Adult Medicaid Manual MA-2270 LONG TERM CARE NEED AND BUDGETING

V. LONG TERM CARE BUDGETING COMPUTATION

A. Determine Whose Income to Count

1. Count only the a/r’s income in determining financial eligibility when the a/r does not have a spouse, or the a/r is an institutionalized disabled child.

2. Count only the a/r’s income when the a/r is married but the spouse remains in a private living arrangement, or in a separate ltc facility, or they share a ltc room but only one spouse requests Medicaid to pay for cost of care.

3. Count both spouse's income when they share a room in a facility and both request Medicaid to pay for cost of care.

B. Establish Financial Eligibility (STEP I)

The a/r must be financially eligible for Medicaid in order to receive help with cost of care. There are several different ways to establish financial eligibility. These are explained in items 1-4 beginning with the most frequently used method. A person only has to qualify under one of the methods. Use DMA-5008, SUPPLEMENT B, as a guide. Financial eligibility (Step I) is already established for SSI Medicaid recipients. Refer to MA-1100, SSI Medicaid-County DSS Responsibility.

1. Nursing Facility's Medicaid Reimbursement Rate (DMA-5008, Supplement B, Step I., A.)

Each facility has an assigned Medicaid reimbursement daily rate based on the medical needs of the facility’s population. To find that rate go to the DMA website at: www.ncdhhs.gov/dma/, click on “provider Links,” scroll down to “Publications,” click on “Fee Schedules,” then scroll down and click on “Nursing Facility Rates.”

Or contact the Division of Medical Assistance, Medicaid Eligibility Unit, 1-919-855-4000.

Note: Rates are adjusted quarterly.

REISSUED 11/01/07 – CHANGE NOTICE 25-07

(V.B.1)

a. When the daily rate for the selected facility is found, multiply that rate by 31 days and round up to the next highest whole dollar. The resulting figure will be the Medicaid reimbursement rate for 31 days.

Example: Daily rate of $107.63 x 31 days = $3,328.16; rounded up to the next highest dollar is $3,329. $3,329 will be the Medicaid reimbursement rate for 31 days.

b. Compare total gross income (nothing excluded) to the facility’s assigned Medicaid reimbursement rate for 31 days.

c. If gross income is less than the facility's assigned Medicaid reimbursement rate for 31 days, the person is financially eligible. Proceed to STEP II to determine the pml.

d. If gross income is greater than the rate, continue to 2., below.

NOTE: Be sure to evaluate the applicant/recipient for Passalong eligibility. This evaluation is done in Step I only. See MA-2110, Passalong.

2. Facility's Private Rate (DMA-5008, Supplement B, Step I., B.)

When the a/r’s gross income is greater than the Medicaid reimbursement rate for the facility, determine if net income (after exclusions) is less than the facility's private rate. Contact the facility to establish the facility's private rate for 31 days. Compare net income to the facility's private rate to establish whether financial eligibility exists.

a. Determine Net Countable Income

From gross income subtract:

(1) PLA exclusions, deductions, disregards, exemptions, and the MN PLA maintenance allowance.

(2) The net countable income is only used to determine financial eligibility in Step 1. Do not use this amount in STEP II to determine patient monthly liability (pml).

b. Compare net countable income to private rate for 31 days.

(1) If net countable income is less than or equal to the facility's private rate, the person is financially eligible. Proceed to Step II to determine the patient monthly liability

(2) If net countable income is greater than facility's private rate, continue to 3., below.

REISSUED 11/01/07 – CHANGE NOTICE 25-07

(V.B.)

3. Needs Test Using All Other Predictable Medical Expenses (DMA-5008, Supplement B. Step I., C.)

Use the same net countable income calculated in 2., above and:

a. Subtract the facility's private rate for 31 days.

b. Compare the amount left to the total amount of predictable medical expenses that will not be covered by the nursing facility.

(1) If the predictable medical expenses are equal to or greater than the income, financial eligibility exists. Proceed to STEP II.

(2) If predictable medical expenses are less than the income, the a/r is financially ineligible for cost of care. Deny the application for cost of care, or propose termination if an active case.

C. Determine Patient Monthly Liability (PML)--STEP II

After establishing that financial eligibility exists in STEP I, proceed to determine the patient's share of cost. STEP II determines the amount of income an a/r must pay to the facility for cost of care. This is called patient monthly liability (PML). Medicaid pays the remainder up to the Medicaid reimbursement rate. Step II procedures are different than Step I procedures. DO NOT USE DEDUCTIONS OR NET COUNTABLE INCOME FROM STEP I IN STEP II. In this step, do not apply passalong.

1. Establish Gross Income for STEP II

Establish gross amounts of all types of income, earned or unearned, that are countable based on policy in MA-2250, Income.

a. Count actual amount of SSA benefit received if it is reduced to recoup an SSA overpayment.

b. Count total VA benefit received in excess of the $90 improved pension, including Aid and Attendance (A&A) and unreimbursed medical expenses (UME), for veterans who reside in a North Carolina State Veterans Nursing Home.

