Representative Payee
NY-ADR
8/2/17 N.Y. St. Reg. PDD-31-17-00003-P
NEW YORK STATE REGISTER
VOLUME XXXIX, ISSUE 31
August 02, 2017
RULE MAKING ACTIVITIES
OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES
PROPOSED RULE MAKING
NO HEARING(S) SCHEDULED
I.D No. PDD-31-17-00003-P
Representative Payee
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed Action:
Addition of section 633.9; and amendment of section 633.15 of Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 13.07, 13.09(b) and 16.00
Subject:
Representative Payee.
Purpose:
To regulate the management of benefit funds received by facility directors acting as representative payees.
Text of proposed rule:
A new Section 633.9 is added as follows:
Section 633.9 Facility Directors as Representative Payees
(a) Applicability. This section applies to OPWDD operated and certified residential facilities, including family care homes.
(b) Definitions.
(1) Beneficiary means an individual who is receiving Social Security or other federal or state benefits.
(2) Facility means an OPWDD operated or certified residential facility. As used in this section, facility also means the agency that sponsors a Family Care home.
(3) Facility director means the executive director, administrator, CEO, or its equivalent of an OPWDD operated or certified residential facility. As used in this section, facility director also means the executive director, administrator, CEO, or its equivalent of an agency that sponsors a family care home.
(4) Health care professional means physician, psychologist, or other qualified medical practitioner whose statements are acceptable to the benefit paying agencies for the purposes of determining the beneficiary’s ability to handle his or her benefits.
(5) Lump sum retroactive benefit means a lump sum retroactive payment of a federal or state benefit that exceeds the expected monthly recurring amount for a reason other than a delay in processing an application, changing a representative payee, or similar administrative delay.
(6) Medicaid exception trust means a trust that contains the assets of the beneficiary in which both the principal and income of the trust are considered exempt for purposes of determining the beneficiary’s eligibility for Medicaid and/or Supplemental Security Income.
(7) Representative payee means a party designated by a benefit-paying organization to receive an individual’s benefit payments in a fiduciary capacity and in compliance with federal and state laws and regulations. This includes, but is not limited to, a party specifically designated by the Social Security Administration (SSA) to handle benefits on behalf of a beneficiary.
(c) Determination of need for representative payee.
(1) The beneficiary does not have a representative payee. If an individual does not have a representative payee, then within ten (10) business days of a beneficiary’s move into a facility, the facility director, in consultation with the beneficiary’s planning team, must conduct a review to determine whether the appointment of a representative payee to manage the individual’s benefits is advisable. The basis for the determination must be documented in the beneficiary’s record. If the facility director and the planning team question whether an individual is able to manage his or her benefits, then the individual must be evaluated by a health care professional. If, in the health care professional’s opinion, the beneficiary cannot manage his or her benefits, then the facility director may apply to become the beneficiary’s representative payee. If, in the health care professional’s opinion, the beneficiary is capable of managing his or her own benefits, then the facility director may not apply to become the beneficiary’s representative payee.
(2) The beneficiary has a representative payee. If an individual has a representative payee, then within ten (10) business days of a beneficiary’s move into a facility, the facility director, in consultation with the beneficiary’s planning team, must conduct a review to determine whether there is a continuing need for the appointment of a representative payee for the beneficiary.
(i) If the facility director and the planning team determine that the beneficiary continues to require a representative payee, then the facility director may apply to become the beneficiary’s representative payee.
(ii) If the facility director and/or the planning team determine that a beneficiary may no longer require a representative payee, or are unsure, then the individual must be evaluated by a health care professional. If the health care professional’s opinion is that the beneficiary cannot manage his or her benefits, then the facility director may apply to become the beneficiary’s representative payee. If the health care professional’s opinion is that the beneficiary can manage his or her benefits, then the facility director may not apply to become the beneficiary’s representative payee. The facility director must notify the benefit paying agency of any change.
(iii) The basis for the determination of the beneficiary’s need or continuing need for a representative payee, as set forth in subparagraphs (i) and (ii) of this paragraph, must be documented in the beneficiary’s record.
(3) A determination of a beneficiary’s need for a representative payee must also be made under the following circumstances and must be documented in the beneficiary’s record:
(i) when there is a significant change in the beneficiary’s physical or mental condition;
(ii) in response to a circumstance that affects the beneficiary’s ability to manage his or her benefits;
(iii) upon request of the beneficiary or a party making a request on behalf of the beneficiary;
(iv) when a beneficiary transfers from one certified residence to another and both residences are operated by the same agency, and the person needs different supports, then the facility director must follow the requirements of paragraphs (1) and (2) of this subdivision; and
(v) when a beneficiary transfers from one certified residence to another, and the residences are operated by different agencies, then the facility director must follow the requirements of paragraphs (1) and (2) of this subdivision.
(4) If the facility director applies to be representative payee, the Director must provide notification in accordance with subdivision (d) of this section. If notice is not provided, then the reason must be documented in the beneficiary’s record.
(d) Notice to qualified persons of intent and application for representative payee status.
(1) Whenever a facility director intends to apply to be representative payee of a beneficiary who is receiving services from an OPWDD operated or certified residential facility, the facility director must give concurrent written notice to the qualified parties as set forth in Mental Hygiene Law 33.16(a)(6) and any other party designated by the beneficiary, of the facility director's intent to make such application.
(i) A facility director is not required to provide notice pursuant to this section if the beneficiary is a “person, capable adult” as defined in subdivision 633.99(bp) of this Part, and the beneficiary objects to such notice; if such notice is prohibited by Court order; or, if the facility director, in consultation with the planning team, determine that it would cause substantial and identifiable harm to the beneficiary. This determination must be documented in the beneficiary’s record.
(ii) The notice will be deemed to have been provided if hand delivered, mailed by first class mail to the last known address of the recipient(s) of the notice, or mailed electronically to the last known email address of the recipient(s).
(iii) The notice to beneficiaries must include information that the Mental Hygiene Legal Service is available to advise beneficiaries regarding the application process.
(2) During the application process or following the appointment of a facility director as a beneficiary's representative payee, the facility must ensure that the beneficiary is apprised of his or her right at any time to request to receive benefits directly, or to request a change in representative payee. Such request must be directed to the Social Security Administration or the federal or state entity that made the appointment.
(e) Policies and procedures.
(1) If a facility director serves or may serve as representative payee, then the residential services agency must establish policies and procedures for the management and use of funds paid to the facility director as representative payee. These policies and procedures must be in compliance with all applicable federal and state laws and regulations. At a minimum, such policies and procedures must include provisions for:
(i) establishment and maintenance of beneficiary accounts in interest bearing accounts;
(ii) individual accounting to segregate balances and permit the application of interest earned, if any, on a pro-rated basis, for collective accounts;
(iii) internal controls to keep the beneficiary accounts and funds secure, prevent identity theft, provide specific authorization for banking transactions, and document receipts and disbursements;
(iv) response to a request to review the representative payee account;
(v) designation of an appropriate staff member to act as a liaison between the facility director and the beneficiary;
(vi) management of the personal allowance derived from the benefit referenced in 633.15; and
(vii) consideration of the use of a Medicaid exception trust, Supplemental Needs Trust, or similar device to protect a lump sum retroactive benefit, inheritance or any other funds which would affect eligibility for benefits.
(2) If the representative payee is the facility director, then the representative payee must:
(i) manage the benefits without charging a fee;
(ii) manage the personal allowance portion of the income without a charging a fee;
(iii) maintain a record of all funds received, including earned income, and report to the benefit paying organization(s) on these funds as required, and;
(iv) maintain a record of all resources, with current values, to meet all benefit paying organization(s) reporting requirements and to ensure that the entitlements are not jeopardized by a beneficiary's resources exceeding regulatory limits.
(3) When a beneficiary does not have a representative payee, the agency or sponsoring agency must offer to assist with:
(i) reporting both earned and unearned income to benefit paying organization(s), as required;
(ii) reporting resource amounts to benefit paying organization(s), as required;
(iii) monitoring resource amounts to ensure that the beneficiary's entitlements are not jeopardized by having excess resources; and
(iv) reporting any changes that may affect a beneficiary’s entitlements to benefit paying organizations, as required.
(4) When the facility director is not the representative payee, the agency or sponsoring agency must offer to manage the beneficiary’s personal allowance. The offer must be in writing and made within ten (10) business days of the beneficiary’s move or change of representative payee.
(f) Transfer of Funds. When a beneficiary moves to a new residence:
(1) If the beneficiary moves to a facility operated or sponsored by the same agency, the agency may retain all funds and the facility director will continue to serve as the beneficiary’s representative payee unless, in accordance with subdivision (c) of this section, the beneficiary no longer needs a representative payee. Cash maintained on behalf of the beneficiary at the facility must be forwarded to the new residential facility.
(2) If the beneficiary moves to a facility operated or sponsored by another agency:
(i) Personal allowance funds derived from payments made by SSA must either be returned to SSA within 10 business days of the person’s departure or, if specifically permitted by SSA, forwarded to the new representative payee. Encumbered funds will be retained by the agency and appropriately disbursed. Funds derived from other sources must be forwarded to the new representative payee within 10 business days of the person’s departure. If funds derived from SSA have been combined with funds from other sources, then the amount returned to SSA must be the percentage of the current total that represents the SSA portion. The percentage must be calculated based on the historical payments received over the last six months from SSA and non-SSA sources.
(ii) The former agency must notify the successor representative payee in writing of the return of the beneficiary’s funds to SSA immediately following such return or transfer of funds. The notification must include the amount returned or transferred and the date it was returned or transferred.
(iii) On or before the date of the move, the former agency must disburse to the new facility a sum equivalent to one month’s minimum statutory personal allowance or the total of the person’s funds, whichever is less, prior to returning to SSA the remainder (if any) of the person’s funds that were derived from payments made by SSA.
(iv) The facility director of the new agency shall apply to the benefit paying agency to become the person’s representative payee no later than ten (10) business days after the person’s admission unless a determination has been made that the beneficiary no longer needs a representative payee.
(v) Upon the appointment of the facility director of the new agency as representative payee by the benefit paying agency and receipt of the person’s accrued funds, the new agency shall consider the funds to be accrued personal allowance, except for any amount which is due and payable to the new agency for the provider payment(s) derived from the benefits at the time of the receipt of funds.
(vi) All funds in a burial reserve account, noted as such, regardless of the origin of the funds, shall be forwarded to the new representative payee within ten (10) business days of the beneficiary’s discharge or change of representative payee.
(vii) Except for funds received from SSA, when the facility director of the former agency is the representative payee, the ongoing monthly personal allowance shall be forwarded to the successor representative payee within five (5) business days of receipt of the benefit check. This arrangement shall continue until a new payee is designated.
(g) Record Retention. Each agency or sponsoring agency must keep records documenting compliance with this section for four (4) years.
• Paragraph 633.15(b)(3) is amended as follows:
(3) Account, payee. An account [record] maintained by [a person who is his or her own payee, or by a payee for earnings,] a representative payee [, or a designated payee] to receive and maintain monies from a benefit paying organization.
• Existing paragraph 633.15(b)(21) is deleted and a new paragraph 633.15(b)(21) is added as follows:
(21) Payee, representative. A party designated by a benefit-paying organization to receive an individual’s benefit payments in a fiduciary capacity and in compliance with federal and state laws and regulations. This includes, but is not limited to, a party specifically designated by the Social Security Administration (SSA) to handle benefits on behalf of a beneficiary.
• Paragraph 633.15(i)(9) is amended as follows:
(9) On a quarterly basis, the agency or sponsoring agency shall send a copy of each person's personal allowance account ledger card or equivalent to payees, other than the chief executive officer. [or a payee for earnings.]
• Subdivision 633.15(n) is amended as follows:
(n) Transfer of funds. This subdivision is superseded by subdivision 633.9(f) of this Part, effective October 1, 2017.
