Par. 1.	Material Transmitted and Purpose – Transmitted with this Manual Letter are changes to Service Chapter 510-05 Medicaid Eligibility Factors.  New language is in red and underlined and old language has been struck through.
Language was changed throughout the manual changing the term “ICF/MR” to “ICF/ID” to comply with legislative requirements; to remove the word “State” from “State Children’s Health Insurance Program per federal requirements.  This manual letter supersedes IM#5121 ‘Electronic Correspondence’, IM #5123 ‘Increase in Income Level for each ineligible family member in Spousal Impoverishment Cases’, and IM #5125 “Property Tax and Rental Income LTC”.

The only change in this AMENDED Manual Letter was to REMOVE changes made to Section 510-05-35-30, Certification of Need for Children in a Psychiatric Residential Treatment Facility (PRTF) or an Institution for mental Diseases (IMD).

Definitions 510-05-05
The definitions of ‘spouse’ and ‘student’ are added for clarification purposes.

Spouse
A person of the opposite sex who is a husband or a wife.  One man and one woman can become husband and wife through marriage (a legal union).  ND Medicaid does not consider members of a civil union or same-sex marriage as spouses.

1.	A Common law marriage from another state is valid in North Dakota only if it can be verified that the marriage is recognized by the other state.
2.	A non-traditional marriage from another country is valid in North Dakota only if it can be verified that the union is declared valid by the other country.
3.	In polygamy situations, the first marriage is the valid marriage in North Dakota.  Any additional spouses are considered non-relatives.

Student
An individual who regularly attends and makes satisfactory progress in elementary or secondary school, General Equivalency Diploma (GED) classes, a home-school program recognized or supervised by the student’s state or local school district, college, university, or vocational training, including summer vacation periods if the individual intends to return to school in the fall. A full-time student is a person who attends school on a schedule equal to a full curriculum.

Improper Payments and Suspected Recipient Fraud 
510-05-10-25
The word “Recipient” is removed from the title of this section. 
Liens and Recoveries 510-05-10-30
Language was added to subsection 2 to include the change in policy that estate recovery is made on individuals who have been permanently institutionalized regardless of their age.

2.	A recovery of Medicaid correctly paid will be made from the estate of an individual who was 55 years of age or older when the recipient received such assistance or who had been permanently institutionalized regardless of age. Recovery is pursued only after the death of the recipient's spouse, if any, and only at a time when the recipient has no surviving child who is under age 21, or who is age 21 or older and who is blind or permanently and totally disabled as defined by the Social Security Administration. The recovery of Medicaid paid for individuals under age 65 is only for assistance paid on or after October 1, 1993. Medicaid benefits incorrectly paid because of a recipient error can be recovered regardless of the individual’s age at the time the assistance was received. Overpayments due to recipient errors that are still outstanding are subject to recovery upon the individual’s death without regard to whether or not there is a surviving spouse.  

Permanently institutionalized individuals are persons who, before reaching age 55, began residing in a nursing facility, the state hospital, the Anne Carlsen facility, the Prairie at St. John's center, the Stadter Psychiatric Center, a Psychiatric Residential Treatment Facility (PRTF), an intermediate care facility for the intellectually disabled (ICF-ID), or receiving swing bed care in hospitals, resided there continuously for at least six months and did not subsequently reside in any other living arrangement for at least 30 consecutive days, and have received written notice that they are consider to be permanently institutionalized. Permanently institutionalized individuals have a right to appeal their permanently institutionalized status.

Home and Community Based Services (HCBS) 510-05-15-05
Subsections 2 and 3 have been deleted, as the waivers for Self-Directed Supports ended 03-31-11.  The remainder of this section has been renumbered.  

The Medicaid program provides home and community based services (HCBS) to eligible individuals who have been screened as requiring nursing care services but who choose to receive those services in the community. Eligibility for individuals with an ineligible community spouse may be determined using the Spousal Impoverishment Provision found at 05-65. Services may be provided through one of the following waivers:
1.	Waiver for Developmentally Disabled:  Services are provided to individuals who meet the developmental disability criteria and who are screened intermediate care-mentally retarded. These individuals generally meet the disability criteria of the Social Security Administration, however, the few who do not may still be eligible for these wavered services. (Began in 1981.)
2.	Waiver for Self Directed Supports for Families: Allows families or individuals, where at least one individual, age 3 to age 21, meets the developmental disability criteria and requires long-term supports and services, to direct their own care and financial resources so the individual may remain in the home. (Began July 1, 2006.)
3.	Waiver for Self Directed Supports for Adults:  Allows individuals, age 21 or over, who meet the developmental disability criteria and require long-term supports and services, to direct their own care and financial resources so the individual may remain in their own home. (Began July 1, 2006.)
5.	Money Follows the Person Grant: This Grant program assists recipients who are residing in a nursing facility or an ICF/MRID who want to transition from an institutional care setting to a HCBS setting. Recipients must have been residing in the institutional setting for a period of 3 consecutive months or more, be screened as requiring care in a nursing facility or ICF/ID, and be Medicaid eligible for at least 30 days immediately prior to transition. (Began June 20, 2008.) 

Application and Redetermination 510-05-25-05
Language is added to the last paragraph of subsection 2(b) to clarify that, in those instances where the eligibility worker has all the information to process a redetermination other than the form, an online narrative is mandated.

