Arkansas Administrative Code
Agency 016 - DEPARTMENT OF HUMAN SERVICES
Division 20 - Division of County Operations
Rule 016.20.95-014 - Changes to the Long Term Care/AABD Section of the Medical Services Manual

3000 Guidelines for the Long Term Care Program and Other AABD

3100 General Information

3110 Facilities Which Provide Services

3120 Services Provided Under Medicaid

3130 Licensing and Classification of Facilities

3135 Nursing Facility

Section 1919 (a) of the Social Security Act defines a nursing facility as an institution which Is primarily engaged In providing:

Skilled nursing care and related services for residents who require medical or nursing care,

Rehabilitation services for the rehabilitation of Injured, disabled, or sick persons, or

Health-related care and services to individuals who because of their mental or physical condition require care and services (above the level of room and board) which can be made available to them only through Institutional facilities,

and is not primarily for the care and treatment of mental diseases.

3140 Personal Allowance for Facility Residents

3150 Special Charges to Recipients in Facilities

3160 Nondiscrimination

3170 Freedom of Choice

3180 Placement

3200 Application Process

3210 Initial Application for Facility Payment

3220 Reapplication for Facility Payment

3230 Distinction Between Application and Inquiry

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

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

3240 Steps in Application Process

3241 Initial Contact

Initial contact may be made in person, by telephone, or by letter. Contact may be made by the applicant, a designated representative, the next of kin, or another person acting responsibly for him. The following tasks will be completed by the county worker during the initial contact:

3242 Referrals from Arkansas State Hospital and George W. Jackson Center

Persons in the Arkansas State Hospital, Little Rock, or the George W. Jackson Center, Jonesboro, may be eligible for long term care placement under Medicaid. The State Hospital will refer the patient by DHS-3300 to the county office.

If the applicant does not have a guardian or custodian and a need for one is indicated, the Hospital staff will determine need and be responsible for the preparation of necessary documents. If no need is established, the individual's transfer record must indicate "No need for Guardian or Custodian". The Hospital staff will coordinate efforts with the Agency's Office of Chief Counsel for the filing of the documents, when appropriate. Long term care patient referrals will be made by Hospital staff to the county in which placement will be made. It is the responsibility of that county office to mail Form DCO-777 to the applicant or his representative and to process any subsequent application.

The ES Supervisor of the domiciliary county will be responsible for corresponding with the county where the guardian or custodian is located, the county where information indicates possible resources, or the county where relatives may be contacted, as may be required to determine eligibility.

3243 Referrals from Arkansas Human Development Centers

The following procedures apply to those individuals currently in an Arkansas Human Development Center who are referred for assistance:

3244 Case Record and Control Card

A case record will be established in the County Office as soon as an application is received. Copies of all documents and correspondence will be placed in this record.

Form DCO-87 (Control Card) will be completed for each application at the time the case record is established.

3245 Entry of Application to WIHA

All applications will be entered into WIMA, with the date of application being the date the application was received in the County Office. The system generated application number will be entered on the DCO-777 by the terminal operator. All formal requests for LTC must be registered.

3247 Denial of Application at Intake

When information presented by the applicant or his representative during initial contact establishes that the applicant is ineligible, the application will be denied at that time. The county worker will complete all tasks required for denial of the application (Re. 3500 #2).

3248 Recording of Applications on Control Sheet

The county worker will maintain a Control Sheet (DCO-88) of all applications assigned to him or her for processing. The worker will list on the Control Sheet:

As applications are completed, the action and the date of completion will be indicated on the DCO-88.

3249 Referral to SSI

All AABD applicants with countable income less than the SSI SPA may be referred to SSA by Form RVI-302 for determination of SSI eligibility. If individuals with countable income of less than the current SSI/SPA ($30.00 for Title XIX facility

residents) allege a disability and apply in the AD category, current disability guidelines will be followed. Information must be sent to MRT if an SSI application is pending (Re. MS 3322). AD applications for these individuals will be approved if found eligible by MRT and if otherwise eligible, when SSA has not yet made a decision on the SSI disability. If SSI disability is later denied, the facility case will be closed (Action Reason 040). If SSI is later approved, facility services may be continued.

Applications for individuals whose countable income is above the current SSI/SPA ($30.00 for Title XIX facilities) will be processed by the County office for AABD eligibility determination (without referral to SSI), including eligibility determination by MRT, if appropriate.

SSA approved individuals with income of less than $50.00 will be eligible for an SSI payment while in a facility. SSA approved individuals with income between $50.00 and the SSI SPA will be eligible for an SSI payment for the month they enter a facility. After they have been in the facility for a full calendar month, the SSI payment will be suspended.

It is not necessary for the County Office to determine whether SSA referrals are later certified or denied for SSI or to report certification for SSI on the DCO-57. This information is communicated to the Office of Information Systems by SSI on the SDX tape, and changes are made automatically.

3250 Securing Information

The county worker will inquire into the circumstances of the applicant in order to ascertain the facts supporting the application and to obtain other information necessary to establish eligibility.

Primary responsibility for obtaining all information necessary to establish eligibility rests with the applicant or his representative. The worker will offer assistance whenever possible.

Collateral information (evidence provided by persons other than the applicant or by written documents) will be obtained when necessary to establish eligibility of the applicant. Collaterals with knowledge of the applicant will be contacted. If necessary, the county worker will use Form DHS-81 (Consent for Release of Information) to secure essential information from a collateral. This form must be signed by the applicant, or by his parent, guardian, or other person acting for the applicant, so that information may be released to the Agency.

The worker will check records or conduct inquiries by correspondence only when information can best be obtained in these ways. Routine record checking or correspondence which will not likely bring forth additional evidence needed to establish eligibility will be avoided.

The worker 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:

Conflicting evidence must be resolved.

3251 Time Limit on Disposition of Application

With the exception of an AD application, the county worker will have up to 45 days from the date of application to make disposition by one of the following actions: approval, denial, or withdrawal. The worker will have up to 90 days from the date of application to dispose of AD applications.

3252 Delayed Action on Application

3253 County Office

When action on an application has been delayed by Agency staff, the applicant will be notified by Form DCO-002 of the reason for the delay and of his right to an appeal.

3254 Applicant

If the applicant has been given notice via the DCO-002 to provide information to clear eligibility but falls to do so by the end of the specified time, the application will be denied. If the applicant Is having difficulty providing essential Information and requests additional time, the county worker will acknowledge the request by sending a second DCO-002 that clearly specifies what information is needed by the end of the extended time period and will assist the applicant in obtaining Information, if possible. If the information has not been provided,by the end of the extended time period, the application will be denied.

3300 Eligibility Determination

Eligibility determination Is the joint responsibility of the applicant, or his representative, and the county worker. The county worker has the responsibility of advising the applicant/representative of the eligibility requirements and for offering assistance whenever possible. The applicant/ representative has the final responsibility for supplying all information necessary to establish eligibility.

3301 Eligibility Reoulrements Eligibility requirements for facility services are:

3310 Establishing Categorical Eligibility

Current recipients of AFDC, U-18, SSI, and Foster Children (Cat. 91 and 92) for whom the Agency has legal responsibility automatically meet the categorical eligibility requirement.

However, if, during the processing of an LTC application, any question regarding the categorical eligibility of these individuals should arise, the question will be resolved with either Agency or SSA personnel before proceeding further with the application. The question and resolution should be documented in the case record.

If the eligibility of an SSI recipient is questionable, a statement will be obtained from SSA (preferably written) to document its awareness and treatment of the eligibility factor. If there appears to be a policy conflict between DCO and SSA, the DCO Medicaid Eligibility Unit will be contacted.

Categorical eligibility for individuals other than AFDC, U-18, SSI, or Foster Children will be determined according to SSI-related AABD facility eligibility criteria as follows:

3320 Verification of Institutional Status

Evidence of institutional status includes any written document, record, etc, from a hospital and/or nursing facility which verifies that the individual was in the hospital and/or nursing facility for 30 consecutive calendar days (Re. 3310).

When an individual cannot meet the institutional status requirement, the application will be denied, unless the individual dies before meeting the 30 day requirement. In that case, certification may be made for the actual days spent in the facility.

* When an individual has met the institutional status requirement of 30 consecutive days, eligibility for facility services will be effective the date of entry into the facility if all other eligibility requirsments are met, unless the individual is in an ICF/MR or was subject to PASARJft (Re. MS 3420).

Note: The institutional status requirement does not apply to individuals who were certified for SSI, AFDC, U-18, or Foster Care (Cat. 91 or 92) in the month of facility entry.

Individuals who become ineligible for SSI, AFDC, U-18, or Foster Care (Cat. 91 or 92) following the month of LTCF entry, will have their categorical eligibility determined according to SSI-related AABD facility eligibility criteria, with the exception of the institutional status requirement.

3321 Verification of Age

Use primary evidence when possible; if not, use convincing evidence.

3322.Verification of Blindness or Disability

Blindness or disability must be established by one of the following means:

The type of documentation used will be entered into the case narrative and a copy filed in the case records, if available.

3322.1 SSA vs. MRT Disability Decisions

The following disability guidelines will apply to all AD Medicaid applicants where disability is an eligibility factor and disability has not been determined. A disability decision made by SSA on a specific disability is controlling for that disability until the decision is changed by SSA. When DCO makes a disability determination, a later contrary SSA determination will supersede the state determination. If SSA has made a decision that a person is not disabled, that decision is binding on DCO for one year with exceptions noted in 3322.3 below.

3322.2 Referrals to SSA

Because SSA decisions are controlling, any new evidence or allegations relating to previous SSA determinations must be presented to SSA for reconsideration within 60 days of the SSA denial notice. If the decision has not been appealed within 60 days, the individual may still request a reopening of the decision within one year.

Therefore, the Agency must refer to SSA, for reconsideration or reopening of a determination, all applicants who allege new information or evidence which affects previous SSA determinations of "not disabled", except in cases specified in 3322.3 below. When the conditions in 3322.3 are met, counties will be required to make an eligibility determination for Medicaid.

Counties may also refer to SSA, for SSI application, those individuals whose income and resources are below SSI limits, because it would be to their advantage to receive both cash assistance and Medicaid.

3322.3 Applications Which Will Require An MRT Decision

When individuals apply for Medicaid and meet one or more of the conditions below, the DCO-106, DCO-107's and/or DHS-Sl's, and DCO-108, along with copies of the Social Security Disability or SSI denial letter (if applicable and available) and WTPY, if appropriate, will be submitted to MRT (Re. MS 3323), provided it appears that the other eligibility factors are met.

I

The Agency will determine eligibility if any one of the following conditions exists:

3322.4 Verification of Social Security Disability or SSI Status

To verify the Social Security Disability or SSI status of an individual the County will:

3322.5 Dual Applications

When an individual applies for both Medicaid and Social Security Disability or SSI, and the application with SSA is still pending, the county should initiate an MRT determination of disability if the individual appears to meet all other eligibility requirements. The Agency will have 90 days from the date of Medicaid application to make this determination. While an MRT decision is pending, the county worker should check the Social Security Disability or SSI status of the applicant 30 days after the Medicaid application has been made, and again at certification, if found eligible by MRT. If WRT finds that the individual meets the disability requirements and SSA has not yet made a decision, the county may certify the case for Medicaid. To verify that no SSA decision has been made, the WASM screen will be checked, if appropriate, and the individual or authorized representative will be contacted by mail or telephone prior to certification.

Additional case action is indicated as follows:

If application for Social Security Disability is approved first: . Notify MRT

Approve Medicaid application (if all other requirements have been met)

If application for SSI is approved first:

. Notify MRT

Deny Medicaid application, except for LTC, which may be approved for facility payment on WNHU (if all other requirements have been met)

If SSA determines the applicant is NOT disabled:

Notify MRT

Deny Medicaid application

*If the county certifies a case based on an MRT disability decision and later learns the individual has been denied by SSA, the Medicaid case will be closed after appropriate notice, unless the recipient appeals the closure. If the appeal is made within the 10-day time frame, the Medicaid case will remain open pending the outcome of the DHS appeals process. In no case, will the Medicaid case remain open pending the outcome of the SSA appeals process, if the recipient has appealed the SSA decision. If an approved Medicaid recipient is approved for SSI, the system will automatically convert the Medicaid case to an SSI category and no further action will be required of the county, except to notify MRT that no future reexamination is required, if appropriate.

3323 Procedure for Verification by Medical Review Team

The following procedures will be followed for verification of blindness or disability through the Medical Review Team. The disability onset date will be indicated on the DCO-109.

3323.1 For Blindness

3323.2 For Disability

3323.3 MRT Decision

The Medical Review Team will report the decision regarding physical or mental Incapacity to the county office on Form DCO-109.

If the medical Team finds that the medical information is not adequate to matedecisi ther medical /psychiatric /psychological examinations may be rcomnmded b edical Review Team at the expense of the Agency.

ArjpfjfBnents :h; evaluations will be made by the Medical Review Team only.

WfesT medical clial evidence has been resubmitted on questioned cases, the

{fitediiisTl Reviev * m make a decision as to disability and notify the county

QiflTfisse-an Fonr lOS. This decision of the Medical Review Team will be final,

saibjac* to the ler appeal process, unless a later decision by SSA finds the

'[irfJw-dial no .bled-

'MA ipplication Due to Mental or Physical Incaoacitv

Ef ia tneappH* is filed and the case has been closed within the past five

f7'£ for re. ;ter than disability and the last Form DCO-109 stated, "Re-

eKcBTnilmiRtion icessary" or iJae date for reexamination has not yet been trEKKdte:ia,, new 1 and social informatloin will not be submitted to the Medical fi&mw team. e case has beem closed fisr more than five years, new medical

mi SBctal t »tlG3i must be Eiliimitted. In all cases of reapplicatlon a

GSdB-HiS;® wil 1 mpleted to determine the applicant's SSA disability status.

