Author: cvolesky
Last saved by: mgee
Company: NDDHS

Bismarck, North Dakota	MANUAL LETTER 3183	July 1, 2009

Par. 1.  Material Transmitted and Purpose --Transmitted with this Manual Letter are changes to Service Chapter 510-05, Medicaid Eligibility Factors.  This manual letter also incorporates:
IM 5063, New Source income in IIM Accounts; 
IM 5062, 2009 Medicaid Poverty Levels; 
IM 5057, 2009 Average Cost of Nursing Facility Care; 
IM 5054, Spousal Impoverishment Changes for 2009; 
IM 5049, Caring for Children Phone Number Change; 
IM 5048, Census Income 2008; 
AMENDED IM 5029, Iraqi Afghani Special Immigrant Policy; 
IM 5033, Child Support Referrals for Subsidized Adoption Children; and 
IM 5031, Long Term Care Partnership Program. 

Definitions 510-05-05
Language was added for clarification.

Remedial services
Those services, provided in specialized facilities, which produce the maximum reduction of physical or mental disability and restoration of the residents to the best possible level of functioning.  Remedial services do not include room and board expenses.

Home and Community Based Services (HCBS) 
510-05-15-05
Four new subsections were added so that this section identifies all of the Medicaid related HCBS for which recipients may qualify.  These four are existing waivers, grants, and programs, but were not previously listed in the manual.

5.	Waiver for Children with Medically Fragile Needs:  Services are provided to children ages to 3 to 18 who have a serious illness or condition which is anticipated to last at least 12 or more months.  Eligible children have medically intensive needs and prolonged dependence on medical care or medical technology.  The waiver is limited to 15 children at a time.  (Began June 1, 2008.) 

6.	PACE (Program of All-Inclusive Care of Elderly):  PACE is available to Medicaid or Medicare recipients age 55 or older, who are screened as requiring care in a nursing facility.  A capitated payment is made to the PACE provider who then provides health and health related services to allow individuals to remain in the community.  (Began August 1, 2008.)

7.	Money Follows the Person Grant:  This Grant program assists recipients who are residing in a nursing facility or an ICF/MR 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 6 months or more, be screened as requiring care in a nursing facility or ICF/MR, and be Medicaid eligible for at least 30 days immediately prior to transition.  (Began June 20, 2008.)

8.	Technology Dependent Medicaid Waiver:  Services are provided to individuals who are ventilator dependent for a minimum of 20 hours per day, and who are at least 18 years of age.   The goal is to adequately and appropriately sustain individuals in their own homes and communities and to delay or divert institutional care.  The waiver is limited to 3 recipients at a time.  (Began August 1, 2007.) 

Application and Redetermination 510-05-25-05
Language is added to identify when a redetermination can be completed without actually having an official redetermination form.  This should occur in rare instances, which need to be documented in the file. 

2.	Redetermination.
b.	A redetermination must be completed at least annually using the Department's system generated "Monthly Report" or "Redetermination of Eligibility;" SFN 407, "Redetermination ~~of Eligibility for Medicaid~~ for Healthcare Coverage"; SFN 642, "Title IV-E/Title XIX Redetermination-Foster Care" for children in Foster Care; SFN 856, "Adoption Subsidy Agreement - Annual Review" for subsidized adoption; or one of the previously identified applications completed to apply for another program. In circumstances where a desk review is appropriate, such as when adding a child, or adding Medicare Savings Programs coverage, to an existing case 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.

Groups Covered Under Medicaid 510-05-30-05
Language was added for clarification and to make corrections. 

1.	The categorically needy group includes:
j.	Aged, blind, or disabled individuals who are receiving SSI payments or who appear on the state data exchange (SDX) as zero payment as a result of SSI’s recovery of an overpayment or who are suspended because the individuals do not have a protective payee, provided that the more restrictive Medicaid criteria is met. Individuals under age 21 who have been approved for SSI may be ~~included~~ categorically eligible beginning with the month of the SSI application. Individuals age 21 or older who have been approved for SSI may be ~~included~~ categorically eligible beginning the month following the month of SSI application.  (If disabled in the month of SSI application, the individual age 21 or older may be medically needy eligible for that month.)

3.	The medically needy group includes:
a.	Eligible caretaker relatives and individuals under age~~s nineteen to~~ twenty-one in families with deprived children who qualify and require medical services on the basis of insufficient income, but who do not meet income or age Family Coverage group requirements, or who do not qualify as optional categorically needy or poverty level ~~but meet medically needy income standards~~.
b.	Individuals under the age of twenty-one who qualify for and require medical services on the basis of insufficient income, but who do not qualify as categorically needy, optional categorically needy, or poverty level, including children in common in stepparent families who are ineligible under the Family Coverage group and foster care children who do not qualify as categorically needy or optional categorically needy.

Age and Identity 510-05-35-40
Added new policy to identify that individuals receiving subsidized guardianship payments are considered to have their identity established and no further identity verification is needed.

5.	Identity must be established and documented as provided in this section.
a.	The following individuals are exempt from the identity verification requirements:
i.	SSI recipients who claim that they are US Citizens and that claim is not questionable (can prove using the SDX or TPQY SSI match);
ii.	Medicare beneficiaries who claim that they are US Citizens and that claim is not questionable (can prove using the TPQY SSA match);
iii.	Individuals receiving SSA disability insurance benefits based on their own disability;
iv.	Individuals receiving Foster Care maintenance payments;
v.	Individuals receiving Subsidized Adoption payments~~.~~ ; and
vi.	Individuals receiving Subsidized Guardianship payments.

Citizenship and Alienage 510-05-35-45
Added new policy to identify that individuals receiving subsidized guardianship payments are considered to have their citizenship established and no further citizenship verification is needed.

2.	Exceptions to verification of citizenship. The following individuals are exempt from the citizenship verification requirements:
a.	SSI recipients who claim that they are US Citizens and that claim is not questionable (can prove using SDX or TPQY SSI match);
b.	Medicare beneficiaries who claim that they are US Citizens and that claim is not questionable (can prove using TPQY SSA match);
c.	Individuals receiving SSA disability insurance benefits based on their own disability;
d.	Individuals receiving Foster Care maintenance payments;
e.	Individuals receiving Subsidized Adoption payments~~.~~ ; and
f.	Individuals receiving Subsidized Guardianship payments.

Non-Qualified Aliens 510-05-35-55
Added clarification that aliens from Micronesia, the Marshall Islands, and Palau are non-qualified aliens that can be eligible for emergency services.

3.	Individuals from the Federated States of Micronesia, the Marshall Islands, or Palau, are permanent non-immigrants.  While considered non-qualified aliens, they are here permanently and therefore can be eligible for emergency services.

Aliens Lawfully Admitted for Permanent Residence on or After August 22, 1996 510-05-35-65
Added clarification that American Indians born in Canada are considered lawfully admitted residents who can be eligible for Medicaid, and added that Iraqi and Afghan aliens may be Medicaid or Refugee Medical Assistance eligible for the first eight months in the country, and then must satisfy the 5 year ban.  Renumbered remaining subsections.  This addition supersedes Amended IM 5029. 

