The term "Medically Needy" refers to categorically related individuals or families whose income and/or resources are too high to qualify as categorically needy individuals but insufficient to provide for all or part of their medical care.

Individuals not eligible for the Medically Needy Program are:

Individuals who may be eligible for the Medically Needy Program are:

The Exceptional Medically Needy are those individuals or families whose income is within the Medically Needy Income Level and whose resources fall within the specified limits of the Medically Needy Program.

Eligibility for Exceptional Medically Needy continues as long as the individual or family meets the criteria for categorical relatedness and the income and resource requirements of the Medically Needy program.

The Service Representative will evaluate the individual or family circumstances

EXCEPTIONS FOR THOSE WITH INCOME/RESOURCES WITHIN SSI PAYMENT LIMITS:

7042 Aid to Families with Dependent Children (AFDC) and AFDC Unemployed Parents (AFDC-UP) Related Eligibility

The MNIL is the income standard used to determine an individual's or family's eligibility for Medically Needy program benefits. An individual or family is considered to be Exceptional Medically Needy if their net income is at or below the maximum specified for their family size.

The Medicare "Buy-In" Premium is the premium normally paid by insured Medicare individuals for Part B Medicare (medical insurance). The Division of Economic and Medical Services pays this premium for Exceptional Medically Needy individuals through a "Buy-In" agreement with the Social Security Administration. "Buy-In" is made on the basis of the individual's Social Security claim number (the Medicare number) which is entered on the EMS-57 at the time a case is certified. The Agency does not pay this premium for the Spend Down Medically Needy.

The cost of Part B Medicare will be treated as follows in Medically Needy determinations:

The Spend Down period is the three calendar months used in determining eligibility for the Medically Needy Program - Spend Down.

The Spend Down quarter can be any continuous three calendar month period between the first day of the three month retroactive period (three calendar months prior to the application month) and the last day of the three month period beginning after the application month. The Spend Down quarter can be the three calendar months prior to the month of application; or two calendar months prior to the month of application and the application month; or one calendar month prior to the month of application, the application month, and one subsequent month; or the application month and two subsequent months; or the month after the application month and the two subsequent months.

Example: The date of application is 4-14-94. The Spend Down quarter can be: (1) January, February, and March; (2) February, March, and April; (3) March, April, and May; (4) April, May, and June; or (5) May, June and July.

The three months chosen for the Spend Down period should be the three months in which the applicant has the greatest medical expenses, or the three months in which he would receive the greatest benefit. A careful examination of dates and amounts of incurred medical expenses during the retroactive period and the application month will provide the facts necessary to select the quarter. The applicant will always be allowed to apply for the retroactive quarter if he chooses to do so.

Date specific eligibility has no effect on the three calendar months chosen for the Spend Down period, i.e., the three month period for consideration will always begin at the first of a calendar month and end on the last day of the third calendar month.

The only exception to a Spend Down period of less than three calendar months occurs when an individual did not qualify for reasons other than income during a portion of the period. For these cases, a one or two month determination will be made, as appropriate.

Both beginning and ending dates of eligibility must be entered on the EMS-56 or EMS-57 at certification.

Exceptional Medically Needy eligibility continues until terminated at reevaluation or by reported changes that affect client eligibility. Any changes affecting eligibility must be reported within 10 days so that the Service Representative can initiate necessary case action(s).

Medically Needy cases are certified as one of the following categories:

Requests for Medically Needy Services must be made to the Division of Economic and Medical Services, or to the Division of Children and Family Services for foster children. For SSI related categories (AABD) and U-18 emancipated individuals, the individual, his legal guardian or his designated representative may apply. For AFDC related categories, the natural/adoptive parent, another relative within the degree of relationship specified for AFDC payees (Re. FA 2250 - 2253), or the guardian of the parent or other relative may apply. Applications for U-18 Medically Needy may be made by a parent, or other relative within the specified degree of relationship for AFDC; by the legal guardian of the parent or other relative; or by an individual who has been awarded custody of an unemancipated individual by court order. Refer to related policy at MS 6130.

Applications will be accepted and processed for deceased persons. The application can be made by the person(s) responsible for medical debts of the de- ceased. The period of medical coverage cannot extend beyond the normal range of retroactive eligibility from the application date. With date specific eligibility, a Spend Down period can begin on the first day of the third month prior to the month of application, but eligibility for the Exceptional Medically Needy cannot begin more than 3 months prior to the date of application. Applications made for deceased person(s) whose date of death is prior to the limits of retroactive eligibility will be denied.

The Agency has the responsibility to follow up any request and to make arrangements for completion of the application. Medically Needy Services can- not be authorized until the application is approved.

Applications will usually be made in the county or the common service area where the applicant resides. Refer to related policy at MS 6130. If a Division of Economic and Medical Services employee or his relative applies for Medically Needy services in the Office where the employee works, the application will be processed by the next level supervisor.

Methods of verification used in eligibility determination will depend upon categorical relatedness.

On-site applications for U-18, U-18-MN, AFDC-MN, TEFRA, and SOBRA (Category 61) are taken at ACH. ACH will log applications according to county of residence and will provide the appropriate County Office (on a daily basis) with a photocopy of the first page of the EMS-95.