2.	Redetermination.
b.	A redetermination must be completed at least annually using the Department's:
i.	System generated "Monthly Report";
ii.	System generated "Redetermination of Eligibility;"
iii.	SFN 407, "Redetermination for Healthcare Coverage";
iv.	SFN 642, "Title IV-E/Title XIX Redetermination-Foster Care" for children in Foster Care, or other confirmation from  a state IV-E agency (in state or out of state) that verifies continued IV-E foster care eligibility;
v.	SFN 856, "Adoption Subsidy Agreement - Annual Review" for subsidized adoption, or other confirmation from  a state IV-E agency (in state or out of state) that verifies continued IV-E subsidized adoption  eligibility; or
vi.	One of the previously identified applications completed to apply for another program.
Ex Parte Redeterminations:  In circumstances where a desk review is appropriate, such as when adding a child, moving to Transitional Medicaid Benefits, processing a change in the level of care, aligning redetermination dates with Healthy Steps, SNAP, or TANF, or adding Medicare Savings Programs coverage; and in which the county agency has all information needed to complete a redetermination, eligibility may be established without a redetermination form. In unique circumstances, when the county agency has all information needed to complete a redetermination, and circumstances prevent a recipient or their representative from timely returning the redetermination form, continued eligibility may be established without a completed form. In circumstances in which information needed to complete a redetermination is available through Healthy Steps, SNAP or TANF, that information should be used to redetermine eligibility without again requiring that information from the individual or family. If all needed information is available, a redetermination can be completed without requiring a redetermination form. Care must be used to ensure all needed information is on hand.  An online narrative must document the completion of the Ex Parte Redetermination.

Decision and Notice 510-05-25-25
References were added to subsection 4, and a new subsection 5 was created, to clarify that notices are considered mailed on the next working day after they are approved in the eligibility system.  The remaining subsections were re-numbered. Language is added under subsection (4)(c)(i) to clarify that information received from an applicant or recipients known email address is considered a signed report.  This supersedes IM 5121.  
4.	As specified below, a notice must be sent in all ongoing cases in which a proposed action adversely affects Medicaid eligibility.
a.	A notice must be mailed (as described in subsection 5) at least ten days in advance of any action to terminate or reduce benefits. The date of action is the date the change becomes effective.
This "Ten-Day Advance Notice" must include the reason(s) for the intended action, the specific administrative code or manual reference supporting the action, the right to a fair hearing, and the circumstances under which assistance is continued if a hearing is requested. This gives the recipient an opportunity to discuss the situation with the county agency, obtain further explanation or clarification of the proposed action, or present facts to show that the planned action is incorrect. The recipient may appear on his own behalf or be represented by legal counsel, a relative, a friend, or any other spokesperson of their choice.
b.	A "Ten-Day Advance Notice" is not required when information exists confirming the death of a recipient.
c.	Under the following circumstances a "Ten-Day Advance Notice" is not required; however, a notice containing the reason(s) for the intended action, the specific administrative code or manual reference supporting the action, the right to a fair hearing, and the circumstances under which assistance is continued if a hearing is requested, must be mailed (as described in subsection 5) no later than the effective date of action (this may mean creating and sending the notice 1 to 5 days prior to the date of action):
i.	The recipient provides a signed, clearly written statement providing information that requires a termination or reduction in benefits, and the recipient indicates that he or she understands that benefits will be reduced or terminated (changes reported on the change report form, the TANF monthly report, and the redetermination form, or via an applicant’s or recipient’s known email address meet this requirement);
ii.	The recipient provides a signed statement requesting termination of assistance (an oral request will also suffice if recorded in the casefile narrative and reflected on the adequate notice to terminate assistance. Termination may be effective as of the current date or a date in the future).  Information reported via an applicant’s or recipient’s known email address is considered a signed statement for Medicaid;
iii.	The recipient has been admitted to an institution where he or she is ineligible for further services;
iv.	The recipient's whereabouts are unknown and mail directed to the client is returned by the post office indicating no known forwarding address;
v.	There is factual information that responsibility for providing assistance has been accepted by another state or jurisdiction; or
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), a Psychiatric Residential Treatment Facility (PRTF), or nursing care services in a facility (LTC) or in the community (HCBS).
d.	A "Ten-Day Advance Notice" is not required when probable fraud exists.
When the county agency obtains facts through objective collateral sources indicating the likely existence of fraud, an advance notice of proposed termination or reduction of benefits must be mailed only five days in advance of the date the action is to be taken. This shorter period allows for more prompt corrective action when probable fraud situations are uncovered.
5.	System generated notices are dated and mailed on the next working day after they are approved in the eligibility system.  Consideration must be given to weekends and holidays (i.e. a notice approved on a Friday is dated and mailed the following Monday, however, if Monday is a holiday, the notice is dated and mailed on Tuesday.  This may mean approving the notice 1 to 5 days prior to the effective date of action).

Screening for Nursing Care, ICF-MRID or HCBS Recipients 510-05-35-25
Changed the term “ICF/MR” to “ICF/ID” to comply with legislative requirements.

Age and Identity 510-05-35-40
Subsection 5 is being renumbered as there are 2 subsections marked as “e”.

Social Security Numbers 510-05-35-80
Language was deleted from subsection 4 to include the change in the requirement from informing the household annually to informing them at the time of application how their SSN will be used by the agency.

