CMS Proposes Regs Upholding Income-First Rule

The Centers for Medicare and Medicaid Services (CMS) is proposing regulations giving states the option of using either the "income-first" or the "resources-first" method of bringing a community spouse's income up to the level of her minimum monthly maintenance needs allowance (MMMNA). Under the proposed rules, a state could elect to use either methodology but would then have to apply the same rule consistently to all spouses. See 66 Federal Register 46763-46768 (7 Sep 2001).

Under the income-first method, a community spouse's resource allowance (CSRA) is increased only if allocating all available income from the institutionalized spouse still does not permit the community spouse to reach the MMMNA. Under the resources-first method, the couple's resources can be protected for the benefit of the community spouse to the extent necessary to ensure that the community spouse''s total income, including income generated by the CSRA, meets the community spouse''s MMMNA.

Some courts have ruled that Medicaid law permits states to employ the income-first method, while others have ruled that this method is prohibited. (See Supreme Court To Hear 'Income First' Case.) CMS opines that the Medicaid Act does not specifically address whether the income-first or the resources-first method is appropriate in making the determination on raising the community spouse's income. "Section 1924(e)(2)(C) of the Act," the agency writes in its discussion of the proposed rule, "directs the State to determine whether the community spouse''s income meets his or her minimum monthly maintenance needs. It also provides that, if the community spouse''s income falls short of meeting those needs, the CSRA should be increased by an amount that will generate sufficient income to bring the community spouse''s income to the minimum monthly maintenance needs level. However, this statutory guidance does not address whether the community spouse''s income may include the institutionalized spouse''s income that could be made available to the community spouse."

Comments on the rule are due no later than November 6, 2001.