Par.1.	Material Transmitted and Purpose – Transmitted with this Manual Letter are changes to Service Chapter 510-05, Medicaid Eligibility Factors.  This manual letter supercedes IM 4947.

05-25-05.  Application and Redetermination

Language was added to subsection 1 to clarify when an application is required, and to allow a redetermination form to be used to re-apply for Medicaid if received within one month of when an individual’s case closed.  Language was added to subsection 2 to clarify when a redetermination is required.
1.	Application.
c.	An application is a request for assistance on SFN 405, "Application for Medicaid, Temporary Assistance for Needy Families (TANF), Food Stamps, and Child Care Assistance"; SFN 502, "Application for HealthCare Coverage for Children, Families, and Pregnant Women"; SFN 641, "Title IV-E/Title XIX Application-Foster Care"; SFN 854, "Adoption Subsidy Application"; or the Department’s system generated "Statement of Facts.;" or if within one calendar month of when an applicant’s Medicaid case was closed, one of the prescribed redetermination forms (see subsection 2(b)).  Applications provided by disproportionate share hospitals or federally qualified health centers are SFN 405 with "HOSPITAL" stamped on the front page.
f.	An application is required to initially apply for Medicaid, to re-apply after a Medicaid application was denied, to re-apply after a Medicaid case has closed, or to open a new Medicaid case for a child who has been adopted through the state subsidized adoption program.
f.g.	A recipient may choose to have a face-to-face or telephone interview when applying for Medicaid; however, none are required in order to apply for assistance.
g.h.	Information concerning eligibility requirements, available services, and the rights and responsibilities of applicants and recipients must be furnished to all who require it.
2.	Redetermination.
c.	A redetermination must also be completed within thirty days after a county agency has received information indicating a possible change in eligibility status, or when eligibility is lost under a category (e.g. Transitional Medicaid Benefits), or when adding an individual to an existing Medicaid case. When the county agency has all information needed to redetermine eligibility based on a change in circumstances, a redetermination form does not have to be completed. When additional information is needed one of the forms identified in b. must be used.

d.	A redetermination, using one of the forms identified in b, is required to open a new Medicaid case for recipients (other than children who are adopted through the state subsidized adoption program which requires an application) who move from an existing case to their own case (e.g. an 18 year old caretaker moves to her own case; a disabled child turns age 18; or a child goes into foster care).

d.e.	A recipient may choose to have a face-to-face or telephone interview for their redetermination; however, none are required in order to complete a redetermination.

05-25-25.  Decision and Notice 
 
Language was added to paragraph vi of subsection 4(c) for clarification.  A ten-day advance notice is not needed whenever an individual’s physician changes the individual’s level of care.  It is not just limited to when an individual enters or leaves a specialized facility, nursing facility, or begins receiving HCBS as previously indicated.

vi.	The recipient has a change in the level of medical care prescribed by the individual’s physician, such as the recipient begins or ceases to receive care in a specialized facility, an institution for mental diseases (IMD), or nursing care services in a facility (LTC) or in the community (HCBS).

05-25-30.  Appeals 
 
Language was changed in subsection 5 to reflect a policy change.  Beginning October 1, 2004, disability reversals by SSA or SSI will automatically reverse a Medicaid disability based denial or termination if the person notifies the county within six months.  The previous policy only allowed 30 days.  

5.	All SSI or SSA denials or terminations based on disability which are reversed on appeal will automatically reverse the Medicaid disability based denial or termination if the person notifies the county agency within 30 days six months of the date of the notice informing the person that they won the SSI or SSA appeal.

05-35-80.  Social Security Numbers

Language was added to subsection 1, and a new subsection 5 was added, to clarify that when NUMIDENT reports a number as not valid, a recipient must provide a valid number in order to continue eligible for Medicaid.  Social Security numbers, or proof of application for one, are required in Medicaid with few exceptions. 