4.	The Medicaid household must be informed, at the time of application and yearly thereafter, that the agency will use the SSN in the administration of the Medicaid Program. The SSN will be used to verify income and asset information from the Social Security Administration, Internal Revenue Service, Job Service, Unemployment Compensation, SNAP, TANF Program, Child Support Enforcement, State Motor Vehicle, Department of Vital Statistics and other states.
The informing requirement is met by the appropriate language found on the Application for Assistance. and the Redetermination of Eligibility.

Blindness and Disability 510-05-35-100
The fourth paragraph under subsection 3 has been reworded to clarify that, if the medical request date is prior to the SSI eligibility, a medical social review must be completed for the months prior to the SSI eligibility month.  
Subsection “i” has been added under subsection 4 to clarify that a medical social review must be completed if an individual was found disabled by the Veteran’s Administration or by the Railroad Retirement Board and the Social Security Administration has not or will not make a determination.

3.	SSA and SSI final determinations of blindness and disability are binding (42 CFR 435.541) and serve as evidence of the presence or absence of statutory blindness or of disability. An exception to this provision is if the individual has applied for Workers with Disabilities coverage and Social Security's decision established that the individual is not disabled due to substantial gainful activity. In these situations, the State Review Team may make an independent decision.
Presumptive determinations of blindness and disability are not final determinations for Medicaid purposes.  Eligibility for Medicaid cannot be determined until a final determination is made. If a final determination will not be made by the Social Security Administration within 90 days after the date of application for Medicaid, the State Review Team will make a determination.
In Title II benefit approvals, the evidence from the Social Security Administration contains the onset of disability for benefits. The onset of disability month for Title II benefits would be the earliest medical approval month provided all other eligibility factors are met.
In SSI approvals, disability determinations are not made prior to the month of SSI application. If the medical approval request date is prior to the eligibility month for SSI, medical and social information must be submitted to the State Review Team for a disability determination for the period prior to the SSI approval month.
4.	The county agency will need to obtain and submit medical and social information to the State Review Team for their evaluation if:
g.	The applicant is within six months of reaching full retirement age; or 
h.	The applicant is requesting assistance under the Children with Disabilities coverage and has not been determined disabled by SSA.; or
i.	The individual has been found disabled by either the Veteran’s Administration (VA) or the Railroad Retirement Board (RRB) and a determination by the Social Security Administration has not been made.

Transitional Medicaid Benefits 510-05-50-05
Language was changed in the examples under Subsection 4 to clarify policy as the changes in policy with Continuous Eligibility no longer fit the circumstance. A new example is added under Subsection 5 to clarify when a parent should go Transitional coverage. Under Subsection 7, references to the twenty-first day of the month were removed to clarify that as long as the income and child care expenses were verified within the 7th and 10th month, coverage can continue if eligible. A new example is added under Subsection 5 to clarify when a parent may be eligible for Transitional benefits. A new subsection 8 is added to clarify how to treat a transitional household that moves back to ND during a transitional period when the transitional case closed for state residency.   

4.	Only recipients become eligible for Transitional Medicaid Benefits. Applicants who fail Family Coverage eligibility due to earned income must be eligible under the Family Coverage group for at least one month, including any of the three prior months, before considering whether they received Family Coverage in three of the past six months.
Example 1: A family is eligible under the Family Coverage group in January and February. The case closes at the end of February for failure to provide information per the family’s request. In June, the family reapplies for Medicaid and requests assistance for the three prior months. When the application is processed, the family is NOT eligible for Family Coverage for March, but is in April. They then fail Family Coverage for May due to income. Because this family received three months of Family Coverage in the past six months, because the family became INELIGIBLE for Family Coverage due to earned income in May, and because the family members were recipients, the family is eligible for Transitional Medicaid Benefits effective May 1.
Example 2: A family is eligible under the Family Coverage group in January, February, and March. The case closes at the end of March for failure to provide information per the family’s request. In June, the family reapplied for Medicaid and does NOT request, or is not eligible for, assistance for April and May. When the application is processed, the family is NOT eligible under the Family Coverage group for June due to earned income. Even though this family received three months of Family Coverage in the past six months, they are applicants and not recipients (no approved months based on this application), this family is NOT eligible for Transitional Medicaid Benefits

5.	If an individual was included as eligible in the Family Coverage case the month the Family Coverage eligibility ended, the individual is included in the Transitional Medicaid Benefits. The following individuals are also eligible for Transitional Medicaid Benefits:
a.	Children (deprived or non-deprived, who meet the age requirements under the Family Coverage group) who are born, adopted, or who enter the home of a caretaker relative during the first or second six month period; and
b.	Parents who were absent from the family when the family became ineligible under the Family Coverage group but who return during either period.
Example:  Mom and her child are eligible under the Family Coverage group from January through April. Dad moves in during the month of April, and is not Family Coverage eligible. His earnings make them ineligible for Family Coverage in May, so they are eligible for Transitional Medicaid Benefits beginning May. Dad is not eligible for Transitional Medicaid Benefits because he was not covered under the Family Coverage Group in the month the Family Coverage ended. 