MmS 'eexamination of Disability' bv MRT

WSte: imeiiical . ;ocfal information indicates that an individual may recover in a ear or m-. and/cfr be rehabilitated to the point where he could meet siE&stnitlal full employment, the Medical Review Team will require iHBasGBmriiratlon let&ser or not required by MRT, reexamination may be requested

& tJhs aDounty ice at any time for the aforementioned reasons.

M e'fitto' cas- t lis the responsibility O'ff the county office to Initiate the irgfitn Jiiy subf; 'ng oirreat medlcsO and socfal information (DCO-106, DC0-108A,

mJ 'MmAOJ a) '' DHS-81) to MRT.

M.M ee:gf1nation Reouired by MRT

liflteEi ItiiicatGd thfs fDCO-109, the county office will key the appropriate date

The 0co-109 The county office will contact the individual in a tlifntel!; iranner wtTI allow all necessary medical and social information to

wsmL IW by t irst o-f the month of reexam. When the reexam decision Is not iTtKceiiMBi! in 1 ounty office by the end of month In which the reexam was trBEqjiimnaGfi, the wilT remain open pending receipt of the MRT decision.

* 3'MS.J examination Resulting from Substantial Gainful Activity

Sufessta-iirttlal ga activity (SGA) is defined as the performance of significant p%smc£T and/o ta-T work activities for pay or profit, or in work activities genrrEralHy perf for pay or profit.

DaMiMrle month irnlnqs are obtained by deducting any employer subsidy and any

Tinpafiirnent rel work expense (not payroll deducts) from the gross income

('§r®ss tncome ides payment in-kind for the performance of work In lieu of cai)),. Then, rnlngs are irregular, they will be averaged oyer the period ffl)f mimy*tfes bein sidered to obtain countable monthly earnings.

Employer subactual service the payment of wages that is more than the value of the actirf service "ormed.

i

If the work is sheltered or if there is marked discrepancy between the amount of pay and the value of services, there exists the strong possibility of a subsidy that requires development of specific evidence.

Sheltered Employment is work performed by handicapped individuals in a protected environment under an institutional program; nonsheltered employment is any work performed by individuals in an unprotected environment.

Impairment Related Work Expenses are items or services needed in order to maintain employment, such as attendant services, prostheses, or other devices. Drugs and medical services are not deductible unless it can be shown they are necessary to control the disability to enable the individual to work. Deductible expenses must be paid for by the individual, and cannot be reimbursable from any source. Legitimate expenses may include installation, repair, or maintenance; the payments may be deducted in one month or prorated over 12 months.

The expenses must be considered "reasonable," i.e. not more than Medicare would allow or than would ordinarily be charged in the individual's community.

The following SGA Earnings Guidelines provide the basis for evaluating whether an individual is engaged in SGA:

3324 Verification of Citizenship or Alien Status

3324.1 Declaration of Citizenship or Satisfactory Immigration Status

The Immigration Reform and Control Act (IRCA) of 1986 ( P.L. 99-603) requires that, as a condition of an individual's Medicaid eligibility, the individual must declare in writing under penalty of perjury if he is a citizen or national of the United States or, if not, that he is an alien in satisfactory immigration status. This requirement does not affect the existing citizenship and alienage requirement nor does it affect the verification requirements for citizenship or alienage. Therefore, an allegation of U.S. citizenship must still be verified, if questionable, and the immigration status of all aliens must be verified.

Each adult applying for or receiving Medicaid assistance must make his own declaration of citizenship or satisfactory immigration status. The parent or guardian will make the declaration for all unemancipated persons under the age of 18 or otherwise incapacitated for whom medical assistance is requested. A legal guardian may also make the declaration for minors or for individuals otherwise incapacitated.

The application form will serve as the written declaration of citizenship for the applicant and/or any unemancipated persons under the age of 18. Caseworkers should be alert to the proper completion of the question on the application regarding citizenship for each person. As the declaration of citizenship is an eligibility requirement for the individual, the citizenship question on the application form must be answered for each person who will be an eligible in a Medicaid case.

In LTC cases where the applicant/recipient or the applicant/recipient's legal guardian has completed a DCO-777, no further action is necessary. In instances where an authorized representative other than a legal guardian has signed the DCO-777, the applicant/recipient should sign the DCO-9, unless he is physically or mentally incompetent to do so. If the applicant/recipient is unable to sign the DCO-9, then the authorized representative's declaration on the DCO-777 will be accepted as declaration of citizenship.

Once an adult has provided declaration of citizenship or satisfactory immigration status for himself or others, a declaration will not be required again unless an individual loses eligibility. If the individual later reapplies, a new declaration will be obtained,

3330 RESOURCES - AABD

Resources are generally defined as those assets, including both real and personal property, which an individual, or couple, possesses. Resources include all liquid assets as well as those assets which are not presently in liquid form.

In order for assets to be considered as resources, property or an interest in property must have a cash value that is available to the individual upon disposition.

Countable resources will be determined on the first day of the month. When resource eligibility exists at the beginning of a month, it continues for the full month. A resource change that occurs during a month in which resource eligibility exists will not be considered for determination of countable resources until the first of the month following the change.

When an individual Is ineligible at the beginning of a month due to excess resources, ineligibility due to resources exists for the full month.

Assets which have been received during the month and considered as income may not also be counted with resources during the same month (unless the income received is given away during the month It is received - Re. MS 3336.6). For example, if an individual had a checking account balance of $1,950 as of June 1, the receipt of a $300.00 SSA check during June would not cause the individual's $2,000 resource limit to be exceeded during June even if the entire check was deposited In the checking account. The individual's resource eligibility would not be affected by the receipt of income during the month. It would only be affected if the income was retained to the extent that it caused the $2,000 limit to be exceeded as of the beginning of July.

SSI lump sum benefits (never counted as income) will be excluded from resource consideration for 6 full months after the month of receipt (Re. MS 3332.3 #6). SSA lump sum payments also have the 6 month resource exclusion, but will count as income in the month of receipt-Re. MS 3341. Interest earned on the excluded funds will be counted as income in the month accrued and, if retained, as a resource in the month following.

Each Individual must be advised of how countable resources are determined and how resource changes can affect eligibility.

Requests for Legal Opinions Regarding Resources

A legal opinion from the Office of Chief Counsel (OCC), will be requested when the worker, the ES Supervisor, and the DCO Program Support Specialist are unsure of whether a resource should be considered or disregarded.

If the equity value of the questionable resource, when combined with other resources, appears to exceed the resource limit, OCC will be contacted if:

3330.1 Countable Resource Limitations

To be eligible for assistance under AABD categories the countable resources of an aged, blind, or disabled individual or couple may not exceed certain limitations. The countable resource limitations for AABD eligibility are as follows:

Note: The resource standards above apply to all AABD Medicaid categories (the resource standards are doubled for QMBs, SMBs and QDWIs), except when one spouse enters LTC and the other does not (spousal rules at MS 3337-3338 apply) or when both spouses enter LTC. When both spouses enter LTC, the couple's standard will apply for the month of entry, but the resources of each will be compared to the individual standard in the month after entry into LTC.

For a married couple in Waiver cases, the couple's standard will apply.

3330.2 Incapacitation

A person is presumed to possess legal capacity unless declared incapacited by a probate court.

Arkansas Statutes define a person as "incapacitated" when by reason of minority or of impairment due to a disability such as mental illness, mental deficiency, physical illness, chronic use of drugs, or chronic intoxication, he is lacking sufficient understanding or capacity to make or communicate decisions to meet the essential requirements for his health or safety or to manage his estate.

Whenever a person is incapable of caring for himself or his property, a need for a guardian is indicated. A guardian of the estate may be appointed if the person is incapable of managing property, money or his legal affairs. A guardianship of the person is indicated if the person is incapable of taking care of his person.

Normally, the question of incapacitation will not be considered in an eligibility determination. If a person has been adjudicated incapacitated and has had a guardian appointed for him, it will be necessary for the guardian to make application for benefits since the individual does not have that legal power.

If a person's incapacitation has not been determined, it will not be considered in an eligibility determination as long as the person Is able to make his wants or application known. If a person has excess resources and a claim is made that his resources are not available due to Incapacitation, it will be the responsibility of the person alleging the incapacitation to furnish proof of the Incapacitation and to find a person able and willing to serve as guardian of the person and/or estate. The person alleging the incapacitation will be required to provide a medical affidavit attesting to the incapacitation of the individual.

Advance Notice

When the medical statement has been obtained, the county office will inform the person alleged to be incapacitated and the person who has made the allegation that:

Case Closures

Case closures, when applicable, will be made on the first day of the month following the month in which:

Advance notice of closure is not required.

Overpayments

If LTC services have been paid, an overpayment will be written when:

3331 Real Prooertv

Real property is land, including houses or immovable objects attached permanently to land. It also includes burial plots and crypts.

In order for real property to be a resource, it must be convertible to cash. If the individual has the right, authority, or power to liquidate the property or his share or interest in property, it is considered a resource unless otherwise excluded (Re. MS 3331.5). If a property right cannot be liquidated, it will not be considered a resource.

Certain types of property may have special restrictions, which include the following:

3331.1 Evidence of Ownership

The following official records will be utilized in establishing real property ownership:

Questions of title, ownership, and property interest which cannot be resolved by the county office will be submitted to the Office of Chief Counsel. The memorandum will present the question involved and any relevant facts. Originals or copies of wills, deeds, contracts of purchase, or other documents affecting the property must be attached. If the applicant does not have the necessary documents, he will be advised of his responsibility to obtain them.

3331.2 Forms Of Ownership

3331.3 Determining Value of Ownership Interest

In determining the equity value (i.e. current market value less encumbrances) of real property, the type of ownership, the number of additional owners, and the individual's actual ownership interest must all be taken into consideration.

3331.4 Determining Equity Value

Equity value of nonhome real property is determined by deducting outstanding encumbrances (e.g., liens, mortgages, etc.) from the current market value (CMV) of the property. CMV is the amount for which the property can be expected to sell on the open market. The equity value determination of property owned by the individual must be fully documented in the case record.

The individual's allegation of property value is accepted without further verification when the following conditions are met:

the value would cause total resources to exceed countable resource limitations (Re. 3330.1);

the individual can dispose of the property; and

it does not qualify for exclusion.

If these conditions are met, with the exception of alleged value (i.e. the individual is unable to provide an estimate), the county worker will ask if the property would sell for at least the individual/couple's resource limit, as appropriate. If he alleges that it would, the worker will initiate action to deny or close.

When the individual's alleged value does not cause resources to exceed countable resource limitations or result in potential conditional eligibility, determine property value as indicated below:

3331.5 Real Property Exclusions

The following resource items qualify for special exclusions from resources when specific conditions are met.

3332 Personal Property

Personal property is property other than real property, consisting primarily of liquid assets.

Personal property which is accessible to the individual, or of which the individual is free to dispose, is a countable resource unless it meets the criteria for exclusion as specified under MS 3332.3.

3332.1 Forms of Ownershio

Generally, ownership of personal property can be in the same form as that of real property (Re. MS 3331.2).

3332.2 Determining Value of Personal Property

Listed below are various types of commonly held assets which are countable resources. The listing also describes how their resource value is determined.

Verification of countable resources is required.

3333 Treatment of Resource Changes

3334 TRANSFER OF ASSETS - HISTORY AND REFERENCES

Treatment of asset transfers for 1 ess than fai r market val ue made by an applicant/recipient, his/her eligible spouse, or their representative are governed by the date of transfer, the institutional or waiver status of the applicant/recipient, and whether the transfer was to the applicant/recipient's spouse.

Prior to 9/1/81 - there was no applicable transfer of assets policy for Medicaid applicants/recipients.

9/1/81 through 6/30/88 (through 9/30/89 for Spouses) - Applicable transfer policy for all Medicaid applicants/ recipients is found at MS 3334.1 through MS 3334.9.2.

7/1/88 and later - There is no policy (i.e., there is no penalty for uncompensated transfers) for non-institutionalized and non-Waiver Medicaid applicants/ recipients.

7/1/88 (10/1/89 for Spouses) through 8/10/93 - Transfer policy for institutionalized and Waiver applicants/recipients is found at MS 3335 - MS 3335.3. Also refer to related policy for institutionalized/community spouses at MS 3337 - MS 3338.12 effective 10/1/89 and later.

8/11/93 and later - Transfer policy for institutionalized and Waiver applicants/ recipients is found at MS 3336 - MS 3336.15.

Refer to chart at MS 3335.4.

3334.1 Transfer of Resources - General

Transfers of assets (including the establishment of or placement into a trust) made by an applicant/recipient, his/her eligible spouse, or a representative acting on their behalf must be verified and evaluated to determine:

whether the transfer is validly irrevocable;

whether any interest remains legally available to the individual or is declared by the current legal owner(s) to be available; and whether an asset was transferred for less than fair market value within the applicable look back period preceding the month of application/ redetermination.

When it is determined that an applicant/recipient, his/her eligible spouse, or representative has the authority or ability to revoke the transfer and regain the transferred interest, the value of such interest will be included with countable assets.

When it is determined that an applicant/recipient or his/her eligible spouse has remaining interest or ownership in a transferred asset, the value of such interest will be included with countable assets.

