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Division Cirulars 3B and 34 were temporarily rescinded on November 6, 2009. 


[Posted - 10/7/2009 / Updated - 11/2/09]



Q&A for Residential Providers about DDD’s
 Division Circular 3B:

  1. Interest Bearing Accounts
  2. Lump Sum Withdrawal
  3. Provision of Basic Personal Hygiene Items
  4. Excess funds I
  5. Excess Funds II ($800 Threshold vs. $2000 SSI Threshold)
  6. Excess Funds III (Cost of Care Debt)
  7. Statement for Excess Funds
  8. Public Comment on DC 3B
  9. Provider is “Rep Payee” but not part of Payee Conversion Program
  10. Additional Resources

  1. Interest Bearing Accounts
    Section VI. B. states that “Any funds that DDD disburses to providers for an individual’s use must be maintained in an interest bearing account that clearly details all receipts, payments and account balances for each individual separately.” However, many community banks not only do not pay interest on accounts with low balances, but they also may charge fees when the balance falls below a certain amount.  Given that reality, how can providers comply with this requirement?

    Ans:
    DDD may allow providers to maintain a single agency account with sub-accounts for individuals. However, this only will be acceptable if the agency is able to document all the transactions, interest allocations and receipts that occur within that account for each individual.

     
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  2. Lump Sum Withdrawal
    Our agency routinely withdraws a lump sum of money from an individual’s account and uses it to make many small transactions that are covered by the PNA report. Is this acceptable?


    Ans:
      
    This is only acceptable if the agency is able to document the movement of these funds from the account and show receipts for each separate cash transaction that is made using those funds. In addition, the agency should only withdraw funds from an interest bearing account in anticipation of specific purchases to be made in the very near future. It is not acceptable to withdraw a lump sum of money for use as a petty cash fund to cover purchases on an ad hoc basis.


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  3. Provision of Basic Personal Hygiene Items
    Section VI. D2 states that acceptable PNA expenditures include “health and hygiene items such as personal soaps, toilet articles, cosmetics, combs and brushes . . . “ DDD staff has always told us that we must provide shampoo and soap. Has this requirement changed?


    Ans:
    No. Agencies are still required to provide basic personal hygiene items, including soap and shampoo, as per Regulation 10:44A-6.14.  Individuals are allowed to use their PNA to purchase additional personal hygiene items, such as a different brand of soap or shampoo. 

     
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  4. Excess funds I
    The Circular states that providers are required to return any individual’s funds in excess of $800 to the Division. When is a provider required to return these funds?


    Ans:
    Providers should return any individual’s funds in excess of $800 to DDD on a monthly basis. They are due on the 25th of each month.


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  5. Excess Funds II ($800 Threshold vs. $2000 SSI Threshold)
    Section VI. A. states that if an individual should accumulate funds in excess of $800, “the extra funds must be returned to DDD to be applied against the individual’s cost of care debt and to maintain benefit eligibility.”  However, in order to retain eligibility for SSI and Medicaid benefits, individuals are allowed to have total combined resources up to $2,000. Why is DDD requiring agencies to return everything above $800?


    Ans:
     The $800 threshold is not new; DDD first notified providers of this requirement in a 
    letter from Assistant Commissioner Kenneth W. Ritchey dated September 26, 2007.  The requirement reflects DDD’s continuing concern about the number of individuals who could lose eligibility for SSI and the Medicaid Community Care Waiver (CCW) simply because they have multiple accounts that, if not managed properly, can have a total balance that exceeds $2,000.  The ramifications for individuals who lose eligibility can be very serious, to include the loss of medical and dental benefits and support services. This is preventable, and DDD and provider agencies all are responsible for making sure it does not happen.

    In addition, the federal government will not contribute to the cost of providing services to individuals who lose eligibility for the CCW. The Division must then use state funds to cover the entire cost of those services, which in turn limits its ability to serve other individuals. This is never a good outcome, but the implications are even more severe now because of the current difficult economic climate.    

    DDD believes $800 provides both 1) a cushion large enough to protect waiver and SSI eligible individuals from losing their benefits and 2) adequate personal spending money for an individual, given that food and shelter are provided through the DDD-funded living arrangement.  The $800 threshold also assures DDD and provider rep payees that they will be able to meet their fiduciary obligation for insuring that an individual will not have more than $2,000 in assets available to them on the first moment of the first day of any given month.

     
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  6. Excess Funds III (Cost of Care Debt)
    How are the excess funds (See Section VI.A.) being applied for the individual’s cost of care debt, and is each individual’s cost of care debt being maintained or tracked, or are the excess funds simply being deposited into the Division’s operational account?

     

    Ans:  DDD tracks individual financial records through its consumer banking system, which is maintained separately from the Division’s operational accounts. As DDD receives an individual’s excess funds, the payment is deposited, recorded and credited against his or her outstanding debt. These payments ultimately offset the lien DDD has placed against the individual.
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  7. Statement for Excess Funds
    Will the individual be given a statement showing where their excess funds are being applied?

     

    Ans: No. All individuals should assume that their funds will be applied against their cost of care debt. The cost of each individual’s care is now $349 per day, or more than $10,000 per month. At this rate, it is reasonable to assume that an individual’s accumulated debt always will exceed any amount collected by the Division.
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  8. Public Comment on DC 3B
    Were there any opportunities for public comment or were hearings held before the passage of Circular 3B? If so, when and what notice was given to those individuals and/or the Providers?

     

    Ans: Division Circular 3B was developed after DDD was informed (following two audits) by the Social Security Administration (SSA) that the Division has a fiduciary responsibility to ensure that individuals’ funds are collected, spent and maintained within SSA’s guidelines, regardless of whether the Division or an agency is the representative payee.

    We felt the emergent nature of this communication from SSA required our immediate action.

    Even so, the requirements contained in Division Circular 3B are not new and providers should be familiar with them. Indeed, New Jersey’s licensing Standards for Community Residences for Individuals with Developmental Disabilities clearly states: “The licensee to whom the individual entrusts his or her funds shall assure that the management of such funds does not jeopardize the individual’s entitlements to any appropriate Federal or private benefit.” [See N.J.A.C. 10:44A-2.10 (i)]

    In addition, DDD notified providers more than two years ago about other requirements now found in Division Circular 3B. This includes the restriction on retaining more than $800 for any individual in their care and the requirement that excess monies must be returned to DDD.

    DDD believes the fact that some agencies have not complied with these requirements, even as individuals in their care have continued to lose eligibility because their account balances were allowed to exceed $2,000, only underscores the urgent need for Division Circular 3B.

    DDD’s Administrative Practices Office is pulling together a workgroup that will expand on Division Circular 3B. We expect the workgroup to be convened shortly.
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  9. Provider is “Rep Payee” but not part of Payee Conversion Program
    I am a provider who is a rep payee but not part of the payee conversion program. Must I still comply with Division Circular 3B?

     

    Ans: Yes.
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  10. Additional Resources
    Representative Payee Program  -
    http://www.socialsecurity.gov/payee

    Best Practices for Maintaining an Effective Representative Payee Accounting System   - http://www.ssa.gov/payee/best.htm 


    Payee Publications  - http://www.ssa.gov/payee/newpubs.htm 
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