1.	A valid social security number (SSN), or verification of application for SSN, must be furnished as a condition of eligibility, for each individual for whom Medicaid benefits are sought except a newborn child for the first sixty days, beginning on the date of birth and for the remaining days of the month in which the sixtieth day falls, and an illegal alien seeking emergency services. (see 05-35-70 for a description of emergency services.)

5.	Social security numbers are electronically verified through the NUMIDENT system (see 449-15-15-05) for all recipients.  When a number is reported as not valid, the recipient must provide their valid SSN in order to continue eligible for Medicaid.

05-35-110.   Sixty Days Free Medicaid for Pregnant Women and Newborns

Language was changed in the last paragraph of subsection 1 for clarification.

This provision is not only available to women who are eligible for Medicaid under any other Medicaid category other than one of the pregnant women category, or coverages in the family category, but is not available to women who are aliens covered by Medicaid for emergency services.

05-57-10.  Individuals Covered (Workers with Disabilities)

Language was added to subsection 5 to address the disposition of the $100 enrollment fee in situations where coverage is initially approved prospectively, but then the individual’s coverage changes before it actually begins.

5.	The $100 enrollment fee must be collected prior to authorizing coverage under this provision.  If coverage is denied, the applicant is not responsible for the fee, and any fee collected for the application must be returned to the applicant.  If coverage is initially approved for a future month, but coverage doesn’t begin because the Medicaid case closes or coverage is changed to a different Medicaid coverage, the applicant is not responsible for the fee, and any fee collected must be returned to the applicant.  Enrollment fees for eligible recipients must be submitted to the departments Fiscal Administration unit using the Medicaid credit form, SFN 828. 

05-57-15.   Gainful Employment

A new paragraph was added to the end of subsection 1 to clarify that work activities of individuals who receive employment related Extended Services from Licensed Extended Service Providers meet the gainful employment criteria.  This addition incorporates policy from FYI 04-022.

The work activities of applicants and recipients who receive employment related Extended Services from Licensed Extended Service Providers meet the gainful employment criteria.  Receipt of Extended Services indicates that the individual is not in an evaluative or experiential activity, but is participating in supported employment on a long-term basis.  Receipt of the Extended Services can be identified in the provider’s Individual Service Plan for the applicant or recipient.

05-60-25.   Assets Which are Excluded for the Medicare Savings Programs

A policy change was made to subsection 3(c) to exclude lump sum Title II and SSI payments for nine months.  Previous policy excluded the payments for six months.  This change is due to a change in federal law.

3.	The following additional assets are excluded:

c.	Lump sum payments of Title II or SSI benefits are excluded for six nine consecutive months following the month of receipt.

05-65-25.   Assets Which are Excluded for Spousal Impoverishment

A policy change was made to subsection 3(c) to exclude lump sum Title II and SSI payments for nine months.  Previous policy excluded the payments for six months.  This change is due to a change in federal law.

3.	The following additional assets are excluded:

c.	Lump sum payments of Title II or SSI benefits are excluded for six nine consecutive months following the month of receipt.

05-70-10.   Asset Considerations

A new subsection 5 was added to identify when assets from an inheritance are considered available.  This information was moved from the Excluded Assets section, 05-70-30 (16), because it is more of an availability issue than an asset exclusion.

5.	Assets received from the estate of a spouse, or a parent who was providing support, are available as of the date of the person’s death. Assets received from any other estate are available at the earlier of:

a.	The day on which the assets are received from the estate; or

b.	Six months after the person’s death.

05-70-30.   Excluded Assets

Changes were made to five subsections as follows:

Policy relating to burial funds held by a third party was deleted from subsection 3 (b).  This is policy that was put on hold until further notice by IM 4947.  Since the policy will likely remain on hold for at least nine more months, it is appropriate to remove it from the manual.  This change supercedes IM 4947.  

3.	Any prepayments or deposits, regardless of ownership, which total $3000 or less, which are designated by an applicant or recipient for their burial. An applicant or recipient designates a prepayment or deposit for his or her burial by providing funds that are used for that purpose.

