GAB Decision 727
March 18, 1986
Texas Rehabilitation Commission;
Docket No. 85-183 through 85-187; 85-189 through 85-196 and 85-227; 85-234
through 85-236
Garrett, Donald F.; Tietz, Alexander G. Settle, Norval D.
The Texas Rehabilitation Commission (State) appealed decisions by the
Social Security Administration (Agency, SSA) denying reimbursement for
the cost of vocational rehabilitation (VR) services provided by the
State to 17 individuals. The State claimed reimbursement under section
1615 of the Social Security Act (Act), which authorizes the Secretary to
pay the states from title XVI funds for the successful rehabilitation of
blind or disabled individuals receiving Supplemental Security Income
(SSI) benefits under that title. All of the appeals involve the issue
whether an individual was "receiving benefits" within the meaning of
section 1615--(1) for months in which the individual did not receive
cash payments but remained on the SSA rolls in a nonpayment status or
(2) for months with respect to which SSA retroactively determined that
cash payments were improperly made. The parties agreed that the cases
should be consolidated for the Board's consideration of the legal issue
and that any factual development of the cases would be stayed until
after the legal issue was decided by the Board. SeeBoard's letter to
parties dated December 17, 1985. As discussed below, we conclude that
an individual was not "receiving benefits" for purposes of reimbursement
for VR services provided in any month unless the individual properly
received cash payments under the SSI program during that month. In view
of this conclusion, no further development of the record in these cases
is necessary, and we uphold the Agency's determination denying
reimbursement for the cost of VR services provided to the 17 individuals
in question.
Statutory and Regulatory Framework
The Vocational Rehabilitation Act of 1943 (and later, the
Rehabilitation
Act of 1973) authorized federal financial participation in the
cost of
vocational rehabilitation services provided by dthe states pursuant
to a
state plan. In 1972, the SSI program was established, providing
for the
payment of benefits to aged, blind, or disabled individuals
determined
to be eligible on the basis of(2) income and resources.
(Section 301,
Pub. L. 92-603) Section 1615 of the Social Security Act, as
amended by
Pub. L. 92-603, required the Secretary to refer to the state
agency
administering the state plan for vocational rehabilitation services
any
blind or disabled individual under age 65 who "is receiving benefits
(or
with respect to whom benefits are paid) under this title." The
section
further authorized the Secretary to pay title XVI funds to the
state
agency for costs incurred in the provision of rehabilitation services
to
individuals referred under that section. Regulations
specifically
implementing section 1615 were published in 1974, appearing with
the
regulations governing the state vocational rehabilitation
services
program under the Rehabilitation Act. (39 Fed. Reg. 25436
(July 10,
1974)) The regulations for the SSI program, also published in 1974,
(39
Fed. Reg. 28625 (August 9, 1974)), did not directly address the use
of
title XVI funds to cover the cost of VR services to SSI recipients.
In 1981, section 1615 of the Act was amended to limit payment from
title
XVI funds for VR services to cases of "successful"
rehabilitation.
(Section 2344, Pub. L. 97-35) The section now provides in
pertinent part
that:
(a) In the case of any blind or disabled individual who--
(1) has not attained age 65, and
(2) is receiving benefits (or with respect to whom benefits are
paid)
under this title,
the Secretary shall make provision for referral of such
individual to
the appropriate State agency administering the State plan for
vocational
rehabilitation services approved under the Vocational
Rehabilitation
Act, . . . and . . . for a review not less often than
quarterly of such
individual's blindness or disability and his need for and
utilization of
the services made available to him under such plan.
* * * *
(d) The Secretary is authorized to reimburse the State
agency
administering or supervising the administration of a State plan
for
vocational rehabilitation services approved under
Vocational
Rehabilitation Act for the costs incurred under such plan in
the
provision of rehabilitation services to individuals who are referred
for
such services pursuant to subsection (a) if such services result
in
their performance of substantial gainful activity which lasts for
a
continuous period of nine months. . . .(3)
The regulations implementing this amendment were published in
1983,
appearing as part of the SSI program regulations. (48 Fed. Reg.
6286
(February 10, 1983)) These regulations were published after the
VR
services were provided in at least some of the cases in question.
/1/
Subsequently, the regulations implementing section 1615 as
orginally
enacted were removed from the Code of Federal Regulations as
obsolete
(50 Fed. Reg. 38628 (September 23, 1985)), and by agreement of
the
parties have no application to the cases letter dated February 18,
1986)
The 1983 regulations provide, in pertinent part, that:
(a) To be payable, the services must have been provided:
* * *
(2) During months the individual is eligible for SSI payments. . . .
20 CFR 416.2213. Section 416.2203 of 20 CFR states:
"Eligible" means meet all the requirements for supplemental
security
income benefits under section 1614 (a)(2), 1614(a)(3) or 1619(a) of
the
Act and is receiving SSI payments.