7.	Budgeting in the second six-month period:
a.	The county agency must send a notice to the recipient in months six and nine, informing the recipient to report earnings and child care expenses. The recipient must report and verify income and child care expenses for the fourth, fifth, and sixth months in by the twenty-first day of the seventh month, and for the seventh, eighth, and ninth months in by the twenty-first day of the tenth month. Verification of earnings is required.
8.	If a Transitional Medicaid Benefits case closes for loss of state residency and the family returns to the state and reapplies while still in the twelve-month period, eligibility may be re-established for the remainder of the transitional period.  If the family returns after a reporting period, the family must show they are still eligible as if the report had been completed.

Gainful Employment 510-05-57-15
Language is added to this section to clarify that such self-employment activities but not day services may qualify as gainful employment.

1.	An individual may be regarded as gainfully employed only if the activity asserted as employment:
a.	Produces a product or service that someone would ordinarily be employed to produce and for which payment is received;
b.	Reflects a relationship of employer and employee or producer and customer;
c.	Requires the individual’s physical effort for completion of job tasks, or, if the individual has the skills and knowledge to direct the activity of others, reflects the outcome of that direction; and
d.	The employment setting is not primarily an evaluative or experiential activity.
e.	Gainful employment will normally look like work to a reasonable person and will normally include withholding or payment of FICA. Gainful employment could include such activities as self-employment but not day services.  Gainful employment cannot be measured by the number of hours worked or amount of earnings, but is based solely on the activity involved.  The following examples may help in determining what is and is not gainful employment.

Premium Calculation for Children with Disabilities 
510-05-58-30
The reference to enrollment fees was removed from the second paragraph under subsection 6 to clarify that there are no enrollment fees for the Children with Disabilities coverage.

6.	Any individual who fails to pay the premium established under this section for three consecutive months shall be disenrolled and may not be reenrolled thereafter without first reestablishing eligibility under this section and paying all outstanding premiums. Any month in which no premium is due shall not be counted as a month in which the individual failed to pay a premium.
An individual who is under age 19 and is continuously eligible for Medicaid who fails to pay the premium for 3 consecutive months cannot be disenrolled prior to the end of their continuous eligibility period.  They may not be reenrolled thereafter without first reestablishing eligibility under this section and paying all outstanding enrollment fees and premiums.  

Asset Limits for the Medicare Savings Program 510-05-60-20
This section was changed to reflect the correct asset limit for a two-person household for the Medicare Savings Programs effective January 2011.  This is a change in policy.

No person may be found eligible for the Medicare Savings Programs unless the total value of all non-excluded assets does not exceed the limit established for the Medicare Part D Low Income Subsidy.  This amount changes annually. Effective with the benefit month of January 2011, the limits are:
1.	$6,680 for a one-person unit ($6,600 in 2010); or
2.	$10,120  10,020 for a two-person unit ($9,910 in 2010):.

Exempt Assets 510-05-70-25
This entire section is deleted and the previously “exempt” assets have been moved to the Excluded Assets section at 510-05-70-30 as there is no real difference between exempt and excluded assets.  This will no longer be included in the Table of Contents.  This is a simplification in policy.

The following assets are exempt from consideration in determining Medicaid eligibility:
1.	The home occupied by the Medicaid unit, including trailer homes being used as living quarters.
The home occupied by the Medicaid unit includes the land on which it is located, provided that the acreage does not exceed one hundred sixty contiguous acres if rural or two acres if located within the established boundaries of a city.
The home is considered occupied by the Medicaid unit when it is the home the Medicaid unit is living in or, if temporarily absent from, possesses with an intention to return and the capability of returning within a reasonable length of time. Property is not occupied if the right to occupy has been given up through a rental or lease agreement, whether or not that rental or lease agreement is written. Property is not occupied by an individual in long-term care or the state hospital, with no spouse, or son or daughter who is under age twenty-one, or blind or disabled (any age), at home, unless a physician has certified that the individual is likely to return home within six months. (See 510-05-70-27 for home equity limit for exempt home during six-month period and for single HCBS applicants and recipients.)
When determining whether an individual is likely to return home within 6 months, the physician’s statement must include the date admitted to the facility, the date of the statement, wording showing that the individual is reasonably expected to return home within the 6 months, and it must be signed by the physician.  Statement language that indicates that an individual “may” return home, or “wants to” return home, is not sufficient. Following are examples of acceptable and non-acceptable physician statements regarding an individual’s stay in a long-term care facility.
Example:  Prepared within 30 days of admittance to facility.
(Recipient Name) entered the (Facility Name) on (Admit date).  She is reasonably expected to return home within 6 months.
(Signed by Physician)
This statement is acceptable as it includes all of the required information.
 
Example:  Prepared at time individual was admitted to facility.
(Date Written)
(Recipient Name) was admitted to the (Facility Name) on (Admit Date).  Anticipate that she may be able to return home within 6 months.
(Signed by Physician)
This statement is not acceptable.  “May” is indefinite.  It would be acceptable if it said she was expected (or likely) to return home within 6 months.
 Example:
(Date Written)
(Recipient Name) is anticipated to return home in less than 6 months.  Patient will receive physical therapy for strengthening and to recover from pneumonia.
(Signed by Physician)
This statement is not acceptable as there is no admit date so the total length of stay cannot be determined.  
2.	Personal effects, wearing apparel, household goods, and furniture.
3.	One motor vehicle, if the primary use of the vehicle is to serve the needs of members of the Medicaid unit. If the vehicle is used primarily by someone who is not in the Medicaid unit, it does not meet this exemption.
4.	Indian trust or restricted lands.
5.	Indian per capita funds and judgment funds awarded by either the Indian claims commission or the court of claims after October 19, 1973, interest and investment income accrued on such Indian per capita or judgment funds while held in trust, and purchases made using interest or investment income accrued on such funds while held in trust. The funds must be identifiable and distinguishable from other funds. Commingling of per capita funds, judgment funds, and interest and investment income earned on those funds, with other funds, results in loss of the exemption.
The Bureau of Indian Affairs should be consulted, if necessary, to determine if the payment is the result of an award by either the Indian Claims Commission or the Court of Claims.
 