2. Subtract Operational Expenses

Subtract operational expenses produced on income-producing real/personal property, or from income produced through the operation of a business. (Refer to MA-2250, Income.)

REISSUED 11/01/07 – CHANGE NOTICE 25-07

(V.C.)

3. Subtract the following personal needs allowances:

The total deduction for all four types of personal needs allowances cannot exceed the PLA medically needy full maintenance level for the budget unit. This means $242 for an individual or $317 for a couple who share the same room and both receive Medicaid to pay for cost of care.

a. Personal Needs Allowance (PNA)

(1) $30 for an institutionalized individual, or

(2) $60 for a married couple who share a room.

b. Personal Needs Allowance for court-ordered guardianship fees:

(1) Guardianship fees are deducted only for an individual with a ‘guardian of the estate’ named by the court. Verify the actual amount paid based on the annual report of receipts and disbursements filed with the clerk of court or with the guardian until the first report is filed.

(2) Deduct the lesser of the following amounts:

(a) Actual amount verified in (1) above,

(b) 10% of a/r’s total gross monthly income, OR

(c) $25 per month.

c. Personal Needs Allowance for non-discretionary mandatory deductions:

This deduction could be from unearned retirement income of a recipient in any level of care. It could also be from earned income of an ICF-MR recipient.

(1) Subtract mandatory withholdings when the payer of the income verifies that the a/r has no choice (no discretion) in whether these amounts are withheld.

(2) These deductions are limited to:

(a) Federal, state, and local income taxes;

(b) Mandatory retirement contributions; and

(c) FICA.

d. Personal Needs Allowance for work incentive:

This is limited to ICF-MR recipients who have earned income from work activities. Subtract the monthly incentive allowance after any mandatory deductions for withholding. ***Net wages means after mandatory deductions***

REVISED 11/01/07 – CHANGE NOTICE 25-07

(V.C)

4. Subtract Community Spouse Allowance

Deduct income required for the support of a community spouse. Refer to VI., below, to calculate the community spouse income allowance.

5. Subtract allowance for dependents when there is a community spouse

Deduct income required for the support of other dependents at home. Refer to VII., below, to calculate this allowance.

6. Subtract $242 Maintenance Allowance when the a/r is expected to return home within 6 Months from the date his CPI began and he has no spouse at home. See V.D. for policy on return home within 6 months.

7. Allowance for minor dependents at home when there is no community spouse

a. When there are minor dependents at home and the a/r is not expected to return home within 6 months, subtract the dependents' gross monthly income from the full medically needy income limit for the number of dependents in the home. Deduct the resulting amount from the a/r’s monthly income in Step II (See VII., below).

b. When there are minor dependents at home and the a/r is expected to return home within 6 months, subtract the dependents' gross monthly income from the full medically needy income limit for the number of dependents in the home plus the a/r; e.g. if there are 2 dependents, use the income level for 3. Deduct the resulting amount from the a/r’s income in Step II (See VII., below).

8. Subtract Unmet Medical Needs (UMN) following policy in VIII., below.

9. Calculate the PML

Income remaining after making above deductions must be less than the facility's Medicaid reimbursement rate for 31 days.

NOTE: Refer to MA-2240, Transfer of Assets, to calculate the PML for partial months of ineligibility due to transfers of resources.

REVISED 11/01/11 – CHANGE NOTICE 17-11

(V.C.9.)

a. If the remaining income is equal to or greater than the Medicaid reimbursement rate, the a/r is ineligible for help with cost of care. Go to XII., below to determine if the a/r could be eligible for other Medicaid services.

b. The income remaining is the pml.

(1) Round PML to the nearest whole dollar (for 50 cents or more, round up; for 49 cents or less round down) and enter in EIS. EIS sends the DMA-5016 to notify facility of the PML.

(2) Enter the total of STEP II deductions into the maintenance allowance field in EIS.

(3) For the a/r’s (couple) in the same room, enter 1/2 of the gross monthly income for the couple in the net unearned and the total monthly income fields on each case. You will enter $30.00 plus any other deductions (PNA) for each spouse in the maintenance field. Subtract the PNA from 1/2 of gross income to determine the PML for each spouse.

(4) Enter the appropriate LTC living arrangement code based on level of care found in the EIS MANUAL, Volume 4.

10. Corrections or Changes to PML

The a/r or facility may report a change (i.e. UMN, income, level of care) to the county. The a/r or representative should report any changes within ten (10) calendar days. This could result in adjustments to the PML. Follow procedures below when a change is reported.

a. Complete the reported change within 30 days.

b. If a client fails to report a change within ten days and the change results in:

(1) An overstated PML (PML should have been lower): Do not decrease PML for past months. Change PML for future month's in EIS.

(2) An understated PML (PML should have been higher):

(a) If adjustment can be made by increasing future PML(s), make the change and notify the a/r or his representative using a timely notice.

(b) If adjustment cannot be made by increasing the PML(s), ask the a/r or his representative to make a voluntary repayment to DMA and refer to county fraud/program integrity staff. Refer to MA-2900, Recipient Fraud and Abuse Policy and Procedures, X.D. for instructions.

REVISED 11/01/11 – CHANGE NOTICE 17-11

(V.C.10.)

c. If the county causes an error, delay, or fails to complete change within 30 days and it results in:

(1) An understated PML (PML should have been higher) -- Do not increase PML for past months. Document in the record the reason for the error and take no further action.

(2) An overstated PML (PML should have been lower) -- Do not decrease PML for past months:

(a) If the recipient was able to pay the overstated PML, deduct as an unmet medical need the difference owed back to the recipient from a future month(s) liability; OR

(b) If the recipient was unable to pay the overstated PML and the outstanding balance owed to the nursing facility cannot be cleared out by adjusting PML for two months, request prior approval from DMA Claims Analysis Unit to change the overstated PML(s) using the DMA-5164, Change in PML Request Memo to DMA Claims Analysis Unit. Any adjustment amount may be charged to the county.

EXAMPLE OF STEP I and STEP II CALCULATIONS (USE DMA-5008, Supplement B)

Johnny Appleseed, age 65, enters the hospital on 6/1 and is discharged to a nursing facility on 6/25. He is in a nursing home and is not expected to return home within 6 months. He gets $1,500 SSA and $2,500 private retirement income each month, which equals $4,000 gross each month. His verified mandatory deductions (taxes, FICA) from his retirement income equals $212 each month. He also pays his BCBS premiums of $100 each month. His wife, age 59, is at home and has never worked. She has no income. Her shelter expenses are $350 each month. He has no other dependents. Determine PML amount.

STEP I FINANCIAL ELIGIBILITY FOR MEDICAID

A. NURSING FACILITY’S MEDICAID REIMBURSEMENT RATE (MRR) NEED TEST

If gross monthly income of the b.u. is less than the lowest monthly Medicaid rate, the client is eligible for help with cost of care. Gross income of $4,000 is greater than $3,385.

B. NEED TEST AT FACILITY'S MRR

1. If gross monthly income of the b.u. is greater than or equal to the Medicaid reimbursement rate (MRR), (refer to V.B.1., above, to determine lowest MRR).

REVISED 07/01/11– CHANGE NOTICE 14-11

(V.C.10.c.(2)(b))

2. If the gross monthly income of the b.u. is less than the facility's MRR for 31 days, the client is eligible for help with cost of care. GROSS INCOME IS LOWER. GO TO STEP II.

STEP II ELIGIBILITY FOR HELP WITH COST OF CARE

A. LTC DEDUCTIONS

The a/r’s PML is $1,819 each month for his share of the nursing facility cost.

EXAMPLE OF COMMUNITY SPOUSE ALLOWANCE WORKSHEET

A. Maximum Income Available for Deeming to CUSP

REVISED 07/01/11 – CHANGE NOTICE 14-11

(V.C.10.)

B. CUSP's Gross Monthly Income

C. Is CUSP's GROSS INCOME (from B., above) greater than or equal to Base Allowance ($1,839)?

REVISED 11/01/11 – CHANGE NOTICE 17-11

(V.)

D. A/R Returns Home Within Six Months (Refer to II.A. for CPI Rules):

When the a/r intends to return to a private home (or to any private living arrangement) within six months, allow a portion of the a/r’s income for maintenance of his home. This section explains the procedures for handling these situations.

NOTE: The doctor’s statement of intent to return home within 6 months has no bearing on exclusion of the homesite from countable resources..

1. A written statement from the "physician of record" is required, in addition to the FL-2/MR-2. The statement must confirm that the a/r may reasonably be expected to return home within 6 months from the date his CPI began.

2. Flag the case for review in the 6th month from the date his CPI began. (e.g. Enters LTC 9/23, 6 months equals 3/23. The review should be conducted in the first week of March allowing the a/r a full six months to return home.)

a. If the recipient has not returned home by the first week of the 6th month, verify with the physician or medical facility whether he will return home before the end of the 6th month. If he is to return home in this month, budget PLA after notice requirements are met.

b. If the physician/medical facility indicates the individual will remain institutionalized beyond the 6th month, stop deducting the medically needy income level for one after sending timely notice. Increase the patient liability beginning with the 7th month. Key the PML change into EIS. EIS sends DMA-5016 to notify the facility of the increased PML.

3. If a single a/r (no spouse/dependents at home) returns home within 6 months and he had not been budgeted to return home within six months:

a. Recalculate the LTC budget for all prior LTC budgeting months through the month of discharge and deduct the full medically needy income level for one in addition to the personal needs allowance.

b. Notify the Claims Analysis Unit via the DMA-5164, Change in PML Request Memo to DMA Claims Analysis Unit, of the revised PML for the previous months. EIS sends the revised DMA-5016 to the facility when the PML change is entered. (See IX. below)

c. Budget the remaining months in the certification period as PLA based on procedures in MA-2260, Financial Eligibility Regulations-PLA.

REISSUED 11/01/11 – CHANGE NOTICE 17-11