Where is the SSA Going with POMS Changes?
Armchair Chat June 25, 2013
Mary E. O’Byrne
Frank, Frank & Scherr, LLC
1400 Front Avenue, Suite 200
Lutherville, MD 21093
410-337-8900
mobyrne@frankelderlaw.com
Neal Winston
Winston Law Group LLC
440 Broadway
Somerville, MA 02145
617-841-4000
nw@winstonlg.com
Overview
History of SSA focus on sole benefit
 Recent activities and creating new advocacy relationship with
SSA
 POMS changes in 2013
 What’s ahead with SSA
 Questions
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Background of “sole benefit”
OBRA ’93, August 1993
 The word “sole” only occurs once in the statute:
◦ 42 U.S.C.A. Sec. 1396p(d)(4)(C)
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 “…(iii) Accounts in the trust are established solely for the benefit of
individuals who are disabled (as defined in section 1382c(a)(3) of
this title) by the parent, grandparent, or legal guardian of such
individuals, by such individuals, or by a court…”
◦ arguably refers to the preservation of an individual’s pooled
account for that beneficiary and not other pooled trust
beneficiaries.
Background of “sole benefit”
HCFA 64 – State program transmittal letter issued in November
1994 by federal Medicaid policy office.
 Broadly defined “sole benefit” as limiting trust distributions in
all (d)(4) trusts only for the singular use of the recipient
beneficiary.
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Background of “sole benefit”
SSI self settled trusts added to OBRA ‘93 requirements under
Foster Care Independence Act, January 2000
 First POMS reference to “sole benefit” in 2001
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Current POMS Sole Benefit Limitation
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“Under the special needs trust exception, the trust must be
established for and used for the benefit of the disabled individual.
SSA has interpreted this provision to require that the trust be for the
sole benefit of the individual, as described in SI 01120.201F.2 . Any
provisions that provide benefits to other individuals or entities
during the disabled individual’s lifetime, or allow for termination of
the trust prior to the individual’s death and payment of the corpus to
another individual or entity (other than the State(s) or another
creditor for payment of goods and services provided to the
individual), will result in disqualification fro the special needs trust
exception.” (Emphasis added.)
POMS SI 011120.203B.1e
New POMS Travel Expense Limitation
May 12, 2012
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“An SSI recipient is awarded a court-ordered settlement
that is placed in an irrevocable trust of which he is the
beneficiary. The trust document includes a provision
permitting the trustee to use trust funds in order to pay for
the SSI recipient’s family to fly from Idaho to Nebraska.
The trust is not established for the sole benefit of the trust
beneficiary, since it permits the trustee to use trust funds
in a manner that will financially benefit the SSI recipient’s
family.” SI 01120.201 F.2, Ex. 1. (Emphasis added.)
Excuse me?
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Described by SSA as a “clarification” of existing policy, and
not a policy change
Assets of trusts with more liberal travel example language
were considered as “countable” to the recipient
Some Regional Offices gave pooled trusts 90 days to amend
existing terms, and individual trusts when reviewed
inconsistently treated
If trust assets have been used for such travel in the past, the
consequences were not clear and not found anywhere in
POMS
Advocates Reach Out
Advocate protests heard by Commissioner Astrue
 POMS travel example removed in mid-December 2012
 SSA Commissioner’s office requests a meeting with advocates
to discuss this provision and other concerns.
 Meeting with SSA Acting Commissioner, relevant Associate
Commissioners, and advocates held January 2013
 Agenda included review of specific SSI POMS for pooled and
individual trusts, internal agency consistency and training,
continuing dialogue with advocates at Associate Commissioner
level
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Specific POMS Review Issues Discussed
General review of SSA interpretation of “sole benefit”
 Prohibition on friends and family travel – change to POMS SI
01120.201. F. Ex. 1.
 Reimbursement to third parties for purchases made on behalf of
beneficiary treated as income to the beneficiary.
 Restrictions on payment of family caregivers.
 Reliance on prior SSA approval of trust; reasonable time for
amendment when rules change.
 Legal obligations paid from trust
 Creation of trust by Court
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Immediate Fix and Longer Range Changes

On February 8, 2013, SSA changed POMS SI 01120.201I.1
adding the following:
◦ f. Reimbursements to a third party.
 Reimbursements made from the trust to a third party for funds
expended on behalf of the trust beneficiary are not income. In
addition, reimbursements from the trust to pay a credit card
belonging to a third party for purchases made for the trust
beneficiary are not income. Existing income and resource rules
apply to items a trust beneficiary receives from a third party.
(Emphasis added.)
SSA Internal Decision
SSA staff had sought input from CMS in developing new rules
regarding payment of legal obligations and third party travel
expenses, and opinion from the SSA Office of General Counsel.
 Late March 2013, SSA advised SNT Advocates that it was
moving ahead with limited third party travel provisions for
medical treatment/oversight only and that it would take
regulatory route for other changes discussed.

