plan, or to each person in a sample group of people who received services. This notice must specify

(i) The service furnished;

(ii) The name of the provider furnishing the service;

(iii) The date on which the service was furnished; and

(iv) The amount of the payment made under the plan for the service.

(3) The written notice must not specify confidential services (as defined by the State) and must not be sent if the only service furnished was confidential.

(4) The system provides both patient and provider profiles for program management and utilization review purposes.

§ 433.114 Termination of FFP for failure to provide access to claims processing and information retrieval systems. The Administrator will terminate FFP at any time if the medicaid agency fails to provide State and Federal representatives with full access to the system, including on-site inspection. The Administrator may request such access at any time to determine whether the conditions in this subpart are being met.

Subpart D-Third Party Liability

§ 433.135 Third party liability: determination of liability and collection procedures.

(a) Basis and purpose. This subpart implements sec. 1902(a)(25) and 1903(d)(2) of the Act by setting forth State plan requirements concerning(1) The legal liability of third parties to pay for services provided under the plan; and

(2) Treatment of reimbursements by a third party to a State for medicaid furnished under the plan.

(b) Definitions. For purposes of this subpart, "third party" means any entity that is or may be liable to pay ali or part of the medical cost of injury, disease, or disability of an applicant or recipient of medicaid.

(c) Requirements for State plans. A State plan must provide that require

ments of paragraphs (d)-(g) of this section are met.

(d) Determining liability of third parties. The medicaid agency must take reasonable measures to determine the legal liability of third parties to pay for services under the plan.

(e) Payment of claims. (1) If the agency has determined that

(i) Third party liability exists for part or all of the services provided to a recipient; and

(ii) The third party will make payment within a reasonable time, the agency must pay only the amount, if any, by which the allowable claim exceeds the amount of the liability.

(2) The agency may not withhold payment for services provided to a recipient if third party liability or the amount of liability cannot be determined, or payments will not be available, within a reasonable time.

(f) Reimbursement for medicaid. The agency must seek reimbursement for medicaid to the extent of a third party's legal liability if—

(1) Liability is determined after medicaid is provided to an individual; or

(2) Liability was determined before providing medicaid but the agency failed to make use of it.

(g) Repayment of Federal share. If the State has received FFP in medicaid payments for which it receives third party reimbursement, the State must pay the Federal government a portion of the reimbursement determined in accordance with the FMAP for the State.

(h) Federal financial participation. FFP is not available in medicaid payments, to the extent of the Federal proportion of the third party liability, if

(1) Third party liability existed when medicaid payments were made, but was disregarded at that time and not subsequently recovered;

(2) The agency failed to take reasonable steps to collect reimbursement from a third party; or

(3) The agency received reimbursement from a liable third party.

MANDATORY COVERAGE OF THE AGED, BLIND, AND DISABLED

435.120 Individuals receiving SSI. 435.121 Individuals in States using more

restrictive requirements for medicaid than the SSI requirements.

435.122 Individuals who are ineligible for SSI or optional State supplements because of requirements that do not apply under title XIX of the Act.

435.130 Individuals receiving mandatory State supplements.

435.131 Individuals eligible as essential spouses in December 1973.

435.132 Institutionalized individuals who were eligible in December 1973. 435.133 Blind and disabled individuals eligible in December 1973.

435.134 Individuals who would be eligible

except for the increase in OASDI benefits under Pub. L. 92-336 (July 1, 1972). 435.135 Individuals who become ineligible for cash assistance as a result of OASDI cost-of-living increases received after April 1977.

Sec.

Subpart C-Options for Coverage as Categorically Needy

435.200 Scope.

435.201 Individuals included in optional

groups.

OPTIONS FOR COVERAGE OF FAMILIES AND CHILDREN AND THE AGEDd, Blind, and DisABLED

435.210 Individuals who would be eligible for but are not receiving cash assistance. 435.211 Individuals who would be eligible for cash assistance except for their institutional status.