Upon receipt of the EMS-95 photocopy, the County Office will register the application on the WIMA Screen. The date of application will be the actual date the application was taken at ACH.

The system assigned register number will be entered on the photocopy EMS-95, and the photocopy will then be mailed back to ACH.

Upon receipt of the photocopy, ACH staff will enter the register number on the original EMS-95.

ACH will complete an eligibility determination for each application. Upon completion, ACH will forward the application/case record to the appropriate County Office for review and authorization.

On-site applications for Medicaid (including Medically Needy) are taken at UAMS. The procedures for on-site applications taken at UAMS are the same as those specified for ACH.

Individuals applying for the Medically Needy Program who may be eligible for AFDC or the U-18 Category have the option of applying for AFDC or the U-18 Category and/or the appropriate category under Medically Needy.

The Service Representative has the responsibility of discussing the alternatives with the applicant so that the applicant may make a decision. The Service Representative will enter the application(s) on WIMA. If more than one application is entered, each application must be disposed of separately. An individual(s) may be certified for only one program during a coverage period. (Exception: A pregnant woman previously certified in SOBRA PE (Category 62) may be given coverage in a different category which would overlap the Category 62 coverage.) All documents will be maintained in one case record.

Every person has the right to apply for Medically Needy Services. No application or inquiry may be ignored.

The distinction between an application and an inquiry is as follows:

Each applicant or his authorized representative will be seen during the application process. He will be seen at the DHS County Office or a place convenient to him if he is incapacitated, incompetent, confined, or otherwise incapable of coming to the DHS office.

When the individual applies for Medically Needy Services, the Service Representative will arrange a personal interview.

The tasks to be completed during the interview include:

No person will be prevented from participation, be denied benefits or be subject to discrimination on the basis of race, color, national origin, age, religion, disability, sex, political affiliation, or veteran status. The Agency will be in compliance with provisions of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act of 1990.

The Service Representative will secure essential social and financial information to determine eligibility.

The applicant will be relied upon as the primary source of information. How- ever, when the applicant is unable to provide essential information and requests assistance, the Service Representative will assist in obtaining the necessary verification.

If necessary, the Service Representative will use Form EMS-81, (Consent for Release of Information) to secure essential information from a collateral source. This form will be signed by the applicant so that information may be released to the Agency.

If the applicant received any type of assistance in another county, the closed case(s) will be requested from that county.

Collateral information is evidence provided by persons other than the applicant or by written documents. Items requiring collateral evidence are designated in sections dealing with specific eligibility requirements.

The Service Representative will protect the rights of the applicant during collateral interviews and will give only the information necessary to enable the person interviewed to understand the need for the information requested.

When an original, photocopy, or certified copy of a document used as evidence is not a permanent part of the case record, it will be necessary for the narrative to contain definitive information as follows:

1. The location of the document, (e.g., where or by whom the document is kept).
2. The pertinent facts which establish authenticity, when the document was made, where the document was registered or filed, registration or filing identification, serial number, etc.

AFDC, UP, PW, FC, AA, AB and U-18 Medically Needy cases will be disposed of within 45 days from the date of application by one of the following actions: approval, denial, or withdrawal.

The Service Representative will complete the following tasks when approving an application:

The Service Representative will complete the following tasks when denying an application.

When an applicant moves out of the county in which the application was taken, the Service Representative in the initial county will:

The individual or family must meet the following factors of eligibility to be certified as AFDC-Medically Needy or UP-Medically Needy.

1. Income Computation - The income computation method employed for AFDC grant cases applies to the AFDC-Medically Needy and UP-Medically Needy with some exceptions.

The net earned income (gross earnings minus AFDC deductions and child care as allowed for AFDC recipients) plus unearned income (less the first $50 of child support paid) is compared to the Medically Needy Income Level to determine income eligibility or the Spend Down liability of the AFDC-Medically Needy. For UP-Medically Needy the work and child care deductions, when applicable, will also be given.

The Project Success/New Hope Requirement for AFDC has been waived by the Department of Health and Human Services for Medicaid Only assistance.

Deprivation due to unemployment must be based on the parent who has been the principal wage earner (PWE) for the past two years. Refer to FA 2241.2 for a definition of unemployment and to FA 2241.1 for a definition of PWE.

The PWE must meet each of the following criteria at initial application, or during the month of application, in order for Medicaid coverage to begin in the month of application (see note below):

1. Must have been unemployed for at least 30 consecutive days;
2. Must have had 6 quarters of work within any 13 calendar quarter period ending within 1 year prior to application (Re. FA 2241.3), or received unemployment compensation within 1 year prior to application (Re. FA 2241.4). For the 6 quarters of work, education may be substituted for up to 4 of the 6 quarters;
3. Must not, without good cause, have refused a bona fide offer of employment or training for employment within the last 30 days;
4. Must not have refused to apply for or accept unemployment compensation if qualified (Re. FA 2241.6).

Pregnant Women (Re. MS 5000) may be considered for Medically Needy-EC or SD, if they do not meet the AFDC need requirements for PW Category 65. If a pregnant woman's income and/or resources exceed the AFDC standards of need, the PW's income and resources will be compared to the Medically Needy MNIL and MNRL to determine eligibility in PW-MN (Cat. 66 or 67). Refer to MS 5400 for instructions in completing the EMS-56.