Earnings accrued on the total amount of the designated burial fund are excluded.

A burial plot for each family member (eligible or ineligible) will also be excluded. (Effective July 1, 1996.)

a.	The value of an irrevocable burial arrangement must be considered towards the burial exclusion.

b.	Any funds, insurance, or other property given to another person or entity in contemplation that its value will be used to meet the burial needs of the applicant or recipient must be considered towards the burial exclusion.  This includes any funds set aside in a separate account or used to purchase insurance or any other burial product.  Any amount in excess of the $3000 burial exclusion is a countable asset if the fund, insurance, or other property has a cash value, fair market value, or surrender value.

Example:   An individual with no burial plan living in a nursing facility gives his daughter $3945 per month for five months, and asks that the money be used for his funeral.  His daughter purchases a $20,000 single premium life insurance policy that designates a funeral home as beneficiary, to the extent necessary to pay for the individual's funeral and burial expenses, with the individual's children named as contingent beneficiaries. The individual applies for Medicaid in the fifth month. The insurance policy has a surrender value of $17,500 in the month of application.  The policy is designated for the individual's burial. $3000 of the value of the policy is excluded. The remaining $14,500 of the value of the policy is an asset held in trust, and is available to the extent provided in 05-70-50 (Trusts). To the extent that the $19,725 paid to the daughter is neither excluded nor available under 05-70-50, a disqualifying transfer has occurred.  

c. b.	When a whole life insurance policy or an annuity are designated for burial, the prepayments on the life insurance policy or annuity are the premiums that have been paid. They are identified as the "cost basis." Premium payments made by insurance dividends or a disability insurance plans do not increase the cost basis.
 
A wording change was made to subsection 7 to identify when the nine-month exclusion period begins.  This policy change is due to a change in federal law.

7.	For nine months beginning with after the month of receipt, unspent assistance received from a fund established by a state to aid victims of crime, to the extent that the applicant or recipient demonstrates that such amount was paid in compensation for expenses incurred or losses suffered as a result of a crime. This asset must be identifiable and not commingled with other assets.

Language was changed in subsection 10 to allow financial aid to be excluded for nine months, and to allow fellowships and gifts used to pay tuition and fees at educational institutions to be excluded for nine months.  This policy change is due to a change in federal law.

10.	For nine months beginning after the month of receipt, any educational, scholarship, grant, or award; and any fellowship or gift (or portion of a gift) used to pay the cost of tuition and fees at any educational institution.  Unspent financial assistance provided for attendance costs to graduate and undergraduate students under programs in title IV of the Higher Education Act or for attendance costs under Bureau of Indian Affairs student assistance programs are excluded for the period of time they are intended to cover. This asset must be identifiable and not commingled with other assets.

Language was changed in subsection 11 to exclude income tax refunds and earned income tax credits for nine months after receipt.  This policy change is due to a change in federal law.

11.	For the month following nine months beginning after the month of receipt, any income tax refund, any earned income tax credit refund or any advance payments of earned income tax credit.

Subsection 16 was deleted as this language was moved to asset considerations, 05-70-10 (5).  Access to inheritances is an availability issue instead of an asset exclusion.

16.	Inheritances, other than from a spouse or from a parent who was providing support, until the earlier of:

a.	The first day of the month after the month in which the inheritance is received; or

b.	The first day of the month beginning at least six months after the person’s death.

05-70-45.  Annuities

Language was changed in subsection 8 to clarify that the irrevocable annuitization of any annuity, other than an annuity described in subsection 9, could be considered a transfer.