SSA Requests and Accepts
Some Advocate Recommendations

On May 15, 2013, SSA issues revised POMS for allowable third party travel
expense from (d)(4) SNT:
◦ “Payment of third party travel expenses which are necessary in order for the trust
beneficiary to obtain medical treatment”;
◦ “Payment of third party travel expenses to visit a trust beneficiary who resides in
an institution, nursing home, or other long-term care facility (e.g., group homes
and assisted living facilities) or other supported living arrangement in which a
non-family member or entity is being paid to provide or oversee the individual’s
living arrangement. The travel must be for the purpose of ensuring the safety
and/or medical well-being of the individual.” POMS SI 01120.201 F.2.b.;
◦ provides for 90 day amendment period for previously approved trusts with old
travel terms, with no retroactive termination or overpayment.
◦ See attached publication with specific POMS changes May 15, 2013
CMS Position And Influence On SSA
Gene Coffey and Jannelle Bratcher, from CMS policy office,
attended 2nd meeting at advocate’s request.
 No CMS position on sole benefit expressed at meeting except
that agency must work “within confines of previously stated
policy”.
 CMS position on “sole benefit” only articulated in HCFA 64,
interim decisions, and letters to regional offices.

SSA Addresses Operational Issues
re: Review of SNTs
Creation of “virtual cadre” of trust experts from around the
country.
 Using automation and electronic files for efficiency and to
leverage national resources.
 Will have a group of trust experts for external case specific
inquiries.
 SSA will identify the trust expert for each region.
 Expect implementation in 2-3 months.
 Also, considering allowing Advocates to review and comment
on training materials.

Other Rule Changes Will Require Regulation

SSA will publish advance notice of proposed rulemaking for
regulations for certain other policy changes such as:
◦ Third party travel expenses for circumstances other than
those related to medical treatment or oversight of safety and
medical well-being.
◦ Payment of certain legal obligations of the beneficiary from
trust considered to be for the benefit/sole benefit of the
beneficiary.
Payment of Family Caregivers
Stated policy of “Not paying mom to be mom”.
 SSA says this has been their policy.
 If the services would otherwise be provided by an outside entity,
family caregiver may be compensated by trust.
 No specific credentialing or training required.
 No rule making anticipated at this time.

SSA Position on Individual
Establishing (d)(4)(A) Trust
SSA Office of General Counsel opinion that beneficiary cannot
establish (d)(4)(A) trust and concluded that Congress must have
intended that beneficiary could only establish a (d)(4)(C) trust.
 Marty Ford, ARC Public Policy Office, commented on original
intent of Congress to allow individual to establish trust, but not
included in statute due to scrivener’s error.
 Advocates request that Court established trust procedure
described in POMS be made more understandable to avoid trust
creation errors.
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Gathering Issues for the Next Meeting with SSA
General rule allowing a reasonable amendment period without
retroactive termination and overpayment for trusts previously
found to meet the SSA special needs trust exclusion, regardless
of policy change or different reviewer on redetermination.
 Court establishment.
 “General trust rules” regarding what choice of contingent
beneficiary makes an irrevocable trust revocable.
 Allowable trust distributions that do not violate sole benefit
interpretation.

General Impressions of the Tone of Our Discussions
SSA staff have been professional, cordial, fairly candid and willing
to engage with the Advocates.
 Although Commissioner Astrue opened the door, the commitment to
meeting with Advocates remains.
 Evident desire to provide better customer service and willingness to
hear us.
 High level of concern about program integrity and the next ugly
front page story about abuses.
 Proprietary attitude re: protecting “our” beneficiaries from abuse by
trustee and having a responsibility to protect these private funds.
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Implications for New and Existing Trusts
Trustees may now reimburse third parties for payments made to
purchase goods and services for the beneficiary without this
counting as income to the beneficiary.
 Payment of third party travel expenses is limited to purposes
outlined in recent POMS changes. Every other third party travel
expense is considered to violate the sole benefit rule.
 Consequences of having used trust assets for disallowed purpose
when found on review? Probably a transfer for less than value
rather than a countable asset.
 Advise clients and beneficiaries that many rules are under scrutiny at
SSA at this time and changes in existing trust provisions and
patterns of distribution may be necessary as SSA rules evolve.
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If trust includes authority to pay for third party travel for other than medical
treatment or oversight of beneficiary’s well-being, amend trust prior to
redetermination to avoid review and penalty.
General “Travel” without details as a permissible expenditure, e.g. on the
list of examples of trust uses, should not be a problem.
If paying family caregivers, document the need for services over and above
expectations of parental support, such as with physician or care manager
orders/recommendations in a plan of care.
When establishing trust by court order, carefully follow POMS terminology,
have court “order” trust creation, and not have beneficiary petition court.
Share the issues you are encountering with us to bring to the next Advocates
meeting.