6/2/2007 Update
NC
Rules Review Commission
Blocks Harsh Hardship Rule -
Matter Sent to General
Assembly - Possible June
Action
As part of the process of
implementing the rather
draconian Medicaid transfer
provisions of the Deficit
Reduction Act of 2006 (“DRA”),
the North Carolina Division
of Medical Assistance
(“DMA”) is being required to
adopt hardship rules
pursuant to the North
Carolina Administrative
Procedures Act. That Act
specifies procedures
involving public notice and
hearings before the Rules
Review Commission when any
state agency wishes to adopt
a formal rule.
The Hardship Rule DMA has
been attempting to
promulgate would have
incredibly harsh effects on
seniors. DRA specifies new
rules that are a trap for
the unwary, and if a senior
transfers property of any
kind to someone (say a
child), that transfer can
“hang around” and haunt the
senior if he or she needs to
go into a nursing home
within five years. The new
DRA rules are so harsh, that
Congress required the states
to implement hardship waiver
rules under each state's
Administrative Procedures
Act before they could fully
implement the new federal
regulations.
The NC version would require
a person with a spouse in a
nursing home who was denied
benefits because of a
transfer within the previous
five years to demonstrate
that severe hardship
exists. A hardship would
not exist if the spouse had
virtually any assets . . .
including a home. There are
many unpleasant scenarios
that could come about under
this approach. For example,
a couple could gift vacant
land to a child, four years
later have a health crisis,
run out of money and the
spouse at home could be
forced to sell a home and
become completely
impoverished before a
hardship waiver would be
granted.
In spite of repeated
requests by the Rules Review
Commission (and others) that
DMA work with advocates to
fashion a fair Hardship
Rule, DMA has not done so.
Nevertheless, at its March
15, 2007, meeting the Rules
Review Commission adopted
the harsh DMA version of the
Hardship Rules. It was a
split vote and the Chair
cast the deciding ballot.
We sensed real concern from
members of the RRC, even
from those who voted for it
(reluctantly, perhaps).
The rules process contains
safeguards, however. If the
RRC adopts a rule and enough
letters are received by 5PM
the following day requesting
legislative review, the rule
must be sent to the General
Assembly. In the meantime,
the agency wishing to adopt
the rule may seek to have
the rule implemented as a
temporary rule by RRC if
certain criteria are met
(i.e., an emergency need for
the rule exists).
RRC received the required
number of letters by 5PM
March 16 (over 100 were
received from Randolph
County alone), and the
matter was sent to the
General Assembly. The Rule
remains suspended until the
earlier of next Spring or
the date the General
Assembly takes action with
respect to the Rule.
At the April 19, 2007,
meeting of the Rules Review
Commission, DMA attempted to
persuade the RRC to adopt
the Rule as a temporary
rule. Curtis Venable (Pisgah
Legal Services – Asheville),
Frank Johns (Booth
Harrington & Johns –
Greensboro) and Bob Mason
(Mason Law, PC – Asheboro)
spoke against the adoption
of the temporary rule
arguing that there was not
an adequate showing of an
emergency need for the rule.
Belinda Smith of the
Attorney General’s office
represented DMA. Smith
argued that the emergency
rule was needed, in part,
because “people were
breaking the law” by
transferring assets (nodding
toward the group of
attorneys who spoke against
the rule). The RRC was not
persuaded and refused to
adopt the rule as a
temporary rule.
Advocates believed that time
had been successfully bought
to work with the General
Assembly to craft a Hardship
Rule that would be fair and
work well for the citizens
of North Carolina.
On May 9, Representative
Dale Folwell (Rep –
Winston-Salem) introduced HB
2026. HB 2026 simply
provided that the Hardship
Rule would be immediately
adopted upon passage by the
General Assembly. The bill
was assigned to Ways and
Means and many believed it
would simply wither away.
Advocates would be free then
to help craft a decent
Hardship Rule.
Unfortunately, the language
of HB 2026 was inserted into
page 105 of the Senate
version of the budget bill
at the last minute. The
Senate adopted their version
on May 31. The House
version of the Budget Bill
does not contain the
provisions of HB 2026.
The Budget Bill will go to a
Conference Committee to work
out the differences,
including the Hardship Rules
language. Needless to say,
we will be watching the
process closely and working
with other advocates to
insure the Hardship Rule
language does not become
part of the final package.