OPTIONS FOR Coverage of FAMILIES AND
CHILDREN

435.220 Individuals who would be eligible for AFDC if child care costs were paid from earnings.

435.221 Caretaker relatives of children who would be eligible for AFDC if they met age or school attendance requirements. 435.222 Individuals under age 21 who would be eligible for AFDC but do not qualify as dependent children. 435.223 Individuals who would be eligible for AFDC if coverage under the State's AFDC plan were as broad as allowed under title IV-A.

OPTIONS FOR Coverage OF THE AGED, BLIND, AND DISABLED

435.230 Individuals receiving only optional State supplements.

435.231 Individuals in institutions who would not be eligible for cash assistance if they were not institutionalized.

DISABILITY

435.800 Scope.

FINANCIAL REQUIREMENTS APPLICABLE TO OPTIONAL GROUPS: FAMILIES AND CHILDREN 435.711 General requirements. 435.712 Financial responsibility of spouses and parents.

FINANCIAL ELIGIBILITY REQUIREMENTS APPLICABLE TO OPTIONAL GROUPS: THE AGED, BLIND AND DISABLED IN STATES COVERING INDIVIDUALS RECEIVING SSI

435.721 General requirements. 435.722 Institutionalized individuals who would not be eligible for cash assistance if they were not institutionalized. 435.723 Financial responsibility of spouses. 435.724 Financial responsibility of parents for blind or disabled children. 435.725 Post-eligibility treatment income and resources of institutionalized individuals: Application of patient income to the cost of care.

of

FINANCIAL ELIGIBILITY FOR THE AGED, BLIND, DISABLED IN STATES USING MORE RESTRICTIVE REQUIREMENTS THAN SSI

435.731 General requirements for deter

mining income eligibility in States using more restrictive requirements than SSI. 435.732 Procedures for determining income

eligibility.

MEDICALLY NEEDY INCOME STANDARDS 435.811 General requirement. 435.812 Medically needy income standard for one person, noninstitutionalized. 435.813 Medically needy income standard for one person, institutionalized. 435.814 Medically needy income standard for two persons, noninstitutionalized. 435.815 Medically needy income standards for institutionalized couples. 435.816 Medically needy income standards for three or more persons.

FINANCIAL RESPONSIBILITY OF RELATIVES 435.821 Financial responsibility of relatives: Families and children. 435.822 Financial responsibility of relatives of aged, blind, or disabled individuals in States using SSI eligibility requirements.

435.823 Financial responsibility of relatives of aged, blind, or disabled individuals in States using more restrictive requirements than SSI.

MEDICALLY NEEDY INCOME ELIGIBILITY

435.831 Income eligibility.

435.832 Determining countable income: Institutionalized individuals.

MEDICALLY NEEDY RESOURCE STANDARDS 435.840 Medically needy resource standards for individuals and two-person families.

435.841 Medically needy resource standards for families of three or more persons.

DETERMINING ELIGIBILITY ON THE BASIS OF RESOURCES

435.845 Medically needy resource eligibility.

REQUIREMENTS FOR STATE SUPPLEMENTS

Sec.

435.1010 Requirement for mandatory State

supplements.

435.1011 Requirement for maintenance of optional State supplement expenditures. AUTHORITY: Sec. 1102 of the Social Security Act, 49 Stat. 647 (42 U.S.C. 1302). SOURCE: 43 FR 45204, Sept. 29, 1978, unless otherwise noted.

Subpart A-Introduction, Definitions, and General Provisions

§ 435.1 Introduction.

(a) This section provides a brief explanation of medicaid eligibility as affected by changes in the cash assistance programs under the Social Security Act.

(b) Medicaid eligibility before enactment of Pub. L. 92-603-(1) Required coverage of the categorically needy. Before enactment of the Social Security Amendments of 1972 (Pub. L. 92603, October 30, 1972), which established the Federal program of Supplemental Security Income (SSI), States were required to make all recipients of cash assistance eligible for medicaid. Cash assistance was provided through Federally-assisted, State-administered programs to needy individuals in four categories: Those age 65 or over (title I, Old Age Assistance), the blind (title X, Aid to the Blind), the disabled (title XIV, Aid to the Permanently and Totally Disabled), and certain types of families (title IV-A, Aid to Families with Dependent Children). At State option, cash assistance to the aged, blind, and disabled could be made available under a consolidated program of Aid to the Aged, Blind, and Disabled (title XVI).