When it is determined that an applicant/recipient, his/her eligible spouse, or their representative has transferred an asset at less than fair market value within the applicable look back period prior to application, the transfer will be presumed to be for the purpose of establishing eligibility, and the amount of uncompensated value from the transfer(s) and the period of time the uncompensated value win be included with countable assets will be determined. Transfer{s) of assets presumed to be for the purpose of establishing eligibility will be subject to rebuttal (Re. MS 3334.6 and MS 3334.7) and, in some cases, subject to exclusion based on other circumstances.

NOTE: The above guidelines apply not only to an applicant/recipient or his/her eligible spouse but also to any fiduciary or individual legally authorized to act on their behalf, such as holder of power of attorney, parent of a minor child, guardian, etc. The guidelines also apply to other persons acting on behalf of the applicant/recipient or eligible spouse, e.g., an ineligible spouse.

3334.2 Documentation of Resource Transfers

Each individual who is subject to a penalty for uncompensated transfers and who applies for Medicaid September 1, 1981 or later, must complete Form DCO-727, Disposal of Assets Disclosure, in conjunction with his/her application for assistance (including applications completed at reevaluations). The county worker will explain to each applicant/recipient (or to his/her representative) that transfers of any assets within the applicable look back period must be disclosed as a part of the eligibility determination.

Reported property transfers will be documented by copy of bill of sale, title transaction, deed, business records, receipts, account statements, etc. A signed statement from the receiving party of the transaction may also serve as evidence. The applicant/recipient or person acting on his behalf must provide necessary documentation to verify the transfer, but the county worker will give assistance when necessary.

In addition to documenting the actual transfer, when a transfer has been made by an applicant/recipient, his/her eligible spouse, or another joint owner or account holder, etc., and fair market value compensation was not received, the worker must complete an Asset Inquiry, Form DCO-778, and forward it to the individual who received ownership of the asset. This inquiry is completed to document current ownership of the asset, the purpose of the transfer, and any expected compensation. If a complete Asset Inquiry Form cannot be obtained the worker should attempt to gather the information through other means, e.g., direct from the client, etc. Assistance cannot be denied solely on the basis of not being able to obtain a completed Asset Inquiry Form.

3334.3 Determination of Uncompensated Value and Period of Consideration

The uncompensated value from an asset transfer is the difference between the fair market value of the asset at the time of transfer (Re. MS 3331-3331.5 for real property and MS 3332-3332.3 for personal property) aniS the value of compensation received for the asset (Re. MS 3334.4).

The period of time that the uncompensated value from a resource transfer is considered is determined by dividing the uncompensated value by the amount specified for the period of time in which the transfer was made. The result will be the number of months that an individual will be ineligible for Medicaid. For example, the value of a transfer made between 9/1/81 and 6/30/88 will be divided by $1000. If $30,000 has been transferred, the period of ineligibility will be 30 months ($30,000 divided by $1000 = 30).

The period of ineligibility due to the uncompensated value of an income transfer is determined according to MS 3336.11. Amounts of uncompensated value and their periods of consideration may be affected by the receipt of compensation at a later time. Refer to MS 3334.8 for treatment.

NOTE: This section does not apply to individuals who applied and/or were receiving assistance prior to 9-1-81, for whom the agency determined eligibility, and who have remained continuously eligible.

When eligibility was determined by SSA for SSI prior to 9/1/81, and eligibility has not been determined by this agency, the date that the individual applies with this agency (e.g. for nursing facility services) will determine which transfer policy is applicable.

3334.4 Determining Value of Compensation Received

The value of compensation received is based on the agreement and expectation of the parties at the time of transfer. For example, if the purchaser agreed to pay the individual $10,000 in 10 installments of $1,000 each, the compensation is valued at $10,000 regardless of the amount of any payment(s) actually received at the time of application or redetermination.

The value of compensation is the gross amount paid or to be paid in a tangible form (such as cash, real or personal property) by the purchaser (the value is not reduced by expenses attributed to a sale). When compensation is equal to or greater than the value of the asset transferred, the transfer wi 11 not be considered uncompensated. However, any balance of resources from the transaction will be counted toward the resource limit.

* NOTE: A transfer for love and consideration is not considered a transfer for fair market value. It is presumed that services provided for free at the time were intended to be provided without compensation. Therefore, any transfer for care or services provided for free is a transfer of assets for less than fair market value.

When uncompensated value exists, proceed to 3334.5.

3334.5 Notifying Individual of Established Uncompensated Value

When uncompensated value is established, the individual must be advised of that fact before the application or redetermination is completed. The individual will be informed by letter (Form DCO-732) that he transferred an asset at less than fair market value and that the uncompensated value will result in a period of ineligibility unless he can provide convincing evidence that the action was exclusively for some purpose other than establishing eligibility. A copy of the letter will be filed in the case record.

If the individual does not respond to the letter within 15 days, it will be assumed that he does not wish to rebut the presumption that the transfer was for the purpose of establishing eligibility.

3334.6 Rebuttal of Presumption That Resources Were Transferred to Establish Eligibility

When an individual elects to rebut the presumption that the asset was transferred to establish eligibility, he will be informed that it is his responsibility to present convincing evidence that the asset was transferred exclusively for some other purpose.

The individual's statement concerning the circumstances of the transfer will be obtained and should include (but need not be limited to) the following points:

3334.7 Factors Which Indicate Transfer Exclusively for Some Other Purpose

The presence of one or more of the following factors may indicate that assets were transferred exclusively for some purpose other than establishing eligibility:

3334.8 ReacQuisition of/or Additional Compensation Received on Resource Transfer at Less Than FMV

Return of Transferred Assets - If transferred assets are returned to the individual who transferred them, no period of ineligibility will be imposed, i.e., the transfer will be considered as if it had never occurred. However, an individual who regains transferred assets may not be eligible for a period of time due to the value of the assets. If only a portion of the transferred assets are returned, a period of ineligibility will be calculated based on the value of the assets not returned and will begin with the date of transfer of the first transferred asset not returned.

The receipt of additional compensation for an asset which was transferred at less than fair market value reduces the consideration of uncompensated value for that asset by the amount of additional compensation received. The additional compensation received plus remaining uncompensated value (if any) will be counted with the value of the other assets of the individual.

3334.9 TRANSFER OF RESOURCES EFFECTIVE 9/1/81 THROUGH 6/30/88 (THROUGH 9/30/89 FOR INTERSPOUSAL TRANSFERS)

All Medicaid applicants and recipients for the period shown above are subject to penalty for transfer of assets for less than fair market value.

3334.9.1 Determination of Uncompensated Value and Period of Consideration

The value of uncompensated transfers occurring within 24 months prior to the month of application/redetermination will be divided by $1000 to determine the number of months of ineligibility for all Medicaid services. Any remainder will count as an additional month. For example, an uncompensated transfer of $41,500 divided by $1000 equals 41.5 months, or 42 months of ineligibility. The first month of ineligibility will be the month following the month of transfer.

3334.9.2 Exceptions to the Period of Ineligibility Due to Transfer of a Home for less than Fair Market Value

The transfer at less than fair market value of the home of an individual who is an inpatient in a medical institution will not cause him to be ineligible if:

3334.9.3 Related Policy

Refer to MS 3334.1 - 3334.8 for policy related to transfers from 9/1/81 through 6/30/88 (through 9/30/89 for interspousal transfers).

3335 TRANSFER OF RESOURCES EFFECTIVE 7/1/88 THROUGH 8/10/93

(EFFECTIVE 10/1/89 FOR SPOUSES)

THIS SECTION (3335 - 3335.4) APPLIES TO TRANSFERS MADE 7/1/88 THROUGH 8/10/93, AND TO INTERSPOUSAL TRANSFERS MADE 10/1/89 THROUGH 8/10/93. SEE MS 3337 -3338.12 FOR ADDITIONAL TRANSFER RULES FOR SPOUSES EFFECTIVE 10/1/89 AND LATER.

This section applies to all resources transferred for less than FMV by, or on behalf of, institutionalized and waiver individuals from 7/1/88 through 8/10/93 and to interspousal transfers occurring from 10/1/89 through 8/10/93.

For the purposes of this policy, an institutionalized individual is an individual who is an inpatient of a medical institution and nursing facility (or nursing facility only) for a period of at least 30 days. The term nursing facility includes all licensed nursing facilities and ICF/MR facilities, A Waiver recipient is an individual who is certified by the Agency for services under a Home and Community Based Waiver Services Program.

Examples:

No period of ineligibility can be imposed on a non-institutionalized or nonwaiver applicant/recipient who transferred, or whose representative transferred, resources for less than FMV on 7/1/88 or later.

SSI recipients who transfer property for less than FMV on or after 7/1/88 will not be penalized unless they become institutionalized or apply for Waiver services. SSA will provide information to the agency regarding any uncompensated transfers made by SSI applicants/recipients after 7/1/88. If an SSI recipient becomes institutionalized or applies for Waiver services, this policy (3335-3335.4) will apply.

The SSI transfer information reported to Central Office by SSA will be keyed to ACES on the WRTR screen by Central Office staff. Counties will access this screen to check for SSI transfers when processing a NF or waiver application or reevaluation of an SSI recipient or former SSI recipient. If an asset transfer

is displayed on WRTR the county must determine if a period of ineligibility is to be applied and, if so, report the penalty to the local SSA office.

3335.1 Determination of Uncompensated Value and Period of Inel igjbil itv

A period of ineligibility will be imposed upon an institutionalized or Waiver individual, if the institutionalized or Waiver individual, his/her spouse, or representative disposed of resources for less than FMV as specified below:

3335.2 Exceotions to (the period of) Ineligibility Due to Transfer of a Resource for Less than FMV

No period of ineligibility for uncompensated transfer will be imposed upon an institutionalized or Waiver individual, as specified in 3335.1, to the extent that:

3335.3 Other Policy Related to Resource Transfers Made 7/1/88 Through 8/10/93 (For Interspousal Transfers. 10/1/89 Through 8/10/93)

For transfers by individuals who applied and transferred property for the periods above, see MS 3334.1 through 3334.8, MS 3335.4, and MS 3337-3338.2.

PROPERTY TRANSFER CHART

MS 3335.4

PROPERTY TRANSFER CHART

** No period of ineligibility for uncompensated transfer will be imposed on an IS as long as the spouse who is not institutionalized does not transfer resource(s) to another for less than FMV. If a noninstitutionalized spouse transfers property to another, refer to MS 3335.1 or MS 3336.9 for determination of a period of ineligibility for the IS.

3336 TRANSFER OF ASSETS HADE 8/11/93 OR LATER

THIS SECTION APPLIES TO TRANSFERS MADE ON OR AFTER 8/11/93 BY ALL .SING FACILITY AND WAIVER MEDICAID APPLICANTS AND RECIPIENTS AND THEIR SPOUl i, AS MANDATED BY THE OMNIBUS BUDGET RECONCILIATION ACT (OBRA) OF 1993.

TRANSFERS OCCURRING PRIOR TO 8/U/93 SHALL BE GOVERNED BY THE RULES AT MS 334.9 or MS 3335.

Individuals and/or their spouses who transfer assets without compensat for less than fair market value on or after 8/11/93 will be ineligible for sing facility vendor payments (or, in the case of Waiver applicants, ineligi for all Medicaid benefits) for a period of time as specified at MS 3336.9 and .10

below. The penalties shall be applied to both institutionalized individi and noninstitutionalized Waiver individuals who have transferred assets and w? jply for Medicaid assistance.

When it is determined that an applicant/recipient, the spouse of the app :;nt/

recipient, or someone acting on behalf of the applicant/recipie* has transferred assets at less than fair market value in the 36 months pt to application or redetermination, it will be presumed that the transfer wa ?iade for the purpose of establishing eligibility. Transfers of assets presumes made for the purpose of establishing eligibility will be subject to rebuttal (T:*. MS 3334.6 and 3334.7).

3336.1 Assets Defined

Assets are defined as all income (Re. MS 3340 - 3348.1) and resources (R?. MS 3330 - 3333) of an individual and of the individual's spouse, includiiv any income and resources to which they are entitled to but do not receive because of action by:

3336.2 The Look Back Date

The look back date will be 36 months from the date on which an individual is both in an institution and has applied for medical assistance or, in the case of a Waiver individual, from the date on which the individual applies for Waiver assistance,

The 36 month look back date is effective with enactment of OBRA, 1993, for transfers occurring 8/11/93 and later. However, county workers cannot begin asking "Have you transferred assets in the past 36 months?" until 36 months have passed since enactment of OBRA, 1993. Therefore, the following dates will be utilized in investigating transfers by NF and Waiver applicants/recipients:

8/11/93 through 2/10/96 - Inquire about transfers in the last 30 months

2/11/96 through 8/10/96 - Inquire about transfers made 8/11/93 or later

8/11/96 and later - Inquire about transfers in the last 36 months.

If an institutionalized or Waiver individual is not eligible when he first applies for assistance and later reapplies, the county worker will ask about transfers in the appropriate look back period from the date of the second application, or the dates of subsequent applications if not eligible at the second application.

3335.3 Income Transfers and Failure to Apply For Benefits

As the definition of assets includes income to which an individual is entitled but does not receive, a penalty for transfer must be considered when, for example, an individual takes action to:

Federal regulations require that, as a condition of eligibility, an individual must take all necessary steps to obtain any annuities, pensions, retirement, and disability benefits to which he is entitled. These benefits include, but are not 1 imited to, veterans' compensation and pensions, OASDI benefits, railroad retirement benefits, and unemployment compensation. If an individual fails through inaction to access any benefits to which he is entitled, he will not be eligible for Medicaid.