Excluded Assets 510-05-70-30
Assets previously included in the ‘Exempt Assets’ section have now become the first 5 assets of this section. The remainder of this section has been renumbered.

Language is added to the first paragraph of subsection 8 to clarify that only those payments made by members of the Medicaid unit are considered payments towards the burial and to subsection 8(c) to clarify that loans on life insurance only affect the net cash surrender value, and have no effect on remaining cost basis. Language is added to the 4th paragraph under subsection 8 to clarify that markers, monuments, and vaults that are included in a pre-need burial service contract are not counted as a separate available asset.  For clarification purposes, language is added to subsection 22 to include the definition of an Employer-sponsored retirement plan.  

1.	The home occupied by the Medicaid unit, including trailer homes being used as living quarters.
The home occupied by the Medicaid unit includes the land on which it is located, provided that the acreage does not exceed one hundred sixty contiguous acres if rural or two acres if located within the established boundaries of a city.
The home is considered occupied by the Medicaid unit when it is the home the Medicaid unit is living in or, if temporarily absent from, possesses with an intention to return and the capability of returning within a reasonable length of time. Property is not occupied if the right to occupy has been given up through a rental or lease agreement, whether or not that rental or lease agreement is written. Property is not occupied by an individual in long-term care or the state hospital, with no spouse, or son or daughter who is under age twenty-one, or blind or disabled (any age), at home, unless a physician has certified that the individual is likely to return home within six months. (See 510-05-70-27 for home equity limit for exempt home during six-month period and for single HCBS applicants and recipients.)
When determining whether an individual is likely to return home within 6 months, the physician’s statement must include the date admitted to the facility, the date of the statement, wording showing that the individual is reasonably expected to return home within the 6 months, and it must be signed by the physician.  Statement language that indicates that an individual “may” return home, or “wants to” return home, is not sufficient. Following are examples of acceptable and non-acceptable physician statements regarding an individual’s stay in a long-term care facility.
Example:  Prepared within 30 days of admittance to facility.
(Recipient Name) entered the (Facility Name) on (Admit date).  She is reasonably expected to return home within 6 months.
(Signed by Physician)
This statement is acceptable as it includes all of the required information.
Example:  Prepared at time individual was admitted to facility.
(Date Written)
(Recipient Name) was admitted to the (Facility Name) on (Admit Date).  Anticipate that she may be able to return home within 6 months.
(Signed by Physician)
This statement is not acceptable.  “May” is indefinite.  It would be acceptable if it said she was expected (or likely) to return home within 6 months.
Example:
(Date Written)
(Recipient Name) is anticipated to return home in less than 6 months.  Patient will receive physical therapy for strengthening and to recover from pneumonia.
(Signed by Physician)
This statement is not acceptable as there is no admit date so the total length of stay cannot be determined.  
2.	Personal effects, wearing apparel, household goods, and furniture.
3.	One motor vehicle, if the primary use of the vehicle is to serve the needs of members of the Medicaid unit. If the vehicle is used primarily by someone who is not in the Medicaid unit, it does not meet this exemption.
4.	Indian trust or restricted lands.
5.	Indian per capita funds and judgment funds awarded by either the Indian claims commission or the court of claims after October 19, 1973, interest and investment income accrued on such Indian per capita or judgment funds while held in trust, and purchases made using interest or investment income accrued on such funds while held in trust. The funds must be identifiable and distinguishable from other funds. Commingling of per capita funds, judgment funds, and interest and investment income earned on those funds, with other funds, results in loss of the exemption.
The Bureau of Indian Affairs should be consulted, if necessary, to determine if the payment is the result of an award by either the Indian Claims Commission or the Court of Claims.
8.	3. Any pre-need funeral service contracts, prepayments or deposits, regardless of ownership, which total $6000 or less, which are designated by an applicant or recipient for the applicant's or recipient's burial. An applicant or recipient designates a prepayment or deposit for his or her burial by providing funds that are used for that purpose.  Only those prepayments paid by members of the Medicaid unit are considered as burial prepayments.  
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. A burial plot is defined to include a grave site, crypt, or mausoleum. (Effective July 1, 1996.)
Markers, monuments, and vaults that have been pre-purchased separately from a pre-need funeral service contract are not considered part of a burial plot and are not considered as prepayments or deposits for burial.  These items are countable assets for Medicaid, based on their current market value.  A marker or monument that has already been engraved with some of the individual’s information will likely have a reduced value.  It may still have a market value, however, the value will be reduced by the cost to resurface the marker or monument.    When a double marker has been purchased and one spouse has already passed away, it can be determined that there is no resale value for the marker.  
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 $6000 burial exclusion is a countable asset if the fund, insurance, or other property has a cash value, fair market value, or surrender value.
Example:  A Medicaid recipient with an insurance policy that is designated for burial previously transferred ownership of the policy to his daughter. The policy has a current cost basis of $6400 and cash surrender value (CSV) of $7500. The insurance policy is considered to be transferred in trust to meet the burial needs of the recipient. $6000 is excluded under the burial exclusion and the additional $400 in cost basis is a countable asset to the recipient ($6400 - $6000 = $400). The extra $1100 in cash surrender value is earnings and is excluded ($7500 CSV - $6400 cost basis = $1100 earnings).
c.	Normally a life insurance policy is a countable asset valued at its cash surrender value, however, when a whole life insurance policy or an annuity is designated for burial, the prepayments on the life insurance policy or annuity are the total premiums that have been paid less amounts paid for any riders and less any withdrawals of premiums paid. They are identified as the "remaining cost basis." Only those prepayments (remaining cost basis) paid by members of the Medicaid unit are considered as burial prepayments. Premium payments made by insurance dividends or disability insurance plans do not increase the remaining cost basis.  Loans on life insurance affect the net cash surrender value only and do not affect remaining cost basis.
22.	17.  Funds held in employer-sponsored retirement plans, but not private retirement plans.
 	An Employer-sponsored retirement plan is a benefit plan that an employer offers for the benefit of his/her employees at no or a relatively low cost to the employees.  These include:
•	SEP-IRA (Simplified employee pension) plans
•	Employer or employee association retirement accounts
•	Employer simple retirement accounts
•	401(k) retirement plans (which include independent (sole proprietorship) plans)
•	403(b) retirement plans
•	457  retirement plans