(The citation to sections 1614(a)(2), 1614(a)(3), and 1619(a) of
the
Act, which define when an individual shall be considered blind
or
disabled, apparently indicates that individuals eligible for SSI on
the
basis of age rather than blindness or disability are not eligible
for
referral for VR services under section 1615.)
Issues Presented
The State's claims for reimbursement for VR services provided in each
of
the 17 cases in question here were denied on the ground that
the
individuals were not eligible for SSI benefits during the months
in
which the services were provided. (Although the SSA determinations
did
not specify that the cases involved SSI payments rather than
disability
insurance payments under title II of the Act--which also provides
a
basis for reimbursement for the cost of VR services--the
parties
indicatt the cases involved ponly SSI. (Board's letter to
parties dated
February 4, 1986)) Specifically, the Agency found that, in
each, the
individual's eligibility(4) for SSI ended prior to the months in
which
the services for which the State claimed reimbursement were
provided.
The State, however, asserted that in some cases the individuals in
fact
received SSI payments in the months in question, and that in
other
cases, the individuals' eligibility for SSI payments had not
been
terminated even though they were not eligible to receive, and did not
in
fact receive, SSI payments during the months in question. In the
former
situation, SSA retroactively ruled that the individuals should not
have
received the SSI payments. /2/ The State did not dispute
SSA's
retroactive determination of ineligibility, but argued that the
receipt
of payments, even where the payments were improperly made, provided
a
basis for reimbursement of the cost of VR services. The
latter
situation occurred because the SSI regulations permit an individual
who
was previously determined eligible for SSI but who no longer meets
all
eligibility requirements to remain on the SSA rolls in
"nonpayment
status" for a period of twelve months, at which time eligibility
for
payment is terminated if eligibility has not been reestablished. 20
CFR
416.1335. This "suspension" as opposed to "termination" of
eligibility
permits payments to the individual to be resumed without the
filing of a
new application if he or she establishes within the twelve-month
period
that all requirements for eligibility are met. 20 CFR
416.1321(b).
Thus, in the case of some of the individuals in question, VR
services
were provided while the individual's eligibility for SSI payments
had
been suspended but not terminated. The question before us is
whether
individuals in either of the two situations described were
"receiving
benefits" within the meaning of section 1615 of the Act.
Analysis
I. Individuals Whose Eligibility Was Suspended
There is no merit in the State's argument that an individual
whose
eligibility for SSI was suspended but not terminated during the
months
in which services were provided was "receiving benefits" within
the
meaning of section 1615. The section refers to an individual who
"is
receiving benefits (or with respect to whom benefits are paid)
under
this title. . . ." The parenthetical expression alludes to the
situation
where, pursuant to section(5) 1631(a)(2) of the Act, someone other
than
the eligible individual (a "representative payee") is designated
to
receive benefits on his behalf. The statute is clear that, in
that
situation, "benefits" are cash payments, since it states that
benefits
are "paid." Inasmuch as a representative payee receives, on behalf
of
the eligible individual, the same benefits as an eligible
individual
would otherwise receive directly, it is clear that the
"benefits"
referred to immediately preceding the parenthetical expression are
also
cash payments. The term "benefit" is, moreover, used
consistently
throughout title XVI to mean cash payment. Section
1611(b)(1) is
preceded by the caption "Amounts of Benefits," which in turn
refers to a
footnote showing specific dollar amounts payable. Section
1631 is
preceded by the caption "Payment of Benefits," and the section
itself
addresses, among other things, the frequency at which benefits "shall
be
paid." Thus, the statute is clear on its face that an individual
is
"receiving benefits" only if he is receiving SSI payments. The
basic
SSI program regulations applicable during the period in question
here
are also clear on this point, since they specifically define the
term
"benefits" as "any payments made under the SSI program." 20 CFR
416.302.
The State acknowledged that an individual must be "receiving benefits"
at
the time the VR services are provided. /3/ The State argued, however,
that an
individual was still "receiving(6) benefits" if his or her
eligibility for
benefits had been suspended since an individual in a
"nonpayment status"
remains eligible for SSI. We disagree. The SSI
regulations are
clear that a suspension as well as a termination is
based on a determination
that the individual is no longer eligible for
SSI payments. The use of
suspensions merely recognizes the practical
realities of the SSI program,
where an individual's status (i.e.,
eligible or non-eligible) can easily
change from month to month as his
income and resources--the primary
determinants of eligibility--
fluctuate. Thus, suspension is merely a
procedural device which
obviates the necessity for a new application each
time the individual
reestablishes his or her eligibility. It is not
substantively different
from termination, and in neither case is the
individual eligible for
SSI.