Individuals will meet the following SSI (AABD) factors of eligibility to be certified as AABD-Medically Needy.

1. Categorical eligibility by reason of "age", "blindness" or "disability".

The individual or family must meet the following factors of eligibility to be certified as U-18 Medically Needy.

Methods of verification used for AFDC grant cases also apply to the U-18 Medically Needy for verification of age, relationship, and living with specified relative.

Each child will be evaluated as a one person household unit against the appropriate criteria. Consideration of parental income/resources will cease effective the month a child enters Foster Care by the Court awarding custody to the Agency. A child taken into foster care on the basis of an emergency order only may be determined Medicaid eligible. If custody is later established by a judicial determination, the DCFS Worker will be required to include a copy of the order in the foster care Medicaid record.

Income is defined as the receipt of assets by an individual in cash or in-kind during a month. To be considered as income, the assets received by the individual must be something of value for his own use and benefit in providing the basic requirements of food, clothing, and shelter. Lump sum or one time payments are considered as income for the month of their receipt.

Evaluations of income for the AABD Medically Needy will be made as follows:

The criteria for determining countable income for the AABD Medically Needy is contained in the Long Term Care section of this manual (MS 3340 through 3348.1).

For any month or portion of a month that the applicant (eligible) resides with his ineligible spouse or parent(s) (if the applicant is a blind or disabled child), deeming of income from the ineligible spouse or parent(s) is required.

Current SSI Standard Payment Amounts (SPA) and Living Allowance amounts can be found in the SSI Chart at Appendix S.

When an applicant/eligible resides with his ineligible spouse, deeming of income from the ineligible spouse is required.

1. From unearned income, deduct the $20.00/mo. general exclusion (carry over any unused balance of the exclusion and deduct from earnings);
2. From earned income, deduct the $65.00/mo. work expense allowance plus one-half (1/2) the remaining balance;
3. Total remaining earned and unearned income to arrive at countable income; proceed to 5.

For purposes of income deeming, a stepparent living in the home with an eligible child is not considered the same as a parent. Do not deem a stepparent's income.

1. From unearned income, deduct the $20.00/mo. general exclusion (carry over any unused balance of the exclusion and deduct from earnings);
2. From earned income, deduct the $65.00/mo. work expense allowance plus one-half (1/2) the remaining balance;
3. Total remaining earned and unearned income;
4. From total remaining income, deduct a living allowance for the ineligible parent(s) equal to the SSI SPA.
5. Remaining income (if any) is deemed to the child as unearned income. It is subject to the $20.00/mo. general exclusion in the child's countable income determination.

4. If parental income is deemed to more than one eligible child, prorate the deemed income equally to each child.

1. The ineligible parents have gross monthly earned and unearned income of $900.00 and $200.00, respectively.
2. From the ineligible parents' unearned income, deduct the living allowance for the ineligible child i.e., $200.00 - $223.00 = $00.00; $900.00 earned income - $23.00 (the remainder of the living allowance for the ineligible child) = $877.00. Since remaining income is earned only, income computation will be as follows:
3.  
   1. From remaining income, deduct the $20.00 general exclusion and the $65.00 earned income deduction ($877.00 - $85.00 = $792.00).
   2. From the remainder of $792.00, deduct 1/2 ($792.00 - $396.00 = $396.00); then deduct the SSI SPA for a couple ($396.00 - $669.00 = $0.00).
   3. $0.00 is deemed to the child as unearned income. If the computation had resulted in an amount greater than zero, it would be added to the child's own income as unearned income for his eligibility determination.
   4. From the child's gross income deduct the $20.00 general exclusion ($35.00 - $20.00 = $15.00) to determine the child's countable income for eligibility.

Example #2. A child has gross unearned income of $130.00/month. His ineligible parents have gross unearned income of $1000.00/month. There is one ineligible child. Deemed income is determined as follows:

1. The ineligible parents have gross monthly unearned income of $1000.00.
2. From the ineligible parents income, deduct the living allowance for the ineligible child ($1000.00 - $223.00 = $777.00). Since remaining income is unearned only, computation will be as follows:
3.  
   1. (1)From remaining income, deduct the general exclusion ($777.00 - $20.00 = $757.00).
   2. From remaining income, deduct SSI SPA for the ineligible parents ($757.00 - $669.00 = $88.00).
   3. $88.00 is deemed to the child as unearned income. This amount would be added to the child's own income for his eligibility determination. ($130.00 + $88.00 = $218.00 less the $20.00 general exclusion = $198.00 countable income to the child.