3336.4 When an Ineligible Spouse Gives Away Income

No penalty will be imposed on an institutionalized spouse (IS) if the individual's community spouse (CS) gives away income belonging to the CS or fails to access CS income, since the CS's income is not counted toward the IS's eligibility nor in the budget for vendor payment. However, if a CS takes such action, no payment will be made from the income of the eligible IS's income to compensate the CS for the income not received. For example, an eligible facility resident agrees to give his spouse $300 of his monthly income and is allowed to give her this amount under the provisions of MS 3338.3 and the DCO-712. The facility resident's spouse has elected to give an elderly sister $100 of her monthly income. An additional $100 of the NF resident's income cannot be given to his spouse ($400 total) to bring her income back up to the level it would have been had she not given $100 to her sister.

If the ineligible spouse of a Waiver applicant/recipient has given away income or refused to access income to which that spouse was entitled, no penalty will be imposed on the Waiver applicant/recipient, since the ineligible spouse's income has no affect on a Waiver applicant/recipient's eligibility.

However, if an ineligible CS later enters a facility or requests Waiver services, the CS will be penalized for the income he/she has given away.

3336.5 Spousal Transfers

If an IS transfers resources or income to the CS in amounts greater than the amounts allowed by the spousal rules (Re. MS 3337-3338.12), no period of ineligibility will be imposed on the IS. However, the assets will still be considered available in the eligibility determination of the IS.

3336.6 Income Received and Transferred in Same Month

If funds are received AND transferred in the same month, the funds are treated as income in the month received and also treated as a resource in that month when considering transfer of assets. The month in which the funds are transferred will be the first month of the penalty period.

When income is received and retained by an individual, it is considered income in the month received and considered a countable resource on the first of the following month.

3336.7 Ownership Held in Common With Others

When assets are held by an individual in common with another person or persons in joint tenancy, tenancy in common or other similar arrangements, the asset (or portion of the asset) shall be considered to be transferred by the individual when any action is taken, either by the individual or by any other person, that reduces or eliminates the individual's ownership or control of such asset. For example, Mrs. White adds her daughter's name to a bank account. Adding a name to an asset in itself does not necessarily constitute a transfer because, in this case, Mrs. White still has full access to her money. However, the daughter later withdraws the money. The withdrawal shall be viewed as if Mrs. White had directly transferred the money to her daughter, and a period of ineligibility will be imposed on Mrs. White if she applies for facility or Waiver assistance.

If in the case of joint tenancy property ownership where an individual cannot access his interest in property due to the refusal of the other owners to give consent to sell the property, it should be determined when the joint tenancy ownership was established. For example, during the look back period an individual had full ownership of 10 acres of land but, prior to entering a facility, deeded the property to himself and two brothers as joint owners who will not consider sale of the property. In this situation, a transfer of assets should be considered, because an action occurred which eliminated or reduced the owner's access to an asset,

If, on the other hand, the joint tenancy ownership has existed for a period of time longer than the look back period, a transfer of assets will not be considered and the applicant's interest in the property will not be considered an asset if the other owners will not consider sale of the property.

When a transfer was made in the look back period by a joint owner which reduces or eliminates an individual's ownership or control of an asset, the individual will be given the right to rebut the presumption of ownership of joint accounts, if applicable (Re. MS 3332.2), and to rebut the presumption that assets were transferred to establish eligibility (Re. MS 3334.6 and 3334.7).

3336.8 Transfers to Trusts and Annuities TRUSTS ESTABLISHED PRIOR TO 8/11/93

TRUSTS ESTABLISHED 8/11/93 AND LATER

3336.9 Income Trusts

3336.10 Determination of Uncompensated Value and Period of

Ineligibility for RESOURCE Transfers

The number of months of Ineligibility for facility/Waiver services will be determined by dividing the uncompensated value of all resources transferred by the individual or spouse on or after the look back date by 1700. There Is no cap on the total number of months of ineligibility (Example: a $250,000 transfer divided by 1700 equals 147.06 months of ineligibility). Any fraction remaining after dividing the total uncompensated value by 1700 will be dropped. The period of ineligibility will begin on the first day of the first month during which assets were transferred.

* Multiple Transfers Made That Do Not Result in Overlapping Penalties - If an individual has made multiple transfers that do not result in overlapping penalty periods, a separate penalty period will be assigned to each transfer. For example, a penalty period for a $3400 transfer made in December will expire at the end of January. A second transfer of $5000 made in February results in a

penalty period that expires at the end of March. A $10,000 transfer in June results in a 5 month penalty period which ends in October. If the individual making these transfers applies in June, he will not be eligible until November 1st. The first two penalty periods will have expired, but the $10,000 transfer penalty will still be in effect.

*Multiple Transfers Hade That Do Result in Overlapping Penalties - The sum total of all transfers made will be divided by $1700 to determine the period of ineligibility.

For example, an individual gives away $8000 in May, $10,000 in June, $12,000 in July, and $4000 in August. He applies for assistance in August. The total value of uncompensated transfers ($34,000) will be divided by 1700, resulting In a penalty of 20 months.

If an individual has made transfers both prior to 8/11/93 and 8/11/93 or later, the rules governing transfers at the time the transfers occurred will be applied to each transfer. For example, an individual gave $10,000 away in 7/93, and an additional $10,000 in 10/93. The July transfer will result in a 6 month penalty ($10,000 divided by 1500 equals 6 months), or a period of Ineligibility from July through December. The October transfer will result in a 5 month penalty ($10,000 divided by 1700 equals 5 months). In this case, although the penalty periods overlap, the additional penalty will be added on to the original penalty, extending from January. 1994, through May, 1994.

*Penalty for Transfer to Annuities - If an applicant with an annuity has not yet annuitized (i.e., started receiving regular payments) and the annuity is revocable, the principal of the annuity is a countable resource. If annuity payments have begun and the contract is irrevocable, the number of years of payout of the annuity must equal the number of years of expected life remaining for the individual, based on the life expectancy tables at MS 3336.17. If the payout years are greater than the life expectancy years, a transfer of assets for less than fair market value has been made.

For example, a male at age 65 purchases a $10,000 annuity that will be paid over the course of 10 years. Since his life expectancy according to the table is 14.45 years, he can expect to recover the full amount of his investment. However, a male at age 80 has a life expectancy of only 7.04 years. If he purchases a $10,000 annuity to be paid over the course of 10 years, the payout of the annuity for approximately three years is considered a transfer of assets for less than fair market value and the amount is subject to penalty, beginning with the first month in which the contract is annuitized. To determine the penalty, subtract the total payout for 7.04 years from $10,000. Divide the difference by $1700 to determine the number of months of ineligibility.

If an annuity is made irrevocable and there will be no payout during the life of the annuitant, the full purchase price of the annuity is subject to a penalty for transfer of assets.

3336.11 Determination of Uncompensated Value and Period of

Ineligibility When INCOME Has Been Diverted

When income has been given away, the period of ineligibility will be determined according to the amount of income not received, based on the life expectancy of the individual who is being penalized.

For example, an individual with income $300 over the NF income limit irrevocably revokes his company pension of $400. The life expectancy tables at MS 3336.17

will be utilized to determine the period of ineligibility. If he is age 76, for example, when he enters a NF and gives away his right to income, his life expectancy is 8.70 years. The income he elected not to receive is valued at $41,760 ($400 monthly x 12 months x 8.70 years). The $41,760 will be divided by 1700, resulting in a penalty of 24 months, beginning in the month he gave up his right to the income.

The above penalty does not apply in the case of an eligible IS who is allowed to give part or all of his income to a CS according to the methodology at MS 3338.3 and on the DCO-712.

3336.12 Penalty to Impose When Transfer Occurs 8/11/93 Through

9/30/93

If an individual has transferred assets during the period of 8/11/93 through 9/30/93, the period of ineligibility will begin in August or September, 1993, but the agency will not be allowed to withhold vendor payments until October 1, 1993, for transfers occurring during these two months. For example, if $30,000 was transferred 8/16/93, a penalty period of 17 months will be imposed ($30,000 divided by 1700) and the first month of the 17 month count will be August, 1993. However, vendor payment cannot be withheld until October 1, 1993, which, in effect, will require the state to pay the facility vendor payment from 8/16/93 through 9/30/93 if the individual is in the facility on 8/16/93, has made application on or after that date, and is otherwise eligible for services. The case would then have to be closed effective 9/30/93, as the individual is not eligible beginning 10/1/93, and the individual would not be eligible for the remaining 15 months of the penalty period.

3336.13 Apportionment of Penalty for Spouses

If the spouse of an individual has transferred resources without compensation which results in a period of ineligibility for an individual, the period of ineligibility will be apportioned between spouses if the spouse otherwise becomes eligible for medical assistance.

For example, a CS of an institutionalized individual has transferred resources valued at $17,000, which results in a period of 10 months of ineligibility for the IS ($17,000 divided by 1700 equals 10). Two months after the transfer, the CS must also enter the nursing home and she meets all the eligibility requirements for Medicaid assistance. The remaining 8 month period of ineligibility will be divided between spouses, leaving only 4 months of ineligibility remaining for the spouse first institutionalized and giving 4 months of the penalty to the spouse who entered last, thus allowing both to become eligible in 4 months.

If a penalty has been apportioned between two institutionalized spouses and one spouse dies, the penalty period for the surviving spouse will be extended. For example, an institutionalized couple is under a penalty period of five months each from January through May. One of the spouses dies in March. The remaining penalty months of April and May for the deceased spouse will be added to the surviving spouses's penalty, causing that spouse to be ineligible for services through June and July.

When an IS under a penalty dies or goes home, the CS of that individual later enters a facility and the penalty period of the IS has not yet expired, the CS entering the facility will inherit the remainder of the penalty previously imposed. Example: An individual under a 12-month penalty imposed January through December of a year dies in July. The surviving spouse enters a NF in September. The remaining months of the penalty (September through December) will be imposed on the surviving spouse.

The above rules will also apply if one member of a couple is an IS and under a penalty and the CS applies for Waiver services, or if both members of a couple are requesting Waiver services, and one is under a penalty previously imposed.

3336.14 Penalty Continues Without Interruption Until Expiration

If an institutionalized resident under a transfer penalty leaves the institution, the penalty period will continue to run. If the individual later reenters an institution and reapplies for Medicaid, the worker will not only inquire about transfers in the appropriate look back period from the date of reapplication, but will also check the case record to determine the length of the penalty previously imposed and whether or not that penalty has expired. The break in institutional status does not eliminate or disrupt a penalty previously imposed.

For example, an individual who transferred $75,000 was penalized from receiving services for 44 months. After 3 months in an institution, the individual is able to return home for a period of 3 months before it again becomes necessary to enter a NF. The previously imposed period of ineligibility will continue (44 months less the 6 months which have elapsed since the penalty began) and the individual will remain ineligible for NF services until the full 44 months have passed.

If he reapplies, for example, when 38 of the 44-month period has elapsed and the county worker inquires about transfers in the 36-nionth look back period, the $75,000 transfer would have occurred more than 36 months prior to this reapplication. However, the original penalty imposed (44 months) will continue to expiration before eligibility can be considered. If the individual has made additional transfers in the 36-month look back period, an additional penalty period will be imposed.

Even though the penalty for facility/Waiver services continues until expiration, an individual living in the community may still be found eligible for Medicaid in another category, such as QMB, AD-MN, etc.

NOTE: In order to track the periods of ineligibility, when an applicant is denied due to transfer of resources, the worker will complete Form DCO-723, Report of Resource Transfer, and route the form to the Medicaid Eligibility Unit, P. 0. Box 1437, Slot 1223, Little Rock, AR, 72203. The Medicaid Eligibility Unit will key the transfer information to WRTR so that, if the individual later applies In another county, workers can determine whether a previously Imposed penalty is still in effect.

3336.15 Exceptions to the Period of Ineligibility

A period of Ineligibility shall not be calculated according to MS 3336.10 or MS 3336.11 and Imposed on an individual if:

3336.16 Related Policy

Other applicable sections of policy which apply to transfers made 8/11/93 and later are MS 3334.1 through 3334.8; MS 3335.4, and MS 3337 through 3338.2.

3336.17 Life Expectancy Tables

Life Expectancy Tables SOURCE: SSA, Office of the Actuary

3337 Treatment of Income and Resources for Certain

Institutionalized Spouses

Effective September 30, 1989, the Medicare Catastrophic Coverage Act (HCCA) of 1988 ( P. L. 100-360) requires special treatment of the income and resources of institutionalized individuals who are legally married to spouses living in the community. No comparable treatment of income and resources is required for noninstitutionaVized individuals or for institutionalized individuals who do not have a spouse living in the community. If there are changes in the marital status or other changes (e.g., - the spouses divorce or the institutionalized spouse returns home), the rules do not apply in the month following the month of change.

Except as specified in MS 3337-3338.12, this section does not affect the determination of what constitutes income or resources, or the methodology and standards used to determine or evaluate income or resources.

3337.1 Definitions

In MS 3337-3338.12, the following definitions apply.

Institutionalized' Spouse (IS) - an individual who is an inpatient in a medical institution or nursing facility, who remains (or appears likely to remain) In the Institution ejr facility for 30 consecutive days, and who is legally married to a spouse who is not in a medical institution or nursing facility. The marriage must be verified and documented.

Community Spouse fCS) - the legal spouse (of the IS) who is not institutionalized.

Medical Instituticsn - an institution (hospital) where care equivalent to that in a nursing facility is provided. Days in a medical institution may be considered a part of the continuous period of institutionalization when an individual enters a nursing facility directly from the medical institution. (If confined to s medical institution only, consider Medically Needy coverage - the spousal rules will not apply).