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Ownership in a Business Entity 510-05-75-05
Language was added to subsection 2 to clarify the treatment of CRP payments and patronage/cooperative dividends as unearned income.

2.	Income: Countable income from a business entity (e.g. a corporation or partnership) that employs anyone whose income is used to determine eligibility is established as follows:
b.	If the applicant or recipient and other members of the Medicaid unit own less than a controlling interest, but more than a nominal interest in the business:
i.	From the business entity’s gross income, subtract any cost of goods for resale, repair, or replacement, CRP payments and patronage or cooperative dividends, and subtract any wages, salaries, or guarantees (but not draws), paid to actively engaged owners to arrive at the business entity’s adjusted gross income; and
ii.	From the adjusted gross income, establish the applicant or recipient’s income share based on the Medicaid unit's proportionate share of ownership in the business entity; and
iii.	Add any wages, salary, or guarantee paid to the applicant or recipient to the applicant or recipient’s income share; and
iv.	Apply the medically needy self-employment income disregards described in 05-85-20; or and
v.	Based on the applicant’s or recipient’s proportionate share of ownership in the business entity, establish the individual’s share of the CRP payments and patronage or cooperative dividends as unearned income; or

Treatment of Conservation Reserve Program Property and Payments 510-05-75-10
Language is added to subsection 3 to include the change in policy that allows higher expenses when the CRP contract requires more extensive maintenance or preparation.  

3.	Expenses.  Actual maintenance expenses, up to $5 per acre per year, which are not reimbursed (e.g. by ASCS), may be deducted from the gross CRP payments. Actual maintenance expenses are those expenses necessary to maintain the property according to the CRP contract, such as seed, spray, etc. Allowable maintenance expenses do not include property taxes or insurance.
When the CRP contract requires more extensive maintenance or preparation, the $5 per acre can be exceeded by actual verified expenses up to the NDSU Extension rate established for the area.
When the applicant or recipient receives 100% of the payment, the allowable expenses that are not reimbursed are allowed. When the applicant or recipient only receives a percentage of the payment, that same percentage of the allowable expenses are is allowed. For example, if 90% of the payment is received by the applicant, then only 90% of the allowable expenses can be allowed as a deduction.

Disqualifying Transfer Provisions 510-05-80-10
Language is added to Subsection 6 to clarify when a transfer occurs.

6.	A transfer is complete when the individual (or the individual's spouse) making the transfer has no lawful means of undoing the transfer or requiring a restoration of ownership.  A transfer takes effect upon delivery, and unless proven otherwise, delivery is presumed to occur at the date the deed was signed.  The deed does not have to be physically delivered or registered at the county office to be delivered.

Unearned Income 510-05-85-15
Language is added to Subsection 2 to clarify that Medical payments are considered as Medical Care Payments.

2.	All nonrecurring unearned lump sum payments, except medical payments of  health or long-term care insurance payments, Veteran's Administration aid and attendance, Veteran's Administration reimbursements for unusual medical expenses, and Veteran’s Administration homebound benefits intended for medical expenses, must be considered as income in the month received and assets thereafter.

Earned Income 510-05-85-20
Language is changed in Subsection 1, second paragraph, to clarify treatment of contract income that covers more months than the payments.  An example is added to subsection 1, third paragraph to clarify the treatment and difference between a travel expense reimbursement and a wage advance for migrants.

1.	If earnings from more than one month are received in a lump sum payment, the payment must be divided by the number of months in which the income was earned, and the resulting monthly amounts are attributed to each of the months with respect to which the earnings were received.
Similarly, earnings paid under a contract must be prorated over the period the contract covers. For example, a teacher receives paychecks in August through May, however, the teacher's contract covers 12 months. The teacher’s annual pay is and employment expenses are annualized and prorated and counted over the 12-month period.
Occasionally, migrants may receive an advance lump sum payment to reimburse or cover travel expenses. Such reimbursement is normally received prior to their arrival and is not considered earned income. An advance for wages, however, is counted as earned income and is prorated over the months it is intended to cover.  
Example:  Don is a migrant worker who received a reimbursement from his grower for traveling to North Dakota to work.  This reimbursement is disregarded from income as a reimbursement.  Don’s grower also gave him a wage advance of $900 in May for the months of June, July and August.  The wage advance would be prorated over the months of June, July, and August as earned income.
Bonuses, profit sharing, and other similar payments are not considered lump sum earnings or wages received other than monthly, but an extra payment of earned income based on a productive period, and are considered income in the month received.

Post Eligibility Treatment of Income 510-05-85-25
A new subsection (1) (i) is added to reflect the policy change that for Post Eligibility Treatment of Income, rental income may be reduced by the amount of property taxes paid for that property. Subsection 2 had language added to clarify that mandatory payroll deductions do not include federal or state income taxes withheld.  Subsection 3(b) had language added to clarify that alimony or child support are not allowable deductions for someone in this living arrangement, rather, this refers to the appropriate Medicaid income level for the non-institutionalized household members.   

1.	The following types of income may be disregarded in determining Medicaid eligibility:
i.	From annual countable gross rental income, an amount equal to the real estate taxes for rental property that the recipient is responsible for paying on that property.

2.	The mandatory payroll deductions under FICA and Medicare are allowed from earned income.  (This does not include federal or state income tax withholding).
3.	In establishing the application of income to the cost of care, the following deductions are allowed in the following order:
a.	The appropriate nursing care or ICF-MRID income level;
b.	Amounts provided to a spouse or family member for maintenance needs (this is the appropriate Medicaid income level for the spouse or family member, NOT alimony or child support);

Disregarded Income 510-05-85-30
The definition of a student is deleted from subsection 13 as it is now included under the “Definitions section at 510-05-05”

13.	Income earned by a child (not a caretaker, spouse, or pregnant woman) who is a full-time student, or a part-time student who is not employed one hundred hours or more per month. The earnings of an eligible child are counted if the child is a part time student who is employed full time. A student is an individual who regularly attends and makes satisfactory progress in elementary or secondary school, General Equivalency Diploma (GED) classes, a home-school program recognized or supervised by the student’s state or local school district, college, university, or vocational training, including summer vacation periods if the individual intends to return to school in the fall. A full-time student is a person who attends school on a schedule equal to a full curriculum;

Income Deductions 510-05-85-35
Subsection 5 was updated to clarify that the recipient’s remedial costs at the facility are used in determining the remedial cost expense deduction.  Also, the Medically Needy Income Level for one was updated in the example to reflect the income levels as of April 1, 2011.  Language was added to subsection 8 to clarify that reasonable child care expenses do not include payments to a parent to care for their own children.  

5.	Except in determining eligibility for the Medicare Savings Programs, the cost of remedial care for an individual residing in a specialized facility is limited to the difference between the recipient’s cost of care at the facility (e.g. room and board remedial rate in a basic care facility) and the regular medically needy income level may be deducted.
Example:
Recipient’s remedial ratel cost of care at the facility	 $ 980	
Less the medically needy income level for one	 - 7504	
Remedial Care Deduction	 $23026	
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.  Reasonable child care expenses do not include payments to parents to care for their own children.  The child must be a member of the Medicaid unit for the deduction to be allowed. This expense may only be allowed as a deduction from the income of the child or those individuals who are responsible for the child, such as a parent or caretaker.

Income Levels 510-05-85-40
This section is updated to add two more household members to each table to reflect the change in the Federal Poverty Levels effective 04-01-11 (tables not shown).  Subsections 2(b) and 2(c) are reworded to show that Anne Carlsen Center is an ICF/ID. Subsection 2 (e) updates the income level for an ‘ineligible family member’ in a spousal case to reflect the change effective 04-01-11.  This supersedes IM #5123.

2.	Medically needy income levels.
a.	Medically needy income levels are applied when a Medicaid individual or unit resides in their own home or in a specialized facility, and when a Medicaid individual has been screened as requiring nursing care, but elects to receive HCBS. The income level is equal to eighty-three percent of the poverty level applicable to a family of the size involved. The family size is increased for each unborn when determining the appropriate family size.
Number of Persons	Monthly Income Level	
1	 $754	
2	 1018	
3	 1282	
4	 1546	
5	 1811	
6	 2075	
7	 2339	
8	 2603	
Effective April 1, 2011	
For each person in the medically needy unit above eight, add $265 to the monthly amount.
b.	Nursing care income level. The nursing care income level is fifty dollars per month and must be applied to residents receiving psychiatric or nursing care services in nursing facilities, the state hospital, the Prairie at Saint John's Center, the Stadter Center, a Psychiatric Residential Treatment Facility (PRTF), the Anne Carlsen facility, or receiving swing bed care in a hospital.
c.	ICF-MRID income level. The income level for a resident of an Intermediate Care Facility for the Mentally Retarded Intellectually Disabled (ICF-MRID) (including the Anne Carlsen facility) is $85 effective January 1, 2010.
e.	Family member income level. The income level for each ineligible family member in a spousal impoverishment case is $607613 effective April 20092011 ($584607 effective April 20082009).

		………………………………………………………………………..
Determining the Appropriate Income Level in Special Circumstances 510-05-85-45
A second paragraph has been added to Subsection 7 to clarify the treatment when both spouses are admitted to a facility for a temporary stay.

7.	An individual with no spouse, disabled adult child, or child under age twenty-one at home who enters a nursing facility may receive the medically needy income level for one if a physician certifies that the individual is likely to return to the individual's home within six months. The six-month period begins with the first full calendar month the individual is in the nursing facility. If, at any time during the six-month period, the individual’s status changes and the stay in the nursing facility is expected to exceed the six months, the individual is only allowed the $50 nursing care income level beginning in the month following the month of the status change.
For a married couple, budget one spouse at the medically needy income level and the other as permanent long term care when:
a.	Both spouses are admitted to a nursing facility for  temporary stays, or
b.	One spouse is permanently in a nursing facility and the other spouse requires temporary nursing care level services.
Only one six-month period is allowed per period of institutionalization. If an individual is discharged, then readmitted to the nursing facility, there must be a break of at least one full calendar month between the periods of institutionalization in order for the new stay to be considered a new period of institutionalization.

Budgeting Procedures for SSI Recipients 510-05-90-45
SSI recipients residing in a nursing facility, an intermediate care facility for
the intellectually disabled (ICF-ID), (including the Anne Carlsen facility) are allowed the ICF-ID income level. Those residing in a nursing facility, the state hospital, the Anne Carlsen facility, the Prairie at Saint John's Center, the Stadter Center, a Psychiatric Residential Treatment Facility (PRTF), or receiving swing bed care in a hospital: The SSI recipient is allowed the nursing care income level. Also see State LTC Subsidy Program 510-05-95-45. 

Parental and spousal income is not considered available to the recipient.  

Individuals between the ages of 21 and 65 are not eligible for Medicaid in the state
hospital.

Budget Procedures for Medically Needy and Poverty Level 
510-05-90-55
Subsection 2 was rearranged to clarify that residents screened for and residing in the Anne Carlsen facility are in an ICF/ID and are budgeted as such.  Language is added to the last paragraph of subsection 3 to clarify that only remedial costs are included in determining the remedial cost deduction, not other costs, such as room and board.
 
2.	Recipients screened for and receiving services in a nursing facility, the state hospital, the Anne Carlsen facility, the Prairie at Saint John's Center, the Stadter Center, a Psychiatric Residential Treatment Facility (PRTF), or receiving swing bed care in a hospital: The recipient is allowed the $50 nursing care income level.
Recipients residing in an intermediate care facility for the intellectually disabled (ICF-ID) (including the Anne Carlsen facility): The recipient is allowed the $85 ICF-ID income level.
3.	Recipients living in a specialized facility: The recipient is allowed the medically needy income level for one. The members of the Medicaid unit remaining in the home are allowed the appropriate income level.
If the individual is under age 21, or if blind or disabled under age 18, and enters the specialized facility from a public institution or the parental home, consider the income of the individual and parents.
If the individual is married, the income of the individual and of the spouse must be considered. If the Medicaid unit in the home is not receiving Medicaid, 75% of the excess income shall be disregarded in determining recipient liability.
If the individual in the specialized facility is eligible for SSI, do not deem income from the Medicaid unit at home to the individual because the maintenance needs are considered to be met.
If the individual in the specialized facility is not eligible for SSI and has no source of income or insufficient income, the family at home may deem income to the individual up to the medically needy income level for one.
The Remedial services provided in a specialized facility are a type of remedial service which cannot be paid through Medicaid, but can be allowed as a deduction. Remedial services are determined by subtracting the medically needy income level for one from the recipient’s remedial cost of care at the specialized facility. The resulting amount is deducted from the individual's income to determine recipient liability. If the actual remedial expense is less than the calculated amount, use the actual amount.  

Budget Procedures for Continuous eligibility for children Under Age 19 510-05-90-75
Subsection 2 was rearranged to clarify that residents screened for and residing in the Anne Carlsen facility are in an ICF/ID and are budgeted as such.

2.	For a continuously eligible child residing in a nursing facility, the state hospital, the Anne Carlsen facility, the Prairie at Saint John's Center, the Stadter Center, a Psychiatric Residential Treatment Facility (PRTF), or receiving swing bed care in a hospital: the recipient is allowed the $50 nursing care income level and excess income becomes recipient liability.

Recipients residing in an intermediate care facility for the Intellectually Disabled (ICF-MRID) (including the Anne Carlsen facility): The recipient is allowed the $85 ICF-ID income level.

For a single individual under age 19, parental income is not considered available during any full calendar month the recipient is in the facility.

State LTC Subsidy Program 510-05-95-45
Subsection 2(c) was updated to indentify that subsidy payments can begin as early as the application month,

2.	Determining the amount of the subsidy payment:
c.	Subsidy payments may be established for the processing application month and prospective months if the recipient is anticipated to be in the facility for the entire month for which the subsidy is determined.  Subsidy payments are not established for retroactive months the three months prior to application.

Par. 2.  Effective Date -- This manual letter is effective for the benefit month of September unless otherwise noted.