Revision 12-2; Effective June 1, 2012

The following is taken from Subchapter C, Financial Requirements, Division 6, Budgeting for Eligibility and Co-Payment.

§358.438. Determination of Co-payment.

(a) After a person or couple in an institutional setting is determined eligible for a Medicaid-funded program for the elderly and people with disabilities, the Texas Health and Human Services Commission (HHSC) determines the person's or couple's co-payment in accordance with:

(1) Section 1902(a)(17) of the Social Security Act (42 U.S.C. §1396a(17)), relating to the general authority;

(2) Section 1902(a)(50) and (q) of the Social Security Act (42 U.S.C. §1396a(50) and (q)), relating to personal needs; and

(3) Section 1924 of the Social Security Act (42 U.S.C. §1396r-5), relating to institutionalized spouses with community spouses.

(b) To determine the co-payment for a person or couple in an institutional setting, HHSC follows 42 CFR §§435.725, 435.726, and 435.735, including the optional deduction for a home maintenance allowance for a person or couple described in 42 CFR §435.725(d).

(c) To determine the co-payment for a person or couple receiving services under the Program of All-Inclusive Care for the Elderly (PACE) in a PACE setting, HHSC follows §1934(i) of the Social Security Act (42 USC §1396u-4(i)).

(d) HHSC follows §1924(d) of the Social Security Act (42 U.S.C. §1396r-5(d)), concerning the protection of income for the community spouse, to determine the minimum monthly maintenance needs allowance, and to determine an institutionalized spouse's co-payment.

§358.439. Guardianship Fee.

In determining the co-payment for a person receiving services in an institutional setting, the Texas Health and Human Services Commission (HHSC) may deduct a guardianship fee, if any, up to an amount set by the court, from the person's total countable income.

(1) The deduction is limited to guardianship-related costs and fees, subject to the limitations of §32.02451 of the Texas Human Resources Code, Section 670 of the Texas Probate Code, and this section, as determined by HHSC.

(2) HHSC deducts the guardianship-related costs and fees from total countable income after deducting the personal needs allowance, but before deducting any other allowances.

(3) The deduction is effective the later of:

(A) the month the judge signs the court order awarding guardianship-related costs and fees;

(B) the first month of eligibility for which the person has a co-payment; or

(C) the first day of the month that the applicant or recipient provides HHSC with a copy of the court order awarding the guardianship-related costs and fees.

(4) HHSC does not deduct any amount of guardianship-related costs and fees awarded before the date the court order was signed. The deduction is prospective only.

(5) HHSC does not deduct a guardianship establishment fee unless a new guardian is named in the most recent court order.

(6) HHSC does not deduct any guardianship-related costs and fees ordered after the recipient has died.

(7) To receive the deduction, an applicant or recipient must provide a copy of the court order to HHSC no later than the date specified by HHSC. No deduction will be given until the applicant or recipient provides HHSC with a copy of the court order awarding the guardianship-related costs and fees by submitting the court order as specified by HHSC.

(8) The deduction authorized by this section is limited to a guardianship of the person. No deductions are allowed for any other type of guardianship.

§358.440. Dependent Allowance.

(a) In determining a person's co-payment, the Texas Health and Human Services Commission (HHSC) may deduct a dependent allowance from a person's total countable income.

(1) For a person with at least one dependent relative at home, HHSC allows the individual Social Security Income (SSI) federal benefit rate for each dependent relative and deducts the individual SSI federal benefit rate from the dependent relative's countable income.

(2) For a person with a spouse and at least one dependent relative at home, when spousal impoverishment provisions apply, HHSC determines the dependent allowance in accordance with 42 U.S.C. §1396r-5.

(b) The amount of the dependent allowance may be appealed based on undue hardship caused by financial duress as determined by HHSC, in accordance with HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

§358.441. Payroll Deductions.

(a) In determining a person's co-payment, the Texas Health and Human Services Commission (HHSC) calculates earned income each month by subtracting the following mandatory payroll deductions:

(1) income tax;

(2) social security tax;

(3) required retirement withholding; and

(4) required uniform expenses.

(b) After a person or couple in an institutional setting is determined eligible, HHSC applies the payroll deductions described in subsection (a) of this section to:

(1) an applicant or recipient;

(2) an applicant's or recipient's spouse; and

(3) a dependent relative of either spouse.

Revision 18-1; Effective March 1, 2018

Determine the copayment for a Medicaid eligible individual or couple residing in an institution, receiving services under the Program of All Inclusive Care for the Elderly (PACE) in a PACE setting, or receiving services under a Home and Community Based Waiver program.

When determining the copayment, consider the total income available to the individual from all sources. Certain payments that are not income and certain exempt income are not considered in the copayment budget. The total income for the copayment budget may be different from the total income for the eligibility budget.

When determining the copayment, do not include the following:

• exempt income (see Section E-2000);
• things that are not income (see Section E-1700), such as:
  • medical care and services;
  • certain social services;
  • receipts from the sale of a resource;
  • miscellaneous items, such as income tax refunds;
  • proceeds of a loan;
  • wage-related payments;
  • mandatory payroll deductions from earned income (see E-1770); and
  • cafeteria plans.
• interest or dividends accrued on certain excluded or partially excluded resources (see E-3331.2);
• interest and dividends earned on an ABLE account (see E-3331.4); and
• VA Aid and Attendance allowance, housebound allowance, and payment adjustment for unusual medical expenses (see E-4300, E-4311.2, E-4315). Reminder: If these payments are deposited into a qualifying income trust (QIT) account, they are countable as copayment.

Note: Income tax withheld from unearned income is not a deductible expense for the copayment calculation.

Revision 09-4; Effective December 1, 2009

See Section E-5000, Variable Income.

See Section E-3331, Interest and Dividends.

• Determine if any interest or dividends are accrued on fully countable resources and count the interest or dividends as income in the co-payment budget.
• Determine if any interest or dividends are accrued on all other resources and count the interest or dividends accrued as income in the co-payment budget (refer to the treatment of that particular resource as outlined in the handbook).

Revision 12-1; Effective March 1, 2012

HHSC deducts the following amounts, in the following order, from the person's total countable income:

1. Personal needs allowance. See Section H-1500, Personal Needs Allowance (PNA).
2. Guardianship fees. See Section H-1550, Guardianship Fees.
3. Maintenance needs of spouse. See Section J-7200, Spousal Co-Payment.
4. Maintenance needs of family (for a person with a family at home, an additional amount for the maintenance needs of the family). See Section H-1600, Dependent Allowance.
5. Incurred Medical Expenses. See Section H-2000, Incurred Medical Expenses.

Optional deduction: Allowance for home maintenance. See Section H-1700, Deduction for Home Maintenance.

Revision 24-1; Effective March 1, 2024

A personal needs allowance (PNA) is the amount of income a Medicaid recipient in an institutional setting may keep for their personal use. The PNA cannot be applied towards the recipient’s cost of medical assistance furnished by the facility. 

SSI  recipients who live in an institutional setting and receive the $30 reduced federal benefit receive a state supplement. This ensures they receive a PNA equal to the minimum level established by the state.

Beginning Jan.1, 2024, the PNA is $75.

From Jan. 1, 2006, through Dec. 31, 2023, the PNA was $60.

From Sept. 1, 2003, through Dec. 31, 2005, the PNA was $45.

From Sept. 1, 2001, through Aug. 31, 2003, the PNA was $60.

From Sept. 1, 1999, through Aug. 31, 2001, the PNA was $45. Before that, PNA was $30.

Note: Refer to E-4300, VA Benefits, for treatment of payments from the Department of Veterans Affairs. Refer to E-4311.2, $90 VA Pension and Institutional Setting, regarding automation limitations and the VA $90 capped pension.

H-1550 Guardianship Fees

Revision 19-4; Effective December 1, 2019

When determining the co-payment for a person receiving services in an institutional setting, guardianship fees, up to an amount set by the court, are deducted from the person's total countable income.

The allowable court-ordered guardianship fee deduction may include the following:

• Monthly guardianship fees up to $250
• Costs related to establishing the guardianship up to $1,000
• Costs related to terminating the guardianship up to $1,000
• Administrative costs related to the guardianship up to $1,000 over a three-year period

Note: Costs related to establishing or terminating the guardianship can exceed $1,000 if the costs in excess are supported by documentation acceptable to the court and the costs are approved by the court. Costs might include compensation and expenses for an attorney ad litem, guardian ad litem, and reasonable attorney fees for an attorney representing the guardian.

Only allow a deduction for actual amounts in the court order.

Allow the reduction in the person's co-payment to be effective the later of the following:

• the month in which the judge signs the court order awarding guardianship fees;
• the first month of Medicaid eligibility in which the person has a co-payment; or
• the first day of the month the person provides HHSC with a copy of the court order.

Route any administrative cost more than $1,000 over a three-year period, or any cost exceeding the $1,000 for establishing or terminating the guardianship, through the regional attorney for guidance.

Do not allow a reduction in the person's co-payment for guardianship fees ordered after HHSC receives verification that the person has died. If the date of death is not verified, staff must clear the discrepancy. Do not allow the guardianship fees as a deduction in the co-payment until the discrepancy has been cleared.

Related Policy

Date of Death Denials and Verification Sources, B-9300
Guardians and Other Agents, F-1231
Order of Deductions from Countable Income, H-1400

Revision 23-3; Effective Sept. 1, 2023

A dependent family member may be either spouse's minor or dependent children, dependent parents and dependent siblings (including half-brothers, half-sisters and siblings gained through adoption) who were living in the institutionalized person's home before the person entered the facility, and who are unable to support themselves outside the person's home because of medical, social or other reasons.

Non-Spousal

For individual and couple budgets, calculate the dependent allowance by subtracting the dependent's income from the SSI federal benefit rate for an individual. 

Note: Mandatory payroll deductions also apply to a dependent's earned income.

Spousal

For spousal budgets, calculate the dependent allowance by subtracting the dependent's income from 150% of the monthly federal poverty level (FPL) for a family of two and dividing the remainder by three. 

Note: Mandatory payroll deductions also apply to a dependent's earned income.  

Related Policy

Spousal Impoverishment Dependent Allowance, J-7400

Revision 20-2; Effective June 1, 2020

HHSC allows a deduction from a co-payment if a person intends to return home within six months of admission to an institutional setting and needs to meet expenses in maintaining the home. The deduction is based on the person's mortgage or rent payment and average utility charges, excluding phone. The amount deducted cannot exceed the SSI income limit, not including the $20 disregard. The first month of the six-month period is the month of admission to the institution.

Note: A separate deduction for maintenance of the home is not allowable in companion cases. The spousal allowance provides for home maintenance in those cases.

The home maintenance deduction is allowable if:

• the person notifies the eligibility specialist that he expects to be in an institutional setting for at least 30 consecutive days, but no more than six months;
• the eligibility specialist receives a practitioner's certification within 90 days of admission. The practitioner certifies that the person is likely to leave the institution within six months of admission; and
• the eligibility specialist receives evidence within 90 days of admission that the person needs to maintain and provide for the expenses of the home to which he may return.
  
  Note: The day of admission to the institutional setting is day zero.
  • Example 1: A person entered a nursing facility on March 1. An application was received on May 30, which included a completed and signed Form H1280, Statement of Residence Maintenance Needs. The applicant signed the form on March 28 and the physician's signature was dated April 15. The day of entry to the nursing home on March 1 would be counted as day zero. The 90th day would be May 30. It is calculated by the following: 31 days in March (30 countable days, since March 1 would be counted as day zero), 30 days in April (30 countable days) and 31 days in May (30 countable days) for a total of 90 days. May 31 would be 91 days. Application was received on May 30; thus, Form H1280 was received by the 90th day.
  • Example 2: A person entered a nursing facility on April 1. An application was received on July 10, which included a completed and signed Form H1280. The applicant signed the form on April 29 and the physician's signature was dated May 15. The day of entry to the nursing home on April 1 would be counted as day zero. The 90th day would be June 30. It is calculated by the following: 30 days in April (29 countable days, since April 1 would be counted as day zero), 31 days in May (31 countable days) and 30 days in June (30 countable days) for a total of 90 days. Application was received on July 10; thus, Form H1280 was not received by the 90th day. The individual is not eligible for the home maintenance deduction.