8.	A determination shall be made whether the irrevocable annuitization of an annuity constitutes a disqualifying transfer upon application for Medicaid for coverage of nursing care services, and upon any subsequent irrevocable annuitization, of an annuity.  Except as provided in subsection 9, the irrevocable annuitization of a countable an annuity constitutes a transfer with an uncompensated value equal to the proceeds that would have been available from the surrender of the annuity immediately before annuitization if the annuity was not immediately annuitized, or the purchase price if the annuity was immediately annuitized, reduced by the total of:

05-80-10.  Disqualifying transfer Provisions

New subsections 4 and 5 were added to clarify policy relating to the look-back date.  Subsection 4 identifies that look-back dates do not change once established, and subsection 5, which includes new policy based on federal regulations, identifies that look-back dates are by individual.  Previous subsections 4 and 5 were renumbered as 6 and 7.

4.	Once a look-back date is established for an individual, it will always be the look-back date for that individual.  

Example:  Mr. Green entered LTC and applied for Medicaid in January 2000.  Since he is both receiving nursing care and has applied for Medicaid, his look-back date is established as January 1997.  Mr. Green left LTC in March 2001, closed his Medicaid case, and made a large transfer.  In May 2004 he enters LTC again and reapplies for Medicaid.  The March 2001 transfer (38 months ago) was made on or after the look-back date (January 1997), so is considered.

5.	Each individual establishes their own look-back date.

Example:  Mr. and Mrs. Brown make a large disqualifying transfer that causes 70 months of ineligibility.  At the same time Mr. Brown then enters LTC and applies for Medicaid.  He is ineligible because the disqualifying transfer was made on or after his look-back date.  Mrs. Brown enters LTC 48 months later.  The disqualifying transfer was made prior to her look-back date (36 months).  Mrs. Brown can be eligible for Medicaid coverage of her LTC costs while Mr. Brown is still ineligible.

05-80-15.  Penalty Periods

Changes were made to two subsections as follows:

Language was added to subsection 1 to clarify that the average cost of care used to establish a penalty period is based on the cost of care at the time of the individual’s first application.  

1.	The number of months and days of ineligibility for an individual shall be equal to the total uncompensated value of all income and assets transferred by the individual, or individual's spouse, on or after the look-back date, divided by the average monthly cost, or daily cost as appropriate, of nursing facility care in North Dakota at the time of the individual’s first application.

The following example demonstrates how the monthly and daily period of ineligibility is calculated:
 
Example:  On December 10, 2002, Mr. Brown made a disqualifying transfer of $70,000.  He applied for Medicaid on July 18, 2003.  The average cost of nursing facility care at the time of application is $3945 per month and $129.71 per day.  $70,000 divided by $3945 is 17.74 months.  Seventeen months at $3945 per month is $67,065, leaving $2935 to which the daily rate is applied.  $2935 divided by $129.71 is 22.63 days.  Mr. Brown's penalty period is 17 months and 23 days (partial days are rounded up).

Since the average cost of care used is the amount from when an individual first applies for Medicaid, if Mr. Brown had previously applied for Medicaid in July 2001 (regardless of the action taken on that application) the average cost of care used to calculate the penalty period would be $3652 per month and $120.08 per day.  Mr. Brown’s penalty period would have been 19 months and 6 days.

Language and examples were added to subsection 3 to clarify that the period of ineligibility of an individual is only apportioned between two spouses if the disqualifying transfer applies to both spouses.  This policy change recognizes that each individual has their own look-back date.

3.	If a transfer results in a period of ineligibility for an individual receiving nursing care services, and the individual’s spouse begins receiving nursing care services and is otherwise eligible for Medicaid, the period of ineligibility shall be apportioned equally between the spouses if the transfer was made on or after the individual’s spouse’s look-back date. Any months remaining in the period of ineligibility must be assigned or reassigned to the spouse who continues to receive the nursing care services if one spouse dies or stops receiving nursing care services.

Example:  Mr. and Mrs. White make a disqualifying transfer in January 2004.  Mrs. White enters LTC in February 2004 and is informed that the transfer in January will cause her to be ineligible for Medicaid coverage of her nursing care services until June 30, 2006.  On March 1, 2005, Mr. White also enters LTC and is otherwise eligible for Medicaid.  There are still 16 months of the penalty period remaining, which is divided between them.  They will both be ineligible for eight months, or through October 2005. 