The State also argued that individuals in a "nonpayment status"
continue
to receive benefits since they remain on the VR rolls by virtue of
the
referral mandated by section 1615, and may remain eligible for
Medicaid
(where eligibility was initially predicated on the receipt of
SSI
payments) under circumstances described in the SSI regulations at 20
CFR
416.266. While these may be considered benefits in a broad
sense,
however, it is clear from the discussion above that the term
"benefits"
as used in the Act has a narrower meaning. Moreover,
eligibility for
Medicaid is not a benefit under title XVI; Medicaid is a
completely
separate program under title XIX of the Act. Similarly,
since
eligibility for VR services is not established by title XVI and
since
funding is available from other sources for VR services that do
not
qualify for reimbursement under title XVI, the receipt of such
services
pursuant to a title XVI referral does not constitute a benefit
under
that title. (7)
The State argued in addition that benefits other than SSI payments
were
available under section 1631(h) of the Act, which provides for
the
payment of travel expenses to individuals in connection with
disability
determinations under title XVI. However, the State did not
allege that
any such payments were received by the individuals in question
for the
months at issue here.
The State also cited as a benefit State supplementary payments
available
under section 1616 to individuals receiving SSI payments or
to
individuals who would but for their income be eligible for
such
payments. The SSI regulations at 20 CFR 416.302 include
State
supplementary payments in the definition of "benefits"; however,
as in
the case of travel payments, the State did not allege that
the
individuals in question here were receiving these benefits.
The State also characterized as benefits under the Act the provision
for
continuation of SSI payments for two months after the cessation
of
blindness or disability (section 1631(a)(5)), and the provision
for
continuation of SSI payments for individuals no longer disabled
until
completion of their VR program (section 1631(a)(6)). However,
since the
benefit conferred by these provisions is the SSI payment itself,
this
fails to advance the State's position that there were title XVI
benefits
other than SSI payments. (The State did not argue that any of
the
individuals in question should have received SSI payments under
these
provisions.)
The State also cited the provision for cost-of-living adjustments in
the
amount of SSI payments (section 1617) as conferring a benefits under
the
Act. However, the provision merely authorizes increases in the
amount
of SSI payments and does not confer a separate benefit.
Finally, the State argued that a dichotomy between SSI cash payments
and
other benefits under title XVI was clear from the fact that the
statute
and regulations permitted cash payments to be made to a
representative
payee although the eligible individual was considered to be
the
beneficiary. This fails to demonstrate the existence of benefits
other
than SSI payments, however, since the eligible individual is
considered
the beneficiary by virtue of the receipt on his behalf of the
SSI
payments.
The Agency cited in support of its determination the
regulations
implementing the 1981 amendment to section 1615. These
regulations
specifically require that VR services have been provided during
months
the individual meets all the requirements for SSI and is(8)
receiving
SSI payments. (20 CFR 416.2213(a)(2) and 416.2203) While
these
regulations clearly support the Agency's position, they do not apply
to
at least some of the cases in question since, as previously noted,
the
regulations were not published when the services were provided.
As
discussed above, however, the statutory language alone is
sufficiently
clear to support the denial of reimbursement in those cases with
respect
to which the regulations do not apply.
II. Individuals Who Received Payments for Which They Were Ineligible
The State's argument that reimbursement is available for VR
services
provided during months that an individual received payments for
which he
was later determined ineligible is also without merit. The
State argued
that the payment "was a benefit when paid" and that the
later
determination of ineligibility was irrelevant because "it was a
matter
between the SSA and its recipients." (State's reply brief, p.
4)
However, the only sense in which a benefit was received in
this
situation is that the individual received an SSI check to which he
or
she was not entitled. The more reasonable interpretation of the
statute
is that the individual must receive benefits which he or she
was
eligible to receive under the SSI program. Moreover, as
previously
noted, "benefits" are defined by the SSI regulations as "payments
made
under the SSI program." A payment that is made to an individual who
is
in fact ineligible for that payment is not made "under the SSI
program"
in accordance with this regulation. Thus, there is in this
situation no
basis for the payment of VR costs since payment is predicated on
the
receipt of SSI benefits. We see no basis, moreover, for the
State's
position that the later determination that the individual was
ineligible
for the payments is a matter of privity between SSA and the
individual.
If the issuance of an SSI payment in the first instance is
an
appropriate subject of inquiry for purposes of determining whether
the
cost of VR services is reimbursable, then the later determination
that
the payment was not properly made is appropriately taken
into
consideration in determining whether the cost of VR services may
be
reimbursed.