Use Form H1280, Statement of Residence Maintenance Needs, to obtain the person's and practitioner's declaration. Use the amount reported on Form H1280 as the home maintenance deduction amount as long as it does not exceed the SSI income limit, not including the $20 disregard. No additional verification is needed.

To ensure the home maintenance allowance is included as a deduction in the recipient’s co-payment calculation, staff makes the following selections within the appropriate Logical Unit of Work (LUW):

• on the Shelter Expense LUW, select an expense type of “Rent” or “Mortgage”;
• on the Utility Expense LUW, select the expense type “gas/propane, water, electric”; and
• select Form H1280, Statement of Residence Maintenance Needs, as verification for both the Shelter and Utility Expense LUWs.

Note: If any other source of verification is selected, the home maintenance allowance will not be allowed in the co-payment.

The system will automatically end the home maintenance allowance in the sixth month after the month of admission and will:

• end date the appropriate shelter or utility records;
• adjust the ongoing co-payment; and
• generate Form TF0001, Notice of Case Action, and Form TF0001P, Provider Notice, to notify both the recipient and the facility of the ongoing co-payment.

Revision 24-1; Effective March 1, 2024

In most cases, the Medicare Part B premium is deducted from the Social Security or Railroad Retirement check. In some situations, a person will be billed for the Medicare Part B premium, usually by quarterly invoice.

The standard Medicare Part B premium changes from year to year. For 2024, the standard premium is $174.70 per month. This amount can vary due to several factors:

• The premium can be higher than standard if a person did not enroll in Medicare the year they became eligible to enroll.
• The premium can be lower than standard if the Retirement, Survivors and Disability Insurance (RSDI) cost-of-living adjustment (COLA) is less than any increase in the monthly Medicare premium. The new monthly RSDI benefit cannot be less than the previous year's benefit.
• The premium can be lower than standard if a person is enrolled in a Medicare Advantage Plan (Medicare Part C), which may offer a Medicare Part B premium discount.

Staff must use the Medicare Part B premium amount as verified in the State Online Query (SOLQ) or Wire Third-Party Query (WTPY). 

The standard monthly Medicare Part B premium is:

Date Range	Amount
Jan. 1, 2024 to Present	$174.70
Jan. 1, 2023 to Dec. 31, 2023	$164.90
Jan. 1, 2022 to Dec. 31, 2022	$170.10
Jan. 1, 2021 to Dec. 31, 2021	$148.50
Jan. 1, 2020 to Dec. 31, 2020	$144.60
Jan. 1, 2019 to Dec. 31, 2019	$135.50
Jan. 1, 2018 to Dec. 31, 2018	$134.00
Jan. 1, 2017 to Dec. 31, 2017	$134.00
Jan. 1, 2016 to Dec. 31, 2016	$121.80
Jan. 1, 2013 to Dec. 31, 2015	$104.90
Jan. 1, 2012 to Dec. 31, 2012	$99.90
Jan. 1, 2011 to Dec. 31, 2011	$115.40

Revision 22-4; Effective Dec. 1, 2022

A Medicaid recipient may pay for health care costs Medicaid does not cover. Some of these expenses, referred to as incurred medical expenses (IMEs), may be deducted from a recipient’s personal income when calculating co-payment amounts. IMEs for necessary medical care are allowable deductions if the medical services were received not more than three months prior to the month of application, regardless of the recipient’s medical effective date (MED). Expenses for services received before the three-month prior period may not be deducted.

When calculating a recipient's co-payment amount, certain IMEs not covered or reimbursed by a third party are deducted. HHSC limits these expenses to Medicare and other general health insurance premiums, deductibles, and coinsurance, and to medical care and services that are recognized by state law but not covered under the Medicaid state plan. Only the amount of the IME that remains after payments from all third-party sources (such as Medicaid, Medicare and private health insurance) becomes the recipient’s responsibility and may be considered as an allowable deduction.

An open-ended IME is an ongoing expense that occurs every month. For example, Medicare Part B premiums and general health insurance premiums are open-ended IMEs.

An IME for a set amount that a recipient will pay off within a specific period is not open-ended. For example, dentures or wheelchairs are not open-ended IMEs.

IMEs may be reported at application, renewal or as a change. 

Process IME requests received after a person is certified for Medicaid as a change.

• process the IME request within 10 work days of receipt; 
• enter the IME information into the Texas Integrated Eligibility Redesign System (TIERS); and
• notify the recipient, the nursing facility, and the IME provider of the co-payment adjustment.

For medical expenses incurred prior to the recipient’s MED, allow the IME deduction in the first month that the recipient has a co-payment responsibility. If the amount of the medical expenses, in addition to other allowable deductions, exceed the recipient’s total countable income for the month, the excess portion of the deduction for the medical expenses may be carried forward to ongoing month(s).

Related Policy

Redetermination Cycles, B-8200
IME Notices, H-2900

H-2110 When to Consider an IME Deduction

Revision 16-2; Effective June 1, 2016

An incurred medical expense (IME) deduction applies only to Medicaid recipients with a co-payment amount other than zero.

The recipient must provide verification of all medical expenses to be considered.

In spousal impoverishment budgets with a co-payment amount other than zero, an IME deduction is allowed when an IME is paid for by the recipient or the recipient’s community-based spouse.

H-2120 Medically Necessary

Revision 16-2; Effective June 1, 2016

Before allowing an incurred medical expense (IME) deduction, the expense must be certified as medically necessary.

Medically necessary is defined as the need for medical services in an amount and frequency sufficient, according to accepted standards of medical practice, to preserve health and life and to prevent future impairment.

Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME,  is used for certification of medical necessity. The form must be completed, signed, and dated by the recipient's physician or a nurse practitioner, clinical nurse specialist, or physician's assistant who is working in collaboration with the recipient's physician.

Form H1263-B, Certification of No Medical Contraindication – Dental, is used for dental IME recipients. By signing Form H1263-B, the attending physician (medical practitioner) certifies that the dental treatment is not medically contraindicated for the recipient. The physician is not able to certify medical necessity for dental services.

H-2130 Form H1263-A and Form H1263-B

Revision 22-4; Effective Dec. 1, 2022

Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, is used to request an IME deduction for medically necessary durable medical equipment.

Form H1263-B, Certification of No Medical Contraindication – Dental, is used to request an IME deduction for necessary non-emergency dental services.

Form H1263-A and Form H1263-B must be signed with handwritten dates and signatures by the recipient or the recipient’s authorized representative (AR) and the recipient’s attending practitioner. A stamped signature is not acceptable.

If Form H1263-A or Form H1263-B is received with a stamped signature:

• pend the case;
• send Form H1052-IME, Notice of Delay in Decision for Incurred Medical Expense – Action Needed, to notify the provider and the recipient of the delay in processing due to the need for a handwritten signature; and
• request a new Form H1263-A or Form H1263-B with handwritten signatures.

The signature dates of the recipient or the recipient's AR and the recipient’s attending physician on Form H1263-A or Form H1263-B must not be more than 90 days apart.

If the signature dates are more than 90 days apart:

• pend the case;
• send Form H1052-IME to notify the recipient or the recipient’s AR and the IME provider of the delay in processing; and
• request a new Form H1263-A or Form H1263-B.

Request a new Form H1263-A or Form H1263-B and send Form H1052-IME if Form H1263-A or Form H1263-B is received without any of the following:

• signature of the recipient or the recipient’s AR;
• a description of authority to act for the recipient listed in Section II of Page 2; or
• signature of the recipient’s attending practitioner.

A request for an IME deduction for services received prior to the MED must be initiated by the recipient or the recipient’s legal guardian, Power of Attorney (POA), or designated AR. The request may not be initiated by a medical services provider or supplier unless the provider or supplier is also the recipient's AR.

For IME requests received after a person is certified for Medicaid, there are no restrictions on who can complete Form H1263-A or Form H1263-B. However, the recipient or the recipient’s AR must sign Form H1263-A or Form H1263-B, Section II of page 2 to indicate a request for a deduction from the recipient's personal income to pay for an IME.

If the recipient is unable to sign and does not have a designated AR, legal guardian or POA, the following can sign the form on the recipient’s behalf:

• nursing facility administrator;
• social worker; or
• director of nursing.

If the recipient has a designated AR but someone other than the AR signs Form H1263-A or Form H1263-B, verify the AR is aware of the IME request. If unable to contact by phone, pend the case and send Form H1052-IME to request the AR sign Form H1263-A or Form H1263-B. If Form H1263-A or Form H1263-B is not returned with the signature of the designated AR, deny the IME request.

This will ensure all parties are knowledgeable of the IME request. If the AR has changed, thoroughly document the explanation in the case record.

Submitting to HHSC

Send completed Form H1263-A and Form H1263-B to HHSC via mail or fax.

Fax to: 877-447-2839
Or
Mail to:
Texas Health and Human Services Commission
P.O. Box 149027
Austin, TX 78714-9027

H-2140 Deductions for Insurance Premiums

Revision 16-2; Effective June 1, 2016

Premiums for general health insurance policies, including premiums for limited scope polices for vision and dental, may be allowable incurred medical expenses (IMEs). Allow an IME deduction when a recipient provides verification that a policy is assignable, the coverage effective date, and the premium amount.

Assignable means the benefits may be paid to the health care provider.

If a health insurance policy is not assignable, payments are made directly to a recipient. The policy is considered an income maintenance policy and is not an allowable IME.

Use Form H1253, Verification of Health Insurance Policy, if a recipient requests help to obtain verification for a policy.

Verification of the first premium payment is not required prior to allowing an IME deduction.

Assignable general health insurance policies must be reported on the Third Party Resource screen in the system of record.

For IME requests for dental insurance premiums, use Form H1053-IME, Provider Notice of Incurred Medical Expense Decision, to notify a dental insurance provider that an IME deduction request is approved or denied. Form H1053-IME does not contain space for co-payment information. To safeguard confidentiality, do not add co-payment information to the form or provide the information to any provider (either verbally or in writing) without written authorization from the recipient.

H-2150 Non-Allowable Deductions – General IME

Revision 22-4; Effective Dec. 1, 2022

The following are not allowable IME deductions:

• items covered by the nursing facility (NF) vendor payment including, but not limited to, diapers, sitters, certain durable medical equipment, dietary supplements or physical, speech or occupational therapy;
• covered services that are beyond the amount, duration, and scope of the Medicaid state plan including, but not limited to, additional prescription drugs;
• expenses incurred by Medicaid-eligible recipients for services covered by the Medicaid state plan but delivered by non-Medicaid providers;
• expenses for medical services received more than three months prior to the month of application;
• premiums for cancer or other disease-specific insurance policies, or general health, dental, or vision insurance policies with benefits that cannot be assigned;
• premiums for insurance policies that pay a flat rate benefit to the insured or income maintenance policies;
• health care services provided outside of the U.S.;
• expenses incurred during a transfer of assets penalty including, but not limited to, nursing facility bills;
• expenses incurred by Medicaid-eligible recipients for eyeglasses, contact lenses, hearing aids, services provided by a chiropractor or a podiatrist (these are covered through the Medicaid program);
• expenses incurred by Medicaid-eligible recipients 21 years or older requiring mental health and counseling services provided by a licensed psychologist, licensed professional counselor, licensed clinical social worker or a licensed marriage and family therapist effective for dates of service on or after Dec. 1, 2005; and
• expenses covered by STAR+PLUS managed care organizations (MCOs) either:
  • as an NF add-on service, including medically necessary durable medical equipment, such as customized power wheelchairs (CPWCs), augmentative communication devices (ACDs), emergency dental services, and physician ordered rehabilitation services (also called goal directed therapies); or
  • as value-added services (VAS). VAS are extra benefits offered by an MCO beyond Medicaid-covered services. VAS may include routine dental, vision, podiatry, and health and wellness services. Note: A recipient may choose to use the MCO VAS or the IME process.

