N.J. Admin. Code § 8:85-1.16

Current through Register Vol. 56, No. 9, May 6, 2024

Section 8:85-1.16 - Utilization of resident's income for cost of care in the NF and for PNA

(a) After provision for the resident's Personal Needs Allowance (PNA) is met, and then after provision for other allocations such as maintenance of spouse and/or dependent's home are satisfied, the remainder of the Medicaid beneficiary's income shall be applied to the cost of care in the NF, which includes per diem, bed reserve and other allowable expenses.

1. The amount of income which shall be collected by the NF from the beneficiary, beneficiary's family or Representative Payee (if any) will be established in the process of determining eligibility and identified by form PA-3L, Statement of Income Available for Medicaid Payment, issued by the CWA. The NF shall collect all of the recipient's income to offset the Medicaid payment.

2. The NF shall notify the CWA immediately whenever there is a change/difference in any income source, as well as when any additional assets or resources come to the attention of the NF.

3. The New Jersey Medicaid program encourages families or any other concerned individual(s) to make voluntary monetary contributions to the State of New Jersey on behalf of Medicaid beneficiaries residing in nursing facilities. Inquiries should be directed to the Division of Senior Benefits and Utilization Management, Office of Administration and Finance, PO Box 722, Trenton, New Jersey 08625-0722.

(b) For all institutionalized aged, blind, and disabled individuals who are eligible for Medicaid, a designated amount of income as determined by State law (30:4D-6a ) shall be protected for personal needs allowance.

1. Certain individuals in a NF have no income, or insufficient income to provide a maximum amount of PNA. For those individuals not already deemed eligible for SSI, the facility shall insure that the application for SSI benefits has been made. PA-3L's for those beneficiaries who only receive an SSI check can be obtained from the Division of Senior Benefits and Utilization Management, Office of Provider Relations, PO Box 722, Trenton, New Jersey 08625-0722.

2. Once the NF initiates billing for a Medicaid beneficiary, that Medicaid beneficiary shall be considered a Medicaid beneficiary for the full term of stay in the NF (that is, until death or physician discharge) unless the patient loses eligibility during the stay or the beneficiary or authorized representative submits to the LTCFO, prior to death or discharge, a notarized statement to terminate benefits.

i. After a beneficiary dies or is discharged, under no circumstances shall that beneficiary's Medicaid billing status be terminated prior to the date of death or discharge for the purpose of avoiding utilization of available income against cost share.

(c) Each Medicaid beneficiary residing in a NF shall be permitted to accumulate a sum of money from the PNA which, when combined with other resources retained by or for the person, does not exceed the maximum resource standard in the Department of Human Services Medicaid Only Manual at 10:71-4.5.

1. If the NF is handling the PNA, the facility shall closely monitor the PNA account and inform the beneficiary and/or his or her representative when the amount comes within $ 200.00 of the resource eligibility cap. If the PNA is in excess of the resource standard defined in N.J.A.C. 10:71-4.5, the beneficiary and/or his or her representative shall be advised of his or her right to reduce the excess monies and that the beneficiary may be terminated from Medicaid coverage, unless the amount in excess of the resource standard is expended.

2. The beneficiary may choose to reduce excess PNA by applying some of the accumulated PNA toward past expenditures paid for his or her care by the Medicaid program. Checks payable to the "Treasurer, State of New Jersey", may be directed to the Division of Senior Benefits and Utilization Management, Office of Administration and Finance, PO Box 722, Trenton, New Jersey 08625-0722.

(d) Standards for management of PNA shall comply with Federal regulations at 42 CFR 483.10(c) and State licensing requirements at 8:39-4.1.

(e) The personal needs allowance (PNA) shall be used as follows:

1. The PNA is intended to meet the personal and incidental needs of a beneficiary residing in a NF, in keeping with his or her wishes. The PNA is not intended to be applied against outstanding balances for the cost of care.

2. The NF shall not charge for items the beneficiary has not requested, nor for any items about which the beneficiary has not been informed in advance that he or she will be billed.

3. NFs shall not charge for any item or service reimbursable under the Medicaid program. A facility may charge the difference between the cost of the brand a beneficiary requests and the cost of the brand generally provided by the facility, if the facility chooses to provide the requested brand. NFs shall not require the purchase of non-covered items as a condition for admission.