Example #3. A child has gross unearned income of $50.00/mo. His ineligible parent has gross earned and unearned income of $1100.00/mo. and $220.00/mo., respectively. There are no ineligible children. Deemed income is determined as follows:

1. The ineligible parent has gross monthly earned and unearned income of $1100.00 and $220.00, respectively.
2.  

Where there is a blind or disabled child living in the home with his parents and one parent is categorically eligible (i.e., acceptable evidence exists that proves that the parent would qualify as aged, blind or disabled except for income), income of the ineligible parent is deemed first to the categorically eligible spouse and then to the eligible child. Deemed income to a blind or disabled child under these circumstances is determined as follows:

Where a blind or disabled child in the home with a parent/parents who is/are eligible except for excess income (i.e., acceptable evidence exists that proves that the parent/parents would qualify as aged, blind, or disabled except for income), only income above the parent(s)' SSI SPA is deemed to the child. Deemed income is determined as follows:

1. Determine the parent/parents' countable income as if no children were involved (allow SSI exclusions listed in MS 3348);
2. If the countable income is equal to or less than the SSI SPA, there is no income to deem to the child. If the countable income is greater than the SSI SPA, the amount above the SSI SPA is available for deeming to the child;
3. Reduce the excess income amount by the living allowance for each ineligible child in the home (i.e., those not blind or disabled). If this reduces excess income to zero, there is no income to deem to the eligible child. If not proceed to 4.
4. If excess income remains after deduction of living allowances, it is deemed to the child's unearned income. If more than one eligible child is in the home, divide the income equally to each child. The amount deemed to the child as unearned income is subject to the $20/month general exclusion in his eligibility determination.

The items listed below are excluded from income of the ineligible spouse or ineligible parent(s) before determination of deemed income.

The following countable resource limitations are in effect for the Medically Needy Program from 1/1/86.

1. Generally, resource eligibility for MN is determined according to the same principles that determine AFDC eligibility (Re. FA 2303). The eligible child(ren) and the natural/adoptive parent(s) in the home will be included in the MNRL unit. However, a parent may choose to exclude a child and that child's resources if inclusion of that child and that child's resources would cause ineligibility for the other children in the MNRL. A parent's needs will always be included when determining eligibility for his/her children.
2. The resources available only to a stepparent will be disregarded in the MNRL of his/her stepchild and his/her spouse (the stepchild's natural/adoptive parent) if that spouse requests assistance as caretaker relative of her deprived child. The stepparent will not be counted in their MNRL.
3. The resources available only to a grandparent, or any relative other than a parent, who is not included in the assistance unit, will be disregarded.

If the grandparent, or other relative other than a parent, chooses to be included in the assistance unit, his/her resources will be included in full in determining resource eligibility for all those included in the MNRL.

When the grandparent or other relative chooses to be included and when the grandparent/other relative has a spouse in the home, the resources available only to that spouse will be disregarded in determining resource eligibility.

4. In dependent child/minor parent/grandparent households, the rules in (3) above will apply, i.e., if the grandparent is to be included as an eligible, the grandparent's resources will be counted; and if the grandparent is not to be included, the grandparent's resources will be excluded.

1. AFDC and U-18 Related - Countable resources are determined and verified in accord with AFDC policy (Re. FA 2310-2344). However, there is no applicable transfer of resource provision which applies to AFDC and U-18 related Medically Needy cases.
2. SSI Related (AABD) - Countable resources are determined and verified in accord with SSI related policy (Re. MS 3330-3339). However, there is no applicable transfer of resource policy which applies to the AABD-MN categories.

When an AABD applicant/eligible resides with his ineligible spouse or ineligible parent(s) (if the applicant is a blind or disabled child), deeming of resources from the ineligible spouse of parent(s) is required.

1. Resources of Ineligible Spouse

The applicant and his ineligible spouse are permitted a couple's countable resource limit of $3,000 (Allow SSI Exclusions); there is no actual deeming.

2. Resources of Ineligible Parent(s)

For purposes of resource deeming, a stepparent living in the home with an eligible child is not considered a parent. Do not deem a stepparent's resources to his stepchild.

Income is the third consideration for Medically Needy applications. Categorical relatedness and resource eligibility should be reasonably established before income eligibility is considered.

1. Household size for MN income determination is made as follows according to categorical consideration.

1. AFDC or SSI cash assistance recipients and their income are excluded. They cannot be considered in a second eligibility determination.
2. AFDC and U-18 Related - Determination of household size for AFDC and U-18 related MN is made as follows. The income of non-AFDC and non-SSI individuals may be considered in more than one MNIL.

1. The eligible child(ren) and the natural/adoptive parent(s) in the home will be included in the MNIL unit. A parent may choose to exclude a child and that child's income from a case budget if inclusion of that child and the child's income would cause ineligibility for the other children. Children may also be excluded for other reasons, and the parent who applies need not state the reason.
2. The income available only to a stepparent will be disregarded in the MNIL of his/her stepchild, and the stepparent will not be counted in the MNIL. If the stepparent's spouse who is the natural/adoptive parent of the stepchild requests assistance, the stepparent's income will be deemed to the spouse (Re. FA 2377.1) and there will be 2 MNIL's and 2 cases, because a natural/adoptive parent and his/her deprived child cannot be in the same case in stepparent households due to disregard of stepparent's income in the stepchild's case.

EXAMPLE: A husband and wife have living in their home a child by his former marriage. Both the man and his child request assistance.

MNIL #1: To determine the child's eligibility use the 2 person MNIL to include the father and child and their income only. Disregard the wife's income.

MNIL #2: To determine the man's eligibility, use again the 2 person MNIL (father and child) with their income included. The income of the wife would be deemed to the unit.

3. A stepchild cannot be in the same MNIL with children of his/her stepparent, even though they may be half siblings.
4. In stepparent households when a natural/adoptive parent of the stepchild requests assistance and when the natural/adoptive parent and the stepparent have a child of their own, there will be three MNIL's and 3 cases, because a stepparent will not be budgeted with a stepchild and because a stepchild cannot be budgeted with children of the stepparent.

EXAMPLE: A husband and wife have a child, and the wife has a child by a former marriage. Assistance is requested for both children and the wife.

MNIL #1: Eligibility for their child in common will be determined in a 3 person MNIL, with all the income of the husband, wife, and their child considered. Only the child can be found eligible in U-18-MN, assuming that both parents are over age 18.

MNIL #2: Eligibility for the stepchild will be determined in a 2 person MNIL that includes only the stepchild and the natural/adoptive parent. Their income will be considered in full. The stepparent's and half-sibling's income will be disregarded.

MNIL #3: Eligibility for the natural parent of the stepchild will be determined in an MNIL that includes only the natural parent and the stepchild, with their income considered along with the deemed income of the step- parent. Disregard the half-sibling's income.

5. If there is a stepchild who resides in a UP-MN household, the stepchild would be set up in a separate Medicaid case, other than UP-MN, with his/her natural parent included in the budget in closed status. The UP-MN case would be set up to include the stepchild's natural parent, that parent's spouse, and their child(ren) in common. There is no deeming of income in UP-MN determinations.
6. In minor parent households, deeming of the income of a grand- parent not included in the assistance unit to a grandchild in the unit is prohibited. However, the grandparent's income will be deemed to the minor parent. Therefore, in minor parent situations where the grandmother is not included, there will be 2 MNIL's, and 2 Medicaid cases.

Income eligibility determinations for the Exceptional Medically Needy will be completed using Part 2 of Form EMS-607 as follows:

Determine the net monthly income to be considered as follows:

With date specific eligibility, eligibility for Exceptional Medically Needy cases begins on the day of application (current) and/or as far back as three months prior to the date of application (retroactive), provided eligibility requirements are met and there are incurred medical expenses for each month of the retroactive period of certification. Example: If application is made on May 3rd, eligibility may be given retroactively to February 3rd, if there are incurred medical expenses in each of the three months and if income/resources requirements are met in each of the months. A shorter retroactive period could be given if the only medical bill in the retroactive period was incurred on April 16th. In that case, eligibility would begin on April 16th.

Eligibility for the Exceptional Medically Needy continues until terminated by the County Office. Termination may occur at the time of reevaluation or at any other time that changes affect eligibility.

The end date of eligibility will be the last day of the 10 day advance notice period, unless a recipient requests a hearing within the advance notice period.

Income eligibility for Spend Down cases is determined on a quarterly basis in Part 5 of the EMS-607. Use actual quarterly income when available. When actual quarterly income is not available, project income for the quarter as follows:

1. Determine average income per pay period (divide actual total income by actual total pay periods). When available use 8 pay stubs if paid weekly, 4 pay stubs if paid bi-weekly or twice a month, or 2 pay stubs if paid monthly.
2. Determine projected income for the remaining month(s) or portion thereof- (multiply average income per pay period by projected number of remaining pay periods).
3. Determine monthly income (total actual and/or projected income for each month).

The eligibility determination based on incurred medical expenses is a two step process:

Incurred medical expenses which are not coverable under the Medically Needy Program will be deducted in the following order. These expenses may include the expenses of an ineligible individual whose needs cannot be included in the MNIL, but whose expenses are the liability of the eligible individual (e.g. the expenses of a deceased spouse).

1. The cost of Health Insurance premiums, including the Part B Medicare premium, for the Spend Down period for all individuals whose needs are included in the MNIL.
2. The cost of any required copayments and/or deductibles for the Spend Down period for all ineligible individuals whose needs are included in the MNIL. Only the cost of required copayments or deductibles on Medicare Part B (non-assigned) claims for the Spend Down period can be deducted for the eligible individual(s) (See Note b.).
3. The cost of remaining incurred medical expenses for the Spend Down period for all ineligible individuals whose needs are included in the MNIL. This includes the expenses of an ineligible spouse (AABD related) and the expenses of the ineligible parent(s) (U-18 related) (See Note b.).
4. The cost of any uncovered incurred medical expenses for the Spend Down period for the eligible individual(s).
5. The cost of any unpaid medical expenses which were incurred outside the Spend Down period for all individuals whose needs are included in the MNIL. Proof of current liability (at the beginning of the Spend Down period) must be provided by the applicant for expenses incurred outside the period or the expenses cannot be used in Spend Down. When the applicant has made arrangements to repay any medical expenses, only the payments due in the Spend Down period can be deducted as noncovered, unless the bill was incurred during the Spend Down period. In that case, the bill may be used in the chronological Spend Down, rather than using the monthly payment amount to be made under the contract. Expenses sold or turned over to collection agencies may be deducted if they are verified to be from a medical source.