Related Policy 

Limitations for Pre-Eligibility Incurred Medical Expenses (IMEs), H-2160

H-2160 Pre-Eligibility IMEs

Revision 22-4; Effective Dec. 1, 2022

Expenses for necessary medical care received within three months prior to the month of application, are allowable IME deductions regardless of the recipient’s MED. Expenses for services received before the three-month prior period may not be deducted. The recipient must provide verification of all medical care expenses.

To be considered as a deduction, the expense must:

• be the responsibility of the recipient;
• be reported at application or within three months of certification;
• not be subject to payment by a third party; and
• remain unpaid at certification.

The allowable deduction must not exceed the Medicaid reimbursement rate in effect when the medical expense was incurred. Do not use the private pay rate. 

Use Form H0005, Policy Clarification Request, and follow policy clarification request procedures to request the Medicaid reimbursement rate for all pre-eligibility IMEs.

Related Policy 

Deduction of Incurred Medical Expenses, H-2100
Form H1263-A and Form H1263-B, H-2130
Non-Allowable Deductions – General IME, H-2150

Revision 16-2; Effective June 1, 2016

Incurred medical expense (IME) deductions are allowed for reimbursements by the recipient to a third party who has paid an allowable IME on behalf of the recipient after it is determined the following conditions exist:

• recipient and third party had an agreement prior to the IME that the third party would be reimbursed; or
• recipient's medical condition precluded such an agreement.

Revision 18-4; Effective December 1, 2018

If the recipient is no longer eligible for a Medicaid type program with a co-payment, do not make any retroactive adjustments to allow the full IME amount. The IME deduction stops and payment of any remaining balance is an agreement between the recipient and the IME provider.

In addition, do not retroactively adjust the co-payment amount for an IME deduction if the recipient:

• discharges from the facility;
• no longer receives waiver services; or
• is not responsible for payment of the IME because someone has been paying the bill on the recipient’s behalf.

Recipient Moves from Facility to Community Waiver

When a facility Medicaid recipient moves to the community with waiver Medicaid benefits, continue the approved IME deduction when there is a co-payment amount other than zero.

The IME deduction ceases if there is no co-payment amount for the community waiver program.

Recipient Moves from Community Waiver to Facility

When a Medicaid waiver recipient with an approved IME deduction enters or returns to a Medicaid facility, verify if the recipient has any balance due on the IME allowance. If there is a balance due, approve a co-payment deduction for the remaining balance of the IME. If a Medicaid recipient re-enters a nursing facility and has an outstanding balance due on an IME incurred during a previous facility stay, allow an IME deduction for the remaining balance.

 

H-2310 IME Budget Adjustments Due to Death

Revision 18-4; Effective December 1, 2018

Do not process IME requests received more than 10 calendar days after a recipient’s date of death. The recipient's authorized representative, family or trustee is responsible for paying the IME provider after the recipient’s death.

Process  IME requests received within 10 calendar days of a recipient’s date of death.

If the IME is approved:

• adjust the recipient’s co-payment retroactively to the first month services were provided; and
• notify the recipient’s authorized representative, the nursing facility and the IME provider.

If the IME is not approved:

• document the reason for the denial in TIERS Case Comments and notify the authorized representative and the IME provider of the denial;
• send Form TF0001, Notice of Case Action, to notify the recipient’s authorized representative; and
• send Form H1053-IME, Provider Notice of Incurred Medical Expense, to notify the IME provider.

Revision 12-1; Effective March 1, 2012

Average and project medical expenses, but reconcile the projection with actual expenses every six months, per 42 Code of Federal Regulations §435.725(e).

For routine dental incurred medical expense (IME) deductions, retroactively allow the deduction beginning the first month the work began. Do not allow any routine dental IME deductions until after the dental work has been completed.

Example 1: Form H1263-B, Certification of No Medical Contraindication – Dental, for dentures is received on May 24, 2010. Dental work began in March 2010. Lower the co-payment in the month of March 2010 and ongoing.

For non-routine dental IME deductions, allow the deduction beginning the first month following approval. Do not allow any deductions for non-routine before approval is received.

Example 2: Form H1263-B for implants is received on June 19, 2010. Approval is received on Form H1263-B on July 15, 2010. Dental work begins Aug. 2, 2010. Lower the co-payment in the month of August 2010 and ongoing.

Documentation of the IME deductions should be entered in the automated system, even if the co-payment amount is $0. See Appendix XVI, Documentation and Verification Guide.

Revision 16-2; Effective June 1, 2016

Medicare Part D related expenses may include:

• Part D premiums;
• prescription drug co-payments/costs;
• prescription drug deductibles; and
• non-formulary Part D drugs.

Allow Medicare Part D related expenses as an incurred medical expense (IME) deduction for a recipient who:

• has Medicare;
• has a co-payment; and
• is receiving home and community-based waiver services, or is residing in a long-term care (LTC) facility.

If a recipient provides verification of payment of an out-of-pocket Medicare Part D related expense, allow the expense as an IME.

Form H1263-A, Certification of Medical Necessity, is not necessary to request an IME deduction for Medicare Part D related expenses, but may be used for documentation of a request. If a recipient is unable to make a request and has no authorized representative, facility staff or home and community-based waiver case managers may provide verification and request an IME deduction.

Revision 16-2 ; Effective June 1, 2016

Revision 17-4; Effective December 1, 2017

Dental services that are not medically contraindicated for the individual may be allowable incurred medical expense (IME) deductions. Requests for dental IMEs must include the following:

• a completed, signed Form H1263-B, Certification of No Medical Contraindication – Dental; and
• an invoice or billing statement indicating the dental services provided, the date of the dental services, and the appropriate Current Dental Terminology (CDT) code(s).

A treatment plan is not required, but may be received along with an invoice or billing statement.

A treatment plan is a schedule of procedures and appointments needed to restore, step-by-step, an individual’s oral health.  The treatment plan must be presented to the individual for approval and should include:

• a description of the individual’s condition;
• the duration of the treatment plan as prescribed by the dentist; and
• a list of the dental procedures recommended by the dentist, including:
  • a description of each service or procedure;
  • the appropriate Current Dental Terminology (CDT) code; and
  • the expected cost for each service.   

Invoice or Billing Statement - A summary of the dental services provided and the amount the individual is expected to pay the dentist. The invoice should include the:

• date(s) of the dental service(s);
• description of each dental procedure provided;
• appropriate CDT code(s) for each dental procedure; and
• cost for each dental procedure provided. 

Note: If the individual has dental insurance, the invoice must reflect any services covered by the dental insurance plan and clearly indicate the remaining balance after any adjustments.

Form H1263-B, submitted with a dental invoice, is only valid for the delivered services listed on the invoice.

Form H1263-B, submitted with a proposed treatment plan, is valid for up to 12 months for dental services:

• identified on the dental treatment plan; and
• delivered within 12 months of the date of the initial dental treatment.

All IME requests for dental services associated with a dental treatment plan must include an invoice indicating the dental services provided, the date the services were provided, and the appropriate CDT code(s).

Note: Additional dental services not listed on the original treatment plan and/or dental services provided past the 12 months require a new Form H1263-B.

Form H1263-B, signed by the attending physician, is verification that the requested dental services are not medically contraindicated. If Form H1263-B is received from a requester with a notation that the attending physician does not agree that the procedure is not medically contraindicated for the recipient, deny the IME request. Notify the provider and the recipient or recipient's authorized representative of the denial using the appropriate notice.

If Form H1263-B is received from a requester without a physician signature, do not process the IME. Notify the provider and the recipient or recipient's authorized representative of a delay in processing the deduction for the requested IME using Form H1052-IME, Notice of Delay in Decision for Incurred Medical Expense.

H-2710 Using the TX Dental IME Fee Schedule

Revision 23-4; Effective Dec. 1, 2023

Determine the proper incurred medical expense (IME) deduction by comparing the fees submitted by a dental provider to the fees listed in the TX Dental IME Fee Schedule. Use the date(s) of service shown on the dental invoice to select the appropriate fee schedule. The fee schedule is available for staff use on the LOOP.

The TX Dental IME Fee Schedule is based on the American Dental Association (ADA) Survey of Fees at the 90th percentile for the West South Central Region, General Dentistry, and contains the ADA’s Current Dental Terminology (CDT) codes. The schedule is updated yearly and separates the CDT codes into routine and non-routine dental services.

Due to legal liabilities associated with the copyright for the ADA Survey of Fees, the TX Dental IME Fee Schedule is a view-only internal document. It is only accessible by HHS enterprise employees. Do not print, make copies, or distribute any of the TX Dental IME Fee Schedule.

The amount allowed for a code cannot exceed the amount listed on the TX Dental IME Fee Schedule. If the dental provider submits a charge with an amount greater than the maximum allowable amount listed for a code, allow the amount listed on the TX Dental IME Fee Schedule for that code as an IME deduction. If a dental provider submits a charge less than the amount allowed on the TX Dental IME Fee Schedule, allow the lesser amount as an IME deduction.

Examples:

• The dental provider submits a charge for code D0272 with the amount of $60. The code D0272, under Radiographs, reflects a maximum of $55. Consider $55 as an IME deduction.
• The dental provider submits a charge for code D0150 with the amount of $60. The code D0150, under Clinical Oral Evaluation, reflects a maximum of $107. Consider $60 as an IME deduction.

Any CDT code(s) listed on the TX Dental IME Fee Schedule may be allowable as an IME.

Contact the dental provider to resolve the discrepancy if the treatment plan received contains:

• a discrepancy in the CDT code and description;
• a CDT code not listed on the TX Dental IME Fee Schedule; or
• no CDT code listed.

H-2720 Non-Allowable Deductions – Dental

Revision 21-3; Effective September 1, 2021

Dental services are not allowable IMEs for Medicaid recipients in intermediate care facilities for individuals with intellectual disabilities (ICFs/IID). A recipient in an ICF/IID receives dental care through the Medicaid program.

The following items are unallowable as an IME:

• adjustments to the fees for X-rays or other procedures performed by mobile dentists;
• sedation charges, CDT code D9248;
• more than two times per year per patient for dental exams;
• more than four times per year per patient for dental cleanings;
• more than one time per year per patient for X-rays;
• aesthetic treatments, CDT codes D9972, D9973, D9974 and D9975;
• trip charges (house call fees), CDT codes D0171, D9410, D9430 and D9440, and finance charges (these are not reasonable medical expenses and cannot be considered when determining IMEs); and
• further add-ons or increased fees for the initial denture and fittings.

Each of the following CDT codes should not be allowed more than two times per year per patient:

• initial or routine exams (D0120, D0150, D0180);
• problem focused exams (D0140, D0160, D0170);
• scaling, root planning or debridement (D4341, D4342, D4346, D4355); and
• Periodontal Maintenance (only for patients who have received active periodontal therapy in the previous 24 months) (D4910).

Each of the following CDT codes should not be allowed more than four times per year per patient:

• dental cleanings (D1110);
• topical fluoride treatments (D1204, D1206); and
• Oral Hygiene Instructions (D1330).

