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DPW Withdraws Proposed NMP Spend Down Regulations
May 25, 2003

The following information is provided by David Gates of the Health Law Project. Many thanks to everyone who advocated against these regulations.

Major Medicaid Victory!
DPW rescinds most of its proposed Medical Assistance cut-backs!

Last October, the Department of Public Welfare (DPW) proposed regulations that would have made several serious cut-backs in Medical Assistance. The cut-back having the greatest impact on persons with disabilities was the proposed elimination of the category of Medical Assistance under which 7,200 people - mostly people on Social Security Disability - currently get health and prescription coverage. This category was called “NMP spend-down.” Elimination of this category of Medical Assistance would have meant the loss of the only affordable prescription coverage for many persons with disabilities under 65. For those on Social Security Disability who were still within the 24-month waiting period for Medicare, loss of this category of Medical Assistance would have meant the complete loss of health insurance.

Another cut-back having significant impact on people with disabilities was the proposed elimination of the “home maintenance allowance” for persons temporarily in a nursing home. Currently, people who have to go into a nursing home temporarily under Medical Assistance do not have to pay all but $35 of their monthly income over to the nursing home as most nursing home residents on Medical Assistance must do. Instead, if a doctor certifies they are expected to return to the community within six months, they can keep up to about $600 a month of their income to pay rent or mortgage on their home in the community so they have a home to come back to. This “home maintenance allowance” has been an important policy in enabling people with disabilities who must temporarily reside in a nursing home to return to the community. The proposed cut-back would have forced people with disabilities who go into a nursing home to give up their chance to return to the community because they could not afford to keep their community home.

The Pennsylvania Health Law Project responded to the proposed cuts by educating consumers and other advocacy groups regarding the impact of the proposed cuts. They then provided analysis of the impact of the proposed cuts to members and staff of the House and Senate committees that were reviewing the regulations. After that, the Health Law Project met with committee staff to explain the impact of the cuts and answer questions. The result was unanimous, bipartisan opposition to the proposed cuts by the reviewing House & Senate committees. Following that, the law project provided detailed comments to the Independent Regulatory Review Commission which also reviews state regulations and then met with staff of the commission to explain the potential devastating impact. The result was comments from the commission which seriously questioned the need and appropriateness of the proposed cut-backs.

While the proposed regulations were issued under the Schweiker Administration, the Rendell Administration included them in their budget proposal. Given the shortfall in state tax revenue, there was a real risk that the Rendell Administration would put the cuts into effect as part of its overall attempts to balance the state budget. The Pennsylvania Health law Project educated the new Secretary of DPW regarding the impact of these cuts.

As a result of the advocacy outlined above and the efforts of numerous consumers and other advocacy organizations, DPW informed legislative staff on May 22 that it was planning to withdraw its proposed regulations that would have eliminated the NMP spend down category of Medical Assistance and eliminated the home maintenance allowance for persons temporarily in a nursing home. Given the tight financial situation the state is currently in, this is a major victory for persons with disabilities and other who rely on Medical Assistance for their health coverage.

DPW also announced they would make significant changes to some of the other proposed cut-backs regarding financial eligibility for nursing home coverage under Medical Assistance including the so called “income first” rule. Unfortunately, DPW did not agree to withdraw the proposed regulation that would restrict eligibility for another category of Medical Assistance called MNO spend down, usually used to cover hospital bills for uninsured persons. However, the anticipated receipt of over $800 million in additional federal Medicaid funds under the federal budget compromise may enable DPW to withdraw that proposal as well.

Thanks to Niles Schore, Democratic Director, Senate Public Health & Welfare Committee, for this information.

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