When excess income is not eliminated after deduction of noncovered incurred expenses, it will be necessary to conduct a daily Spend Down (i.e., eliminate remaining excess income through chronological deduction of incurred expenses coverable in the Spend Down quarter). These expenses would be comprised of all services incurred during the Spend Down quarter for individuals potentially eligible for Medically Needy services and apparently coverable under the program (includes the cost of Medicare copayments and/or deductibles) on assigned claims and the cost of any prescribed drug(s) covered by the Medicaid program (name brand drugs must be certified by the physician as medically necessary if lower cost generic equivalent drugs are available).

For maternity expenses, any payments will be deducted on the date of such payments and the balance will be deducted on the date of delivery (if applicable).

A third party resource is insurance or some other form of entitlement which helps defray the cost of medical services. Third party resources recognized by the Medicaid program include Medicare, private health insurance, public and private liability insurance, workman's compensation, veteran's insurance, CHAMPUS, etc. Third party resources make specific payment for medical services and/or are assignable to a medical provider. Insurance which makes nonspecific payments (i.e., pay whether or not medical services are rendered) and is nonassignable to a medical provider (i.e., pays to the individual only) is not considered a third party resource. Payments from this type of insurance are considered as unearned income. However, insurance which makes nonspecific payments and is assignable will be considered a third party resource (Re. MS 7634.3).

Payments which are received from third party resources within a reasonable period of time will be applied to the cost of incurred medical expenses to determine the liability of the individual. Any portion of incurred medical expenses paid by third party resources is not the liability of the individual and cannot be deducted from excess income. Any portion of incurred medical expenses not paid by third party resources is the liability of the individual and can be deducted from excess income.

Statements which are received from third party resources within a reasonable period of time can be used to determine the liability of the individual if they indicate either the amount of payment to be made or that no payment is to be made. When statements indicate the amount of payment to be made, the indicated amount of payment will be applied to the cost of incurred medical expenses to determine the liability of the individual (i.e., it will be treated as if it were an actual payment). When statements indicate that no payment is to be made, the total amount of incurred medical expenses is the liability of the individual and can be deducted from excess income.

When a third party resource has not made payment, does not indicate the amount of payment to be made, or indicates that no payment is to be made within a reasonable period of time, the actual liability of the individual cannot be determined and the incurred medical expenses cannot be deducted from excess income.

NOTE: For administrative ease, the time limit imposed for the disposition of the applicable Medically Needy application (45 or 90 days) will be considered to be "a reasonable period of time" to obtain verification of medical expenses paid by a third party.

1. Part A - Hospital Insurance - coverage is provided for inpatient hospital care, post hospital extended care and post hospital home health care and skilled nursing care. Part A pays Medicare per diem rate, less any unmet deductible(s) and/or coinsurance.

Under Part A - Medicare pays direct to the hospital/supplier. The hospital/supplier agrees to accept the Medicare per diem rate. The actual liability of the individual is limited to the following, where applicable:

. Inpatient Deductible, and/or

. Blood Deductible, and/or

. Coinsurance.

NOTE: Medicare provides an unlimited number of hospital days after the annual Part A deductible.

2. Part B, Medical Insurance - coverage is provided for physician services, supplies, home health care, outpatient hospital services, therapy and other services. Part B pays 80 per cent of the Medicare amount approved, less any unmet deductible.

Private Health Insurance, like Medicare, consists of two types of coverage, Hospital and Medical.

For hospital care, private insurance makes reimbursement by means of per diem payments, percent of charge payments or a combination of the two.

Under the per diem method, the insurance will apply a fixed amount for each day of hospitalization, regardless of the total charges for the hospitalization.

Example - A child is hospitalized for 4 days; daily charges are $1200, $1100, $900 and $650 for days 1-4, respectively. The child's parents have insurance which pays a $600 per diem less any unmet deductible. The insurance payment and client's liability are determined, as follows:

Example: Mr. Doe is hospitalized for 4 days, daily charges are $1200, $1100, $900 and $650 for days 1-4, respectively. Mr. Doe has insurance which pays 80 percent of total charges, less any unmet deductible. The insurance payment and Mr. Doe's liability are determined as follows:

The following is an example of a combination of the per diem and percent of charge methods:

Example - Mr. Doe is hospitalized for 4 days; daily charges, less room charge, are $1325, $1000, $900 and $700 for days 1-4, respectively; the room charge is $250 a day. Mr. Doe has insurance which pays 80 per cent of total charge, less room charge, less any unmet deductible. The insurance, also pays a $200 per diem on room charge. The insurance payment and Mr. Doe's liability are determined as follows:

Some private insurance (e.g., Medipak, which only covers the deductible and coinsurance charges that Medicare does not pay) provides limited coverage, only.

Although private insurance offers an infinite variety of coverage plans, most companies make payment using one of the methods described or a similar method.

Nonmedical charges (e.g., charge for telephone, television, etc. while hospitalized) cannot be deducted from excess income even though the charges are a liability of the individual.

When a third party resource makes or indicates that it will make a nonspecific assignable payment (method of calculating payment is not known), the payment will be applied in the following manner.

When all factors of Medically Needy eligibility have been established, the case will be certified on Form EMS-56 or EMS-57.