Nursing Facility - a facility which offers both skilled and intermediate nursing care, awd ICF/MR facilities.

* Likely to Remain - With medical documentation (physician's statement, hospital records, etc.) that the patient is "likely to remain" in the institution and/or facility for a pertod of 30 days, the rules may be applied and the individual may be certified, if the Individual is otherwise eligible, before a period of 30 days has passed". If the case was opened and the patient does not remain Institutionalized 30 days, no penalty will be imposed on the patient (nor on the county by Quality Control) if there is "likely to remain" documentation in the case record. "Likely to remain" applies ONLY to individuals in facilities with community spouses. Single individuals must meet the 30 day institutionalization requirement.

Dependent Family Member - includes minor (under age 18) or dependent (age 18 or over) children, dependent parents, or dependent siblings (including half-brothers and half-sisters) of the IS or CS who live in the home of the CS. To qualify as a dependent, an Individual must be claimed on the income tax return of the IS or CS \s a dependent, which must be verified by viewing the tax return.

Initial Assessment - an evaluation of resources and computation of the spousal share of resources at the beginning of the first continuous period of institutionalization (this does not apply if entry into LTC was prior to

9/30/89). Compute on DCO-710.

Continuous Period of Institutionalization - a period of residence in a medical institution and/or nursing facility of at least 30 consecutive days (therapeutic visits will be allowed).

Beginning of a Period of Institutionalization - date of entry into a medical or nursing facility.

Community Spouse Maximum Resources (CSMR) - the total amount of resources which may be considered available to the CS; this amount includes resources held solely by the CS (in which the IS has no ownership interest) and the Community Spouse Resource Allowance. Compute on DCO-713.

Community Spouse Resource Allowance (CSRA) - the maximum amount of the IS's resources which may be transferred to the CS or to another for the sole benefit of the CS. Compute on DCO-713.

Community Spouse Minimum Monthly Maintenance Needs Allowance (CSMNA) - the total income that the CS needs for his/her support. This amount may not exceed the limit shown on the DCO-712.

Community Spouse Monthly Income Allowance (CSMIAl - the maximum amount that an IS may contribute toward the support of the CS. Compute on DCO-712.

Family Member Allowance (FMA) - the amount of income an IS can give to a dependent family member other than the CS. Compute on DCO-712.

3337.2 Resources

The rule for treatment of resources specified in MS 3337.2 - MS 3337.13 are effective October 1, 1989, and apply ONLY to institutionalized spouses who begin continuous periods of institutionalization on or after September 30, 1989.

Resource eligibility for an IS whose period of institutionalization began prior to September 30, 1989, will be determined according to the policy in effect at that time.

3337.3 Initial Assessment

Upon application for LTC, or upon request by the IS, CS, or representative, the county worker will promptly assess and document the total value of countable resources (less exclusions specified in MS 3331.5 and MS 3332.3, except that no limit will be imposed on the value of the home, household goods and one vehicle) to the extent that either the IS or the CS or both hold an ownership interest, as of the date on which the first continuous period of institutionalization begins.

The purpose of the initial assessment is to record the total amount of resources held by both the IS and CS at the time of entry into LTC and to compute a spousal share of the total resources for the CS, which will be a protected amount and will remain constant as long as there is an IS/CS situation (Re. MS 3337.7).

The IS, CS, or representative will be responsible for providing relevant documentation of the composition and value of all resources held by the couple as of the beginning of the first period of institutionalization. The county worker will assist in obtaining such documentation when requested. The assessment will be completed promptly, and in all cases within 45 days, unless pending receipt of Information from the requesting party or a third party (bank, insurance company, etc.). An DCO-002 will be given or sent to the requesting party to inform the party that the information should be provided as soon as possible but within 45 days and that the assessment cannot be completed until the information is provided.

If the request was for an assessment only, no further action is required by the county until the information has been provided.

At the time of the assessment, Form DCO-710 will be completed to reflect all countable resources held by either the CS or IS, or both, at the beginning of the first period of institutionalization. The total value of these resources and the spousal share (equal to one-half of the total value) will be entered on the DCO-710. The resources owned solely by the CS will also be totaled on the form.

The worker will provide a copy of the DCO-710 to each spouse, or representative, and retain the original, regardless of whether an application for LTC is made at that time. Only an applicant or applicant's spouse will have appeal rights if there is disagreement with the attribution of assets on the form. A person requesting only an assessment has no right to appeal if an application has not been made.

If application has been made, the DCO-710 will become a part of the case record. If no application has been made, the DCO-710 will be kept by the county in an alphabetical file for future reference if the individual later makes application, (e.g., - An individual enters LTC and makes application on September 30, 1995, and an assessment of resources made on October 1, 1995, results in an ineligibility determination. A reapplication is made two years later, after two years of continuous residence in LTC. The county must look at assets held at the beginning of that first continuous period of institutionalization, i.e., September 30, 1995. Reference to a form on file will be preferable to reconstructing the assets held two years earlier. If the applicant left LTC at any time during the two year period but returned to LTC, the county will use the assessment of resources made at the time of first entry in determining eligibility).

3337.4 Resource Eligibility

At the time of application, all resources held by either the IS or CS shall be considered available to the IS to the extent that the resources exceed the Community Spouse Maximum Resources (CSHR), the maximum resources that are considered available to the CS.

When application has been made, or upon request of either spouse or representative, the worker will compute the CSMR and the Community Spouse Resource Allowance (CSRA), and will determine resource eligibility on the DCO-713.

The CSRA is computed to determine the amount of the IS's resources which may be transferred to the CS. Resources of the IS may be transferred for less than fair market value to the CS (or to another for the sole benefit of the CS) only to the extent allowed by the CSRA. For rules regarding transfer by the IS, refer to MS 3337.10 - 3337.11.

3337.5 CSHR and CSRA Computation

The Community Spouse Maximum Resources (CSMR - the maximum amount of resources that a CS is allowed to retain) and the Community Spouse Resource Allowance (CSRA - the amount of resources that an IS may transfer to the CS in order to give the CS the maximum allowed) are computed on Form DCO-713.

By following the instructions on the DCO-713, the CSMR, Line 2 of the form, and the CSRA, Line 4 of the form may be computed.

MCCA of 1988 set a maximum amount (the dollar amount shown in Section 1, #1 of the DCO-713) that a CS was allowed to keep under the law, and also allowed states to set a minimum amount (the dollar amount shown in Section 1, #2 of the DCO-713) that a CS could keep. These amounts are subject to change by the Consumer Price Index and will be changed annually on the DCO-713.

The total amount of resources that a CS is allowed to retain depends on the total amount of combined resources that a couple has and also on the current minimum state standard and the current maximum standard set by law.

RESOURCE RULE

If total combined resources are equal to or less than the state minimum standard, the CS may keep all.

If total combined resources are between the state minimum standard and twice the state minimum standard, the CS may keep an amount equal to the state minimum standard.

If total combined resources are in an amount of twice the state standard up to twice the maximum standard, the CS may retain one-half of all resources.

If total combined resources are greater than twice the maximum standard, the CS may still keep only the maximum standard allowed by law.

The CSRA may only be changed by a hearing officer (Re. MS 3337.9 and MS 3338.7) or by a court order.

3337.6 Determining Resources of the IS After CSRA Computation

To determine the IS's resource eligibility, Part II of the DCO-713 will be utilized. If the amount in Line 7 exceeds the one person resource level, the IS is ineligible and the application will be denied.

If the amount in Line 7 is at or under the one person resource level, the IS will be considered resource eligible for the month of determination.

When determined eligible, it will be necessary for the IS or representative (guardian or power of attorney) to sign the statement on the reverse side of the DCO-713, agreeing to transfer the described property to the CS. If the IS or representative refuses to sign, then the combined resources will be considered fully available to him/her and the IS will not be resource eligible at that time.

A copy of the DCO-713 will be provided to each spouse upon determination of eligibility, or to the spouse requesting the CSRA and eligibility determination, if a request by either spouse is made prior to application.

The DCO-713 will be retained by the County as a part of the case record, if application was made. If no application was made, a copy will be kept in a County file for reference if application is made in the future.

3337.7 Spousal Protected Amount fCSMR)

When resources exceed the limits, the IS will be ineligible until combined countable resources are reduced to the greater of the following:

Example: The IS above left LTC for 60 days and then reenters. The couple has combined countable resources of $65,000 at reentry; the spousal share earlier computed was $70,000. Since total combined resources are now only $65,000, which is less than the spousal share, all of the resources may be attributed to the CS, and the IS is eligible for LTC.

3337.8 Retroactive Eligibility

* Retroactive eligibility may be given under these rules, provided all eligibility requirements are met. For example, application is made January 1, 1995, after entry into LTC on October 1, 1994. The assessment of resources owned by the couple as of October 1, 1994, will be made and, if eligible, the case may be opened retroactively to October 1, 1994).

3337.9 Appeal Rights' - Changing the CSRA

The CSRA may be changed by court order, or may be changed by the Agency in the following three Instances:

3337.10 Rules for Transfer by the IS

Effective October 1, 1989, if .the IS (who has entered 9/30/89 or later) or a representative acting on his/her behalf, transfers resources (in an amount less than or equal to the CSRA) for less than FMV on or after October 1, 1989, to the CS, or to another for the sole benefit of the CS, no period of ineligibility will be applied to the IS.

If resources are transferred by the IS for less than FMV on or after October 1, 1989, to anyone other than the CS, or to another but not for the sole benefit of the CS, a period of ineligibility will be applied according to the resource transfer provisions in effect at the time of the transfer. The period of ineligibility will apply to the vendor payment only. If the IS is otherwise eligible, he/she may be given eligibility for a Medicaid card ONLY. Prohibited transfers for uncompensated value will not affect eligibility for the Medicaid card.

3337.11 Time Period for Transfer of CSRA to Community Spouse

The IS will be encouraged to transfer the CSRA to the CS as soon as possible. He/she will be given a period of 12 months (from the date the notice of approval is completed) to transfer the property In the amount of the CSRA to the CS.

If the transfer has not been made by the end of the 12 month period, the case will be closed, and the IS will not be eligible in the 13th month. No penalty will be applied, i.e., no overpayment will be written if the CSRA transfer was not made. .. ,

3337.12 Rules for Transfer by the CS

* If a spouse transfers property to his/her spouse before or after LTC entry and the receiving spouse.transfers it to a third party for uncompensated value, a period of ineligibility will be imposed on the IS. The transfer will be treated as if the IS had transferred directly to the third party. For example, a man transfers his home and land worth $40,000 to his wife on 11/1/94. His wife gives the property to her nephew without compensation on 3/1/95, and the man enters LTC on 4/1/95. An assessment will be made at application, and the County will inquire about transfers. A period of ineligibility will be imposed on the IS, beginning 3/1/95.

3337.13 Consideration of Resources After Eligibility is Determined

During the continuous period in which an IS is in an institution and after the month that the IS is determined eligible- for LTC, any resources owned solely by the CS which were considered available to the IS at determination of eligibility (i.e., any resources of the tS which exceeded the CSMR, and were considered available to the IS at determintion of eligibility) will not be considered available following the mcmth of eligibility determination. Resources will be considered available ta each spouse according to actual ownership of those resources, except that the period for transfer specified in MS 3337.11 will be allowed.

3338 Income Eligibility Determinatiern for the IS

The rules for treatment of income appTy to all spouses who are in an institution on or after September 30, 1989. If a case was certified prior to September 30, 1989, the new income rules. w411 be applied at reevaluation, case change or upon request of the IS, CS, or representative. If an application is pending September 30, 1989,, the new rules will apply.

* Income eligibility for the IS will be determined in general following the procedures in MS 3340 - MS 3349. Gross income-of the IS cannot exceed the current LTC income limit in determining: eligibility, unless an income trust has been established. Income of the CS wi.TT not be deemed to the IS in any month or partial month of institutionalization. If an IS is receiving full SSI payment for the first three months of institutionalization, the SSI payment will be disregarded as income.

3338.1 Consideration of Income

After the IS has been determined to be res.ource eligible for Long Term Care, income of the IS and CS will be considered;as follows:

3338.2 Rebutting Consideration of Income

The county worker will advise the applicant or representative of the income that will be considered in the gross income test of the IS. If the IS or representative disagrees with the treatment of ownership interest in income (other than from a trust) required by MS 3338.1, the IS or the representative will be given the opportunity to rebut the presumption of ownership. In order to successfully rebut the presumption of full or partial ownership, he/she must provide the following within 30 days of the date on the DCO-712:

3338.3 Determination of Nursing Home Net Income

After determination of resource eligibility and the post-eligibility consideration of income (or upon request by the IS, CS, or their representative), the Nursing Home Net Income, Community Spouse Minimum Monthly Maintenance Needs Allowance (CSMNA), Community Spouse Monthly Income Allowance (CSMIA), and any Family Member Allowances (FMA) will be computed on Form DCO-712. Amounts will be rounded to the nearest dollar (Round 50it up). These amounts will be deducted from the IS's gross income, in the following order:

An income offset for the purchase of ey«g.1icfsses;j contact lenses, hearing aids, prostheses, and dentures can be mad® mily if the following procedure is followed:

3338.4 Option To Estimate Net Income

County offices may elect to estimate for a period not to exceed six months any or all of the following: the income of the IS, the spousal and family member maintenance allowances, and the medical expenses. The six month projection will show reasonable income and expenses, based on the six month period immediately preceding the projection and may be preferable when income or living/medical expenses fluctuate.

3338.5 Verification or Refusal of Contributions

Prior to certification of the IS, the IS or representative must complete and sign the statement on the reverse of the DCO-712 to indicate that the IS plans to contribute the CSHIA and the FMA specified on the front of the DCO-712, during the period of institutionalization.

If the DCO-712 is not completed and signed, no allowances for the CS or other family members will be used in determining Nursing Home Net Income. The CSMIA and FMA will only be deducted to the extent actually contributed by the IS.

If the CS does not want to accept the contribution from the IS, the CS should decline the income by completing the appropriate section on the DCO-712.

3338.6 Quality Control Errors

The amount computed as net income to be applied to the vendor payment will be subject to Quality Control error.

If a contribution or medical expense is deducted from gross income and the IS is not actually meeting the contribution or expense, this will be an understated liability and a dollar error.

If the contribution (or full contribution) or medical expense is not being deducted from the income, and the IS has agreed to pay the contribution, or has incurred a medical expense, this will be an overstated liability but no dollar error.

3338.7 Appeals and Hearings

If either spouse is dissatisfied with the determination of:

*the CS's monthly income allowance,

*the amount of monthly income otherwise available to the CS,

*the computation of the spousal share of resources,

*the attribution of resources, or

*the CS's resource allowance,

such spouse is entitled to a hearing, if application has been made on behalf of the IS.

Any hearing regarding the determination of the CS's resource allowance shall be held within 30 days of the date of the request for the hearing.

REVISION OF MINIMUM MONTHLY MAINTENANCE NEEDS ALLOWANCE

If it is established that the CS needs income above the level provided by the minimum monthly maintenance needs allowance (CSMNA) due to exceptional circumstances resulting in significant financial duress, a greater allowance may be substituted by a hearing officer, but only to the extent the IS is willing to make the IS's income available to the CS.

"Exceptional circumstances resulting in extreme financial duress" are defined as circumstances other than those taken into account in establishing the maintenance standards for the CS, such as unreimbursed medical expenses or household repair and maintenance for which the income allowance calculated by the Service Representative on the DCO-712, along with the CS's income, is inadequate to pay.

If an income allowance greater than the one calculated by the county worker on the DCO-712 is granted by a hearing officer, the greater amount cannot exceed the current maximum, as shown on the DCO-712. For example, in 1993 the maximum CSMNA is $1769. A CS's CSMNA computed on the DCO-7i2, based on rent and utilities, is $1400. The CS's income is $800 a month, and the IS is allowed to give the CS $600 per month, giving the CS a total of $1400. The CS establishes that her monthly expenses are $1800, due to exceptional circumstances. A hearing officer may allow the IS to give the remainder of the IS's income, if any, to the CS (excluding the $30 PNA). If the IS has $369 additional income, it may be given to the CS to bring the CS's income up to the maximum CSMNA ($800 + $600 + $369 = $1769, the maximum allowed). No additional amount can be granted to raise the CS's total income to $1800, because $1800 is over the maximum.

REVISION OF COMMUNITY SPOUSE RESOURCE ALLOWANCE

If an IS is willing to contribute all of the IS's monthly income (less the $30 PNA) to the CS and the CS still does not have enough monthly income to raise the income to meet the needs of a CS when financial duress exists, a hearing officer may change the CS's resource allowance to bring the CS's income up to the maximum CSMNA. Any additional resources attributed to the CS must be income producing, otherwise the resources would not serve to increase the CS's income. In determining an increased resource allowance, no resources can be transferred which, along with the CS's other income (including the income from the IS) would generate total income to the CS in an amount greater than the current maximum CSMNA limit shown on the DCO-712.

If a greater CSMIA is awarded by a hearing officer due to extreme financial duress, the county may:

Request the hearing officer to reopen and review the case when the county has reason to believe the exceptional circumstances no longer exist;

Have the hearing officer schedule future hearings to review the circumstances and determine if financial duress still exists; and

[GREATER THAN]

Monitor the case(s) to assure that exceptional circumstances still exist, and make adjustments when indicated.

3338.8 Certification

The procedures in MS 3400 will be followed in certifying the applicant for facility services. The sum of the CSMIA, FMA, and noncovered medical expenses will be entered in the Protected Maintenance Field of WNHU. The amount of the IS's income remaining after deduction of all allowances (the sum of the CSMIA, FMA, noncovered medical expenses, and the personal needs allowance) will be entered in the Nursing Home Net Income field.

Each Form DCO-86 and EMS-87 for IS's who have a CS will be marked in red in the upper right corner to assist in identifying these cases.

3338.9 Changes

The IS, CS, representative, and family members will be advised to report any changes in income, shelter costs, or medical expenses while the IS remains in the facility. Any of these changes will affect the amount that the IS is required to contribute toward the facility vendor payment.

The county office will not be required to make monthly adjustments to the net income. If the county has elected to project income and expenses for a period of six months (Re. MS 3338.4), the case will be flagged through WALR or DCO-87 for a net income adjustment, if necessary, at the end of the six month period. Adjustments must be made sooner than six months if changes are expected or reported.

A full reevaluation (completed DCO-777, etc.) will not be necessary at the six month review. Only changes in income, shelter costs, and expenses will be reverified, if reported as changed, and a new DCO-712 will be completed.

When the IS, CS, or individuals receiving an FMA are affected by the annual Cost of Living Adjustment made by SSA, the SSA income amount of each individual whose needs are included in the calculation of the Nursing Home Net Income Amount must be recomputed to determine if the allowance or the net income changes.

Each time the CSMIA, FMA, noncoverable medical expense deduction, or Nursing Home Net Income is adjusted, the reverse side of the DCO-712 will be completed and signed by the IS or representative, declaring that the IS intends to provide the CSMIA and FMA for the support of the CS and family members (or that the CS refuses to take the allowance). The CSMIA and FMA will only be deducted to the extent contributed by the IS.

Each time a DCO-712 is completed, a copy of the DCO-712 will be provided to each spouse.

3338.10 Retroactive Adjustments

When the county discovers that the income of an IS, CS, or other family member has changed, that the maintenance needs of the CS have changed, or that uncovered medical expenses have changed (any change that affects the net income applied to the cost of facility services), the retroactive fields of WNHU will be used to adjust the net income for retroactive periods.

3338.11 NonRecurrinq Lump Sums

If nonrecurring lump sums are received, or anticipated, they will be treated according to policy at MS 3341.

3338.12 Reevaluations

Regular case reevaluations will be made yearly. At each reevaluatlon, the amount of the CSMNA, CSMIA, and FMA will be recomputed on Form DCO-7i2. In order for the CSMIA, FMA and medical expense deductions to continue, the recipient and the CS will be required to reverify the amounts of income, shelter expenses, and medical expenses which are being considered in the computation of the facility net income. If this information is not provided at reevaluation, the deductions will not be- aTlowed.

The DCO-712 must be signed by the IS or representative at reevaluation, and a copy of the form must be given to both the IS and CS.

3340 INCOME

Income is defined as the receipt of assets by an individual in cash or in-kind (Re. MS 3347) during the month. To be considered as income, the assets received must be something of value received by the individual 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.

Income Tnay be received in cash (including checks, money orders, etc.) or in-kind (including items such as rent, free food, etc.) The cash value of items received in-kind must be determined. The value of infrequently and irregularly received items such as small gifts of clothing will not be considered as

income.

3341 Income Evaluation

Determt'hation of income eligibility will be based on an applicant/recipient's monthly income. The recipient's gross monthly income will be compared to the monthly income eligibility standard to make this determination. (Exclude VA Aid and Attendance and CME/UME in this computation).

Income-which is received on a basis other than monthly (annually, semiannually, etc.) will be considered as income for the month of receipt only. (Do not count dividends received from Insurance policies as income in eligibility determinations). Amounts carried over into the following month will be considered as resources. Nonmonthly income receipts will be treated as follows:

3342 Consideration of Ineligible Spouse/Parentfs) Income after Initial Eligibility Has Been Established

ftfter initial eligibility has been established, income of the noninstitution-alized Ineligible spouse/parent(s) may be considered available to the eligible spouse/child in a facility only to the extent that it is voluntarily contributed either to the eligible spouse/child in a facility or directly to the facility for partial vendor payment.

The Ineligible spouse/parent{s) is not required to make a contribution to the eligible spouse/child in a facility or to the facility and may, in fact, choose 5 ta'make irio contributions.

If, however, the ineligible spouse/parent(s) indicates that he will voluntarily iOcohtribute any Income, determine whether the contribution Is made directly to the'eligible person In the facility or directly to the facility for partial vendor payment.

contribution made directly to the eligible person in the facility will be considered as unearned income both in determination of eligibility and in determining the net income to be applied to the vendor payment.

Contributions made directly to the facility as partial vendor payment will only be cansldered for client share of the facility vendor payment, and will not be coiisidered for recipient eligibility. The payment made by the ineligible %jj[LESS THAN]mse/parent(s) must be for covered services under the LTC program to be torisidered available to apply toward the vendor payment. Payments made by the ineTlgible spouse/parent(s) for special charges or additional services and Items not covered by the facility vendor payment will not be considered. This Includes payments made by the family of the facility recipient to the facility for the cost of a private room.

In the advance notice that the case will be closed and that a new application will be required to reopen the case.

Anticipated income changes that will not result in case closure may be entered in WNHU no earlier than the month prior to the month of receipt of the income. The vendor payment adjustment will then be made by the Medicaid claims processing agent (Re. DCOUM 3723 for procedure). The client or his representative should be notified of his increased vendor payrnant responsibility by DCO-700 at least ten days prior to input of the change.

3342 Consideration of Ineligible Soouse/Parentfs) Income after Initial Eligibility Has Been Established

After initial eligibility has been established, income of the nonlnstitution-allzed Ineligible spouse/parent(s) may be considered available to the eligible spouse/child In a facility only to the extent that it is voluntarily contributed either to the eligible spouse/child in a facility or directly to the facility for partial vendor payment.

The ineligible spouse/parent(s) is not required to make a contribution to the eligible spouse/child in a facility or to the facility and may, in fact, choose to make no contributions.

If, however, the ineligible spouse/parent(s) indicates that he will voluntarily contribute any income, determine whether the contribution is made directly to the eligible person in the facility or directly to the facility for partial vendor payment.

Contributions made directly to the eligible person in the facility will be considered as unearned Income both in determination of eligibility and in determining the net income to be applied to the vendor payment.

Contributions made directly to the facility as partial vendor payment will only be considered for client share of the facility vendor payment, and will not be considered for recipient eligibility. The payment made by the ineligible spouse/parent(s) must be for covered services under the LTC program to be considered available to apply toward the vendor payment. Payments made by the ineligible spouse/parent(s) for special charges or additional services and items not covered by the facility vendor payment will not be considered. This includes payments made by the family of the facility recipient to the facility for the cost of a private room.

Each ineligible spouse/parent will be advised that income contributions may be made on a voluntary basis to the eligible spouse/child in a facility or to the facility, and of the different ways that the contribution may be considered if one Is made. The decision of whether to contribute or not contribute is left to the ineligible spouse/parent(s) to make, and no suggestions or recommendations of action will be given to him. Any questions that the ineligible spouse/parent(s) has regarding the affects of a specific action will be answered.

Nonvoluntary contributions can only be effected by court order, and only considered when actually paid by the ineligible spouse/parent(s). The eligible person in a facility is not required to seek support from the ineligible spouse/parent{s) to remain eligible for facility Care.

3343 Determination and Verification of Earnings from Employment

The monthly gross amount of any earnings from employment will be determined. Monthly gross income is determined by the actual earnings received (or to be received) during the month of application or reevaluatlon, whether paid weekly, biweekly, semimonthly, or monthly. In cases where 5 pay periods during the month of application result in ineligibility, the application will not be denied (if otherwise eligible) but will be considered for eligibility in the following month when there will be only 4 pay periods. In ongoing cases where earnings are biweekly, the cases will be flagged (by DCO-88 or WALR) to make income adjustments on WNHU during the months when 5 paychecks 'are to be received.

If the earnings fluctuate, the worker will determine, by averaging or other means, an amount which fairly reflects the income actually currently available to the applicant on a monthly basis. The case narrative will clearly reflect the manner in which the Income was determined and the justification for considering it a fair reflection of the actual, current Income available to the applicant.

Verification of earnings from employment will be by check stubs, pay slips, or collateral contact with the employer. Sufficient verification must be obtained so that the actual income of the employee can be determined. The worker will not automatically assume that one check stub accurately reflects earnings for an entire month. The latest month's verification will be required. If a person is paid weekly, then the latest 4 (or 5) consecutive check stubs will be required. If the person is paid every other week or twice a month, then the latest two check stubs will be required, and if paid monthly, then the latest check stub will be required. If the client does not have the required verification, then verification from the employer will be required.

EXCEPTION: For cases in which applicant/recipient has just begun employment and a month's verification is not available, the Service Representative will compute the income from the best information available. In this instance the case will be flagged for a redetermination of earnings in the following month using full verification procedures.

3343.1 Earnings of ICF/MR Facility Residents

Residents of ICF/MR facilities who have earned income may be given a disregard of up to $100 of their monthly earnings, in addition to the $30 personal needs allowance. The same disregard may also be given to nursing facility residents with earnings who receive intermediate care, provided there is documentation

that a physician has prescribed employment activity as a therapeutic or rehabilitative measure. If a nursing home resident receiving skilled care reports earnings, the Utilization Control Committee of the OLTC should be contacted and requested to reevaluate medical necessity.

All nursing facility and ICF/MR residents must first pass the gross Income test,-with no disregards allowed. If found eligible, the consideration of earnings will be as follows.

3344. Determination and Verification of Earnings from Farm. Business

or Self-Employment

Gener|lly, it is necessary for the self-employed individual to estimate current incomes based on a projection from the tax return filed for the previous year tsind from current records kept in the regular course of business.

Becailse of the fluctuating nature of income receipts and self-employment expen'ses, current estimates for net income from self-employment will be based en the entire taxable year.

3344.4 Determining Amount of Net Earnings from Self-Emolovment

he aiiiount of net earnings from self-employment is not always ascertainable from business records. If this is the case, use the first of the following

methods that is likely to give the most accurate estimate of current and future net earnings which may be allocated on a monthly basis.

3344.2 Unstated Income

Unstated income is income not reported or otherwise accounted for, but known to exist because living expenses exceed the income that has been reported.

An applicant, recipient or person whose income is subject to deeming may have unstated income.

The amount of unstated income to be considered as unearned income in determining eligibility is the difference between the declared monthly income and the monthly living expenses.

3344.3 When to Develop Unstated Income

When an individual's stated income does not appear adequate to cover living expenses, it will be necessary to develop unstated income, unless there is a reasonable explanation to account for the difference; e.g., savings have been used or bills have not been paid.

If the previous year's income tax return of an individual engaging in self-employment activity shows "0" or only a small amount of net income, living expenses and unstated income must be explored.

3344.4 Development of Living Expenses

When development of living expenses is required due to unstated income, explain to the individual what information will be needed to develop living expenses and why it is needed. Consider the living expenses of each and every member of the self-employed individual's household, and explain that all expenses must be considered. It is essential that a complete disclosure be obtained.

The following guide should be used in developing living expenses:

3344.5 Determination of Unstated Income

3345 Sources of Unearned Income

The following are possible sources of unearned income:

3346 Determination and Verification of Unearned Income

The monthly amount of unearned income must be determined, verified, and included in the budget. Verification will normally be by documentary evidence obtained from the source of the income. Another means of verification may be used if it clearly establishes the source and amount of the income.

In addition. If the applicant or recipient is potentially eligible for any benefit, he will be required to apply for it and to accept the benefit if found eligible. Verification of his application for such benefits will be included In the case record. Once the applicant has applied for the benefit, his application or reevaluatlon may be completed. If he is otherwise eligible. The DCO-87 will be held current pending decision on his application for the benefit. If the applicant refuses to apply within 30 days of his application for any benefit for which he may be eligible, his application will be denied (or case closed).

3346.1 Social Security Benefits

Social Security benefits are paid upon retirement, disability, or death of a covered wage earner. Retirement benefits are payable at age 62.

Social Security disability benefits are payable at any age. A wife or widow is eligible at age 60, disabled widows at age 50. A wife or widow is eligible at any age if there are minor children of the wage earner living in their home. Children are covered until age 18, or until age 19, if attending school, and an individual may receive a child benefit at any age if incapacitated prior to age 21. All unmarried children of a wage earner are covered, even though the wage earner and the mother of the children were later separated or divorced. Illegitimate children may be covered if the wage earner can be established as the parent.

* Social Security benefits will be verified by BENDEX, WTPY response, SSA-1610, or by award letters. WQRY will be keyed at any time to verify benefits when there is an indication that the applicant may be eligible for Social Security benefits at "initial eligibility" determinations and when other sources of verification are not available; and to clear discrepancies between amounts reported and BENDEX.

3346.1.1 Voluntary Reduction of Benefits

The withholding from Title II benefits by SSA for the recovery of SSI overpayments is voluntary on the part of the overpaid SSI recipient. The money withheld from this cross-program adjustment will be considered as available income for the institutionalized individual's contribution toward his cost of care.

Individuals who have agreed to the Title II reduction will not have sufficient income to pay their share of the cost of institutional care. Since the individual remains liable for the cost of institutional care, the county office will inform the individual of the possible adverse consequences of choosing cross-program adjustments while residing in a Title XIX nursing home, and of his right to revoke the agreement.

Note: The withholding from Title II benefits by SSA for the recovery of SSA overpayments is not voluntary on the part of the overpaid SSA recipient. The money withheld from this adjustment will not be considered as available income for the institutionalized individual's contribution toward his cost of care.

3346.2 Railroad Retirement Benefits

Railroad Retirement Benefits are paid to individuals and spouses covered under the Railroad Retirement Act. An individual may receive both Railroad Retirement and Social Security, if covered under both programs, and the wife of a Railroad Retirement beneficiary may receive a wife's benefit while drawing Social Security.

* Information on Railroad Retirement Benefits may be secured from:

U.S. Railroad Retirement Board Three Financial Centre 900 S. Shackleford, Suite 513 Little Rock, AR 72211

3346.3 Military Allowances or Allotments

If the applicant has a son, daughter, or spouse in the Armed Services, the Service Representative will explore the possibility of obtaining an allotment.

The address of the Army Finance Center is: Army Finance Support Agency

Indianapolis, Indiana 46492

The address of the Navy Finance Center is: Navy Finance Center

Federal Office Building Cleveland, Ohio 44199

The address of the Air Force Finance Center is: Air Force Finance Center

3800 York Street Denver, Colorado 80205

3346.4 Veterans Benefits

If the applicant is a veteran, or the wife, widow, child, or other dependent of a veteran, full exploration will be made of potential eligibility for Veterans Benefits. Only the portion of the VA Benefit attributable to the veteran/surviving spouse will be counted as his/her income. The dependent's portion of the VA Benefit will be counted as income to the dependent(s). It will be necessary to determine the portion of the VA Benefit that is attributable to the applicant/recipient. Veterans, widows and other surviving dependents eligible for higher benefit payments under the Veteran's Pension Improvement Act must agree to apply for and accept those benefits. Information on Veterans' Benefits should be requested on Form DCO-52 from:

VA Regional Office

Building 65, Fort Roots

North Little Rock, Arkansas 72205

County Office workers will not attempt to represent veterans or dependents in filing claims. Such persons should be referred to Service Officers of the local American Legion Post, County Offices, Veterans Administration Contact Offices, or the Veterans' Service Office, American Legion Arkansas Department, 1415 West 7th, Little Rock, Arkansas.

3346.5 Civil Service Benefits

Civil Service Benefits are paid to individuals and to surviving spouses of individuals who retired from civilian government jobs (e.g.. Internal Revenue Service, Postal Service, etc.). These benefits include regular retirement and disability retirement.

Information on Civil Service Benefits may be secured from:

U.S. Office of Personnel Management Retirement Operations Center Boyers, PA 16017

3347 In-Kind Support and Maintenance and Other In-Kind Income

There are two types of unearned in-kind income: in-kind support and maintenance, and other in-kind income.

3347.1 Valuation of In-kind Income and In-kind Support and Maintenance

The value of other in-kind income is determined by its current market value. The value of In-kind support and maintenance is determined by presumed value. The presumed value of In-kind support and maintenance is based on one third of SSI standard payment amount plus $20.00.

Presumed values of in-kind support and maintenance are as follows:

Individuals receiving in-kind support and maintenance always have the right to rebut the presumed value and must be advised of this right.

To rebut the presumed value:

3347.2 Third Party Payments Excluded as In-Kind Support and Maintenance

3348 Supplemental Security Income Exclusions

When the State's Income limitation for LTC or Waiver services is at the Federal maximum (three times the SSI payment limit for an individual in his own home), SSI income exclusions are not allowable. The individual's gross income will be compared to the LTC or Waiver income limitation, and no SSI exclusions will be used in the eligibility determination or when computing the recipient's share of the facility vendor payment.

When the State's income limitation for AABD Medicaid categories other than LTC or Waiver is below the Federal maximum, SSI exclusions are allowable for the purpose of determining initial and continuing eligibility.

The following exclusions are allowed by SSI in determination of countable income (in order of application).

3350.5 County Office Procedures

When the patient is determined to be in need of facility care, he will be assigned a classification based on his required level of care. The assigned classification will appear on the DCO-704. The classifications assigned are: Skilled Care (S), Intermediate Care I (A), Intermediate Care II (B), Intermediate Care III (C), and Developmentally Disabled (D). The "D" classification will apply to patients in ICF-MR only,

Individuals found to be in need of facility care may also choose to receive hospice services. For new approvals, the county office will receive a DCO-704 from the Utilization Control Committee which will indicate if the individual has elected hospice care.. The classifications assigned to these individuals are: Hospice Skilled (J), Hospice Intermediate I (K), Hospice Intermediate II (L), or Hospice Intermediate III (M).

The level of care (classification) and the level of care begin date must be entered into WNHU, after the case has been opened on WASM (Re. MS 3500, DCOUM 3624). If a review date is shown on the OCO-704, the date will be entered on WNHU. If no review date is given on the DCO-704, zeroes will be entered in the LVC Review Date Field on WNHU.

Facility payment may not begin prior to the level of care begin date. On WNHU, the level of care begin date must equal the nursing home eligibility start date. If the level of care begin date Is prior to the nursing home eligibility start date, the nursing home eligibility start date will be input for the level of care begin date on WNHU.

If the nursing home eligibility start date, determined by the county, is prior to the level of care begin date, the level of care begin date will be input for the nursing home eligibility start date. However, in no case will an ICF/MR case be certified with an eligibility start date which precedes the decision date on the DCO-704 (or PASSAR date for PASARR casesK

When a level of care review date is indicated on the DCO-704, the level of care review date must be a future date when the case is opened unless the case is added with a NH eligibility start and stop date for a fixed period. If the level of care review date is not a future date when a case is to be added on WNHU, a later DCO-704 must be requested from the OLTC Utilization Control Committee. When Utilization Control completes another level of care review prior to county request and/or certification of a case, the later EMS-704 will be automatically forwarded to the county office.

Once the level of care, the level of care begin date, and the level of care review date, when appropriate, have been entered in WNHU at certification, the county office will not make any later changes to these fields. Any changes in the level of care, decision date, and review date will be processed centrally by OLTC and the Medicaid claims processing agent.

* If a Medicaid recipient in a facility elects hospice care after a case has been certified by the county with a level of care code S, A, B, C, or D, the code will be system changed by OLTC, and the county will not be involved.

The county office is responsible for completing part III of the DCO-704 and distributing the DCO-704 to the appropriate parties at the time facility eligibility is authorized via the DCO-57 or DCO-765.

3351 Prompt Notice of Skilled Care Classifications

In any case that the county office cannot complete certification action promptly after the receipt of an DCO-704 which indicates a skilled care classification, the Service Representative will provide a machine copy of the DCO-704 to the facility where the patient is residing. This copy will be annotated with the following information at the top of the form:

"Information Copy for Utilization Control Requirements Only" and the name of the facility.

3352 Appeal of Utilization Control Committee Action There are two types of appeal in the Utilization Control process:

3400 Determination of Net Income

When categorical eligibility and medical necessity have been established, the county worker will determine the amount of the individual's income that will be applied to the cost of care. Section 3 of the DCO-707 (and the DCO-712 when there is a CS) is used for the determination.

Using Section 3 of the DCO-707, determine the income to be applied to the cost of care as follows:

3401 Treatment of Extended SSI Benefits for Institutionalized

Recipients

Effective 7/1/88, those SSI recipients entering a medical or nursing facility:

0 who have a home to maintain, and

0 who obtain a medical statement for SSA to document that the medical confinement will not exceed 3 calendar months after the month of entry to the facility

will be allowed to retain their full SSI benefits for a period up to 3 full months. No extension beyond the 3 months will be allowed.

When aware of the extension of SSI benefits for facility applicant/recipients, the county office will totally disregard the SSI benefits for determination of facility eligibility and vendor payment. If the applicant/recipient has income from any other source (e.g. VA, SSA, RR Retirement, etc.), that income will be included in the facility budget.

At certification of facility applicants receiving the full SSI benefit (who have no other income), only the $30.00 personal needs allowance will be entered on the DCO-57 (WNHU) and the remaining income will be disregarded.

When certifying recipients with a combination of SSI and other income, all of the SSI benefit will be disregarded. The other income will be entered in the budget section of the DCO-57 (WASM) and DCO-765 (WNHU). The $30.00 personal needs allowance will be deducted from the countable income, and the remaining income will be entered as NH Net Income (patient liability) on the DCO-57 or DCO-765 (WNHU).

If the SSI recipient's stay in the facility actually exceeds three months, no adjustment in the budget will be required, as it remains correct.

3410 Authorization of Services

Facility services will be authorized on the DCO-57 or DCO-765, except for current recipients of AFDC, Foster Care (Cat. 91 or 92) and U-18. AFDC and U-18 recipients must be changed to Special Needs only (Re. FA 2385.1) and, if they remain eligible, facility services will be authorized on the DCO-765. For Foster Care cases, the DCFS worker should enter any necessary changes to the status of the Foster Care case before authorization of facility services on the DCO-765.

3420 Effective Eligibility Dates for LTC and ICF/HR Services

The effective date of eligibility of an applicant for LTC and services in an ICF-MR depends on three factors:

3500 Disposition of Application

The Service Representative will take the following actions to complete an application for facility care and services:

3500.1 Certification of Patients Approved for Medicare

When Medicare approves individuals for skilled nursing care/extended care, the facility receives reimbursement in the form of Medicare per diem and Medicaid coinsurance (if applicable) for up to 100 days, provided the individual continues to meet Medicare criteria.

Applications for Medicare approved admissions will be processed in the same manner as applications for non-Medicare approved admissions, except that nursing home services will not be authorized on WNHU until Medicare benefits have been exhausted. Medicaid for Medicare eligible individuals will be authorized on WASM, however, so that all other Medicaid covered services may be paid. For example. Medicare pays 100% of facility expenses for only 20 days. After this time, the individual becomes liable for coinsurance, which cannot be paid by Medicaid until the case is opened on WASM.