Aliens who entered the United States for permanent residence on or after August 22, 1996, and who meet all other Medicaid criteria may be eligible for Medicaid as qualified aliens.
1.	The following qualified aliens may be eligible at any time:
a.	Honorably discharged veterans, aliens on active duty in the United States’ armed forces, and the spouse or unmarried dependent child(ren) of such individuals;
b.	Refugees;
c.	Asylees who have been granted asylum (not applicants for asylum);
d.	Cuban and Haitian Entrants;
e.	Victims of a severe form of trafficking;
f.	Aliens whose deportation was withheld under Section 243(h) of the Immigration and Naturalization Act (INA); ~~and~~
g.	Aliens admitted as an Amerasion immigrant~~.~~ ; and
h.	American Indians born in Canada as described in 510-05-35-50.  

2.	Iraqi and Afghan aliens and family members who claim special immigrant status, and can provide verification that they have been admitted under section 101(a)(27) of the INA, may be eligible for Medicaid for the first eight months after their entry into the United States.  

After the eight month period of initial entry, Iraqi and Afghan Special Immigrants and their families may only qualify for Medicaid coverage of emergency services until such time that they satisfy the 5-year ban and can be credited with forty qualifying quarters of social security coverage.

Iraqi and Afghan immigrants who are determined ineligible for Medicaid may be eligible for Refugee Medical Assistance (RMA) but only for coverage during the eight month period after entry.

Emergency Services for Non-Citizens 510-05-35-70
Added language to clarify that permanent non-immigrants are entitled to emergency services, and that emergency services do not include follow-up care that is not itself an emergency. 

Illegal aliens, permanent non-immigrants (identified in subsection 3 of 05-35-55),  and qualified aliens~~,~~ who are not eligible for Medicaid because of the time limitations or forty qualifying quarters of social security coverage requirement, may be eligible to receive emergency services that are not related to an organ transplant procedure, if all of the following conditions are met:
3.	The alien’s need for the emergency service continues. Eligibility for Medicaid ends when the emergency service has been provided, and does not include coverage of follow-up care if the follow-up care is not an emergency service.  A pregnant woman who delivers a child and is covered under this provision is not eligible for the sixty-day period of eligibility after pregnancy. Her child, however, is a citizen and may be eligible for the sixty-day period.

Social Security Numbers 510-05-35-80
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 the following individuals do not have to provide a SSN, or verification of application for SSN:
a.	~~a~~ 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, or if the newborn is continuously eligible, for the remaining days of the newborn’s first eligibility period;
b.	~~an~~ An individual who is currently eligible for Transitional or Extended Medicaid Benefits~~,~~ ; and 
c.	~~an~~ An illegal alien seeking emergency services. (see 05-35-70 for a description of emergency services.)
Members of the Medicaid unit who are not seeking benefits may voluntarily provide their SSN; however, they are not required to do so.

State Residence 510-05-35-85
Added language to clarify residence issues for children.  A new paragraph in subdivision (b) addresses the interstate compact for adopted children and identifies when it controls residency for the child.  Language in subdivision (d) places emphasis on whether the child is in the state temporarily, or for an indefinite period, regardless of whether the child lives with a parent or other caretaker.  Subdivision (e) identifies that the residence of an institutionalized child is that of the parents or legal guardian at the time of placement or at the time of Medicaid application if the child is institutionalized in the same state.

1.	For individuals entering the state, the earliest date of eligibility is the date of entry. Residence may not be established for individuals who ~~are receiving Medicaid benefits or~~ claim~~ing~~ residence ~~from~~ in another state.
2.	Individuals under age twenty-one.
a.	For any individual under age twenty-one who is living independently from his parents or who is married and capable of indicating intent, the state of residence is the state where the individual is living with the intention to remain there permanently or for an indefinite period.
b.	For any individual who is receiving foster care or adoption assistance payments, under Title IV-E, from another state and is living in North Dakota, North Dakota is the state of residence for Medicaid purposes.  
Children receiving non-IV-E adoption assistance payments from another state are considered residents of North Dakota for Medicaid purposes if there is an Interstate Compact on Adoption and Medical Assistance (ICAMA) agreement with a member state that indicates that the receiving state will cover the Medicaid.  Likewise, children from North Dakota receiving non-IV-E adoption assistance payments who move to another member state may no longer be considered North Dakota residents if the ICAMA agreement indicates that the receiving state will cover the Medicaid.  The Children and Family Services division provides county agencies with information on whether a sending or receiving state is a member state and which state is responsible for the medical coverage per the agreement.  
c.	For any individual under age twenty-one not residing in an institution, whose Medicaid eligibility is based on blindness or disability, the state of residence is the state in which the individual is living.
d.	For any other non-institutionalized individual under age twenty-one, the state of residence is the state in which ~~the parent is a resident, or if~~ the child is ~~residing~~ living with the child’s parent or another caretaker relative on other than a temporary basis~~, the state in which the caretaker is a resident~~. A child is normally considered to be living in the state temporarily if:
~~i.~~	~~The child comes to North Dakota to live with relatives through a private arrangement;~~
i.	The child comes to North Dakota to receive an education, special training, or services in the Anne Carlson School, maternity homes, vocational training centers, etc. if the intent is to return to the child's home state upon completion of the education or service;
ii.	The child is placed by an out-of-state court into the home of relatives or foster parents in North Dakota on other than a permanent basis or on other than an indefinite period; or
iii.	The child entered the state to participate in Job Corps or other specialized services ~~(including a child placed by a court into the home of relatives or foster parents in North Dakota)~~ if the intent is to return to the child’s home state upon completion of the activity or service.
e.	For any institutionalized individual~~,~~ under age twenty-one~~,~~ who is neither married nor living independently, residence is that of the parents or legal guardian at the time of placement or the State of residence of the parent or legal guardian at the time of Medicaid application if the child is institutionalized in the same state. Only if the parental rights have been terminated, and a guardian or custodian appointed, may the residence of the guardian or custodian be used. If the individual has been abandoned by his parents and does not have a guardian, the individual is a resident of the state in which the individual lives.

Medical Support 510-05-40-10
Language was added to identify that a child support referral is not sent when a subsidized adoption child enters foster care.  This addition supersedes IM 5033. 

3.   An automated referral will be made to Child Support for all children whose deprivation is based on the absence of a parent, except that no referral is made when a Subsidized Adoption child enters Foster Care.

Continuous Eligibility Periods 510-05-53-15
Added clarifications and an example that continuous eligibility is not established when re-working a prior month; that continuous eligibility must end for the specific reasons identified in subsection 5; and that Iraqi and Afghan children who become continuously eligible are only eligible for the eight months permitted by their status as lawfully admitted aliens.  This addition supersedes Amended IM 5029. 

1.	Continuous eligibility may be established from the first day of the application month, or if later, the first day that the individual becomes eligible for Medicaid under a coverage group other than medically needy.  Continuous eligibility periods cannot be established when re-working a prior month.

Example 3:  An application was taken for the month of September and the child was determined medically needy for September and October.  When determining eligibility for November, the family’s income decreased so the child becomes poverty level eligible for November.  The child becomes continuously eligible effective November 1 and their continuous eligibility period end date would be equal to the redetermination due date of August 31. In November the parents provide verification of decreased income for October and when re-working the month of October the child is now poverty level eligible.  The child’s continuous eligibility period would remain November thru August.
5.	A continuous eligibility period ~~can~~ must be ended earlier than redetermination ~~only~~ for any of the following reasons:
a.	The recipient turns age 19;
b.	The recipient loses state residency;
c.	The recipient requests that their coverage end;
d.	The recipient dies; or
e.	The agency has lost contact with the recipient.
Afghan and Iraqi immigrant children who become continuously eligible are only entitled to Medicaid for the first eight months they are in the country, and not for the normal 12-month period.  Their continuous period must be ended at the end of the eight month period.  Note:  It will be necessary to contact the Helpdesk to do a data change to shorten the period.

A continuous eligibility period ~~may~~ must also be ended if it is determined that the recipient should not have become continuously eligible because the individual was approved in error; approval was based on fraudulent information; an appealed ending is upheld in favor of the agency.  

Subsidized Adoption 510-05-55-25
Language was added to identify that children eligible under Tribal subsidized adoption programs are processed the same as other non-Title IV-E subsidized adoption children.
 
Children eligible under the state or Tribal subsidized adoption programs are categorically needy (Title IV-E) or optional categorically needy (non-Title IV-E) eligible for Medicaid and no further financial determination is needed.

Community Spouse Asset Allowance 510-05-65-20
Updated the 2009 community spouse asset allowances.  This addition supersedes IM 5054. 

2.	The community spouse asset allowance is determined by first establishing a spousal share.  The spousal share is an amount equal to one half of the total value of all countable assets owned (individually or jointly) by the institutionalized, HCBS, or community spouse.
Example:
If the couple's countable assets are: | The community spouse share is:
$25,000 | $12,500
$90,000 | $45,000
$250,000 | $125,000
From the spousal share, the community spouse asset allowance is established, and is an amount that is equal to the community spouse share, but not less than ~~$20,880~~ $21,912, and not more than ~~$104,400~~ $109,560, effective January ~~2008~~ 2009 (~~$20,328~~ $20,880 and ~~$101,640~~ $104,400 effective January ~~2007~~ 2008).
Example:
If_the_spousal share is: | The community spouse asset allowance is:
$12,500 | ~~$20,880~~ $21,912 (at least the minimum)
$45,000 | $45,000
$125,000 | ~~$104,400~~ $109,560 (one-half is more than the maximum allowed, so the community spouse gets the maximum)
 
Long-Term Care Partnership Program 510-05-66
This new section, which includes sections 05-66-05 through 05-66-25, incorporates the LTC Partnership Program policy into the manual.  This addition supersedes IM 5031. 

General Information 510-05-66-05
Under the Long Term Care Partnership Program, individuals who purchase long-term care insurance policies that meet certain requirements (“Partnership Policy”) can apply for Medicaid under special rules for determining financial eligibility. These special rules generally allow the individual to protect assets equal to the insurance benefits received from a Partnership Policy so that such assets will not be taken into account in determining financial eligibility for Medicaid and will not subsequently be subject to Medicaid estate recoveries.  The North Dakota Long Term Care Partnership Program became effective on January 1, 2007.  

Asset Protection 510-05-66-10
1.	a partnership policy provides asset protection by allowing individuals to protect additional assets if assistance under Medicaid is ever needed.  Specifically, Medicaid disregards an additional amount of assets equal to the amount of insurance benefits received from the Partnership Policy.  
Example:  If an individual receives $200,000 of insurance benefits from a Partnership Policy, the individual generally will be able to retain $200,000 of assets above the amount of assets normally permitted for Medicaid eligibility.  (An equal amount of assets are also protected from Medicaid estate recovery.)  

2.	The asset disregard applies to all insurance benefits received from a Partnership Policy, regardless of whether the insurance benefits are for long-term care related costs that would not be covered by Medicaid (i.e. benefits paid for assisted living).  The asset disregard as of any date equals the insurance benefits that have been received to that date, or are due but not yet paid from a Partnership Policy, even if additional insurance benefits may be received in the future from the Partnership Policy.  (The asset disregard, however, does not include return of premium payments made upon the termination of a Partnership Policy (due to cancellation or death) since such payments do not represent insurance benefits.)

3.	With regard to married individuals, the asset disregard applies to both spouses, regardless of which spouse actually received the insurance benefits.
Example:  Mr. and Mrs. Smith have a joint Partnership Policy that will pay up to $200,000 in benefits for either of them.  Mrs. Smith enters long-term care and uses up $180,000 in benefits before she passes away.  Eventually, Mr. Smith enters long-term care.  His care is covered by the Partnership Policy for another $20,000.  The policy then ends because it has paid a total of $200,000 in benefits.  When Mr. Smith applies for Medicaid, he is allowed a disregard of $200,000 in assets in addition to his $3,000 asset level.  

In the above example, if the Partnership Policy only covered Mrs. Smith (Mr. Smith was not covered under the policy), the disregard would still be allowed for Mr. Smith, but the disregard would only be $180,000 as that was all that was paid by the policy.

Example:  Mr. and Mrs. Brown each have their own Partnership Policy that will pay up to $200,000 in benefits.  Mrs. Brown enters long-term care and uses up $150,000 in benefits from her Partnership Policy before she passes away.  Eventually, Mr. Brown enters long-term care.  His care is covered by his own Partnership Policy up to the maximum $200,000 his policy provides.  The policy then ends and Mr. Brown applies for Medicaid.  He is allowed a total disregard of $350,000 in assets in addition to his $3,000 asset level ($200,000 from his policy and $150,000 for Mrs. Brown’s policy).  

Application of Other Medicaid Provisions 510-05-66-15
1.	Eligibility for Medicaid is subject to all other eligibility provisions, such as the disqualifying transfer provision and home equity limitation. For instance, the individual can become Medicaid eligible while retaining the assets, but if the assets are given away without receiving adequate compensation, it may be considered a disqualifying transfer and the individual may be ineligible for coverage of long-term care costs.  
Example:  Mr. White had a Partnership Policy that paid $180,000 in benefits before it ended.  He is still in the nursing home so applies for Medicaid to further assist with his expenses.  He had farmland worth $120,000 and $62,000 in liquid assets, for total countable assets of $182,000.  During the application process he transferred ownership of his farmland to his children without receiving adequate compensation.  This was a disqualifying transfer that causes him to be ineligible for coverage of nursing care services.  If he had not made the transfer, he would have been eligible for Medicaid as $180,000 was protected, and the remaining $2000 in countable assets was within the $3000 asset limit.  His penalty period begins in the month of the transfer because he was otherwise eligible for Medicaid at that time.  

2.	With regard to annuities or special needs trusts, the requirement to name the Department as a primary beneficiary still applies.

Partnership Policies  510-05-66-20
1.	In order for a long-term care insurance policy to be considered a Partnership Policy (including a certificate issued under a group insurance contract) the policy must satisfy all of the following requirements:
a.	The policy must be a qualified long-term care insurance contract, as defined in the Internal Revenue Code of 1986.  The majority of all long-term care policies legally sold in North Dakota already meet this requirement.
b.	The policy must be issued on or after January 1, 2007 which is the effective date of the North Dakota Long Term Care Partnership Program.  A policy issued prior to January 1, 2007 is treated as newly issued and eligible for Partnership Policy status only if it is reissued or exchanged on or after January 1, 2007. The addition of a rider, endorsement, or change in the schedule page to policies issued prior to January 1, 2007, may be treated as an exchange for the purpose of meeting the Long Term Care Partnership requirements.
c.	The policy must cover an insured individual who was a resident of the state when coverage first became effective under the policy. 
d.	The Federal consumer protection requirements of the Social Security Act must be met with respect to the policy. The majority of all long-term care policies legally sold in North Dakota already meet this requirement.
	e.	The policy must include the proper inflation protection based on the insured individual’s age at the time the coverage became effective.  
i.	If the policy was sold to an individual who was under age 61 on the date of purchase, the policy must provide compound annual inflation protection.   There is no set minimum percentage level.  Compound inflation protection must continue on the policy and may only end when the policy doubles, or when the insured individual reaches age 76, whichever occurs first;
ii.	If the policy was sold to an individual who was age 61 but had not attained age 76 as of the date of purchase, the policy must provide some level of inflation protection.  There is no set minimum percentage level.  Inflation protection, which can include simple interest inflation protection,  must continue on the policy and may only end when the policy doubles, or when the insured individual reaches age 76, whichever occurs first; and 
iii.	If the policy was sold to an individual who had attained age 76 as of the date of purchase, no inflation protection is required.

2.	A partnership policy issued in North Dakota will be identified by a notice to the policy holder (from the insurer) that certifies it as a Partnership Policy at the time the policy is issued.  The notice will be issued if the policy meets all of the above criteria, including the inflation protection requirements.  Because policies may be changed after they are issued, when an individual applies for Medicaid, they will need to obtain and provide a current notice from the insurer indicating whether the policy continues to meet the Partnership Policy requirements, and if so, to identify the amount of benefits paid while meeting those requirements.

Reciprocity  510-05-66-25
The North Dakota Long Term Care Partnership Program will provide reciprocity with respect to long-term care insurance policies covered under other state long-term care insurance partnerships.  This will allow individuals who purchase a Partnership Policy in one state to move to another state with a Long Term Care Partnership program without losing the asset protection.  This protection is only available between states that offer reciprocity.  A federal database is being developed to identify states that agree to reciprocity, and to identify Partnership Policies from those states.  

Asset Considerations 510-05-70-10
Subsection 1 was broken down into subdivisions, and a new subdivision (g) was added to identify that entrance fees or deposits paid to a continuous care retirement community or a lifecare community are considered available assets under certain circumstances.  This policy is a result of the Defict Reduction Act, and the fact that we are now seeing such facilities in the state.  Finally, language was added to subsection 3 to clarify that pre and post-nuptial agreements have no affect on Medicaid asset determinations and do not allow spousal assets to be considered unavailable.

1.	All assets which are actually available must be considered in establishing eligibility for Medicaid. Assets are actually available when at the disposal of an applicant, recipient, or responsible relative; when the applicant, recipient, or responsible relative has a legal interest in a liquidated sum and has the legal ability to make the sum available for support, maintenance, or medical care; or when the applicant, recipient, or responsible relative has the lawful power to make the asset available, or to cause the asset to be made available.  Asset availability is also as follows:
a.	An individual may have rights, authority, or powers, which he or she does not wish to exercise. Examples include individuals who choose not to collect a secured debt or individuals who believe family disharmony would result from the sale of the individual's interest. It is important to distinguish the individual's desire to avoid a sale from an absence of any right, authority, or power to sell. In such cases, the value of the property will be counted as an available asset whether or not the applicant or recipient pursues selling the asset. Likewise, Medicaid does not require an individual to begin foreclosure against a note in default. However, because the individual has the authority to do so, the current value of the note will be counted as an available asset.
b.	When an applicant or recipient files bankruptcy, it is necessary to consider the terms of the bankruptcy and to determine which assets are included in the bankruptcy. Any assets that are exempt from the bankruptcy are considered available assets for Medicaid purposes.
c.	When an applicant or recipient is a creditor to someone else who files bankruptcy, determine if the applicant or recipient has any security on the debt. If there is security (e.g. the debt is a contract for deed or promissory note on real property), the asset is considered to be available. If there is no security, the asset is not considered to be available.
d.	Occasionally, some children receive money through the Uniform Gift to Minors Act. These funds are considered available to the child for Medicaid purposes. A minor, or if under age 14, someone acting on their behalf, can request that the funds be made available to meet the needs of the child.
e.	Funds from a loan that must be repaid, and that the applicant or recipient demonstrates are for a purpose unrelated to achieving Medicaid eligibility, are not considered to be available assets if identifiable as a loan and if not commingled with other assets.
f.	The surrender or equity value of any money, insurance, or other property given to another person or entity to be held for the use of a member of the Medicaid unit is considered to be held in trust and is available to the extent provided in 510-05-70-50 (Trusts).
g.	When an applicant or recipient has paid an entrance fee or deposit to a continuous care retirement community or a lifecare community, the entrance fee or deposit is considered  an available asset to the extent that:
i.	The individual has the ability to use the funds, or the contract provides that the funds may be used, to pay for care;
ii.	The individual is eligible for a refund of any remaining funds when the individual dies or leaves the community; or
iii.	The payment or deposit does not confer an ownership interest in the community.

2.	The financial responsibility … 
3.	All spousal assets are considered actually available unless:
a.	A court order, entered following a contested case, determines the amounts of support that a spouse must pay to the applicant or recipient;
b.	The spouse from whom support could ordinarily be sought, and the property of such spouse, is outside the jurisdiction of the courts of the United States;
c.	The applicant or recipient has been subject to marital separation, with or without court order, the parties have not separated for the purpose of securing Medicaid benefits; or
d.	In cases where spousal impoverishment applies, the assets are those properly treated as belonging to the community spouse.
Pre-nuptial, or post-nuptial, agreements have no affect and do not allow spousal assets to be considered unavailable.

Forms of Asset Ownership 510-05-70-20
Language was added to subsection 3 to clarify that liquid assets held jointly between two Medicaid units is considered to be owned in equal shares instead of in full.  This prevents double-counting the assets.

3.	Liquid assets in shared ownership are available in total to the Medicaid unit, unless the liquid asset is held jointly with an individual who is in a different open Medicaid case.  In that instance, the liquid asset is considered to be owned in equal shares by each Medicaid unit so that the assets are not counted more than once.

Exempt Assets 510-05-70-25
An additional paragraph was added to subsection 1 to clarify what needs to be included in a physician’s note that indicates an individual in LTC is likely to return home within 6 months.   Several examples were also added.

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.  

Excluded Assets 510-05-70-30 
Three new subdivisions were added to subsection 2 to clarify the time periods to wait for real property, other property, and annuities, to determine if the property is not saleable without working an undue hardship following a good faith effort to sell.  The remaining subdivisions were re-numbered.  
In subsection 3, the burial allowance was increased to the new amount of $6000, and a new paragraph was added to clarify when and how markers and vaults are counted as available assets.  Because the $6000 burial allowance is not effective until August, the effective date for changes to this section is August 1, 2009.

2.	Property that is not saleable without working an undue hardship. Property that is not saleable without working an undue hardship means property which the owner has made a good faith effort to sell which has produced no buyer willing to pay an amount equaling or exceeding seventy-five percent of the property's fair market value, and which is continuously for sale. Property may not be included within this definition at any time earlier than the first day of the first month in which a good faith effort to sell is begun.
Refer to 05-05 for the definition of "good faith effort to sell" to determine the method and order in which an attempt to sell property must be made.
a.	Persons seeking to establish retroactive eligibility must demonstrate that good faith efforts to sell were begun and continued in each of the months for which retroactive eligibility is sought.
~~b.~~	~~Eligibility cannot be determined until the third month after the month in which the good faith effort began.~~ Good faith efforts to sell, other than for an annuity, must be repeated at least annually.
c.	When making a good faith effort to sell real property, wait to determine eligibility until the third month after the month in which the good faith effort began.  This provides a reasonable amount of time for offers to be received without loss of potential months of eligibility for an applicant.  If the property is determined to be non-saleable without working an undue hardship, the property must remain continuously for sale, and any offers received must be reported.  
d.	When making a good faith effort to sell property other than real property or an annuity, wait to determine eligibility until at least 30 days after the good faith effort has been made to determine if any offers are received. If the property is determined to be non-saleable without working an undue hardship, the property must remain continuously for sale, and any offers received must be reported. 
e.	When making a good faith effort to sell an annuity, there is a specific market, known as the factors market, to which the good faith effort must be made.  Eligibility may be determined after the good faith effort has been made and responses received from the factors that were contacted.  
~~c~~  f.	If a Medicaid unit claims … 
~~d~~ g.	In order to demonstrate that property is …
~~e~~ h.	When offering property for sale …
~~f~~ i.	It is expected that a “good faith effort to sell” …

3.	Any prepayments or deposits, regardless of ownership, which total ~~$5000~~ $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.

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 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.  
c.	Normally a life insurance policy is a countable asset valued at its cash surrender value, however, ~~W~~when a whole life insurance policy or an annuity is 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 disability insurance plans do not increase the cost basis.

i.	At the time of application the value of a designated burial fund is determined by identifying the value of the prepayment which are subject to the burial exclusion and asset limit amounts.

Designated burial funds, other than life insurance, which have been decreased prior to application for Medicaid will be considered redesignated as of the date of last withdrawal. The balance at that point will be considered the prepayment amount and earnings from that date forward will be disregarded.
For example: A savings account of $5000 ~~$8000~~ designated for burial has grown to ~~$7000~~ $8000. The owner withdraws $1000 before application for Medicaid. All ~~$6000~~ $7000 is now considered to be the principal amount designated.
~~$5000~~ $6000 would be excluded for burial and the remaining $1000 would be applied to the $3000 asset limit.

Contractual Rights to Receive Money Payments 
510-05-70-40
Language was changed in subsection 3 to identify how the value of a contract for deed is determined.  If the contract is current, it is the value of the outstanding payments of principle; and if it is not current, it is in default so is the value of the property securing the contract, or if not secured by property, the outstanding principle and past due interest.  Language was also added to subsections 4 and 5 to clarify that annuities have their own method of valuation as identified in the annuity sections of the manual.

3.	 Contract values.
a.	The value of a contract in which payments are current is equal to the total of all outstanding payments of ~~principle~~ principal  ~~and interest~~ required to be made by the contract, unless evidence is furnished that establishes a lower value.  
b.	The value of a contract in which payments are not current is an amount equal to the ~~greater total of all outstanding payments of principle and interest required to be made by the contract, or the contract~~  current fair market value of the property subject to the contract. ~~SFN 880, "Contractual Right to Receive Money Payments Valuation Request," (05-100-95) may be used to request a valuation from the Legal Advisory Unit when payments are not current. The request must indicate the amount of each payment made and time each such payment was made.~~  If the contract is not secured by property, the value of the contract is the total of all outstanding payments of principal and past due interest required to be made by the contract.
4.	The purchase or establishment of a …

b.	Except for annuities (see 05-70-45), a contractual right to receive money payments that consists of a promissory note, loan, or mortgage is ~~The contract itself is also~~ a disqualifying transfer unless:
i.	All payments due on the contract are …
5.	There is a presumption that the holder's interest in contractual rights to receive money payments is saleable without working an undue hardship. This presumption may be rebutted by evidence demonstrating that the contractual rights are not saleable without working an undue hardship, or in the case of an annuity, by establishing its countable value for Medicaid purposes (see 05-70-45-15 for valuation of annuities) (see 05-70-30(2) for more information regarding property that is not saleable without working an undue hardship).

Valuation of Annuities 510-05-70-45-15
Clarification was added to specifically identify one method of establishing the value of an annuity.
 
1.	The value of a countable annuity is:
a.	If the annuity may be surrendered to its issuing entity for a refund or payment of a specified amount or provides an available lump-sum settlement option, an amount equal to the total available proceeds from that refund, surrender, or settlement; and
b.	For any other annuity, an amount equal to either:
~~i.~~	~~Its value as a contractual right to receive money payments (~~ The value of all outstanding payments ~~due)~~ required to be made by the annuity; or

Annuities Purchased from August 1, 2005 Through February 7, 2006 510-05-70-45-25
This section was updated to include the 2009 annuity payment limits.  This addition supersedes IM 5054.

2.	The annuity is counted as an available asset in the asset test unless:
c.	The annuity meets all of the following conditions:
v.	The monthly payments from all annuities that meet the requirements of this subsection do not exceed ~~$2610~~ $2739 effective January ~~2008~~ 2009 (~~$2541~~ $2610 for ~~2007~~ 2008) and, when combined with the annuitant’s other income at the time of application for Medicaid, does not exceed ~~$3915~~ $4109 effective January ~~2008~~ 2009 (~~$3811~~ $3915 for ~~2007~~ 2008); and

Annuities Purchased or Changed on or After February 8, 2006 510-05-70-45-30
This section was updated to include the 2009 annuity payment limits.  This addition supersedes IM 5054.

3.	The annuity is counted as an available asset in the asset test unless:
c.	The annuity meets all of the following conditions:
v.	The monthly payments from all annuities that meet the requirements of this subsection do not exceed ~~$2610~~ $2739 effective January ~~2008~~ 2009 (~~$2541~~ $2610 for ~~2007~~ 2008) and, when combined with the annuitant’s other income at the time of application for Medicaid, does not exceed ~~$3915~~ $4109 effective January ~~2008~~ 2009 (~~$3811~~ $3915 for ~~2007~~ 2008); and
vi.	If the applicant for Medicaid is age 55 or older, the Department of Human Services is irrevocably named as the primary beneficiary of the annuity following the death of the applicant and the applicant’s spouse, not to exceed the amount of benefits paid by Medicaid.  If a minor child who resided and was supported financially by the applicant or spouse, or disabled child, survives the applicant and spouse, any payments from the annuity will be provided to those individuals.

NOTE:  This subsection applies to determining whether an annuity is a countable asset.  The provision in paragraph (vi) above allows a community spouse to name an institutionalized spouse (IS) or HCBS spouse as the primary beneficiary ahead of the Department.  If the annuity, however, was purchased or changed within the individual’s or the individual’s spouse’s look back period, ONLY a community spouse (not an IS or HCBS spouse) can be named ahead of the Department to avoid a disqualifying transfer as discussed in subsection 4 below.

Example:  Mr. White, who is in LTC, has an annuity that meets the criteria above and names Mrs. White, the community spouse, as the primary beneficiary and the Department as the secondary beneficiary.  The annuity is excluded as an asset and is not considered a disqualifying transfer because Mrs. White is a community spouse.

Mrs. White also has an annuity that meets the criteria above and names Mr. White as the primary beneficiary and the Department as the secondary beneficiary.  The annuity is excluded as an asset because it meets the criteria above, however, it may be considered a disqualifying transfer because Mr. White is not a community spouse.  It is necessary to determine whether Mrs. White’s annuity was purchased or changed within Mr. or Mrs. White’s look back period.  If it was, then her annuity is a disqualifying transfer equal to the annuity value.  If the annuity was last changed prior to their look back periods, then it is not an issue.

Valuation of Assets 510-05-70-60
Subsection 2 was changed as contractual rights to receive money payments no longer are sent to the Legal Advisory Unit for valuation, and life insurance companies are identified as the source to value life insurance policies.  An example was added to subsection 4 for clarification on determining the amount of a disqualifying transfer when transferring a remainder interest without compensation.

2.	With respect to personal property other than liquid assets:
e.	With respect to contractual rights to receive money payments: If payments are current, the contract, and if payments are not current, ~~the Legal Advisory Unit of the Department (~~see 05-70-40~~)~~.  
f.	With respect to other personal property: dealers and buyers of that property.
g.	With respect to life insurance policies, the insurance company.

4.	Divided or partial interests. …
c.	Life estates and remainder interests.
iii.	In most situations, the act of establishing a life estate interest in property is transferring a partial interest, a remainder interest, in property to someone else, while retaining (or giving another) the life estate interest. When transferring a remainder interest, part of the value of the property is also transferred. The value transferred is established by multiplying the value of the property at the time of transfer by the appropriate value in the remainder interest column of the life estate and remainder interest table. 
Example:  A 75-year-old individual transfers a remainder interest in property, valued at $80,000, to his children and keeps a life estate interest. Using the table, the value of the remainder interest is $38,280.80 ($80,000 x .47851 = $38,280.80).  That is the amount he gave to his children and is the amount of the disqualifying transfer.  He still owns the life estate interest, which has a value of $41,719.20. 

Equity in the property must also be considered when determining the amount of the transfer. If there is a loan against the property that is assumed by the remaindermen as part of the transfer, then the amount of the loan is considered compensation received. If the life tenant retains the loan obligation, the full value of the remainder interest is the amount transferred.

Example: A 75-year-old transfers a remainder interest ~~and keeps a life estate interest~~ in property, valued at $80,000, to his children and keeps a life estate interest. He has a $20,000 mortgage on the property, which he is still obligated to pay. Using the table, the value of the remainder interest is ~~$35,888.25~~ $38,280.80 ($80,000 x .47851 = ~~$35,888.25~~ $38,280.80) and is the value of what he transferred away. He still owns the life estate interest, which has a value of ~~$44,111.75~~ $41,719.20, but he only has ~~$24,111.75~~ $21,719.20 in equity (~~$44,111.75~~ $41,719.20 - $20,000 loan). If the children who received the remainder interest also assumed the mortgage, the children actually are giving compensation, so the uncompensated amount of the transfer is only ~~$15,888.25~~ $18,280.80 (~~$35,888.25~~ $38,280.80- $20,000 loan = ~~$15,888.25~~ $18,280.80).

Definitions 510-05-80-05
The 2009 average cost of nursing care was updated.  This addition supersedes IM 5057.

9.	The average cost of nursing facility care is:
 
Year | Daily Rate | Monthly Rate
2009 | 179.27 | 5453
2008 | 165.59 | 5037
2007 | 159.96 | 4865

Penalty Periods 510-05-80-15
An additional example was added for clarification.  In this case the transfer penalty period was already past when the transfer was discovered, so the case is not closed, and only an overpayment is established.

6.	As with any adverse action, proper notice is required before the adverse action can be taken.  On an application, proper notice is given in the approval or denial notice.  In an ongoing case, even though the penalty period should have already begun, it cannot be imposed until an advance notice is provided to the recipient.  For the period of time from when the penalty period should have started through the date it is imposed following advance notice, an overpayment must be processed (manually).
Example:  Ms. Green is a current Medicaid recipient receiving HCBS.  On November 2 she made a disqualifying transfer of her home and reported it to the county on December 5.  The county determines a penalty period from November 1 through September 15 of the next year.  An advance notice is sent to Ms. Green informing her that Medicaid will stop paying her HCBS services from December 16 through September 15 of next year.  A manual overpayment is established for HCBS payments made by Medicaid for the period of November 1 through December 15.
 
Example:  Mr. Brown is a current Medicaid recipient in a long-term care facility.  On March 28 of last year he made a disqualifying transfer of an inheritance, but did not report it until January of this year.  The county determines a penalty period from March 1 of last year through December 17 of last year.  Since the penalty period has elapsed, and the county cannot give a 10 day notice, the penalty period will not be imposed, however, an overpayment in the amount of the long-term care benefits paid for Mr. Brown from March 1 to December 17 of last year is established. 

Hardship Provision 510-05-80-20
The assets allowed when determining a hardship is changed to include the new burial allowance which is effective August 1, 2009.  Because the $6000 burial allowance is not effective until August, the effective date for changes to this section is August 1, 2009.

4.	An undue hardship exists only if the individual shows that all of the following conditions are met:
e.	The individual’s remaining available assets, and the remaining assets of the individual’s spouse, if any, are less than the asset limit applicable to a Medicaid eligible unit that would include the individual, the individual’s spouse, if any, and the individual’s minor children, if any, counting the value of all assets except:
i.	The home, but not if the individual, or the individual's spouse, if any, have equity in the home in excess of $125,000;
ii.	Exempt personal effects, wearing apparel, household goods, and furniture;
iii.	One motor vehicle, if the primary use of the vehicle is to serve the needs of members of the Medicaid unit; and
iv.	Funds for burial of ~~$5,000~~ $6000 or less for the individual and the individual's spouse.

Exceptions to Disqualifying Transfer Provision 
510-05-80-25
A note was added to subsection 2 to identify that if assets protected under the LTC Partnership Program are transferred without compensation, it is a disqualifying transfer.  This addition supersedes IM 5031.  Clarification was added to subsection 3 that the value of the home or residence is not included when identifying the amount of assets that can be transferred from an institutionalized or HCBS spouse to the community spouse.

2.	A transfer is not disqualifying to the extent that the asset transferred was any Medicaid exempt or excluded asset other than:
a.	The home or residence;
b.	Property which is not saleable without working an undue hardship;
c.	Excluded home replacement funds;
d.	Excluded payments, excluded interest earned on the payments, and excluded in-kind items received for the repair or replacement of lost, damaged, or stolen exempt or excluded assets;
e.	Life estate interests;
f.	Mineral acres;
g.	Inheritances, during the six months in which they are excluded; or
h.	Annuities.
Note:  This exception to the disqualifying transfer provision does not allow transfers of assets that are protected under the Long Term Care Partnership Program.  If assets protected under the Long Term Care Partnership Program are transferred, the disqualifying transfer provisions in 05-80-10 apply.
3.	A transfer is not disqualifying to the extent the income or assets were transferred:
a.	To the individual's spouse or to another for the sole benefit of the individual's spouse, except that transfers to a community spouse may not exceed the limits identified in section 05-65-15, Institutionalized Spouse or HCBS Spouse Asset Limit (the value of the home or residence is not included in the limit on assets that can be transferred to a community spouse, but the limit only applies to other assets);

Transfers to Relatives for Services Received 510-05-80-35
Three examples were added to clarify when a contract with an individual’s fiduciary is acceptable.

Where any income or asset is transferred to a relative for services or assistance furnished by the relative, the services or assistance furnished may not be treated as consideration for the transferred income or asset unless:
 
1.	The transfer is made pursuant to a valid written contract entered into prior to rendering the services;
2.	The contract was executed by the individual or the individual's fiduciary who is not a provider of services or assistance under the contract;
Example:  It is acceptable for a Medicaid recipient’s fiduciary to sign the contract to have a third party provide the services. 
Example:  It is not acceptable for a Medicaid recipient’s fiduciary to sign the contract to have the fiduciary provide the services. 
Example:  It isacceptable for a competent Medicaid recipient to sign the contract to have the fiduciary provide the services. 
3.	Compensation is consistent with rates paid in the open market for the services actually provided; and
4.	The parties' course of dealing included paying compensation upon rendering services or assistance, or within 30 days thereafter.

Unearned Income 510-05-85-15
The processing of new source income into an IIM account was added.  This addition supersedes IM 5063.

5.	Types of unearned income include but are not limited to:
p.	Payments, not otherwise disregarded in section 05-85-30 (relates to income from leases and trust or restricted funds for non-LTC and Medicare Savings Programs), that are deposited in Individual Indian Monies (IIM) accounts by the Bureau of Indian Affairs (BIA).
Payments received in either the past twelve months or in the most recent four full calendar ~~year~~ quarters may be used to estimate the current IIM payments. If the applicant or recipient demonstrates, by furnishing lease documents or reports, that the deposit amount will be substantially different, current payments ~~may~~ must be determined by totaling all payments likely to be made in the twelve-month period beginning with the month in which the lease arrangement changed.

When new source income is deposited into an individual’s IIM account, the countable amount is determined using the IIM account verification from either the past twelve months or the most recent four full calendar quarters, less deposits that cannot be counted as IIM income, such as inheritances, VA, SSA, SSI, gaming profits, etc.   The new source income from the most current month, or an average if received for multiple months, is multiplied by twelve and added to the countable deposits for the twelve-month period (excluding the new source income deposited into the IIM account).  The $2000 disregard is subtracted, and the remaining balance is divided by twelve to determine the monthly countable unearned income.   

Earned Income 510-05-85-20
Since income received for temporary employment with the Census Bureau is disregarded, it is removed as a type of countable earned income to avoid confusion.  This addition supersedes IM 5048.  In subsection 4, language was added to address the annual rate change when determining self-employment income for QSPs, and in determining total countable income for QSPs who are providing care to family members.  An example was also added.  This information was previously provided in FYI 08-055.

3.	Types of earned income include:
l.	~~Census income;~~
~~m.~~	Stipends and the "living allowance" portion of earnings from AmeriCorps (not to be confused with AmeriCorps*VISTA); and
~~n~~ m.	The Family Subsistence Supplemental Allowance (FSSA) paid to members of the Armed Services.

4.	Calculating "self-employment" income:
a.	Self-employed individuals whose business does not require the purchase of goods for resale. Examples of this type of business include persons who provide childcare services in their own home, or qualified service providers (QSP's) (who are not employees of a home health agency) who provide HCBS. For example, those QSP's who receive payments from the Department. Such income may be accounted for on a monthly basis, or the income tax return from the previous year may be used if it reflects a full year’s operation. When the tax return is used, one-twelfth of the annual gross income is monthly earnings. The first 25% of the gross monthly earnings shall be disregarded to offset the cost of producing the income and will cover such things as additional food, utilities, supplies, etc. The remaining 75% of gross monthly earnings is the figure to which the appropriate earned income deductions are applied to arrive at monthly net income.

QSP rates change each July, and per policy at 510-05-85-05(1), all income which is available to a unit must be considered.  The annual increase in the rate paid is a known increase, so must be taken into consideration when determining income.  The daily rate the QSP is paid should be used.  It is important also to note that income tax returns filed by QSPs who are providing services to a family member may only include the income they are paid by the Department, and not the recipient liability amount that is applied toward the QSP bill (because they did not collect the recipient liability from their family member). The recipient liability due the QSP is income they are paid in addition to that from the Department.  The available income to the QSP must include the higher rate and any recipient liability amounts due them. The self-employment percentage disregard and earned income deductions can then be allowed from this total amount. As a result, all available income will be correctly counted. Following is an example:

Example:  Mr. Brown receives HCBS services. Mrs. Brown is the QSP and she is entitled to receive the current rate of $36.51 per day. Prior to July she was paid only $26.84 per day. Instead of using last year’s tax return, the current rate should be used beginning in July. $36.51 x 365 divided by 12 provides a monthly estimate of earnings, to which the 25% self-employment disregard can be applied. This amount can be used until there is a rate change, at which time a new calculation is needed.

New rate increase information can be obtained from the QSP, or from the HCBS case manager, as rates will vary by case, depending on the type and amount of services received.

Post Eligibility Treatment of Income 510-05-85-25
This is new policy which allows for a medical expense deduction of old medical bills that are actually paid in the month for which eligibility is being determined.  The deduction, however, is not allowed if the expense was previously used as a current month incurred expense to reduce recipient liability, or if it was used to offset recipient liability.  If the expense is allowed here, it must be removed from the offset screen so that it cannot later be used again. 

3.	In establishing the application of income to the cost of care, the following deductions are allowed in the following order:
a.	The nursing care income level;
b.	Amounts provided to a spouse or family member for maintenance needs;
c.	Medical expenses for necessary medical or remedial care. Each medical or remedial care expense claimed for deduction must be documented in a manner, which describes the service, the date of the service, the amount of cost incurred, and the name of the service provider. An expense may be deducted only if it is:
i.	Incurred in the month for which eligibility is being determined, or was incurred in a prior month but was actually paid in the month for which eligibility is being determined and was not previously allowed as a deduction or offset of recipient liability;
ii.	Provided by a medical practitioner licensed to furnish the care;
iii.	Not subject to payment by any third party, including Medicaid and Medicare;
iv.	Not incurred for nursing facility services, swing bed services, or HCBS during a period of ineligibility because of a disqualifying transfer; and
v.	Claimed.

Disregarded Income 510-05-85-30
Added language to disregard income from temporary employment with the Census Bureau.  This addition supersedes IM 5048.  

44.	Medicare Part D premiums, copayments, and deductibles refunded by prescription drug plans; ~~and~~
45.	For periods after October 1, 2008, all wages paid by the Census Bureau for temporary employment related to census activities will be disregarded as income; and  
46.	Reimbursements from an employer… 
					
Income Deductions 510-05-85-35
This is new policy which allows for a medical expense deduction of old medical bills that are actually paid in the month for which eligibility is being determined.  The deduction, however, is not allowed if the expense was previously used as a current month incurred expense to reduce recipient liability, or if it was used to offset recipient liability.  If the expense is allowed here, it must be removed from the offset screen so that it cannot later be used again. 

2.	Except in determining eligibility for the Medicare Savings Programs, medical expenses for necessary medical or remedial care claimed for deduction must be documented in a manner which describes the service, the date of the service, the amount of cost incurred, and the name of the service provider. A medical expense may be deducted only if it is:
a.	Incurred:
i. 	~~by~~ By a member of a Medicaid unit in the month for which eligibility is being determined; or
ii.	By a member of the Medicaid unit (or a spouse or child they were legally responsible for) in a prior month, but was actually paid in the month for which eligibility is being determined, and was not previously allowed as a deduction or offset of recipient liability;

5.	Except in determining eligibility for the Medicare Savings Programs, the cost of remedial care for an individual residing in a specialized facility limited to the difference between the recipient’s cost of care at the facility (e.g. room and board in a basic care facility) and the regular medically needy income level may be deducted.
Example:
Recipient’s cost of care at the facility | $980
Less the medically needy income level for one | - ~~500~~750
Remedial Care Deduction | $~~480~~230

Income Levels 510-05-85-40
The new medically needy income levels, at 83% of poverty were added to subsection 2(a).  The 2009 family member income level in spousal impoverishment cases was updated in subsection 2(d).  The 2009 poverty levels were updated in subsection 3 (not shown).  This addition supersedes IM 5062.
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 | ~~$500~~ $ 750
2 | ~~516~~ 1008
3 | ~~666~~ 1267
4 | ~~800~~ 1526
5 | ~~908~~ 1784
6 | ~~1008~~ 2043
7 | ~~1083~~ 2302
8 | ~~1141~~ 2560
~~9~~ | ~~1200~~
~~10~~ | ~~1250~~
Effective ~~January 1, 2003~~ July 1, 2009
For each person in the medically needy unit above ~~ten~~ eight, add ~~$57~~ $259 to the monthly amount.
d.	Family member income level. The income level for each ineligible family member in a spousal impoverishment case is ~~$584~~ $607 effective April ~~2008~~ 2009 ($~~571~~ 584 effective April ~~2007~~ 2008).
 
3.	Poverty income levels.
a.	Qualified Medicare Beneficiaries and Children age six to nineteen. The income level is equal to one hundred percent of the poverty level applicable to a family of the size involved.
For Qualified Medicare Beneficiaries these levels apply regardless of living arrangements (i.e., in home or in a nursing facility...).
Annual Title II cost of living allowances effective in January shall be disregarded when determining eligibility for QMBs for January, February, and March. This disregard prevents QMBs from becoming ineligible pending issuance of the new poverty levels which are effective April 1 of each year.
For individuals and families with children age six to nineteen, the family size is increased for each unborn when determining the appropriate family size.

Number of Persons | Monthly Income Level
1 | ~~$ 867~~ $ 903
2 | ~~1167~~ 1215
3 | ~~1467~~ 1526
4 | ~~1767~~ 1838
5 | ~~2067~~ 2150
6 | ~~2367~~ 2461
7 | ~~2667~~ 2773
8 | ~~2967~~ 3085
Effective April 1, ~~2008~~ 2009

Refugee Medical Assistance Program 510-05-95-20
Language was added to subsection 3 to clarify that the eight months of Refugee Medical Assistance for an asylee only begins at the point asylum is granted.  A new subsection 5 was added to clarify that a refugee who is determined eligible with a recipient liability has that recipient liability for each month of their coverage.  The recipient liability cannot increase, but can decrease if there is a decrease in income.

3.	Refugee Medical Assistance is available during the first eight months a refugee is in this country, the first eight months after an asylee has been granted asylum, or longer if an unaccompanied minor.  
a.	Unaccompanied minors are not limited to the eight-month refugee time limit, but can remain eligible under the unaccompanied minor coverage until age 21. Children age 18-21 must be attending school full time.
b.	The date an asylee is granted asylum (regardless of the actual date of entry) is considered the date the asylee entered the country and and is the first month of the eight month period.
c.	When any other refugee has been in this country for eight months, Refugee Medical Assistance ends. Refugees who want continued medical coverage must have their eligibility determined under the Medicaid or Healthy Steps programs.
5.	A refugee who has income above the medically needy income level will have a recipient liability.  Because increases in income do not affect eligibility, the recipient liability will remain the same for the duration of the Refugee Medical Assistance coverage, except that the recipient liability can decrease if income decreases or expenses increase.  
 
* 	For Asylee's, individuals that enter the US and have not been granted Asylum by INS are considered an 'Applicant for Asylum'. Federal Law prohibits 'Applicants for Asylum' from being eligible for Medicaid or Refugee Medical Assistance.  Therefore, they must be granted Asylum ~~during the first 8 months of residing in the US~~ in order to be eligible for Medicaid or Refugee Medical Assistance under the 'Refugee Category'. ~~In most situations, an alien who applies for asylum (Applicant for Asylum), is not actually granted asylum until after residing in the US for 8 months and thus most would not be eligible for Medicaid or Refugee Medicaid Assistance.~~

Caring for Children 510-05-95-35
The Caring For Children phone number was changed.  This addition supersedes IM 5049.

Caring For Children is a program, operated by the North Dakota Caring Foundation, that provides health and dental benefits to eligible children, at no cost to the children or their families.  Children from birth through age 18 who are ineligible for Medicaid, Healthy Steps, or other health insurance may qualify for coverage.  For information about Caring For Children ~~or to apply~~, call ~~1-800-342-4718 (277-2227 in Fargo)~~ 1-877-KIDS NOW (1-877-543-7669).

Word Search Assistant
The Word Search Assistant was previously added as a new section to the manual, but was not previously identified in a manual letter.

Typographical Corrections
Other typographical corrections and clean-up changes were made, but are not significant enough to address here. 

	Par. 2.  Effective Date  -- This manual letter is effective for the benefit month of July 2009, except for sections 510-05-70-30 and 510-05-80-20 which are effective for the benefit month of August 2009.

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Carol K. Olson, Executive Director	Manual Letter #3183
North Dakota Department of Human Services	Page  of  Pages