Because an eligible individual had to be both categorically related (that is, eligible as aged, blind, disabled, or a member of a family with children deprived of the support of at least one parent) and financially eligible on the basis of income and resources, recipients of cash assistance were termed categorically needy.

(2) Optional coverage of t' e categorically needy. States could elect to cover selected groups of individuals under medicaid who were financially eligible

for cash assistance but ineligible because of certain other requirements, or who did not wish to receive cash assistance. Individuals eligible under these optional coverage provisions were considered as categorically needy and were eligible for the same services provided under medicaid to cash assistance recipients.

(3) Coverage of the medically needy. States could limit coverage under medicaid to the categorically needy or could, in addition, extend medicaid to aged, blind, or disabled individuals, or members of families with dependent children, who had too much income to be eligible for cash assistance but not enough for medical care. These individuals were termed "medically needy." A State could set higher levels of income and resources for determining eligibility for medicaid than those used in determining eligibility for cash assistance. Whether it used higher levels for the medically needy or the same level as for the categorically needy, the State had to deduct an applicant's incurred medical expenses from income in determining his eligibility for medicaid. As a result, unlike eligibility for cash assistance, eligibility under the medically needy coverage provision did not depend solely on the absolute amount of an individual's income.

Because a State would be covering more people under the medically needy program, it was permitted to provide more limited medicaid services to the medically needy than to the categorically needy.

(c) Changes in cash assistance resulting from enactment of Pub. L. 92-603— (1) Supplemental Security Income. Pub. L. 92-603 established a Federal program of cash benefits for the aged, blind, and disabled under a new title XVI of the Act. The SSI program, administered by the Social Security Administration, became effective January 1, 1974, and replaced the previous programs for the aged, blind, and disabled in all jurisdictions of the United States except Puerto Rico, Guam, and the Virgin Islands. In addition to establishing uniform nationwide eligibility standards and requirements, the new title expanded the definition of disability to include individuals under

age 18. It also provided for State supplements to the Federal SSI benefit.

(2) Mandatory State supplements. In general, most individuals who had been receiving cash assistance under State programs that had used more liberal eligibility requirements than SSI were deemed to meet the new SSI requirements for purposes of medicaid coverage. In addition, States that had been making higher payments to individuals under the previous programs of cash assistance were required to pay the difference between the SSI benefit and the previous payment. States must provide medicaid to recipients of these mandatory State supplements.

(3) Optional Siate supplementation. States may also pay optional cash supplements either to all aged, blind, and disabled SSI recipients or only to reasonable classifications, such as the aged. Under certain conditions, States may provide medicaid to optional supplement recipients.

(d) Changes in medicaid eligibility as a result of Pub. L. 92-603-(1) General. In view of the projected increase in the number of individuals who would qualify for cash assistance under SSI, Pub. L. 92-603 changed the requirements for medicaid coverage in that States are no longer required to cover all aged, blind, and disabled cash (SSI) recipients. It did not change the mandatory coverage of all AFDC recipients.

(2) SSI option. States may make SSI recipients eligible for medicaid. In addition, they may provide medicaid to individuals receiving only optional State supplements.

(3) Restricted eligibility ("section 209(b)") option. Section 209(b), Pub. L. 92-603 (sec. 1902(f) of the Act), permits States to limit medicaid eligibility for the aged, the blind, or the disabled to individuals who meet eligibility requirements more restrictive than those under SSI. However, States exercising this option must deduct SSI, optional State supplements, and incurred medical expenses from income in determining medicaid eligibility.

Thus, there is no fixed income ceiling under this option; it prmits any aged, blind, or disabled individual with enough medical expenses to become eligible.