The monthly Medicare per diem amount will not be considered when determining income eligibility, but it will be treated as a third party resource to be applied to the cost of care in a facility.

When Medicare approves an individual for skilled nursing care, the facility should notify the county office of the Medicare admission via the DCO-702.

If at some point the individual fails to meet Medicare criteria or exhausts his benefits, Medicare will stop payment. The facility will notify the county office of the change in status via the DCO-702. On the day following termination of Medicare benefits, the Service Representative may authorize facility services on WNHU to be effective on that date, provided the individual continues to meet all LTC requirements.

3600 Continuing Eligibility

Reevaluation of facility cases to determine continuing eligibility is required periodically by the county office for all categories of LTC. Once a case has been certified, the county office responsibilities will be limited to completing regularly scheduled reevaluations, making retroactive and current income adjustments on WNHU, transferring cases, and effecting closures due to death, discharge or other eligibility factors.

3610 Reevaluation of Eligibilitv

*The time period for review of facility cases will vary according to the category, as shown below. All facility cases, regardless of category, must be reviewed within 30 days of receipt by the receiving county when a case transfer has been made to assure continuing eligibility. However, a new application and full reevaluation is not required unless it is time for the annual reevaluation.

3611 AFDC. Foster Care (Cat. 91 or 92) and U-18 Cases

*These cases will be reevaluated every six months. Eligibility will be redetermined according to the current eligibility criteria for the category. Form DCO-95 will be completed (DCO-98 for Cat. 92, IV-E foster children), along with other required forms.

3613 SSI

These facility cases will be reevaluated every twelve months. Form DCO-777 and all other required forms will be completed. Categorical eligibility is established if the individual continues to receive SSI payment.

3614 AA. AB. and AD

These cases will be reevaluated every twelve months. Form DCO-777 and all other required forms will be completed, and eligibility will be redetermined according to the current AABD criteria. NOTE: If the individual has a spouse and/or other dependents in the community and fluctuating noncovered medical expenses, a partial reevaluation will be completed every 6 months, if the county has elected to estimate net income (Re. MS 3338.4).

3615 Completion of Reevaluation

Upon determination of continuing eligibility, the DCO-57 will be completed for data entry into WASM. An "0" action will be shown along with worker number, date of completion of review, and any changes.

WNHU update will be made only if there have been changes in income, NH county or NH number. If income has changed, NL must be entered as the Action Type on WNHU.

If an income change was not previously reported, the retroactive income with start and stop dates will be entered in the retroactive payment section of the DCO-765 or DCO-57 for WNHU update. If the last income change is the current income, however, this change will be entered as a current change with an income start date effective the month the new amount was received (i.e., do not use a retroactive field).

The DCO-87 will be coded for next anticipated change/reevaluation, and the DCO-88 will be marked to show the reevaluation was completed.

3620 Utilization Control

*The Utilization Control Committee of the Office of Long Term Care will periodically review and redetermine patient classification and necessity for continued stay in a facility when required. Classification and medical necessity reviews will be made only for individuals whose medical condition changes and for those admitted for convalescent care.

When the need for continued stay in a facility has been determined to be medically necessary, a new review date is assigned and the approval/patient classification is valid through that date. The county office will not receive notice of change in classification, unless a change in medical necessity will require case closure, or transfer to another facility. The change in classification (if any), the decision date, and the new review date will be system entered by OLTC.

When the county office is notified by DCO-702 from a facility that an individual has entered another facility prior to the scheduled review date, the county office will complete a blank DCO-704 (Re. 3637.7) to advise the receiving facility of the scheduled review date, If any, and the current level of care.

3621 Changes in Classification

When the Utilization Control Committee finds that reclassification of a recipient is warranted, the Office of Long Term Care will provide the findings of the committee to the facility and to the claims processing agent who will make the adjustment to the vendor payments.

3622 Continued Stay in a Facility Not Medically Necessary

When continued stay in a facility Is determined not to be medically necessary, the Office of Long Term Care will notify the attending physician, the facility administrator, and the county office by letter. Recipients determined not in need of facility services will be allowed thirty (30) calendar days continued LTC eligibility to arrange for relocation.

The county office will:

3623 Appeal of Utilization Control Action

Reclassification may be appealed by the facility administrator and attending physician using the same procedure provided for the appeal of the Initial classification (MS. 3351).

3625 Continued Stay in a Facility Not Medically Necessary (PASARR)

When continued stay in a facility Is determined not to be necessary due to PASARR evaluation, the Office of Long Term Care will notify the recipient or his legal guardian and the facility administrator by letter. The county office will be provided a copy of the recipient/guardian letter of such notifications. Recipients determined not in need of facility services will be allowed thirty (30) calendar days continued LTC eligibility to arrange for relocation.

The county office will:

3630 Change of Status

The recipient or his representative is responsible for reporting to the county office within 10 days any change which might affect his eligibility for assistance.

The county office will complete appropriate case actions as soon as possible " following discovery of a change. When the county office becomes aware of a change, a prompt investigation will be made to assure that appropriate case actions are completed timely.

Other types of recipient changes of status may occur as the result of action taken by the Office of Long Term Care. These actions are specified in different policy sections of this manual.

3631 Advance Notice for Terminations of Assistance

When the county office proposes to terminate Long Term Care assistance for a recipient, advance notice must be mailed to the recipient on Form DCO-700.

The advance notice given on Form DCO-700 must be mailed to the recipient at least ten (10) days prior to the effective date of action unless probable fraud is indicated. Where probable fraud exists, five (5) days prior notice Is required. The notice given on the DCO-700 must include a statement of the action the Agency intends to take, the effective date of the action, the reason(s) for the action, the manual policy reference(s) supporting the action, an explanation of the person's right to request a hearing, and an explanation of the circumstances under which assistance is continued if a hearing is requested (Hearing rights are preprinted on the DCO-700).

If a hearing is requested within the advance notice period, the county worker will forward a copy of the DCO-700 with the DCO-1200 and the Hearing File to Central Office Appeals and Hearing and delay action pending outcome of the appeal. If a hearing is not requested within the advance notice period, action will be taken by the Service Representative on the date indicated on the DCO-700,

3632 Advance Notice for Reduction of Assistance

When the recipient's net income increases, advance notice of his increased liability for facility services and of the effective date of change will be given on Form DCO-700. No action will be taken by the county worker before the 10 day advance notice period expires, in order to allow the applicant an opportunity to request a hearing. If a hearing is not requested, the income change will be system entered.

The recipient and/or his representative will be advised of the amount of personal allowance money that he is entitled to keep from monthly income and of his payment obligation to the facility for his care. In addition to prompt reporting when income changes, the recipient will be advised to pay any increased amounts of income to the facility as part of his share of vendor payment, and to keep only the approved amount for a monthly personal needs allowance.

When recipient income has increased, and the increased amount has been paid to the facility, the change in income will be entered on the DCO-765 for data entry, with the new amount effective the first day of the month of change. An informational copy of Form DCO-704 will be provided to the facility by the county office to show the new patient liability and the effective date. When making changes to the recipient income only, do not change the NH Eligibility Start Date.

If the increased recipient income has not been paid to the facility, the income adjustment will be effective the first day of the month of discovery. An over-

payment report will be submitted onthe DCO-51 if the recipienthas received

more than $5.00/month in excesspersonal needs allowancefunds. An

informational copy of the DCO-704will be completed for thefacility as previously described.

3633 When Advance Notice is Not Required Advance notice is not required when:

3634 Acquisition of Additional Income and Resources

The acquisition of additional income and resources by a recipient will be verified in the same manner used for determination of initial eligibility. Necessary income adjustments or closures will be entered on Form DCO-57 and/or DCO-765 to be submitted for data entry. Advance notice will be given when required for terminations of assistance or increased vendor payment liability.

Refer to: MS 3330 through MS 3339.8 for specific information regarding resource evaluations and changes, etc.; MS 3340 through 3348.1 for specific information regarding income treatment; MS 3349 for specific Information regarding the preliminary budget for income eligibility; and MS 3400 for specific information regarding the net income determination (or MS 3338.3 when there is a CS).

3634.1 Case Adjustments for Lump Sum Payments in Prior Months»

* When a County Office learns that a recipient received lump sum benefits in a prior month which caused ineligibility for the month of receipt only, it will not be necessary to close the case if the recipient regained eligibility the month following the receipt of the lump sum. If the recipient has lost eligibility for more than one month, then the case will be closed and a new application will be required.

Example: The County Office learns in March 1995 that the recipient received a lump sum payment in January 1995 which caused ineligibility due to excess income but, in February 1995, the recipient's income and resources were below the limits again. The case will not be closed and a new application will not be required because the recipient regained eligibility the month following receipt of the lump sum.

Case adjustments in this situation will be made as follows:

3635 Completion of Changes. DCO-57 Data Entry Form

The county office will complete Form DCO-57 and/or DCO-765 for data entry to effect necessary case actions and adjustments. The Office of Information Systems will provide Form DCO-57 to the county office for each active case.

If the county office does not have an DCO-57 to effect a case change, the form may be requested on WTUR (Re. DCOUM Appendix C, Screen Summaries).

NOTE: When making income adjustments, do not change the NH Eligibility Start Date on the DCO-57.

3636 Absences from Long Term Care Facilities

All facilities are required to report to the county office certain recipient absences from the facility on Form DCO-702. Absences will be reported for death, discharge, and transfer. Overnight home visits and hospitalizations will not be reported. Admissions to the Arkansas State Hospital (Little Rock) and the George W. Jackson Center (Jonesboro) will be reported as discharges (Re. MS 3637.5).

3637 County Office Responsibilities Followlnq Report of Absence on

Form DCO-702

3637.1 Death or Discharge

Upon receipt of Form DCO-702 from the facility reporting the death or discharge of a recipient, the county office will initiate action to close the recipient's case. Advance notice is not required for closure due to death. The county office will:

3637.2 Home Visits

A recipient receiving long term care services has the right to make overnight home visits whenever he desires, provided they are consistent with his required level of care and his attending physician's orders. This includes authorized home visits during the 30 days in which institutional status is achieved.

The Office of Long Term Care is responsible for monitoring recipient home visits and their consistency with the patient's required level of care. For example, a skilled care patient who makes overnight home visits might require reclassification action by Long Term Care.

Long Term Care services may continue during a recipient's absence due to therapeutic home visit without regard to the cumulative number of days absence during a calendar year. However, a 14 consecutive day limit is placed on each home visit for payment purposes,

Home visits of less than 14 days will not be reported by facilities to the county office. The date left counts as the first day of absence. For home visits which exceed 14 consecutive days, facilities will report the date left and a discharge on the 15th consecutive day of absence on the DCO-702. If the recipient is expected to return to the facility within 90 days of the date left, the facility will also indicate "code 88" by the discharge date on the DCO-702.

When there is no indication that the recipient is expected to return to the facility, the county office will initiate action to close the case as described under MS 3637.1.

When there is an indication that the recipient is expected to return to the facility ("code 88 indicated on the DCO-702), the county office will take action as follows:

3637.3 Procedure for Reactivating a Suspension Case

When a recipient returns from an extended home visit, the facility will notify the county office of his return on Form DCO-702. To reactivate the suspended or closed case, the County Office will:

3637.4 Hospitalization

Hospitalizations will not be reported to the county office (Exception: State Hospital admissions. Re. 3637.5) by the facility, but will be reported to the claims processing agency for payment adjustments.

If a recipient dies during hospitalization, is discharged to his home or elsewhere from the hospital, or reenters another facility following hospitalization, the facility will report to the county on Form DCO-702 for appropriate county office action (Re. MS 3537.1).

Any terminations due to death or discharge will be made effective the date of death or discharge. The number of hospital days for which the facility will be reimbursed is a determination of the claims processing agent. In all instances of termination following hospitalization, the Stop Date field on the DCO-765 should coincide with the date of death or discharge shown on the DCO-702.

If the county office is notified of a transfer from the hospital to another facility, the county office will not stop services in the Stop Date field on the DCO-755. Re. DCOUM 3726 for transfer procedures.

3637.5 Hospitalization at the Arkansas State Hospital (Little Rock) or the George W. Jackson Center (Jonesboro)

All admissions to the Arkansas State Hospital (Little Rock) and the George W. Jackson Center (Jonesboro) will be reported as a discharge by the facility on the DCO-702 to the county office.

In all cases of reported recipient absence to the State Hospital or the George W. Jackson Center, facility services will be discontinued effective the date the recipient left the facility and will remain suspended until the recipient returns to the facility.

Cases of recipients who are absent to the State Hospital or the George W. Jackson Center will be suspended and be maintained in the county of last facility residence for up to 60 days. For those recipients who return to the facility within 60 days, facility services will be restarted effective the date of reentry. Cases of recipients who do not return to the facility within 60 days will be either closed or transferred to the county of domiciliary residence.

Even though nursing home services may not continue, recipients under age 21 and recipients age 65 or over may qualify for continued Medicaid assistance while at the State Hospital under the same eligibility criteria used for Long Term Care Services eligibility. Recipients aged 21 through age 64 will not qualify for continued Medicaid while at the State Hospital.

Procedures for suspending cases of recipients who have been admitted to the State Hospital are contained in the following paragraphs.

3637.6 Procedures for Suspension of Cases-State Hospital and George W. Jackson Center

The procedure used to suspend a case during a recipient's absence to the State Hospital and the George W. Jackson Center depends on the recipient's aid category and whether continued Medicaid assistance is authorized. Two procedures are employed to account for differences between cases. They are specified by categories according to age.

3650 Closure

A case will be closed:

3650.1 To Close Case: