You asked for a section-by-section analysis of the governor's bill to implement the Department of Social Services' (DSS) budget, HB 5023.

All of the provisions are effective on July 1, 2002.

Section 1 permits DSS to enter into a contract with a consortium of federally-qualified community health centers (FQHC) to provide medical assistance to State-Administered General Assistance (SAGA) and General Assistance (GA)(Norwich only) recipients. Under current law, DSS is authorized to provide medical care to this population through a primary care case management model but this model has never been implemented.

Under the FY 02-03 governor's Mid-Term Budget Adjustments, DSS would move these individuals into risk-based managed care but would use the FQHCs to provide their prescription drugs. Apparently, these entities have access to the federal supply schedule, which means they can get access to drugs at a deep discount.

Sections 2 and 3 eliminate SAGA and GA medical assistance coverage for eye care, optical hardware, optometry, home health care, durable medical equipment, podiatry, chiropractic, and naturopathy services.

Sections 4, 5, and 6 permit DSS to seek a federal waiver to implement a pilot program to provide subsidies toward employee health insurance premium costs for (1) parents or needy caretaker relatives of children under age 19 and (2) childless adults. Only applicants with household income below 185% of the federal poverty level (FPL) can participate. The bill permits the pilot components to include:

1. paying a subsidy of up to $ 60 per month for an employee with no children, and up to $ 100 per month for each family member in households with parents or caretaker relatives;

2. identifying minimum benefits standards that employer-sponsored plans must meet to qualify;

3. limiting the number of pilot participants to ensure it is operated within available appropriations (the Office of Policy and Management estimates 3,000 to 5,000);

4. giving the DSS commissioner the option to contract with a private entity to run the pilot; and

5. planning for an evaluation of the program's cost-effectiveness and client satisfaction.

The bill also requires parents and caretaker relatives with incomes between 100% and 150% of the FPL to get HUSKY B, instead of Medicaid coverage, once DSS receives the waiver.

Under HUSKY B, enrollees make co-payments for certain services. There are currently no co-payment requirements for adults receiving Medicaid covered services. The bill specifies that coinsurance requirements for adults with incomes between 100% and 150% of FPL will be the same as those that HUSKY B parents whose incomes are between 235% and 300% of FPL currently pay for their children's coverage. Currently, these latter families pay a maximum of $ 1,250 each year in combined premiums and co-payments.

The effect of moving adults into HUSKY B is that the state will be eligible for a higher federal payment. The federal State Children's Health Insurance Program (SCHIP) law, under which the HUSKY program was created and receives most of its funding, pays 65% of an SCHIP program's costs, while Medicaid pays a 50% match.

Section 7 decreases DSS's reimbursement to pharmacists for drugs dispensed under the Medicaid, SAGA, GA, Connecticut Pharmaceutical Assistance Contract to the Elderly and Disabled (ConnPACE), and Connecticut AIDS Drug Assistance programs.

Currently, DSS must reimburse pharmacists at the rate that the federal Health Care Financing Administration (now Centers for Medicare and Medicaid Services (CMS)) sets as the federal acquisition cost or, if no such rate is established, the estimated acquisition cost (EAC). DSS currently uses the EAC, which is the average wholesale price (AWP) minus 12%. The bill lowers the EAC to AWP minus 13½ %. And it requires DSS to reimburse pharmacists at the lower of the federal acquisition cost or AWP minus 13½%.

In addition to this reimbursement, the law requires DSS to pay pharmacists a dispensing fee for each drug dispensed. The bill reduces the fee from $ 4. 10 to $ 3. 50.

Section 8 permits the DSS commissioner to establish maximum allowable costs for generic prescriptions in its pharmacy programs. These maximums can be based on the actual acquisition cost, among other things.

Section 9 establishes penalties for nursing homes that fail to return certain unused prescriptions to pharmacies, as required by law. Homes will be fined $ 30,000 each time they fail to comply.

The bill permits the DSS commissioner to offset a home's "payment" (presumably Medicaid) to collect the penalty.

Before imposing a penalty, DSS must notify the home of the alleged violation and the accompanying penalty, and must permit the home to request, within 15 days of receiving the notice, that DSS review its findings. DSS must stay the imposition of the penalty pending the review's outcome. The bill permits DSS to impose the penalty even when the home has undergone a change in ownership since the violation occurred, provided it issues the notice before the effective date of the ownership change. DSS must maintain a record of these notices in a central registry.

The bill requires DSS to deposit any penalties it collects into the General Fund for the DSS Medicaid account.

Section 10 permits DSS to establish a voluntary mail order option for any maintenance prescription drug covered under its pharmacy programs.

Section 11 permits the DSS commissioner to implement a pharmacy purchasing initiative by contracting with an established entity for the purchase of maintenance drugs though the lowest pricing available. The entity with which DSS contracts must have an established pharmaceutical network and be able to process the prescription volume expected from DSS's pharmacy assistance clients.

Section 12 delays by one month, from July 1, 2002 to August 1, 2002, the effective date of the 2% nursing home Medicaid rate increase for FY 02-03. The rates in effect for FY 01-02 remain in effect through July 31, 2002.

Section 13 requires nursing homes to have all of their beds licensed by both Medicaid and Medicare. As a condition of participating in Medicaid under current law, any nursing home must participate in the Medicare program to the same extent. (This essentially means that all beds in a home are certified for both Medicare and Medicaid reimbursement. ) But homes can ask DSS to have a larger portion of their facilities certified for Medicaid if they are certified for a "distinct part" by Medicare and can demonstrate to DSS's satisfaction that they have enough distinct part beds to serve all Medicare-eligible recipients who might seek admission to the home, or to return to it. The bill eliminates this exception.

Section 14 establishes an asset test in the ConnPACE program. For single applicants, the limit is $ 50,000 and for married couples it is $ 75,000. For married applicants, the assets of both spouses are counted. Assets mean anything considered available under the Connecticut Home Care Program for Elders. These include bank accounts; stocks; bonds; certificates of deposit; the cash surrender value of life insurance policies; and real estate, other than the applicant's primary residence.

Section 15 establishes a rebuttable presumption that Medicaid long-term care transfers of assets that result in DSS imposing penalties (i. e. , certain uncompensated transfers made within 36 months of Medicaid application) were made with the transferee's intent to enable the person transferring the asset to qualify, or remain eligible, for Medicaid.

The presumption can be rebutted only by clear and convincing evidence that the transferor's eligibility or potential eligibility for Medicaid was not a basis for the transferee's accepting the asset. Currently, this presumption applies only to the person transferring the asset, not the one receiving it.

By law, DSS can impose a penalty of a period of Medicaid ineligibility when it ultimately determines that someone has made an inappropriate transfer. Under current law, DSS must begin the penalty period on the date the transfer was made. But PA 01-2, JSS directs DSS to seek federal approval to start the penalty period when the transferor is determined eligible for Medicaid, to ensure that the transferor actually experiences the ineligibility.

Once DSS receives this approval, the bill permits the DSS commissioner to establish undue hardship in cases where the transferee continues to possess the asset or has other assets of comparable value that could be used to pay the transferor's care costs. The bill permits the commissioner to implement policies and procedures needed to carry out this provision while in the process of adopting regulations and procedures in regulation form. She must publish notice of intent to adopt the regulations in the Connecticut Law Journal within 20 days after implementation, and the policies and procedures remain effective until the regulations are effective.

Finally, the bill establishes that any transfer that results in the imposition of a penalty period creates a debt, as defined in state banking law, that will be due and owing by the transferee to DSS in an amount equaling the amount of Medicaid spent to provide long-term care services to the transferor after the transfer was made. This amount cannot exceed the fair market value of the asset at the time of transfer.

Section 16 repeals Sections 1 and 2 of PA 01-02, JSS that permit DSS to allow nursing homes to lower staff-to-resident ratios during FYs 02-03 and 03-04.

It also repeals the Working Person's Personal Care Assistance (PCA) program. This state-funded program provides subsidies to people with severe disabilities to hire PCAs. The PCAs enable the disabled to get to work by helping with activities of daily living. (The governor's budget assumes that people in this program would instead be served by the state's Medicaid PCA waiver program. )

RC: eh