The original buy-in included several key eligibility components:

• Individuals are not required to have been on SSI.
• Eligibility was set at net income of less than 250 percent of the federal poverty level, with all SSI exclusions applied.
• Except for their earnings, the person with a disability would be eligible for SSI.
• Performance of substantial gainful activity (i.e., earnings in excess of $700 monthly) is not an eligibility consideration.
• States could increase the resource limits to as high as $14,000.
• States could charge premiums or other cost-sharing charges.

        Section 201 of the Ticket to Work and Work Incentives Improvement Act of 1999 included several key provisions to make the Buy-in program more attractive:

• It allows states to offer a buy-in to persons with earnings greater than 250 percent of the poverty level.
• States will be allowed to set income limits and require cost-sharing and premiums, based on income, on a sliding scale. A state could require some individuals to pay the full premium as long as the premiums do not exceed 7.5 percent of the individual’s total income.
• States must require a 100 percent premium payment for individuals with adjusted gross incomes greater than $75,000 unless states choose to subsidize the premium using their own funds.

        As this document is written, approximately 10 states had adopted and were implementing buy-in programs, with an additional 25 or more states at various stages of pre-implementation (including several that had been adopted and were awaiting federal approval, and several pending in state legislatures). You may wish to check the status of the buy-in program in your state.

        Although Medicaid continues to be a source of many administrative appeals and some AT-related litigation, many AT devices are available without dispute in most states. That AT can only be accessed, however, if the person can establish Medicaid eligibility. Hopefully, this article will provide readers with a good reference to the many ways of establishing or retaining Medicaid eligibility for persons with disabilities.

        Mark your calendars for our fifth annual national AT conference, to be held at the Sheraton Hotel in downtown Austin, Texas. Wednesday, April 4^th will be a full-day, pre-conference session on Medicaid and special education for newer AT advocates. The agenda for the Thursday-Friday main event is being developed.

        Two New York cases challenge the state Medicaid agency’s routine denial of custom and power wheelchairs to residents of skilled nursing facilities. In Taher v. Novello (N.Y. App. Div., 4^th Dept.)(co-counseled by our State AT Project, the Western New York Law Center and a private firm), the three petitioners each sought custom reclining wheelchairs. In Spina v. Novello (E.D.N.Y.)(handled through Cardozo Law School in New York City), the two plaintiffs sought power wheelchairs. In both cases, the state denied the requests without considering individual needs, contending that the nursing home was responsible for meeting any of these needs as part of its per diem rate.

        Both cases involve claims that the state violated the federal Medicaid law. Taher adds state Medicaid and Administrative Procedure Act (failure to follow rule making procedures) claims, while Spina adds claims under the most integrated setting mandates of the Americans with Disabilities Act and the anti-discrimination provisions of section 504 of the Rehabilitation Act.

[For copies of the Appellate Division brief filed in Taher or the federal court complaint filed in Spina, contact the AT Advocacy Project.]

        Two more Medicare decisions have awarded funding for augmentative and alternative communication (AAC) devices. This brings to nine the number of favorable administrative law judge (ALJ) decisions awarding Medicare funding for AAC devices. The Rhoda G. case, handled by the Iowa Law School, approved funding for a Lightwriter under both the durable medical equipment (DME) and prosthetic devices categories. The Kim D. case, out of Portland, Maine and handled by Lew Golinker of Ithaca, New York, approved funding for a Lightwriter as a replacement for an eight year old device. We expect to have new federal policy guidance for AAC devices through Medicare by the end of the year.

        Jim Engstrand of the Rhode Island Disability Law Center reports two Medicare hearing decisions. In Richard W., the ALJ ordered Medicare payment for a power operated scooter under the “power operated vehicle” provisions. Although the ALJ’s decision has limited analysis of the legal merits, Jim’s 20-page brief will be helpful for anyone facing a denial based on Medicare Coverage Issues Manual § 60-9 language that the wheelchair (or scooter) cannot be funded unless “without the use of the wheelchair the patient would be otherwise bed or chair confined.” In Matter of Anonymous, the ALJ denied funding for a stair glide, finding that it does not meet the DME definition, stating that the record failed to establish that it was “primarily and customarily used to serve a medical purpose ... [and] the type of equipment not generally useful without regard to illness or injury.” Jim has appealed this decision to the Departmental Appeal Board within the Health Care Financing Administration.

[For copies of any of these four decisions or the brief filed in Richard W., contact the AT Advocacy Project.]

Update on The National Assistive Technology Resource Library

        We have designed a word-searchable digest, using computer technology, to store and retrieve hearing decisions and other administrative documents. We also have indexed more than 400 documents from more than 100 pending and decided court cases. All documents are available through our AT Resource Library. Please send us your hearing decisions, briefs and other documents involving AT.

Please send information to: TEL: (716) 847-0650
Attn.: Diane Dustin FAX: (716) 847-0227 e-mail: atproject@nls.org
Neighborhood Legal Services, Inc. TDD: (716) 847-1322
Ellicott Square Building Web Page: www.nls.org
295 Main Street, Rm 495
Buffalo, NY 14203

The AT Advocacy Project will provide nationwide services to PAAT projects including technical assistance to advocates wanting to access funding for assistive technology for individuals with disabilities.

NLS Home Page| Feedback