Note: Paragraphs (n)(1) and (2) remain unchanged.
• Subdivision 633.15(r) is amended as follows:
(r) Payee designation and responsibilities. This subdivision is superseded by section 633.9 of this Part, effective October 1, 2017.
Note: Paragraphs (r)(1) - (6) remain unchanged.
Text of proposed rule and any required statements and analyses may be obtained from:
Office of Counsel, Bureau of Policy and Regulatory Affairs, Office for People With Developmental Disabilities (OPWDD), 44 Holland Avenue, 3rd Floor, Albany, NY 12229, (518) 474-7700, email: [email protected]
Data, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
45 days after publication of this notice.
Additional matter required by statute:
Pursuant to the requirements of the State Environmental Quality Review Act, OPWDD, as lead agency, has determined that the action described herein will have no effect on the environment and an E.I.S. is not needed.
Regulatory Impact Statement
1. Statutory authority:
a. OPWDD has the statutory responsibility to provide and encourage the provision of appropriate programs, supports, and services in the areas of care, treatment, habilitation, rehabilitation, and other education and training of persons with intellectual and developmental disabilities, as stated in the New York State (NYS) Mental Hygiene Law Section 13.07.
b. OPWDD has the authority to adopt rules and regulations necessary and proper to implement any matter under its jurisdiction as stated in the NYS Mental Hygiene Law Section 13.09(b).
c. OPWDD has the statutory authority to adopt regulations concerned with the operation of programs and the provision of services, as stated in the NYS Mental Hygiene Law Section 16.00. As this matter concerns the provision of services pursuant to provisions of NYS Mental Hygiene Law sections 29.23 and 33.07 in relation to the receipt of federal and state benefits received by individuals supported in facilities certified or operated by OPWDD, the proposed regulations are necessary to satisfy these statutory provisions. The regulation also ensures compliance by OPWDD certified and operated residences with the proper provision of services.
2. Legislative objectives: The proposed regulations further legislative objectives embodied in sections 13.07, 13.09(b), 16.00 and 16.05 of the Mental Hygiene Law. The regulations add a new part and amend existing regulations on representative payees.
3. Needs and benefits: The proposed regulations amend 14 NYCRR Part 633 by adding a new section 633.9 concerning representative payees for individuals receiving services in residential facilities operated and/or certified by OPWDD, and by making conforming changes to existing regulations in section 633.15 concerning the management of personal allowance of residents who reside in such facilities.
The proposed regulations are necessary to satisfy provisions of sections 29.23 and 33.07 of the NYS Mental Hygiene Law that require OPWDD to promulgate regulations regarding the management and protection of individuals’ funds where a facility director is appointed or may be appointed as an individual’s representative payee.
The proposed regulations in 633.9 require facility directors, in consultation with an individual’s planning team, to determine their need or continuing need for a representative payee to handle their funds. The regulations require documentation of the basis for that determination in the individual’s record. This provides management benefits and protection to the individuals we serve.
The proposed regulations in 633.9 require facility directors to follow policies and procedures when acting as representative payee, which benefit the individuals we serve by providing management and protection of the individual’s funds.
The proposed regulations amend definitions in 633.15 to correspond with the addition of 633.9.
In addition, the proposed regulations supersede certain requirements for the management of personal funds for people who are receiving services in facilities operated and/or certified by OPWDD.
4. Costs:
a. Costs to the Agency and to the State and its local governments:
There is no anticipated impact on Medicaid expenditures as a result of the proposed regulations. The regulations require a facility director, in consultation with the beneficiary’s planning team to determine a beneficiary’s need or continuing need for a representative payee, to document the basis for that determination in the beneficiary’s record, and to follow guidelines when a facility director is acting as representative payee. Consequently, there are no anticipated costs for the State in its role of paying for Medicaid costs.
These regulations will not have any fiscal impact on local governments, as the contribution of local governments to Medicaid has been capped. Chapter 58 of the Laws of 2005 places a cap on the local share of Medicaid costs and local governments are already paying for Medicaid at the capped level.
The regulations may result in minimal costs to OPWDD in its role as a provider of services to comply with the new requirements. Consequently, there may be costs associated with developing policies and procedures and with subsequent training. However, these costs will be satisfied with existing resources.
b. Costs to private regulated parties:
OPWDD expects that the costs to develop new policies and procedures will be minimal and be satisfied with existing resources. Costs to have a healthcare professional certify a beneficiary’s competency to handle his/her benefits will be minimal because most facilities will take the beneficiary to the beneficiary’s treating healthcare professional for certification.
5. Local government mandates: There are no new requirements imposed by the rule on any county, city, town, village; or school, fire, or other special district.
6. Paperwork: Providers will experience a minimal increase in paperwork as a result of the proposed regulations. The regulations will require facility directors to document the determination of whether a beneficiary needs or continues to need a representative payee and to provide notice to appropriate parties.
7. Duplication: These regulations mirror federal benefit paying agency regulations concerning representative payees/fiduciaries. The duplicative impact of the proposed state regulations is minimal as documentation showing compliance with federal benefit paying agencies can also be used to meet OPWDD requirements.
8. Alternatives: OPWDD did not consider any other alternatives to the proposed regulations. The regulations are necessary to comply with MHL 33.07.
9. Federal standards: The proposed rule exceeds minimum standards of the federal government, as benefit paying agencies do not require a review of the person’s need or continuing need for a representative payee when the person has life changes. Given the unique population served by OPWDD, and the ramifications of the representative payees’ decisions, this is in accordance with current New York State statutes.
10. Compliance schedule: OPWDD is planning to adopt the proposed amendments as soon as possible within the timeframes mandated by the State Administrative Procedure Act. The proposed regulations were reviewed by Mental Hygiene Legal Services. The proposed regulations were discussed with and reviewed by representatives of providers in advance of this proposal. Additionally, OPWDD will be mailing a notice of the proposed amendments to providers in advance of the effective date.
Regulatory Flexibility Analysis
1. Effect on small business: OPWDD has determined, through a review of the certified cost reports, that many OPWDD-funded services are provided by not-for-profit agencies which employ more than 100 people. Smaller agencies that employ fewer than 100 employees are classified as small businesses. OPWDD is unable to estimate the number of agencies that may be considered to be small businesses.
The proposed amendments have been reviewed by OPWDD in light of their impact on small businesses. The proposed amendments require facility directors in consultation with the beneficiary’s planning team to determine a beneficiary’s need or continuing need for a representative payee, to document the basis for that determination, and to follow policies and procedures when a facility director is acting as representative payee.
2. Compliance requirements: The proposed amendments will impose some additional compliance requirements on facilities. OPWDD expects that the compliance costs to develop new policies and procedures will be minimal and satisfied with existing staff. Additionally, costs to have a healthcare professional certify a beneficiary’s competency to handle his/her benefits will be minimal because most facilities will take the beneficiary to the beneficiary’s treating healthcare professional for certification.
The amendments will have no effect on local governments.
3. Professional services: The proposed amendments will affect facilities that need to have a healthcare professional certify a beneficiary’s competency to handle his/her benefits. This will be minimal because most facilities will take the beneficiary to the beneficiary’s treating healthcare professional for certification.
4. Compliance costs: OPWDD expects that the compliance costs to develop new policies and procedures will be minimal and satisfied with existing staff. Additionally, costs to have a healthcare professional certify a beneficiary’s competency to handle his/her benefits will be minimal because most facilities will take the beneficiary to the beneficiary’s treating healthcare professional for certification.
5. Economic and technological feasibility: The proposed amendments do not impose the use of any new technological processes on regulated parties.
6. Minimizing adverse impact: The purpose of these proposed amendments is to require facilities to determine whether a beneficiary needs or continues to need a representative payee, to document the basis for that determination, and to follow policies and procedures when a facility director is acting as representative payee. The amendments will result in costs to facilities, including facilities that are small businesses. However, OPWDD does not expect that such costs will result in an adverse impact to providers because costs will be minimal.
OPWDD has reviewed and considered the approaches for minimizing adverse impacts as suggested in section 202-bb(2)(b) of the State Administrative Procedure Act (SAPA). However, since the representative payee determination and documentation requirements are needed to ensure beneficiaries receive a representative payee when appropriate, OPWDD did not establish different compliance, reporting requirements or timetables from these requirements and timetables on small businesses or exempt facilities that are small businesses.
7. Small business participation: The proposed regulations were discussed with and reviewed by representatives of providers, some being small businesses, in advance of this proposal. OPWDD also plans to inform all facilities, including small business providers, of the proposed amendments in advance of their scheduled effective date.
Rural Area Flexibility Analysis
1. Types and Estimated Numbers of Rural Areas: 44 counties have a population of less than 200,000: Allegany, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia, Cortland, Delaware, Essex, Franklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madison, Montgomery, Ontario, Orleans, Oswego, Otsego, Putnam, Rensselaer, St. Lawrence, Saratoga, Schenectady, Schoharie, Schuyler, Seneca, Steuben, Sullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, Wyoming and Yates. 9 counties with certain townships have a population density of 150 persons or less per square mile: Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga and Orange.
The proposed amendments have been reviewed by OPWDD in light of their impact on entities in rural areas. The proposed amendments require a facility director in consultation with the beneficiary’s planning team to determine a beneficiary’s need or continuing need for a representative payee, to document the basis for that determination and to follow policies and procedures when acting as representative payee.
2. Compliance Requirements: The proposed amendments will impose some additional compliance requirements on facilities. OPWDD expects that the compliance costs to develop new policies and procedures will be minimal and satisfied with existing staff. Additionally, costs to have a healthcare professional certify a beneficiary’s competency to handle his/her benefits will be minimal because most facilities will take the beneficiary to the beneficiary’s treating healthcare professional for certification.
The amendments will have no effect on local governments.
3. Professional Services: The proposed amendments will affect facilities that need to have a healthcare professional certify a beneficiary’s competency to handle his/her benefits. However, most facilities will take the beneficiary to the beneficiary’s treating healthcare professional for certification.
4. Compliance Costs: OPWDD expects that the compliance costs to develop new policies and procedures will be minimal and satisfied with existing staff. Additionally, costs to have a healthcare professional certify a beneficiary’s competency to handle his/her benefits will be minimal because most facilities will take the beneficiary to the beneficiary’s treating healthcare professional.
5. Minimizing Adverse Impact: The purpose of these proposed amendments is to require facility directors to determine whether a beneficiary needs or continues to need a representative payee, to document that determination in the beneficiary’s record, and to follow policies and procedures when acting as representative payee. The amendments will result in costs to facilities, including facilities in rural areas. However, OPWDD does not expect that such costs will result in an adverse impact to providers as the costs will be minimal.
OPWDD has reviewed and considered the approaches for minimizing adverse impact as suggested in section 202-bb(2)(b) of the State Administrative Procedure Act (SAPA). However, since the determination and documentation requirements are needed to ensure beneficiaries receive a representative payee when appropriate, OPWDD did not establish different compliance, reporting requirements, or timetables on providers in rural areas or local governments or exempt providers in rural areas or local governments from these requirements and timetables.
6. Rural Area Participation: The proposed regulations were discussed with and reviewed by representatives of providers, including some in rural areas, in advance of this proposal. OPWDD also plans to inform all providers, including providers in rural areas, of the proposed amendments in advance of their scheduled effective date.
Job Impact Statement
A Job Impact Statement for the proposed amendments is not being submitted because it is apparent from the nature and purposes of the amendments that they will not have a substantial adverse impact on jobs and/or employment opportunities.
The proposed regulations require facility directors in consultation with the beneficiary’s planning team to determine a beneficiary’s need or continuing need for a representative payee, and document that determination in the beneficiary’s record. The amendments also require facility directors to follow policies and procedures when acting as the representative payee. The amendments will not result in staffing costs, and compliance requirements for facilities are minimal. Consequently, the amendments will not have a substantial impact on jobs or employment opportunities in New York State.
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