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DRA is On the Way
SB 483 (Kuehl) has been amended to incorporate the Department of Health Care Services’ provisions for implementing the Deficit Reduction Act of 2005 changes to the Medicaid rules. The DRA requires states to impose specific limitations on eligibility for applicants and beneficiaries of home and facility care services that are subject to Medicaid/Medi-Cal reimbursement. States are required to implement these provisions or risk loss of federal financial participation.
By including, among other provisions, that the laws will be prospectively applied, SB 483 will protect those applicants and beneficiaries who have relied on current law for their eligibility. In addition, SB 483 incorporates substantial hardship provisions to protect those consumers who would otherwise be denied life-sustaining services.
There have been numerous questions about the impact on transfers made prior to the implementation of the DRA provisions. Although the proposed language in SB 483 does not include the details that will be in the regulations, the new transfer rules, which will be in the regulations, will not apply to transfers made on or before the new regulations are effective. It will be similar to the implementation of the MCCA rules - applicable prospectively only - i.e., only to transfers made on or after the date the regulations are filed with the Secretary of State.
Following is a summary of the major changes included in SB 483:
SB 483 increases the equity limit to $750,000, defines “equity interest” as the lower of the assessed value or the appraised value, minus encumbrances, and provides for an increase in the equity limit effective 2011 based on the consumer price index. The home equity limits will not apply if:
The demonstrated hardship criteria is relatively detailed and makes clear that the provisions will not be retroactively applied, i.e., to those who were receiving services prior to January 1, 2006 or to those who applied on or after January 1, 2006, but before the regulations implementing the new provisions were filed with the Secretary of State.
Treatment of Annuities
The annuity provisions require applicants to disclose any interest the applicant or applicant’s spouse has in an annuity (although that is current law) and require the Department to inform applicants and beneficiaries that the state will become a remainder beneficiary in certain types of annuities. The annuity provisions also:
Transfer of Assets
California currently uses a 30-month look back period, and the period of ineligibility begins from the month of the date of the transfer. The DRA requires states to increase the look-back period to 60 months and to begin periods of ineligibility in either the month of application or the first day of the month during or after which assets were transferred by an eligible Medicaid beneficiary when they begin receiving those services.
The Department’s provisions, as amended in SB 483, would implement the new transfer of asset rules pursuant to federal law and pursuant to the adoption of non-emergency regulations. Regulations will likely phase in the new look back period, e.g., 1/09=30 months, 2/09=31 months, etc., until the five-year look back is reached. The new rules will not be applied retroactively, i.e., to transfers made on or before the date the final regulations are filed with the Secretary of State.
The undue hardship provisions for transfer of assets are substantial, and require that undue hardship be considered prior to a finding of ineligibility. The provisions also include requirements for adequate notice, due process and opportunity for fair hearings.
Consistent with the DRA provisions, SB 483 authorizes the nursing home to act on behalf of the beneficiary and authorizes the facility to request “bed hold” payments for up to 30 days while the undue hardship process is underway. The bill would also amend the Welfare and Institutions Code to include partial months of ineligibility.
Under the new federal "income first" rule, states are required to allocate any available income from the nursing home spouse first, before any additional assets will be allocated. Although ACWDL 06-12 implemented the “income first” rule for CSRA increases pursuant to Fair Hearing requests, these instructions apply only to Administrative Law Judges. They do not impact 3100 petition court-ordered increases in the CSRA or spousal allocation, which will still be honored.
The proposed language in SB 483 does not address the "income first" issue, and court ordered increases in the CSRA and spousal allocation will still be available.
For the full text of the bill, as of June 17, 2008, and to track any amendments, visit www.leginfo.ca.gov. Once SB 483 is passed by the Senate and Assembly and signed by the Governor, non-emergency regulations will still need to be promulgated and filed before the provisions are effective. Meanwhile, current (old) rules still apply. No changes in Medi-Cal eligibility rules will occur until final regulations are filed with the Secretary of State. We will keep you informed as to the progress of the bill.
Click here for a more detailed side-by-side chart of the specific changes proposed to California law (pdf).