With date specific eligibility, the beginning date of medical eligibility for Exceptional Medically Needy cases (EC) will be the day of application unless retroactive eligibility is authorized. Retroactive eligibility may be authorized as far back as three months prior to the date of application, provided the individual or family meets the eligibility requirements for the retroactive period, and medical expenses were incurred during the period. Eligibility may be authorized for any one or all of the months during the retroactive period. Each period of retroactive eligibility must be shown on the EMS-56 or EMS-57, with Month/Day/Year begin and end dates For example, an eligible individual who applies 7/15/93 qualifies for 3 months retroactive coverage. In the Retro 1 Start Field (Field 78) of the EMS-57 an entry of 4/15/93 will be entered. In the Retro 1 Stop Field (Field 79), 7/14/93 will be entered. However, if the individual has only 2 unpaid bills incurred on June 2 and June 19 of the retroactive period, an entry of 6/2/93 will be made in Field 78 and an entry of 6/19/93 made in Field 79.

No termination date will be entered for Exceptional Medically Needy cases. Eligibility will continue until closure is authorized by the County Office via Form EMS-56 or EMS-57. With date specific eligibility, an end date can be entered to terminate coverage on any day of a month, after appropriate 10 day advance notice. For example, if a county is informed of an income increase on 10/13/93 which makes an individual ineligible, the case may be closed effective 10/23/93 after advance notice.

Both the beginning and end dates of eligibility are shown for Medically Needy Spend Down cases. The beginning date listed on the EMS-56 or EMS-57 will always be the day of Spend Down. The ending date for Spend Down cases listed on the EMS-56 or EMS-57 is the last day of the third month of the Spend Down quarter used. Once the entitlement period has been established and the certifying document has been submitted, no additional medical expenses can be considered for the entitlement period. The "unmet liability" amount reflected in Part 6 of the EMS-607 will be rounded to the next lower dollar and entered on the EMS-56 or EMS-57 in the space provided. Date Specific Eligibility will not change the consideration of the Begin and End dates for the Spend Down certification period.

The begin and end dates will also be shown for fixed eligibility cases. If certifying for fixed eligibility, the begin and end dates may be any day of a month. For example, an individual who applies 5/15/93 needs coverage for April and May, and is income/resource eligibility for those months. Bills were incurred April 18th, and May 5th through 10th. The fixed eligibility period for this individual will begin April 18th and end May 10th.

In AFDC-MN and U-18 households that require separation of the eligible members into different cases (Re. MS 7610) each eligible member will be entered in open status in his/her case, and the other eligible members of the unit will be entered in closed status in that case on the EMS-56.

When an eligible member is entered in closed status in another eligible's case, a "Y" will be entered in the Budget Ind. Field (#112) of the EMS-56 of the open eligible's case to show that the income of the closed member is included in the budget.

EXAMPLE: In a stepparent household where a man, his wife, and her child live, there will be separate cases for the child and his/her natural/adoptive parent, with an open and closed member in each case. In the child's case, a "Y" will be entered in the Budget Ind. Field to show that the income of the closed member (the natural/adoptive parent) in this case is included in the budget.

In UP-MN cases, the deprivation code of 71 (Father Unemployed) or 72 (Mother Unemployed) will be shown for each eligible child in Field 90 on the EMS-56.

When only one member of an AABD couple has expenses on the date of Spend Down, enter the unmet liability amount on the EMS-57 of that member. Where both members of an AABD couple had expenses on the date of Spend Down, prorate the unmet liability amount to each member on the basis of their percent of expenses on the date of Spend Down. For example, an AABD couple has $200 in unmet liability and $250 in expenses (i.e. $150 - Member A and $100 - Member B) on the date of Spend Down. The amount of unmet liability to be entered on the EMS-57 of each member is determined as follows:

1. Divide the expenses of each member by total expenses.


Member A - $150 divided by 250 = 60%

Member B - $100 divided by 250 = 40%

2. Multiply the unmet liability amount by each member's percent of expenses.


Member A - $200 x 60% = $120

Member B - $200 x 40% = $80

In AFDC or U-18 related cases when more than one member had medical expenses on the date of Spend Down, the total unmet liability will be prorated for each member and each individual's prorated unmet liability will be shown in the member segment of the EMS-56.

Examples:

1. In an AFDC-SD case containing 3 members, medical expenses were incurred on the date of Spend Down by only one member and totaled $300.00. The unmet liability on the date of Spend Down was $100.00 The total unmet liability should be entered on the EMS-56 for the member who had medical expenses on the date of Spend Down.
2. In a U-18-SD case, three members had medical bills on the date of Spend Down. Child 201 incurred $150.00 on the date of Spend Down, child 202 incurred $75.00, and child 203 incurred $275.00. The total unmet liability was $100.00 on the date of Spend Down. To determine each member's unmet liability:

1. Divide the expenses of each member by the total expenses.

2. Multiply the total unmet liability by each member's percent of the expenses.

When the certification document is keyed, a case number will be assigned by the system.

Medicaid cards will normally be mailed to the recipient within 5 days following certification.

All applications for Medically Needy will be entered on WIMA. Dispositions of applications will also be noted, as well as the date of disposition.

Each Service Representative responsible for applications will maintain an EMS-88 (monthly control sheet) which reflects all pending applications at the beginning of the month, applications received during the month, and the disposition and date of disposition for applications processed during the month.

The Central Office, Research and Statistics Section, will provide a monthly statistical application report to each County Office for reconciliation of pending and disposed applications on the register as well as overdue applications.

Reevaluation of Exceptional Medically Needy cases will be completed at least within twelve months from the month of certification or the last completed reevaluation (initial reviews counting from the date that the EMS-56 or EMS-57 is approved by the County Office). To insure that reevaluations are completed by the end of the twelfth month, they will be scheduled for the eleventh month. Reevaluation of "transfer in" cases will be completed within 30 days from the date of the transfer. Six month reviews are preferable, when possible.

For AFDC related cases, reevaluations may be conducted by face-to-face interviews or by telephone and mail. Reevaluations for AABD related cases may be conducted by telephone. For all categories, however, the caseworker will reserve the right to require office interviews in lieu of telephone interviews for reevaluations if, in the judgment of the worker, there are valid reasons to conduct face-to-face interviews.

For a reevaluation, a worker will mail an application and the other forms required to the recipient, along with an EMS-75, specifying exactly what is needed (e.g., completed application, check stubs, collateral statement, etc.) and a date by which the forms and verification should be returned. A worker may also use telephone contact along with mail service to obtain additional information or to clarify any questionable information, etc.

The Office of Information of Systems will send the EMS-75 case reevaluation notices to the County Office the first part of the fourth month of the eligibility period between reevaluations, or after the initial certification.

When an EMS-75 is received indicating it is time for a reevaluation, case records should be carefully checked to determine when the last reevaluation was completed. If it is nearing twelve months since the last one, a full reevaluation must be completed. If one was done in the previous six months, and unless there is reason to complete another one, workers will complete EMS-56s for data entry, showing an "O" Action Type, "201" Action Reason, and an update of the "RE Date" in order to prevent those cases scheduled by the system for six month reevaluations from appearing on county overdue reevaluation lists.

The County Office is responsible for completing the reevaluation and making any necessary changes on the EMS-56 or EMS-57 at the time the reevaluation is completed.

The EMS-75's and EMS-87's will be reconciled for the given month that reevaluation is due to insure that no cases due for reevaluation are overlooked. Medically Needy cases due for reevaluation within a given month will be listed on the EMS-88 (control sheet) along with other category cases due for reevaluation for the month.

The first copy of the EMS-75 will be sent to the recipient as notice to come in for reevaluation interview. Blank EMS-75's will be completed for transferred cases and other cases for which the EMS-75 is not available.

At the time of reevaluation, all factors of eligibility must be reverified. The factors reverified will vary according to the categorical relatedness of the case. Particular attention will be given to verification of items subject to frequent change such as income.

The Service Representative will:

1. Review with the recipient the statements on the EMS-95. Advise the recipient of the legal consequence of fraud, misrepresentation or perjury, and of the recipient's responsibility to report any change within ten days.
2. Obtain a signed and completed EMS-95, and sufficient information to verify all income, resources, and any income related expenses and deductions. Other forms will be completed, as appropriate (Re. MS 7154).
3. Recompute income eligibility on the EMS-607.
4. If additional information/verification is needed to establish continuing eligibility, the recipient will be given an EMS-84 Request for Information form and an EMS-700 advising of case closure if the requested items are not returned by the due date.

The ten day advance notice requirement applies to all categories of Medically Needy and is given in all instances of adverse action with the following exceptions.

Advance notice is not required when:

1. The agency has factual information confirming the death of the recipient.
2. The agency receives a written statement signed by a recipient that he or she no longer wishes assistance, or that gives information which requires termination or reduction of assistance, and the recipient has indicated that he understands the consequences of supplying such information.
3. The recipient has been admitted or committed to an institution thereby making him ineligible except when special conditions are met. (Re. MS 2070).
4. The recipient's location is unknown and agency mail directed to him has been returned by the Post Office indicating no known forwarding address. The recipient's Medicaid card must be made available to him if his whereabouts becomes known during the eligibility period covered by the returned ID card.
5. A recipient has been accepted for assistance in a new jurisdiction (another state) and that fact has been established by the jurisdiction that previously granted assistance.
6. A child is removed from the home as a result of a judicial determination or voluntarily placed in foster care by his legal guardian.

Information Systems will automatically effect closure of current open Spend Down cases and all cases which are converted to SSI eligibility. The County Office will effect all other closures by Form EMS-56 or EMS-57.

With the exception of closed past Spend Down and Fixed Eligibility Certifications, the ten day advance notice applies to all categories. Recipient notifications will be made on Form EMS-700 or EMS-55.

A notation of the reason for closure will be made in the narrative of each closed case and a copy of the closure document will be filed within the case record. The case record of each closed case will be pulled and filed in the closed files with EMS-87 attached.

The Medically Needy Case Record will contain the following items required for proof that all conditions of eligibility are met.

1. Documentation of the eligibility factors that correspond with the Medically Needy category to which the case is related. (Refer to the section regarding categorical relatedness).
2. All medical bills/statements/receipts (and/or photo copies) used in determining Spend Down eligibility. Each bill must be:

The case record will contain the following Agency forms used, as appropriate to the category, in the determination of eligibility:

Agency forms used at the time of authorization of eligibility (or change in status) are: