Audit of the Catastrophic Illness in Children Relief Fund Overview of Audited Entity

This section describes the makeup and responsibilities of the Catastrophic Illness in Children Relief Fund.

Overview

The Catastrophic Illness in Children Relief Fund (CICRF) was established within the Department of Public Health (DPH) under Section 2ZZ of Chapter 29 of the Massachusetts General Laws. CICRF’s purpose, according to its fiscal year 2019 annual report, is to provide assistance to families for catastrophic medical and health-related expenses that are not covered by insurance, public benefits, or other financial sources. This assistance is provided through reimbursements to families to cover qualified medical expenses they have incurred.

CICRF is managed by DPH’s Bureau of Family Health and Nutrition. Oversight and guidance are provided by an 11-member commission consisting of commissioners from DPH, the Division of Insurance, and the Office of the State Treasurer; the Secretary of Health and Human Services; and 7 commissioners recommended by the Attorney General and the Governor, all of whom are appointed by the Governor. CICRF’s daily operations are managed by a treasurer and director selected by DPH.

CICRF Funding

Section 9 of Chapter 111K of the General Laws requires the Department of Unemployment Assistance (DUA) to provide CICRF with $1 annually for each employed person whose wages are reported quarterly to DUA by employers. For example, in fiscal year 2019, DUA made four transfers to CICRF; total deposits (transfers plus interest) for the year were approximately $3.1 million. DUA provides this money from the quarterly state unemployment tax it collects from employers. During the audit period, CICRF reimbursed 363 families a total of $3,548,763 for medical expenses and related expenses. At the end of fiscal year 2019, CICRF had a balance of more than $5.6 million.

CICRF Reimbursements (by Expense Category) in Fiscal Years 2018 and 2019

Expense Category	Reimbursement
Family Support	$ 1,208,620
Purchase of an Unmodified Vehicle	718,030
Vehicle Modifications	712,847
Purchase of a Previously Modified Vehicle	215,283
Home Modifications (Interior)	190,602
Health Enabling Services/Equipment	136,893
All Other (Includes Funeral Expenses, Medication, Mobility Aids, and Similar Expenses)	366,488
Total	$ 3,548,763

 

Qualified Medical Expenses

Expenses listed in CICRF’s “Expense Policy” are eligible for reimbursement. These expenses include inpatient stays; laboratory expenses; home healthcare; mental health treatment; occupational and physical therapy; prescriptions; over-the-counter medications; nutritional supplements; treatment in, and travel to, out-of-state facilities visited because of their geographic convenience; non-pharmaceutical experimental treatment; alternative medicine and therapies; premiums for MassHealth or state-run healthcare plans for children who do not qualify for MassHealth; ambulances; medical equipment that includes mobility aids such as wheelchairs, walkers, and stair lifts; expenses of hospital trips to visit a child, such as travel, lodging, and meals; vehicle modifications and purchases; home modifications; whole house generators that may be used to prevent power loss and ensure that necessary medical equipment functions as intended; and funeral and burial services.

Medical expenses are not reimbursable if they are covered by health insurance, public benefits, or other financial sources.

Applicant Eligibility

Applicants are required to meet some conditions to qualify for reimbursements from CICRF. The individual for whom reimbursements are requested must be a resident of Massachusetts. The individual must have been under the age of 22 when the medical services for which reimbursement is requested were provided. Finally, according to CICRF’s website,

The family’s out-of-pocket expenses related to their child’s illness, accident, or disability must be more than 10% of the family’s yearly income from all sources up to $100,000, plus 15% of any portion of the family income that is above $100,000, in a given 12-month period.

In rare cases of medical emergencies, CICRF may approve reimbursements before medical expenses are incurred. The commission has the final say on reimbursements from CICRF.

Application Process

Applicants can apply for assistance once per year. They apply to CICRF by completing and then submitting the CICRF Application for Assistance, a paper application that requires information such as family size and income, diagnoses and medical history, insurance information, and expenses claimed. Along with this application, according to CICRF’s “Procedures for Fund Staff,” families must submit the following supporting documentation:

• tax returns, Internal Revenue Service W-2 forms, earning statements, employer letters, and Social Security benefit letters
• documentation supporting inpatient and outpatient services, such as medical bills
• the patient’s applicable medical records
• medical-treatment-related invoices for home modifications, pharmaceutical services, and durable medical equipment
• information on medical insurance coverage, including primary and secondary insurance
• a physician’s letter testifying to the child’s illness
• for vehicles purchased, the certificate of registration, bill of sale, loan documents, invoices, and pictures of modifications to the vehicle, as applicable.

When CICRF employees begin reviewing and processing an application, they initially screen it to determine whether it meets eligibility requirements related to age, residency, annual income, and qualified expenses. CICRF reviews all the information in an application and determines all the applicant’s sources of income and whether the claimed expenses qualify for reimbursement. CICRF works with the family and other agencies as it processes an application to make a final determination of applicant eligibility and amounts eligible for reimbursement. CICRF staff members also work with the family to determine the eligibility period, which can consist of either one or two 12-month periods. Then, using the supporting expense documentation, CICRF staff members determine the application eligibility period, defined by eligibility start and end dates. Staff members work with the family to find the eligibility period that will award the family the greatest reimbursement from CICRF.

CICRF’s director or secretary/treasurer reviews all payment requests for required documentation, accuracy of income and expense calculations, and adherence to CICRF’s policies and procedures. Once an application is complete and CICRF has all required supporting documentation, the application can be approved by either the director or the commission. If a family’s annual income and qualified expenses do not meet CICRF’s eligibility requirements, the family is determined to be ineligible and is notified of the determination by CICRF’s staff. Once an application is approved (the date this happens is called the approval date), the CICRF director or secretary/treasurer and the family sign a memorandum of understanding, and CICRF processes reimbursements through the state’s Massachusetts Management Accounting and Reporting System.

Sliding Fee Scales

Section 5(d) of Chapter 111K of the General Laws grants CICRF the power to determine the amount of reimbursement for qualified medical expenses using a sliding fee scale. The scale is based on a family’s size, income, assets, and incurred medical expenses. The sliding fee scale depends on the type of qualified expense. For example, most qualified medical expenses are reimbursed using a general sliding fee scale. Different sliding fee scales are used for qualified medical expenses for vehicle modifications, vehicle purchases, home modifications, and whole house generator purchases.

With the general sliding fee scale, CICRF first compares a family’s size and annual income to the federal poverty income guidelines to determine whether the family’s annual income is greater than, or less than or equal to, 800% of the federal poverty level (FPL).¹ Next, CICRF considers whether a family’s assets are above or below $1 million. These two factors determine the percentage of qualified medical expenses the family is entitled to receive as reimbursement.

For purchase of a vehicle, there is a cap on the amount a family can be reimbursed depending on the percentage of the FPL that the family makes, although regardless of its FPL percentage, a family cannot be reimbursed more than $45,000 for the purchase of a previously modified vehicle² or $20,000 for the purchase of a new vehicle. For example, a family with an income that is 625% of the FPL could be reimbursed up to $32,500 if it purchased a previously modified vehicle or up to $7,500 for a new vehicle.

A family with an annual income below 800% of the FPL can also be reimbursed for modifying a vehicle it already owns. CICRF reimburses up to $25,000 for the cost of vehicle modification.

A family with an annual income below 800% of the FPL can also be reimbursed for home modifications to make a child’s home more accessible or safe. A family can be reimbursed up to $10,000 for interior home modifications and up to $6,000 for exterior home modifications.

There is a $24,000 lifetime limit on reimbursement for home modifications. There is a $100,000 limit on reimbursement for the child’s lifetime for any combination of vehicle purchases or vehicle or home modifications. However, CICRF can make exceptions to this if the family can demonstrate a need.

A family can be reimbursed up to $10,000 for the purchase of a whole house generator. The amount that can be reimbursed is determined by the FPL percentage of the family’s annual income. For example, a family with 500% of the FPL could be reimbursed 40% of the purchase cost of a whole house generator.

Federal Financial Participation

Section 10 of Chapter 111K of the General Laws requires DPH to maximize and coordinate federal financial participation (FFP) for CICRF for qualified medical expenses. A state can recover funds from the federal government for certain medical expenses under Medicaid and other human service programs as part of FFP. Such medical expenses could be incurred by families with MassHealth coverage and include goods and services like durable medical equipment, prescribed drugs, home healthcare, hospital care, and physician and laboratory services. These items are typically eligible for federal matching funds under the state’s Medicaid program. States are reimbursed based on their federal medical assistance percentage, which is 50% for Massachusetts. Thus, if Massachusetts submitted to the federal government $100,000 for FFP-eligible medical expenses that had been reimbursed to families, Massachusetts would recover $50,000.

1.    According to these guidelines, in 2019, the federal poverty level for a family of four was $25,750, which means 800% of the federal poverty level was $206,000.

2.    A previously modified vehicle is a vehicle that has been made wheelchair accessible for a child or has been changed to accommodate an extraordinary amount of medical equipment for the child that will not fit into an unmodified vehicle.

Date published:	April 20, 2022