4. The basic items that NFs shall make available for beneficiary use under the Medicaid program include:

i. Personal hygiene items such as soap, facial tissues, towels, washcloths, shaving materials (lotion, razor, razor blades), combs, hair brushes, shampoo, tooth brushes, tooth paste, laundry services, denture cleaner and adhesive, dental floss, deodorant, incontinent supplies, sanitary napkins, disinfecting soaps or specialized cleaning agents, when medically indicated to treat special skin problems or to fight infections;

ii. Durable medical equipment such as wheelchairs, gerichairs, crutches, canes, walkers, commodes, Hoyer lifts, mattresses;

iii. Services, including electricity, TV antenna or cable hook-up when needed for acceptable reception, banking charges that are not deducted from the interest; and

iv. Basic room furnishings, such as chairs, table, fans, bed-spreads, curtains.

5. The facility may not mandate TV rental.

6. Examples of personal items for which PNA is intended are:

i. Small purchases, such as cosmetics, electric shavers, hair spray, special lotions or powders, clothes brushes, tobacco or candy;

ii. Personal items, such as clothing, jewelry, watches, accessories, haircuts, beauty parlor services, newspapers or magazines;

iii. Personalization of living area with items requested by the resident, such as bed-spread, rug, pictures, furniture, radio or TV;

iv. Community contacts, such as home visits, transportation, trips to special events or places of interest, telephone calls, stationery, stamps or gifts;

v. Hobbies, such as games, photographic materials, aquariums, plants or audio or video tapes.

7. The PNA may be used to continue a bed reserve, if a beneficiary transferred to a hospital is unable to return within the 10-day bed reserve period. Payment shall be strictly voluntary, however, and shall be permitted only when the beneficiary's right to return to the NF (see 8:85-1.4 ) has been fully explained to the beneficiary and his representative. The beneficiary's request to use the PNA for this purpose shall be in writing. Under no circumstances shall the facility use overt or implicit coercion in this matter.

(f) A uniform accounting system shall be maintained by the facility as follows:

1. In compliance with Federal and State rules and regulations, the NF shall accept fiduciary responsibilities for a Medicaid beneficiary's PNA if the beneficiary and/or authorized representative requests that his or her PNA be managed by the facility. The NF shall establish and maintain a system that assures a full and complete and separate accounting, according to generally accepted accounting principles, of each beneficiary's personal funds entrusted to the facility on the beneficiary's behalf. In compliance with Federal and State rules and regulations, the facility shall deposit any resident's personal funds in excess of $ 50.00 in an interest bearing account (or accounts) that is separate from any of the facility's operating accounts. The facility shall credit all interest earned on the resident's account to his or her account.

2. The PNA account and related supporting information, such as receipts, canceled check, bank statement, check register shall be maintained at the facility. The Department recommends that a direct deposit system be utilized.

3. A general ledger control account shall be established to record the total amount of PNA held in escrow by the facility.

4. A subsidiary ledger shall be established whereby each beneficiary's deposits and disbursements are recorded and the total of the beneficiary's balances reconciled to the general ledger control account each month, or as last reported by the banking facility.

5. When recording the beneficiary's income in a cash receipts journal, the PNA shall be segregated from the available income applied to the cost of the beneficiary's care. Within five days of receipt, the PNA shall be deposited directly into the interest bearing checking or savings account restricted for PNA. The general ledger control account shall reflect a credit posting to indicate the total PNA received during the month. Each beneficiary's subsidiary ledger account shall also be posted to record the deposits to the appropriate account.

6. To facilitate the beneficiary's access to the PNA, a portion of the total cash may be transferred periodically from the segregated checking/savings account to a petty cash fund. The amount of the fund shall be reasonable and necessary for the size of the facility and needs of the beneficiaries.

7. In compliance with Federal and State rules and regulations, the facility shall provide, at least quarterly, to the beneficiary and/or his or her authorized representative, an accounting of all transactions with regard to the PNA account. The amount of balance in the beneficiary's account shall be available for the beneficiary and/or his or her authorized representative on request.

8. Management of funds shall be as follows:

i. For beneficiaries who are able to manage their funds, a family member must have authorization in writing from the beneficiary/authorized representative for a specific amount before funds are disbursed from the PNA.

ii. Beneficiaries who are unable to manage their funds should have representative payees appointed.

iii. Family members should withdraw funds only on presentation of receipts showing items purchased for the beneficiary, unless this appears to be a financial hardship for the family member.

iv. In cases where there is an outside representative payee, and the beneficiary appears to be denied access to his or her PNA funds, or personal items are not being purchased for him or her, the facility shall take steps to ensure that the beneficiary's right to his or her PNA benefits is restored. Such steps may include warning letters to the representative payee, use of the NF attorney, and/or referrals to the Office of the Ombudsman for Institutionalized Elderly and the Social Security Administration. In such cases, the facility may wish to request representative payeeship.

9. When drawing checks or cash to make disbursements from the beneficiary's PNA account, either an original invoice or a signed receipt from the beneficiary or an authorized representative shall be retained by the facility and referenced to the beneficiary's account. The receipt must stipulate the use of the funds or specify the items purchased.

10. When the facility draws checks on behalf of a beneficiary or reimburses the petty cash fund, disbursements of PNA shall be segregated from the operating expenses of the facility. At the end of each month, the general ledger control account shall be charged for the total PNA disbursed and each beneficiary's subsidiary ledger account shall reflect the monthly disbursements on that beneficiary's behalf.

11. Accumulated interest is the property of the beneficiary. Although a beneficiary's PNA may not be used for banking service charges, interest from the account may be used for this purpose.

12. Upon discharge or transfer to another NF or other place of residence, the facility shall provide the beneficiary with a final accounting statement and a check in the amount of the beneficiary's close-out balance within seven working days of the transfer; however, a beneficiary transferred to another NF shall be given the option of authorizing the sending facility in writing to transfer any balance to the beneficiary's account at the receiving facility. The transfer of a PNA account from one facility to another shall be documented in writing, with a copy given to the beneficiary and/or his or her authorized representative. A beneficiary discharged or transferred shall have the right to the return of his or her personal property, such as, television, radio or other items.

13. Unclaimed PNA funds left behind by a discharged beneficiary who cannot be located or where the authorized representative cannot be located, shall be forwarded within 30 days to the Bureau of Administrative Control, Mail Code #6, PO Box 712, Trenton, New Jersey 08625-0712.

14. Within 10 days after the death of a Medicaid beneficiary, whether death occurred in the NF, in a hospital, or during a period of therapeutic leave, the NF shall send a written notice regarding the existence of PNA funds both to the CWA and the individual identified by the beneficiary as the person to contact. A NF shall exercise all reasonable efforts to locate and notify any family, representative payee or interested person acting on behalf of the deceased Medicaid beneficiary.

i. The facility shall advise the contact person or responsible person that any claims made for PNA funds must be directed to the NF. When no CWA claim exists, the executor(rix) or administrator(rix), upon presentation of a letter of administration from the County Surrogate's Office, must be issued a check made payable to the estate of the deceased Medicaid beneficiary for the PNA funds. A check for the funds shall not be issued unless a Surrogate's letter is presented, except when a beneficiary dies intestate, leaving no surviving spouse, and the total value of the estate is less than $ 5,000; in such case, an affidavit of administration in accordance with 3B:10-4 is acceptable.

ii. If there is an outstanding funeral bill which is deemed reasonable and there is no claim by the CWA or an executor/administrator, the NF may directly reimburse the funeral director from the PNA funds.

iii. If no claim for PNA funds is made to the NF within 30 days of death, a check made payable to the "Treasurer, State of New Jersey" shall be forwarded as follows:

Payee mail to:

Treasurer, State of New Jersey-Medicaid

Division of Revenue

Lock Box 656

160 S. Broad St. 1st Floor

Trenton, NJ 08625

Certified, courier, or FedEx to:

Treasurer, State of New Jersey-Medicaid

Division of Revenue

160 S. Broad St. 1st Floor

PO Box 656

Trenton, NJ 08628

Attn: Frank Clark.

The following information shall be included:

(1) An identification of the funds as unclaimed PNA funds of the deceased Medicaid beneficiary;

(2) Beneficiary's name;

(3) HSP (Medicaid) Case Number;

(4) Date of death; and

(5) Amount enclosed for that beneficiary.

iv. If a claim is received by the NF after the PNA funds have been forwarded to the Bureau of Administrative Control and within five years of the Medicaid beneficiary's death, the claim must be referred to the Bureau for processing. After five years, all claims received by the NF must be referred to the State Treasurer.

v. Any transactions involving distribution of a deceased Medicaid beneficiary's PNA funds must appear on the NF's record for audit purposes.

(g) Questions regarding personal needs allowance administration, for example, procedures, policy, or use of funds, should be directed to the Department:

Division of Long Term Care Services

PO Box 367

Trenton, New Jersey 08625-0367

N.J. Admin. Code § 8:85-1.16

Recodified from N.J.A.C. 10:63-1.16 and amended by R.2005 d.389, effective 1/17/2006.
See: 36 N.J.R. 4700(a), 37 N.J.R. 1185(a), 38 N.J.R. 674(a).
Rewrote the section.
Administrative change.
See: 44 N.J.R. 1701(a).