It is arguable, however, that since neither the statute nor the
regulation
discussed above expressly require that the individual be
actually eligible
for the SSI payments received, it is reasonable to
read the statute without
implying this requirement. Unlike the
situation in I. above, the State
here had no way of knowing at the time
that it provided the VR services that
the individual was not in fact
eligible for the SSI payments. The
determination of eligibility was
made by SSA, possibly based on(9) erroneous
information provided by the
recipient or possibly based on its own error in
the face of accurate
information. Since SSA administers the SSI
program, it might be argued,
SSA should bear the cost of VR services which
the State provided on the
basis of that erroneous determination.
However, the State never alleged that it relied on the SSA
determination
of eligibility in initiating or continuing VR services, nor is
it likely
that this was the case. A referral of an SSI recipient by the
Secretary
to the State VR agency does not obligate the State to provide
VR
services to that individual. Once an individual is referred to
the
State, the State must make a determination whether the individual
meets
basic eligibility requirements for VR services. 34 CFR
361.31. Even if
the individual meets all requirements for VR services,
such services may
not be provided depending on the order established in the
State's VR
plan for selecting individuals to be provided VR services when
those
services cannot be provided to all eligible individuals. 34 CFR
361.36.
/4/ Moreover, it is likely that the State might have provided
VR
services to the individuals in question here even if they had not
been
referred by the Secretary since referrals may be made by other
sources
and since the individuals themselves might have applied for VR
services.
See 34 CFR 361.20(a) and 361.30. Thus, the referral by the
Secretary is
merely one of several mechanisms for assuring that the State
makes VR
services available to individuals who meet criteria established by
the
State in its State VR plan. The availability (or not) of title
XVI
funding does not appear to affect the determination by the State
to
provide VR services or to continue providing such services once
the
State becomes aware of the individual's ineligibility for SSI.
(10)
As was the case in the situation described in I. above, the Agency
relied
on the 1983 regulations implementing the 1981 amendment to
section 1615
(which may not be applicable to all of the cases in dispute
here) to support
its determination. These regulations expressly require
that the
individual must be actually eligible for the SSI payments
received in order
to provide a basis for reimbursement of the cost of VR
services provided to
him or her. Since we have found that this
requirement is implicit in
the statute and that this reading of the
statute is supported by the
definition of "benefits" in the basic SSI
regulations, we conclude that the
Agency correctly denied the State's
claims for reimbursement in these cases
regardless of whether the 1983
regulations applied.
Conclusion
For the foregoing reasons, we conclude that reimbursement for the cost
of
VR services provided to individuals during months when their
eligibility for
SSI was suspended or in which they received SSI payments
for which they were
not eligible was properly denied. Accordingly, we
uphold the Agency's
determination in all 17 appeals. /1/ Due to
the
lack of factual development in
these cases, the record does not
show the dates services were provided in all
cases. /2/ We note that
the
SSI regulations provide that the Agency may under certain
circumstances waive
recovery of an overpayment. 20 CFR 416.550. Since
there is no
indication in the record for the 17 cases at issue that a
waiver was
requested, however, our decision does not consider
this
situation. /3/ The
"receiving benefits" language of section 1615
appears only in the context of
the requirement that the Secretary make
provision for referring any blind or
disabled individual for VR
services. Thus, the statute does not
expressly require that an
individual continue to receive benefits during the
time that he receives
VR services in order for the cost of those services to
be reimbursable.
However, this is in our view the only reasonable reading of
the statute.
If the State were permitted to rely solely on the referral from
SSA of
individuals then eligible for SSI as a basis for claiming
reimbursement
for the cost of VR services, there would be no limit on
reimbursable
services, even where the individual's eligibility for SSI had
been
terminated. Moreover, section 1631 (a)(5) of the Act provides for
the
continuation of SSI payments to an individual who is no longer
disabled
until the completion of the individual's VR program if certain
criteria
are met. Since this reduces the likelihood that SSI payments will
stop
while an individual is receiving VR services, it mitigates the
apparent
harshness of the rule that reimbursement is not available for the
cost
of VR services provided to an individual no longer receiving
SSI
payments. In addition, as noted previously, the 1981 amendment
to
section 1615 made reimbursement available only where VR services
are
successful, i.e., result in the performance of substantial
gainful
activity which lasts for a continuous period of nine months.
The
intended effect of this provision was to pay only for those VR
services
which resulted in the reduction or elimination of the individual's
need
for SSI payments, by enabling hin to obtain gainful employment. No
such
savings would be realized where the individual was not receiving
SSI
payments when the VR services were
provided. /4/
Section
361.124(b) in 34 CFR Subpart E provided that the order of selection
for
services for any SSI recipient "shall be in accordance with
the
recipient's readiness and potential for rehabilitation to
productive
activity and without regard to any other order of selection set
forth in
the State plan." As noted previously, however, both parties agreed
that
Subpart E was not applicable during the periods in question in
these
cases.