If Mr. White left LTC on June 20, 2005, his remaining four months and ten days from his ineligibility period must be given back to Mrs. White, extending her period of ineligibility through February 10, 2006.

Example:  Mr. and Mrs. Brown make a large disqualifying transfer that causes 70 months of ineligibility.  At the same time Mr. Brown enters LTC, applies for Medicaid, and is ineligible because the disqualifying transfer was made on or after his look-back date.  Mrs. Brown enters LTC 48 months later and applies for Medicaid.  The disqualifying transfer was made prior to her look-back date (36 months) so none of Mr. Brown’s remaining 22 months of penalty period is assigned to Mrs. Brown.

05-85-15.  Unearned Income

Subsection 3, relating to interest and dividend income, was deleted and moved to 05-85-25, Post Eligibility Treatment of Income, and 05-85-30, Disregarded Income.  The remaining subsections were renumbered.

3.	Interest and dividend income earned on a liquid asset that is paid directly to the applicant or recipient is income in the month received. Interest accrued is an asset.

05-85-25.  Post Eligibility Treatment of Income

Interest and dividend income from assets has been added as an income exclusion when establishing eligibility for individuals receiving nursing care.  This is a policy change because it no longer matters whether the income accrues to the account or is paid out.  This change is due to a federal policy change.

1.	The following types of income may be disregarded in determining Medicaid eligibility:

h.	Interest or dividend income from assets.

05-85-30.   Disregarded Income

One new subsection was added and changes were made to two subsections as follows:

A new subsection 27 was added to disregard fellowships and gifts used to pay tuition and fees at educational institutions.  This policy change is due to a change in federal law.

27.	Any fellowship or gift (or portion of a gift) used to pay the cost of tuition and fees at any educational institution;

The word “Act” was deleted from subsection 35 for clarification so the provision more clearly allows any (state or federal) crime victims payments to be excluded. 

35.	Crime Victims Reparation Act payments;

Subsection 42 was added to disregard Interest and dividend income from assets when considering income.  This is a policy change because it no longer matters whether the income accrues to the account or is paid out.  This change is due to a federal policy change.

42.	Interest or dividend income from assets.

05-85-35.   Income Deductions

Changes were made to two subsections as follows: 

Language was added to subsection 1 for clarification.  

1.	Except in determining eligibility for the Medicare Savings Programs, the cost of premiums for health insurance may be deducted from income in the month the premium is paid or prorated and deducted from income in the months for which the premium affords coverage. The Workers with Disabilities coverage enrollment fee and premium is an allowed deduction except when determining eligibility for the Workers with Disabilities coverage. For purposes of this deduction, premiums for health insurance include payments made for insurance, health care plans, or nonprofit health service plan contracts, which provide benefits for hospital, surgical, and medical care, but do not include payments made for coverage which is:

a.	Limited to disability or income protection coverage;

b.	Automobile medical payment coverage;

c.	Supplemental to automobile liability insurance;

d.	Designed solely to provide payments on a per diem basis, daily indemnity, or nonexpense-incurred basis; or

e.	Credit accident and health insurance.

(If questionable, contact the Third Party Liability unit for assistance in determining whether a policy fits into one of the above categories.)

Language was added to subsection 8 for clarification.  

8.	Reasonable child care expenses, not otherwise reimbursed, that the Medicaid unit is responsible to pay, may be deducted if necessary to engage in employment or training. The child must be a member of the Medicaid unit for the deduction to be allowed.

05-90-23.  Budgeting Procedures for Financially Responsible Absent Parents

Two typographical errors were corrected.  

05-100-100.  Budgeting Workbook 
 
Workers with Disabilities budget examples were added.

Par. 2.  Effective Date – October 2004