H-2730 Reserved for Future Use

Revision 13-2, Effective June 1, 2013

H-2740 Reserved for Future Use

Revision 13-2, Effective June 1, 2013

H-2751 Hospice Recipients

Revision 23-4; Effective Dec. 1, 2023 

For hospice recipients with a dental incurred medical expense (IME), Current Dental Technology (CDT) codes notated with an asterisk (*) on the routine schedule can be allowed by staff without further review.

For CDT codes not marked with an asterisk, follow regional procedures to submit the request to the contracted dentist for clearance. The contracted dentist reviews each request for hospice recipients whether the CDT codes are routine or non-routine.

Before sending the request to the contracted dentist, get the following:

• documentation from the hospice provider or attending practitioner about the prognosis; and
• the reason for the dental request and how the dental services will benefit the recipient.

Encrypt all external email communication with the contracted dentist per the Health Insurance Portability and Accountability Act (HIPAA ). Use encrypted email which is available through the Options menu in Outlook when sending IME requests to the contracted dentist. Encrypt all email communication, including replies and forwards in the same conversation.

Note: Do not send any IME requests by regular email to the contracted dentist.

Staff without access to encryption email software must send the request by fax to the contracted dentist. Ensure the fax cover sheet has the fax number and region number of the requestor. The contracted dentist will respond by fax to the requestor.

H-2760 Replacement of Lost Dentures

Revision 10-3; Effective September 1, 2010

The replacement of dentures is an allowable incurred medical expense (IME) as long as the recipient/authorized representative provides written verification from the facility that the facility will not cover the replacement of lost dentures. The verification request for a facility’s written statement is to be sent to the recipient/authorized representative and not the dental provider. The recipient or the authorized representative is to provide the facility’s written statement to the MEPD specialist. The request for replacement of lost dentures is to be initiated by the recipient/authorized representative, not the dental provider.

H-2770 Emergency Dental Services

Revision 16-2; Effective June 1, 2016

STAR+PLUS managed care organizations are responsible for payment of emergency dental services for nursing facility recipients. Emergency dental services are not allowable incurred medical expenses.

H-2780 Reserved for Future Use

Revision 20-2; Effective June 1, 2020

H-2790 When the Co-Payment Adjustment is Not Used to Pay Dental Provider

Revision 24-1; Effective March 1, 2024

Payment for dental IME services is a matter between the person or the person’s payee and the dental provider. The income from the co-payment adjustment must be used to pay the dental provider in a timely manner.

When IMEs are projected in the co-payment budget, monitor the case at regular intervals. If the income from the co-payment adjustment is not used to pay the dental bill, remove the ongoing co-payment adjustment and reconcile the budget. Reconciliation is required if the payments were not made, or the amount paid was different from the amount projected.

Related Policy

IME Notices, H-2900
Incurred Medical Expenses (IMEs), H-3120
Incurred Medical Expenses (IMEs), H-3420
Incurred Medical Expenses (IMEs), H-3520
Incurred Medical Expenses (IMEs), H-3620

Revision 16-2; Effective June 1, 2016

Certain medically necessary DME may be allowable incurred medical expense (IME) deductions. Examples include:

• customized, manual wheelchairs; and
• basic, power wheelchairs.

Certain medically necessary DME expenses are not allowable IME deductions, if they are:

• covered by a third party;
• covered under the Texas Medicaid State Plan;
• included in the nursing facility (NF) vendor payment; or
• included as NF add-on services.

Examples of medically necessary DME included in NF vendor payments are:

• standard wheelchairs;
• walkers;
• crutches;
• canes;
• air mattresses;
• hospital beds;
• trapeze bars;
• ventilators;
• oxygen equipment, such as tanks, concentrators, tubing, masks, valves and regulators; and
• DME that could be used by other residents, such as oversized wheelchairs or beds.

Note: If a recipient wishes to keep DME that is covered by the vendor payment for personal use only, the recipient is responsible for the purchase and it is not an allowable IME. See The Nursing Facility Requirements for Licensure and Medicaid Certification Handbook for additional information.

Direct recipients to their NF representative to request DME items included in the NF vendor payment.

Any repairs to DME for which an IME deduction was allowed are the responsibility of the NF. Refer to the Texas Department of Aging and Disability Services rules at Texas Administrative Code Section 19.2601(b)(8)(C), Vendor Payment (Items and Services Included).

Use Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, for a DME IME request.

H-2810 Using the DME Fee Schedule

Revision 16-2; Effective June 1, 2016

Determine the appropriate incurred medical expense (IME) deduction by comparing fees submitted by a durable medical equipment (DME) provider to the fees listed in the DME fee schedule.

The Medicare fee schedule for DME contains Healthcare Common Procedural Coding System (HCPCS) codes used by DME providers to file claims. The Texas-specific amounts allowed for IME claims for each code are available on the HHSC Office of Social Services Intranet. The DME Fee Schedule is updated, as needed.

There are no copyright issues with the DME Fee Schedule posted on the Office of Social Services Intranet. This fee schedule is available to the public on the Centers for Medicare and Medicaid Services website.

The amount allowed for a particular HCPCS code cannot exceed the amount listed on the DME fee schedule. If the DME provider submits a charge with an amount greater than the maximum allowable amount listed for a particular code, allow the amount listed on the DME Fee Schedule for that particular code as an IME deduction. If a DME provider submits a charge less than the amount allowed on the DME Fee Schedule, allow the lesser amount as an IME deduction.

Examples:

• The DME provider submits a charge for code E2214 with the amount of $35.00. The code E2214, Pneumatic caster tire, reflects a maximum of $32.52. Consider $32.52 as an IME deduction.
• The DME provider submits a charge for code E2603 with the amount of $120.00. The code E2603, Skin protect cushion < 22 inches, reflects a maximum of $126.07. Consider $120.00 as an IME deduction.

Not all codes listed on the DME fee schedule are allowable as IME deductions. IME requests for codes highlighted in gray or codes not listed on the fee schedule should be submitted for review to state office. See H-2830, DME Exception Processing/Codes Not on the Fee Schedule.

Contact the DME provider to resolve the discrepancy if the treatment plan received contains:

• a discrepancy in the HCPCS code and description;
• an HCPCS code not listed on the DME Fee Schedule; or
• no HCPCS code listed.

H-2820 DME Procedures

Revision 18-1; Effective March 1, 2018

Use the following procedures to process incurred medical expense (IME) requests for durable medical equipment (DME).

1. If the MEPD specialist receives an IME request, send Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, to the requestor within two working days of receipt of the request.
2. Inform the requestor to have Form H1263-A completed and the service or equipment provider submit written, detailed specifications for the requested service or equipment to the recipient's attending practitioner after assessing the recipient's needs. The specifications must include the following:
   • a detailed explanation of medical equipment/services recommended;
   • an itemized listing of all equipment and accessories and costs;
   • the appropriate DME Healthcare Common Procedural Coding System (HCPCS) code for each service or equipment; and
   • a clear explanation of why the nursing facility equipment will not meet the recipient's needs.
3. The recipient's attending practitioner, physician assistant or advance practice nurse employed by the attending practitioner, must sign and date the form that lists the medical procedure and the itemized list of equipment and accessories that includes the explanation of why the nursing facility equipment is not adequate for the recipient.
4. The requestor submits to the MEPD specialist:
   • completed Form H1263-A;
   • a provider service statement reflecting service or equipment provided along with the appropriate HCPCS code(s); and
   • a statement from the provider showing the equipment is delivered and the date of delivery. 
     
     The MEPD specialist must document on the form the date the form was received by the agency. 
     
     If the request does not contain a detailed explanation or identification of the equipment needed, return the request to the provider. Explain to the provider that more information is needed regarding the need to identify the equipment or an explanation for the need of the equipment.
5. Once the completed Form H1263-A, written/detailed specifications and itemized list are received, the MEPD specialist determines the correct amount of the recipient's co-payment adjustment by comparing the fees submitted by the provider to the appropriate HCPCS codes and charges on the Medicare DME Fee Schedule. This is in accordance with B-8200, Redetermination Cycles, for treatment of a change. Within this same time frame, the MEPD specialist ensures entry into the appropriate automated system and notifies the recipient of the co-payment adjustment, using Form H4808, Notice of Change in Applied Income/Notice of Denial of Medical Assistance, or Form H1259, Correction of Applied Income, in accordance with established agency notification requirements.
6. Complete the same type of form that was sent to notify the recipient of the IME adjustment and mail it to the provider with only the following information:
   • the particular claim that is approved;
   • total amount approved;
   • recipient's co-payment is adjusted (not the actual co-pay amount); and
   • the beginning month of the co-payment or adjustment.

To safeguard confidentiality, do not send a notice to a provider that includes specific information about the recipient's finances, sources of income or the amount of co-payment. Do not use auto-populated forms or a copy of the same notice that was sent to the recipient. If a provider inquires about a recipient's finances, refer the provider to the recipient or the recipient's authorized representative. Do not refer the provider to nursing facility staff.

Reminder: To safeguard confidentiality, do not provide the co-payment amount to any provider (either verbally or in writing) without written authorization from the recipient.

H-2830 DME Exception Processing/Codes Not on the Fee Schedule

Revision 17-3; Effective September 1, 2017

The Medicare fee schedule does not contain all of the Healthcare Common Procedural Coding System (HCPCS) codes used by durable medical equipment (DME) providers. Medicare considers these codes as miscellaneous codes or codes not otherwise specified or classified. Based on the DME exception processing information from the Centers for Medicare & Medicaid Services, certain miscellaneous codes may be allowable incurred medical expense (IME) deductions even though the HCPCS codes are not identified on the Medicare fee schedule.

Based on the DME exception process, determine the amount of the IME deduction for allowable miscellaneous codes and allowable codes not listed on the fee schedule using the following steps.

• Request the wholesale pricing in writing from the DME provider for each HCPCS miscellaneous code on the invoice.
• Multiply the wholesale price by 40 percent to obtain the markup amount.
• Add the wholesale price and the markup amount for the total fee.
• Allow up to the total amount as an IME deduction.

Example: K0108 wholesale price is $350. $350 x 40 percent = $140. $140 is the markup amount. $350 + $140 = $490 total amount. $490 is the allowable IME.

If a DME provider does not provide the wholesale pricing for a particular HCPCS miscellaneous code, do not allow that code as an IME deduction. Do not deny the entire IME request. Use Form H1052-IME, Notice of Delay in Decision for Incurred Medical Expenses, to notify the provider of a delay in processing the IME and include the additional information needed to process the request. If the wholesale price is not provided, process the IME request for the remaining codes. If the wholesale price is provided after the remaining IME has been approved, process the change and allow the code as an IME deduction.

H-2840 DME Modifier Code for Rental Items

Revision 10-3; Effective September 1, 2010

Because of Medicare regulations regarding durable medical equipment (DME), an individual owns the DME after a set number of payments. This is common for wheelchairs.

On the Medicare Fee Schedule, some DMEs are considered capped rental items. In these situations, the first Modifier column (column labeled Mod) will reflect only RR for rented. The DME supplier must transfer ownership of the capped rental equipment to the individual after the 13th continuous month of rental. An individual in an institution makes a one-time purchase instead of renting the DME. Calculate the incurred medical expense (IME) deduction by multiplying the monthly rental amount on the Medicare Fee Schedule by 13. This is the total allowable amount of IME deduction for this item.

Example: An individual purchased a heavy-duty wheelchair with modifications specific for his use. The code submitted with Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, is K0006. The monthly rental amount for this code is 125.41. The total IME deduction for this DME is $1,630.33 ($125.41 x 13).

To safeguard beneficiary access to quality equipment throughout the duration of the rental period, Medicare requires that the DME supplier may not provide different equipment from that which was initially furnished to the individual at any time during the 13-month rental for capped rental DME unless one of the following exceptions applies:

• the equipment is lost, stolen or irreparably damaged;
• the equipment is being repaired while loaner equipment is in use;
• there is a change in the beneficiary's medical condition such that the equipment initially furnished is no longer appropriate or medically necessary; or
• the DME carrier determines that a change in equipment is warranted.

Based on this, an individual is limited to only one IME deduction for each identified DME during the capped rental period. If an exception is met and a need is identified for a change, request the DME provider to submit a copy of the exception request/approval.

H-2850 Wheelchairs

Revision 18-3; Effective September 1, 2018

Customized Power Wheelchairs

A customized power wheelchair (CPWC) is a covered service in a nursing facility (NF).  Direct individuals to request CPWCs through a recipient's managed care organization.

Customized Manual Wheelchairs (CMWCs)

CMWCs may be considered for an incurred medical expense (IME) deduction for an NF recipient with:

• A completed, signed, and dated Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME
• Written and detailed specifications and an itemized list of the requested durable medical equipment (DME) and all accessories
• Clear, written explanation, signed by the physician, of why the NF equipment will not meet the recipient's needs

Before allowing an IME deduction, if the recipient has a positive preadmission screening and resident review (PASRR) evaluation, verify what type of positive PASRR the person has.

A NF recipient with a positive PASRR evaluation for an intellectual disability (ID) or a developmental disability (DD) is eligible to receive DME through NF specialized services. Do not consider an IME deduction for a CMCW.  Direct these individuals to the NF to request a CMWC as a NF specialized service.

A NF recipient with a positive PASRR evaluation for Mental Illness (MI) is not eligible to receive DME through NF specialized services. Requests for CMWCs can be considered for an IME deduction.

Basic Power Wheelchairs

Basic power wheelchairs that are not customized can be considered for an IME deduction if the following verification is received:

• a completed, signed, and dated Form H1263-A; and
• a clear, written explanation, signed by the physician, of why the NF equipment will not meet the recipient's needs.

Basic power wheelchairs include the wheelchair, necessary batteries and may include the following basic components. Do not allow separate charges for the items listed below:

• lap belt or safety belt;
• battery charger;
• batteries (initial);
• complete set of tires and casters, any type;
• leg rests;
• foot rests or foot platform;
• arm rests;
• any weight-specific components (braces, bars, upholstery, brackets, motors, gears, etc.), as required by a person’s weight capacity; and
• controller and input device.

H-2860 Reserved for Future Use

Revision 20-2; Effective June 1, 2020

H-2870 When the Co-Payment Adjustment is Not Used to Pay DME Provider

Revision 24-1; Effective March 1, 2024

Payment for durable medical equipment is a matter between the person or the person’s payee and the durable medical equipment (DME) provider. The income from the co-payment adjustment must be used to pay the DME provider in a timely manner. 

When DMEs are projected in the co-payment budget, monitor the case at regular intervals. If the income from the co-payment adjustment is not used to pay the DME provider, remove the ongoing co-payment adjustment and reconcile the budget. Reconciliation is required if the payments were not made, or if the amount paid was different from the amount projected

Related Policy 

IME Notices, H-2900
Incurred Medical Expenses (IMEs), H-3120
Incurred Medical Expenses (IMEs), H-3420
Incurred Medical Expenses (IMEs), H-3520
Incurred Medical Expenses (IMEs), H-3620

Revision 20-4; Effective December 1, 2020

Form TF0001, Notice of Case Action, is used to notify a recipient, authorized representative (AR), or both that a request for an IME deduction is approved or denied.

Form TF0001P, Provider Notice of Case Action, is used to notify the nursing facility that a co-payment adjustment has been approved.

For approved IME requests, TIERS automatically generates Forms TF0001 and TF0001P with the following information:

• a note that the co-payment adjustment is for an IME allowance and that the funds must be used to pay the IME provider;
• the reason for the IME adjustment (receipt of dental services or durable medical equipment);
• the date the IME item or service was received; and
• the total amount of the IME allowance.

For denied IME requests, TIERS automatically generates Forms TF0001 and TF0001P, but the forms do not reflect changes in the co-payment or provide a reason for denial when the IME request is denied.

IME Provider Notice

For both dental or durable IME requests, use Form H1053-IME, Provider Notice of Incurred Medical Expense Decision, to notify an IME provider that a request for an IME deduction is approved or denied.

• If the IME request is approved, the form will list the services and total amount of the IME allowed.
• If the IME request is denied, the form will list the services not allowed, and staff manually add additional comments to why the IME request was denied.
• Do not add co-payment information to this form.

Reminder: To safeguard confidentiality, do not provide the co-payment amount to any provider (either verbally or in writing) without written authorization from the recipient or the recipient’s AR.

Request for Verification of Delivery

When an IME request does not include proof of delivery or verification of the date services were provided, use the following forms to request verification of receipt of services from the recipient or the recipient’s authorized representative (AR). Do not send the request to the provider. The provider may assist the recipient in providing the requested information, but the recipient or the recipient’s AR must complete the form.

• For durable IME requests, use Form H1051-IME, Receipt of Durable Medical Equipment.
• For dental IME requests, use Form H1054-IME, Proof of Dental Services.

Notice of Delay

For both dental or durable IME requests, use Form H1052-IME, Notice of Delay in Decision for Incurred Medical Expenses, to:

• Notify the recipient of a delay in processing an IME request when the following information is needed on Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment, or on Form H1263-B, Certification of No Medical Contraindication - Dental:
  • the written signature of the recipient or authorized representative; or
  • a description of the authority to sign for the recipient.
• Notify the IME provider of a delay in processing an IME request when the following information is needed:
  • current dental terminology (CDT) or health care common procedural coding system (HCPCS) codes;
  • the written signature of the attending practitioner on Form H1263-A or Form H1263-B; or
  • other information.

Related Policy

Deduction of Incurred Medical Expenses (IMEs), H-2100
IME Budget Adjustments Due to Death, H-2310
Notices, R-1300

H-3110 Variable Income

Revision 09-4; Effective December 1, 2009

1. The person has income that fluctuates from month to month (such as earnings, royalties, dividends, interest, rents, etc.) and the average from all sources is $5 or more. 

2. Variable income from any combination of sources was received during at least three of the preceding six months, is anticipated to reoccur, and the average from all sources is $5 or more.
   
   Example: The applicant entered the nursing facility (NF) in January and applied for MEPD the same month. During the six months preceding the month the case is worked (February), the person received the following variable income payments, all of which are anticipated to reoccur during the projection period (March through August).

   Month	Source #1	Source #2	Payment Rec.
   Aug.
   Sept.	$20		X
   Oct.
   Nov.		$20	X
   Dec.
   Jan.

   
   Since the person did not receive variable income from all sources during at least three of the preceding six months, do not average and project variable income, even though these payments are anticipated to reoccur with the same frequency during the coming six months.
   
   Note: If an eligibility budget is being calculated for the prior month of November, the $20 payment received that month is excluded as infrequent/irregular income in the eligibility budget. There is no co-payment for November, since the person did not enter the NF until January. 

3. In spousal impoverishment cases, the community-based spouse received variable income from any combination of sources during at least three of the preceding six months, the variable income is anticipated to reoccur, and the monthly average from all sources is $5 or more.
   
   Example: The applicant entered the NF in January and applied for Medicaid the same month. The person has no variable income. However, the community-based spouse receives monthly royalty payments from a mineral lease. During the six months preceding the month the case is worked (February), the community-based spouse received monthly royalties as follows: August = $25; September = $30; October = $20; November = $15; December = $22; and January = $25.
   
   Since the community-based spouse received variable income during at least three of the preceding six months, all payments are anticipated to reoccur during the coming six months, and the average from all sources is $5 or more ($25 + $30 + $20 + $15 + $22 + $25 = $137 ÷ 6 months = $22.83 monthly average). The eligibility specialist projects the $22.83 average as the community-based spouse's income in the co-payment calculation.
    
4. For applications, variable income which is anticipated to reoccur is calculated into the co-payment budget for the month of certification and is projected over the next six months. If eligibility is being tested for prior months, the amount of variable income actually received during a given month is budgeted as income for that month.
    
5. For ongoing cases, variable income (earned or unearned) is not calculated into the co-payment budget until the month following the month in which the person received his first variable payment.
   
   Example (Reviews Only): The person's first monthly variable payment (such as earned income or interest) is received in October. This payment is calculated into the co-payment budget in November to be effective December. 

H-3120 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

1. IMEs fluctuate from month to month, or they remain constant and are paid on a monthly basis and are anticipated to continue during the coming six-month period.
   
   Example: A redetermination is performed in February, and the person is making monthly payments for dentures purchased six months ago. During the preceding six months (August through January), the person paid $30 a month for dentures, and these payments are anticipated to continue during the projection period (March through August). The average of IMEs paid from August through January, or $30, is projected in the co-payment budget from March through August.
    
2. The person pays IMEs that are regular and fixed and paid on a quarterly, semi-annual or annual basis. These IMEs are converted to a monthly amount and projected over a 12-month period.
    
3. IMEs that have not been paid in preceding months are anticipated to occur in subsequent months.
   
   Examples:
   • A relative has been paying the person's insurance premium, but the person will begin paying it in March. The IME is calculated into the co-payment budget in February to be effective March.
   • The person will pay for dental work in monthly installments. Both the dental work and the payments begin in March. The monthly payment is calculated into the co-payment budget in February to be effective March.

H-3210 Variable Income

Revision 10-1; Effective March 1, 2010

1. Variable income is received from all sources in fewer than three of the preceding six months and is not anticipated to increase in frequency. Variable income which is not projected is restituted at the annual redetermination if the amount in the month of receipt is $5 or more.
   
   Example: The applicant entered the nursing facility (NF) in January and applied for Medicaid in the same month. During the six months preceding the month the case is worked (February), the applicant received the following variable payments, which are anticipated to reoccur during the projection period (March through August).
    

   Month	Source #1	Source #2	Payment Rec.
   Aug.
   Sept.	$20		X
   Oct.
   Nov.		$20	X
   Dec.
   Jan.

   
   Since the person did not receive variable income from all sources during at least three of the preceding six months, do not average and project variable income, even though these payments are anticipated to reoccur with the same frequency during the coming six months.
   
   Note: If an eligibility budget is being calculated for the prior month of November, the $20 payment received that month is excluded as infrequent/irregular income in the eligibility budget. There is no co-payment for November, since the person did not enter the NF until January.

2. Variable income is received during three of the preceding six months from any combination of sources, but payment from at least one of the sources is not anticipated to reoccur during the next six months, and payments from remaining sources were not received during three of the preceding six months.
   
   Examples:
   • The applicant entered an NF in January and applied for Medicaid the same month. During the six months preceding the month the case is worked (February), the applicant received the following unearned variable payments, but the payment from Source #3 was a one-time payment and is not anticipated to continue.

     Month	Source #1	Source #2	Source #3	Payment Rec.
     Payment Rec.
     Aug.	$30			X
     Sept.
     Oct.		$30		X
     Nov.
     Dec.
     Jan.			$50	X

 

• Although the person received variable income from all sources during three of the preceding six months, the payment from Source #3 is not anticipated to reoccur. Therefore, the variable payments from Sources #1 and #2 are not averaged and projected for future months.

Note: If eligibility is being determined for the prior month of October, the unearned variable income of $30 received during that month is not countable income, as the amount is less than the infrequent or irregular exclusion of the first $60 unearned in a calendar quarter. (See Section E-9000, Infrequent or Irregular Income.) There is no applied income for October since the person did not enter the NF until January.

• The applicant entered the NF in January and applied for Medicaid the same month. During the six months preceding the month in which the case is worked (February), the person received the following variable payments, but the payment from Source #3, received in October, was a one-time payment and is not anticipated to recur.
   

  Month	Source #1	Source #2	Source #3	Payment Rec.
  Aug.	$20			X
  Sept.		$20		X
  Oct.			$20	X
  Nov.
  Dec.	$20	$20		X
  Jan.

• Since the person received variable income from Sources #1 and #2 during three of the preceding six months, the income from Sources #1 and #2 is averaged and projected into the applied income budget for the coming six months (March through August). However, since the one-time $20 payment from Source #3 is not anticipated to recur, it is not included in the average of variable income to be projected.

3. Variable income from all sources was received during three of the preceding six months and is anticipated to recur, but the average of income from all sources is less than $5.
   
   Example: The applicant entered the NF in January and applied for Medicaid the same month. During the six-month period preceding the month in which the case is worked (February), the person received the following variable payments, all of which are anticipated to recur.

   Month	Source	Payment Rec.
   Aug.	$2	X
   Sept.	$1	X
   Oct.	$2	X
   Nov.	$5	X
   Dec.	$3	X
   Jan.	$4	X

   
   The person received variable payments from all sources during each of the six preceding month; however, since the average of all payment is less than $5 ($2 + $1 + $2 + $5 + $3 + $4 = $17 ÷ 6 months = $2.83) and is not anticipated to increase, that average is not projected into the applied income budget.

 

H-3220 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

1. Medical services were received prior to the medical effective date (MED).
   
   Example: The person entered the nursing facility (NF) on Jan. 10, applied for Medicaid the same month, and meets all eligibility criteria as of Jan. 10. She underwent routine dental treatment during the preceding October, for which she will be making monthly payments of $30 for 12 months. Since the treatment occurred prior to the medical effective date, no deduction for IMEs is allowed.
2. Someone other than the person (or community-based spouse to whom income is being diverted in the co-payment calculation) is paying the IME.
   
   Example: A NF person has an assignable general health insurance policy. The premiums are $50 a month and are paid by the person's son. The son states that he will continue to make these premium payments for the person. Since the person is not paying the premiums, they are not deductible as an IME.

 

H-3230 Both Variable Income and Incurred Medical Expenses (IME)

Revision 09-4; Effective December 1, 2009

Co-payment is $0 and is not anticipated to change. In this situation, semi-annual reviews of variable income/IMEs are not required, and variable income/IMEs may be re-budgeted on an annual basis.

H-3310 Variable Income

Revision 09-4; Effective December 1, 2009

If the applicant routinely receives variable income that is anticipated to continue, use an average of variable income received during the six months preceding the application file date, or the six months preceding any month up to the certification month, and project that average for the coming six-month period. Schedule a special review for the sixth month after the case is certified to rebudget co-payment.

Examples:

• The person applied in January and is being certified in February. The eligibility specialist verifies that the person received variable income totaling $300 from August through January, which is anticipated to reoccur, and obtains an average of $50 per month ($300 ÷ 6 months). This average ($50) is budgeted as variable income in the co-payment calculation. A special review is scheduled for the following August, six months from the certification date.
• The person applied in January and is being certified in March. The eligibility specialist has the option of averaging variable income for any one of the following six-month periods:
  • July through December (six months prior to January, the month in which the application was filed);
  • August through January (six months preceding February, which is a month prior to the March certification month); or
  • September through February (six months prior to the certification month of March).

If variable income is received on a monthly basis and is anticipated to continue, the amount to be projected is an average of variable income received during preceding months. If variable income was received during all six of the preceding months, divide the total received by 6; if there are only five months of variable income, divide the total by 5; if there are only four months of variable income, divide the total by 4; and so on.

Examples:

• The application was filed in January and is being certified in February. The person began receiving monthly variable income six months ago, in August. Variable income received from July through December totaled $400. The average to be projected over the coming six months is $66.67 ($400 total ÷ 6 months = $66.67). A special review is scheduled for the following August to rebudget variable income.
• The application was filed in January and is being certified in February. The person began receiving monthly variable income two months ago, in December. Variable income received for December and January totals $75. The average to be projected over the coming six months is $37.50 ($75 total ÷ 2 months = $37.50). A special review is scheduled for the following August to re-budget variable income.

In spousal impoverishment cases, if the community spouse has variable income that is anticipated to continue, in the co-payment budget use an average of variable income received during the six months preceding the application file date, or the six months preceding any month up to the certification month, and project that average for the coming six-month period. Schedule a special review for the sixth month after the case is certified to rebudget co-payment.

Note: If co-payment is $0 and there is a wide margin of variability for variable income, semi-annual reviews are not required. Variable income should be re-budgeted at each annual redetermination.

Note: Cases with significant month-to-month differences in income amounts should be reviewed quarterly rather than every six months. This quarterly averaging will minimize the impact on a person if he receives income in very low amounts for several months. If the monthly average of variable income from all sources is less than $5, the variable income need not be budgeted for co-payment purposes.

If variable income from all sources was received during at least three of the preceding six months and is anticipated to reoccur, total the variable income received during the preceding six months and divide by six to determine the initial budget. Schedule a special review for the sixth month after the case is worked to rebudget co-payment.

Example: The application is worked in February. The preceding six months are August through January. Variable income totaling $65 from two different sources was received in August, October, December and January and is anticipated to continue. The average to be projected (from March through August) is $10.83 ($65 ÷ 6 months = $10.83).

Spend Down Situations — Amounts of variable income received during preceding months may differ from amounts anticipated for future months. In these situations, obtain a statement of anticipated income amounts from the source, if possible. If the source cannot provide a statement, expected income must be determined based on other information.

Examples:

• Interest Income — The applicant entered the nursing facility in September, and her Medicaid application is being worked in February. She owns an interest-bearing bank account, but has been spending down resources since September. The current bank account balance is sufficient to continue generating interest. The eligibility specialist budgets the anticipated interest amount based on the best estimate available, considering the reduced account balance and current interest rates, rather than averaging the interest posted during preceding months when the account balance was much higher. A special review is scheduled for no later than August to reconcile.
• Rental Income — The amount of rental income to be projected is a net amount based on gross rents anticipated to be received, less allowable expenses anticipated to be paid, during the six months following the month the case is worked (the month the case is certified).

 

H-3320 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

1. If IMEs are paid on a monthly basis and are anticipated to continue, the amount to be projected is an average of expenses paid in preceding months. If expenses were paid during all six of the preceding months, divide the total by 6; if there are only five months of expenses, divide the total by 5; if there are only four months of expenses, divide the total by 4; and so on.
   
   Examples:
   • The application was filed in January and is being certified in February. Beginning the preceding August, the person began paying a monthly premium of $50 on an assignable general health insurance policy. The average IME to be projected over the coming six months is $50. This is calculated as follows: $300 total paid ÷ 6 months = $50 average. A special review is scheduled for the following August.
   • The application was filed in January and is being certified in February. Two months ago, in December, the person began paying a monthly premium of $60 on an assignable general health insurance policy. The average IME to be projected over the coming six months is $60. This is calculated as follows: $120 total paid ÷ 2 months = $60 average. A special review is scheduled for the following August.
      
2. Regular and fixed IMEs which are paid on a quarterly, semi-annual or annual basis are converted to a monthly average and projected for a 12-month period. If these are the person's only recurring IMEs, the case should be monitored at regular intervals (for example, every six months for quarterly and semi-annual payments) to ensure that payments continue, but reconciliation of projected expenses is not required unless the expense is not paid or the amount paid is different from the amount projected.
   
   Examples:
   • The person entered the nursing facility (NF) in January and the application is being certified in February. She pays quarterly premiums of $150 on an assignable general health insurance policy. This quarterly premium is converted to a monthly amount, and $50 ($150 quarterly premium ÷ 3 months = $50) is budgeted as a monthly IME. A special review is scheduled for the following August to ensure that payments continue. However, reconciliation will not be required in August, unless payment of premiums was discontinued or the premium amount changed.
     
     Note: Reconciliation of fixed IMEs is not required if the amount paid overall is correct, even though the schedule of payments may have been interrupted.
   • The person pays a monthly premium of $50 on an assignable general health insurance policy. At the semi-annual review performed in April, the eligibility specialist verifies that in December the person made no premium payment, but made a double payment ($100) in January. Since the overall payment is still $50 per month, reconciliation is not performed for either December or January.
      
3. For fixed IMEs paid on a monthly basis, the amount to be projected is based on anticipated amounts for the coming six-month period.
   
   Examples:
   • If the person has been paying a monthly health insurance premium but says he is dropping the policy, do not project the expense in the budget. (The premium expense should be allowed through the month of the last payment.)
   • The person entered the NF in January, and the case is being certified in February. She has been paying monthly premiums of $25 on an assignable general health insurance policy. However, there is verification that these premiums will increase to $35 effective April 1. The eligibility specialist budgets $25 as an IME, and schedules a special review for March to re-budget co-payment based on the new premium amount. At the special review in March, the eligibility specialist budgets an IME deduction of $35 to be effective April.
      
4. IMEs are projected for no more than six months.
   
   Exception: If the person's only IME is a fixed amount and there is no variable income, the IME may be projected for a 12-month period. The case is monitored at regular intervals (such as every six months for monthly, quarterly and semi-annual payments) to ensure that payments continue, but reconciliation is not required unless payments were not made or the amount paid is different from the amount projected.

 

H-3330 Both Variable Income and Incurred Medical Expenses (IME)

Revision 09-4; Effective December 1, 2009

1. Variable income/IMEs to be projected for future months (not to exceed six) are based on income received/expenses paid in months preceding the month in which the application is worked.
    
2. If variable income was received during three of the preceding six months and is anticipated to reoccur, or if variable income will be received monthly, the amount to be projected for the coming six months is an average of variable income received during preceding months. (If variable income was received in all six of the preceding months, divide the total by 6; if there are only five months of variable income, divide the total by 5; if there are only four months of variable income, divide the total by 4; and so on.)
   
   If IMEs are paid monthly and are anticipated to reoccur, or if they are in a fixed amount and are paid on a quarterly, semi-annual or annual basis, the amount to be projected for the coming six months is a monthly average of IMEs paid during preceding months.
   
   Examples:
   • The application was filed in January and is being certified in February. The person receives monthly royalties from a mineral lease, which totaled $230 during the preceding six months (August through January). The person also pays a quarterly premium of $150 on an assignable general health insurance policy. There are no other IMEs.
     
     The amount of variable income to be projected over the coming six months is $38.33. This is calculated as follows: $230 total ÷ 6 months = $38.33 average.
     
     The amount of IMEs to be projected over the coming six months is $50. This is calculated as follows: $150 quarterly premium ÷ 3 months = $50 average.
      
   • The application was filed in January and is being certified in February. During the preceding six months, the person received the following variable income payments, each of which is anticipated to reoccur:
      

     Month	Source #1	Source #2	Source #3
     Sept.	$75
     Nov.		$50
     Jan.			$60

     
     The person also pays a quarterly premium of $120 on an assignable general health insurance policy. There are no other IMEs.
     
     The amount of variable income to be projected over the coming six months is $30.83. This is calculated as follows: $75 + $50 + $60 = $185 total ÷ 6 months = $30.83 average.
     
     The amount of IMEs to be projected over the coming six months is $40. This is calculated as follows: $120 quarterly premium ÷ 3 months = $40 average.
     
     A special review is scheduled for the following August to re-budget variable income and IMEs.

H-3410 Variable Income

Revision 09-4; Effective December 1, 2009

When projecting variable income, it is permissible to overlap months (or to skip a month), if verification is unavailable.

Examples:

The case is reviewed in February and verification of variable income for January is unavailable. The options are:

• Average variable income from July through December (total divided by six months), and project that average through the following August. (This is true even though variable income received in July was used in the average calculated at the preceding semi-annual review in August [when the income from the preceding February through July was averaged].) Also at this February semi-annual review, reconcile the months of August through December. (Do not reconcile for July, since that month was reconciled at the previous semi-annual review last August. Never reconcile the same month twice!)
• Average variable income from August through December (total divided by five months), and project that average through the following August. Reconcile for August through December.

Options at the next annual review (the following August) are:

• Average variable income received from January through July (total divided by seven months), and project that average through the following February. Reconcile for January through July.
• Skip January altogether, and average February through July (total divided by six months), and project that average through the following February. Reconcile for January through July.
• If verification of variable income received in July is unavailable, average variable income received from February through June (total divided by five months), or variable income received from January through June (total divided by six months), and project that average through the following February.

H-3420 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

1. IMEs which have been projected in the co-payment budget must be re-budgeted at least every six months.
   
   Exception: If the person's only IME is a fixed amount and there is no variable income, the IME may be projected for a 12-month period. The case is monitored at regular intervals (such as every six months for monthly, quarterly and semi-annual payments) to ensure that payments continue, but reconciliation is not required unless payments were not made or the amount paid is different from the amount projected.
2. IMEs which have not been paid in preceding months, but which are anticipated to occur in subsequent months, may be projected. This will afford the person sufficient income to pay the expense.
   
   Examples:
   • A relative has been paying the person's insurance premium, but the person will begin paying it in March. The IME is calculated into the co-payment budget in February to be effective March.
   • The person will pay for dental work in monthly installments. Both the dental work and the payments begin in March. The monthly payment is calculated into the co-payment budget in February to be effective March.
3. For fixed IMEs paid on a monthly basis, the amount to be projected is based on anticipated amounts for the coming six-month period.
   
   Example: The case is being worked in October, and the person has been making monthly premium payments of $25, which are not anticipated to change. During the preceding six months (April through September), no payment was made in May, but a double payment ($50) was made in June. The amount projected (from November through April) is $25 ($150 total payments ÷ 6 months = $25 average).
4. If an IME is expected to cease, such as payments on a dental bill will be completed, schedule a special review to delete the IME from the budget effective the month payment is to cease.

H-3430 Both Variable Income and Incurred Medical Expenses (IME)

Revision 13-4; Effective December 1, 2013

1. Variable income/IMEs which have been projected in the co-payment budget must be re-budgeted at least every six months.
   
   Exception: If the co-payment is $0 and is not expected to change, a 12-month average may be used, and semiannual reviews are not required.
    
2. If it is discovered after the case is worked that the person receives variable income or pays IMEs, or if variable income/IMEs begin on an active case, base the projected amount on income received/expenses paid in the preceding six-month period, or however many months during the preceding six-month period in which payments/expenses occurred, or the amount expected to be received/paid. The average of the preceding months may be used to project the budget.

Examples:

• An annual review was completed in January. Monthly variable income payments totaling $300 were received during the preceding six months (July through December). The projected variable income amount was $50 ($300 total ÷ 6 months = $50 average). A semiannual review was scheduled for the following July. In April, the eligibility specialist is notified that the person will begin making monthly payments of $50 for dentures. These payments begin in May and are to continue for 48 months. The $50 monthly IME (the amount expected to be paid) is calculated into the co-payment budget in April to be effective in May.
  
  At the semiannual review in July, the eligibility specialist verifies that the $50 monthly payments for dentures continue, and he averages variable income received from January through June.
   
• An intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID) application was certified in January, at which time a monthly premium of $60 on an assignable general health insurance policy was projected as an IME. A semiannual review was scheduled for the following July. In April, the eligibility specialist is notified that the person began participating in a sheltered workshop in March and was paid $25 that month. This $25 variable income payment is calculated into the co-payment budget in April to be effective in May.
  
  At the semiannual review the following July, the eligibility specialist verifies that the person continues to pay the $60 monthly health insurance premium. The eligibility specialist verifies that variable income received from March through June totals $110. The IME amount to be projected for the coming six months continues to be $60. The variable income amount to be projected for the coming six months is $27.50 ($110 total ÷ 4 months = $27.50 average). The annual review is scheduled for the following January.
   
• An application was certified in January. There were no variable income or IMEs, and the annual review is due the following January. In March, the eligibility specialist is notified that in February the person began renting out her home for $200 per month. There have been no repair/upkeep expenses, and real property taxes are not due until December. However, annual real property insurance totaling $200 will be paid in June.
  
  The eligibility specialist opts to synchronize the semiannual variable income reviews with the annual review cycle, so a semiannual review is scheduled for July (six months from the January certification). The amount of variable income to be projected through July is $150. This is calculated as follows: $200 annual real property insurance ÷ 4 months (the projection period – April through July) = $50 monthly average; $200 gross monthly rents − $50 allowable deductions = $150 net monthly rents).
  
  In May, the eligibility specialist is notified that in April the person began paying a quarterly premium of $150 on an assignable general health insurance policy. The eligibility specialist calculates $50 ($150 quarterly premium ÷ 3 months = $50 average) as an IME into the co-payment budget in May to be effective in June.
  
  At the July semiannual review, the eligibility specialist verifies that the person continues to pay the $150 quarterly ($50 monthly average) health insurance premium. The eligibility specialist also projects rental income through the following January, deducting the real property taxes due in December from gross rents anticipated to be received.

3. Verification of amounts of variable income/IMEs should be for recent months before the month the case is worked. If verification is not available for the month immediately preceding the month in which the case is being worked and there is no anticipated change (such as variable income/IMEs will not terminate nor will the amounts significantly change), do not delay case action pending receipt of verification for the immediate preceding month.
   
   Example: The case is being reviewed in February, and the preceding six months are August through January. IMEs are a fixed amount and have not changed. Verification of variable income received in January is unavailable. Take an average of the variable income received from July through December (six months), or from August through December (five months), and project that average through August.
    
4. Temporary fluctuations in the amounts of variable income received/IMEs paid, such as up to two consecutive months in which no variable income was received or IMEs were paid, do not disrupt the six-month review cycle. Variable income/IMEs that cease for three or more consecutive months and that are not anticipated to resume should be deleted from the budget.
    
5. If receipt of variable income/payment of IMEs resumes after having been deleted from the budget, the new projected amount is based on the amount of variable income/IMEs expected to be received/paid. Historical data may be used for the projection.
    
6. The eligibility specialist may elect to synchronize or not to synchronize semiannual reviews of variable income/IMEs with the annual review cycle. If the specialist chooses to synchronize, more frequent reviews than every six months may be required.

Example: The specialist is working in a 10-month review cycle and chooses to synchronize variable income/IME reviews with annual reviews. Variable income reviews would be conducted every five months.

H-3510 Variable Income

Revision 09-4; Effective December 1, 2009

Retroactive reconciliation is not required for stable variable income with narrow fluctuations. The eligibility specialist will average the variable income received during the preceding six months. If average variable income exceeds $4.99 per month, this average is projected for the following six months. This process is repeated every six months.

Unstable variable income or variable income with wide fluctuations must still be retroactively reconciled.

Notes:

• Retroactive reconciliation is always required if requested by the authorized representative.
• Reconciliation performed is for the entire reconciliation period (the block of time considered for reconciliation), and not month-by-month. If the variable income adjustment is a positive number (the person underpaid co-payment), add the adjustment to the co-payment for the most recent month in the reconciliation period.
  
  Example: If reconciling the period of October through March, the most recent month in the reconciliation period is March. Form H1259, Correction of Applied Income, is sent to the person and nursing facility, and after 12 days the co-payment is adjusted in SAS in the most recent month. There is no month-by-month adjustment in the reconciliation period (October-March) in SAS for this underpayment. Form H1201-A, Client Declaration or Streamline Review Worksheet, Page 2, may be utilized to assist in calculating the correct reconciliation period and the most recent month in the reconciliation period.

H-3520 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

When IMEs have been projected in the co-payment budget, review the case at least every six months and reconcile the budget according to the monthly IMEs actually paid. If the projected average monthly IMEs and the actual average monthly IMEs are each less than $2, or the difference between the two is less than $1, then reconciliation is not required. (Although reconciliation is optional for these small amounts, reconcile whenever the person requests it.)

Note: Reconciliation performed is for the entire reconciliation period (the block of time considered for reconciliation), and not month-by-month. If the variable income adjustment is a positive number (the person underpaid co-payment), add the adjustment to the co-payment for the most recent month in the reconciliation period.

Example: If reconciling the period of October through March, the most recent month in the reconciliation period is March. Form H1259, Correction of Applied Income, is sent to the person and nursing facility, and after 12 days the co-payment is adjusted in SAS in the most recent month. There is no month-by-month adjustment in the reconciliation period (October-March) in SAS for this underpayment. Form H1201-A, Client Declaration or Streamline Review Worksheet, Page 2, may be utilized to assist in calculating the correct reconciliation period and the most recent month in the reconciliation period.

H-3610 Variable Income

Revision 09-4; Effective December 1, 2009

1. The average monthly variable income adjustment for the reconciliation period is less than $5. 
2. Variable income is stable with minor fluctuations.
   
   Example: The review is completed in February, with the preceding six months being August through January. Actual variable income for the period totaled $100; projected variable income for the period totaled $75. Calculation: $100 Total Actual − $75 Total Projected = +$25 Income Adjustment. Divide the income adjustment by the number of months (+$25 ÷ 6 = +$4.17). The +$4.17 monthly average is less than +$5, so reconciliation is not required. Do not reconcile if the monthly average is less than +$5.

H-3620 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

1. If the person's only IME is a fixed amount, there is no variable income, and the IME has been projected for a 12-month period. The case is monitored at regular intervals (such as every six months for monthly, quarterly and semi-annual payments) to ensure that payments continue, but reconciliation is not required unless the payments are no longer made or the amount paid is different from the amount projected.
2. If a missed monthly IME payment was made up by a double payment in a subsequent month, do not reconcile for the missed payment.

H-3630 Both Variable Income and Incurred Medical Expenses (IME)

Revision 09-4; Effective December 1, 2009

If co-payment is $0 and reconciliation would not change the co-payment amount, do not reconcile.

H-3710 Variable Income

Revision 12-1; Effective March 1, 2012

• To obtain the variable income adjustment, subtract the total projected income from the total actual income.
  
  Note: Make adjustments in the Service Authorization System Online (SASO).
  
  Example: The review is completed in February with the preceding six months being August through January. Actual variable income for this period totaled $200; projected variable income for the period totaled $75. Calculation: $200 − $75 = +$125. $125 ÷ 6 = +$20.83 per month (reconcile since monthly average is over $5).
  
  If the variable income adjustment is a positive number (for example, the person underpaid co-payment), add the adjustment to the co-payment for the most recent month in the reconciliation period.
  
  Examples:
  • If reconciling the period of October through March, the most recent month in the reconciliation period is March. Form H1259, Correction of Applied Income, is sent to the person and nursing facility, and after 12 days the co-payment is adjusted in SAS in the most recent month. There is no month-by-month adjustment in the reconciliation period (October-March) in SAS for this underpayment. Form H1202-A, MAO Worksheet-Income Changes, Page 2, may be used to assist in calculating the correct reconciliation period and the most recent month in the reconciliation period.
  • Same situation as the first example above. Co-payment for the most recent month in the reconciliation period (January) was $230. Add the variable income adjustment (+$125) to the co-payment for January. Calculation: $230 co-payment for January + $125 variable income adjustment = $355 reconciled co-payment for January.
     
• If the variable income adjustment is a negative number (for example, the person overpaid co-payment), subtract it from the co-payment for the most recent month in the reconciliation period. If the co-payment for the most recent month in the reconciliation period is insufficient to absorb the adjustment, subtract the excess negative adjustment from the next-to-most-recent month in the reconciliation period.
  
  Example: The review is completed in February, with the preceding six months being August through January. Actual variable income for this period totaled $100; projected variable income for this period totaled $150. Calculation: $100 actual − $150 projected = –$50 variable income adjustment. Co-payment for the most recent month in the reconciliation period (January) was $25. Co-payment for the next-to-most-recent month in the reconciliation period (December) was also $25. Reconciliation for January: $25 co-payment − $50 variable income adjustment = $0 (or –$25 rollback). Thus, reconciled co-payment for January is $0.
  
  Reconciliation for December: $25 co-payment − $25 rollback = $0 reconciled co-payment.
   
• If co-payment must be increased or decreased because of income averaging, use Form H1259 to correct retroactive periods. Notify the person about the correction to co-payment. Send copies of the notice and Form H1259 to the nursing facility. For ongoing adjustments, process through the automated system.

 

H-3720 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

To obtain the IME adjustment, subtract total actual expenses from total projected expenses.

Example: A review is completed in February, with the reconciliation period being August through January. Actual IMEs for the reconciliation period totaled $90; projected IMEs totaled $60. Calculation: $60 total projected − $90 total actual = –$30 IME adjustment. Reconcile as it is to the person's advantage.

 

H-3730 Both Variable Income and IMEs

Revision 09-4; Effective December 1, 2009

1. ach review of variable income/IMEs (at least every six months), determine the total actual amount of variable income received/IMEs paid during the reconciliation period (the block of months being considered for reconciliation).
    
2. Total the amount of variable income/IMEs that were projected during the reconciliation period (the same block of months considered for reconciliation in the paragraph above).
   
   Note: Use reconciliation worksheet to complete your calculations.
    
3. If the IME adjustment is a negative number, subtract it from the variable income adjustment. The difference is the overall adjustment.
   
   Examples:
   • A review is completed in October, with the reconciliation period being April through September. Actual variable income totaled $150, and actual IMEs totaled $90. Projected variable income totaled $160, and projected IMEs totaled $60.
     • Calculation of income adjustment $150 actual − $160 projected = –$10 income adjustment.
     • Calculation of IME adjustment $60 projected &minus $90 actual = –$30 IME adjustment.
     • Overall adjustment –$10 income adjustment + –$30 IME adjustment = –$40 overall adjustment.
   • A review is completed in October, with the reconciliation period being April through September. Actual variable income for this period totaled $160; actual IMEs totaled $60. Projected variable income totaled $150; projected IMEs totaled $50. Monthly co-payment for the reconciliation period was $150.
     • Calculation for variable income $160 actual &minus $150 projected = +$10 variable income adjustment.
     • Calculation for IMEs $50 projected &minus $60 actual = –$10 IME adjustment.
     • Overall adjustment +$10 variable income adjustment + –$10 IME adjustment = $0 overall adjustment.
   
   There is no adjustment to the co-payment for the most recent month in the reconciliation period (September).
    
4. If the IME adjustment is a positive number, add it to the variable income adjustment. The difference is the overall adjustment.
   
   Examples:
   
   Same as second example above, except that actual income totaled $170 and actual IMEs totaled $90. Projected income totaled $160, and projected IMEs totaled $150.
   • Calculation of variable income $170 actual − $160 projected = +$10 income adjustment.
   • Calculation of IMEs $150 projected − $90 actual = +$60 IME adjustment.
   • Overall adjustment +$10 income adjustment + $60 IME adjustment = +$70 overall adjustment. Since the overall adjustment exceeds the monthly threshold of +$5 (+$70 ÷ 6 months = +$11.67 > + $5 monthly threshold), reconcile the entire overall adjustment.
      
5. If the overall adjustment for the reconciliation period is a positive number, this means the person underpaid co-payment. If the overall adjustment is +$30 or more (+$30 ÷ 6 months = +$5 per month), reconcile the overall adjustment. If the overall adjustment is +$29.99 or less (+$29.99 ÷ 6 months = +$4.99 or less), do not reconcile.
   
   Examples:
   • A review is performed in October, with the period considered for reconciliation being April through September. The variable income adjustment is +$10; the IME adjustment is +$10. Thus, the overall adjustment is +$20 (+$10 variable income adjustment + $10 IME adjustment = +$20). Since the overall adjustment is less than +$30 (+$20 ÷ 6 months = +$3.33 < $5 threshold), do not reconcile.
   • Same situation as above, except that the variable income adjustment is +$15; the IME adjustment is +$15. Thus, the overall adjustment is = +$30 (+$15 variable income adjustment + $15 IME adjustment = +$30). Since the overall adjustment is equal to the +$5 monthly threshold (+$30 overall adjustment ÷ 6 months = +$5), reconcile for the most recent month in the reconciliation period (September). Co-payment for September was $240.
     
     Reconciliation for September: $240 co-payment + $30 overall adjustment = $270 reconciled co-payment.
   • The case is worked in October, and verification of variable income for September is unavailable. The eligibility specialist averages variable income from March through August (total divided by six months), and projects that average through the following April. He reconciles for the months of April through August (five months). (He does not reconcile for March, since that month was reconciled at the previous semi-annual review the preceding April. Never reconcile for the same month twice!)
     
     The variable income adjustment is +$60; the IME adjustment is –$30. Thus, the overall adjustment is +$30 (+$60 variable income adjustment − $30 IME adjustment = +$30). Since the overall adjustment exceeds the monthly threshold $30 ÷ 5 months = $6 > + $5 threshold), reconcile for the most recent month in the reconciliation period (August). Co-payment for August was $300.
     
     Reconciliation for August: $300 co-payment + $30 overall adjustment = $330 reconciled co-payment.
      
6. If the overall adjustment for the reconciliation period is a negative number, this means the person overpaid co-payment. For overpaid co-payment in any amount, reconcile using Form H1259. Do not perform a month-by-month reconciliation. Rather, subtract the overall adjustment from co-payment for the most recent month in the reconciliation period.
   
   Example: The case is worked in October. At the previous semi-annual review the preceding April, variable income for March was unavailable, so the eligibility specialist averaged variable income received from September through February, and projected that average through this review month (October). At this review (in October), the eligibility specialist reconciles for the months of March through September (seven months). (He does not reconcile for February, since that month was reconciled at the previous semi-annual review the preceding April. Never reconcile for the same month twice!) Co-payment from March through September was $200.
   
   The variable income adjustment is –$10, and the IME adjustment is –$10. Thus, the overall adjustment, is –$20 (–$10 variable income adjustment, –$10 IME adjustment). Since the overall adjustment is a negative number, it must be subtracted from co-payment for the most recent month in the reconciliation period (September).
   
   Reconciliation for September: $200 co-payment − $20 overall adjustment = $180 reconciled co-payment.
    
7. If the negative overall adjustment exceeds co-payment for the most recent month in the reconciliation period, roll the excess negative adjustment back and subtract the excess amount from the co-payment for the next-to-most-recent month in the reconciliation period.
   
   Example: A review is performed in October, with the period considered for reconciliation being April through September. Monthly co-payment for the reconciliation period was $45. The variable income adjustment is –$30; the IME adjustment is –$20. Thus, the overall adjustment is –$50 (–$30 variable income adjustment + –$20 IME adjustment = –$50).
   
   Reconciliation for September: $45 co-payment − $50 overall adjustment = $0 (or –$5 rollback). Reconciled co-payment for September is $0.
   
   Reconciliation for August: $45 co-payment − $5 rollback = $40 reconciled co-payment for August.
    
8. Never reconcile for the same calendar month twice, even at different reviews. While it is permissible to overlap months in averaging and projecting variable income, it is not permissible to overlap months for reconciliation purposes.
   
   Example: A review is performed in October, with the period considered for reconciliation being April through September. Verification of variable income received in September is not available, so the eligibility specialist averages variable income from March through August and projects that average through the following April. (This is true even though at the previous six-month review the preceding April, variable income for March was part of the average for October through the March, which was projected through this review month (October). At this review, the eligibility specialist reconciles for the months of April through August. The month of March was reconciled at the previous review the preceding April.

Revision 12-1; Effective March 1, 2012

Step 1

Determine the total actual and projected co-payment amounts for the reconciliation period.

Actual Co-payment — For each month in the reconciliation period, calculate the actual co-payment (co-payment based on actual variable income received and incurred medical expenses (IMEs) paid). Calculate the personal needs allowance (PNA)/protected earned income (PEI) allowance based on actual earnings received. Total the actual co-payment for the reconciliation period.

Note: For fixed income, do not include an increase that is subject to restitution policy rather than reconciliation policy.

Projected Co-payment — Total co-payment amounts for each month in the reconciliation period.

Example: A review is completed on an ICF-ID case in January, with the preceding six months being July through December.

Actual Co-payment (AI)

Month	Fixed	Earned	Other	IMEs	PNA/PEI	App. Inc.
July	$250	$60	$0	$0	$105.00	$205.00
August	$250	$75	$0	$0	$112.50	$212.50
September	$250	$85	$0	$0	$117.50	$217.50
October	$250	$78	$0	$0	$114.00	$214.00
November	$250	$65	$0	$0	$107.50	$207.50
December	$250	$80	$0	$0	$115.00	$215.00
Total						$1,271.50

Projected AI

Month	From Co-pay Screen
July	$275
August	$275
September	$275
October	$275
November	$275
December	$275
Total	$1,650

Step 2

Determine the co-payment adjustment by subtracting total projected co-payment for the reconciliation period from the total actual co-payment for the reconciliation period. The result is the co-payment adjustment.

A. Total Actual Co-payment (from Step 1)	$1,271.50
B. Total Projected Co-payment (from Step 1)	– $1,650.00
C. Total Co-payment Adjustment	– $378.50
D. Number of Months in Reconciliation Period	÷ 6
E. Average Monthly Adjustment	– $63.08

If the average monthly adjustment is +$4.99 or less, stop. Do not reconcile.

If the average monthly adjustment is +$5 or more, proceed to Step 3.

If the average monthly adjustment is a negative (–) figure in any amount, proceed to Step 3.

Step 3

Reconcile co-payment for the most recent month in the reconciliation period.

If the total co-payment adjustment (from Step 2C) is a positive (+) number, add it to the co-payment for the most recent month in the reconciliation period. The result is the co-payment adjustment.

If the total co-payment adjustment (from Step 2C) is a negative (–) number, subtract it from the co-payment for the most recent month in the reconciliation period. The result is reconciled co-payment.

A. Co-payment Month: December	$275.00
B. Total co-payment adjustment (from Step 2C)	– $378.50
C. Reconciled co-payment	$–103.50
D. If A.-B. is less than $0, enter the negative (–) amount here	( – $103.50) Excess Negative Adjustment

If there is an "excess negative adjustment" from Step 3D, proceed to Step 4.

Step 4

If there is an "excessive negative adjustment" (from Step 3D), subtract the excess amount from the co-payment for the next-to-most-recent month in the reconciliation period.

Revision 24-1; Effective March 1, 2024

After determining eligibility, calculate a co-payment for a person or couple living in an institutional setting.

The total countable income for the co-payment budget may be different from the total countable income for the eligibility budget. Refer to H-1200, Income That Is Not Used in the Co-Payment.

When determining the co-payment, consider the following:

• E-1760, Wage-Related Payments
• E-1770, Mandatory Payroll Deductions
• E-3110, Wages

HHSC nets the person's and spouse's earned income each month by subtracting the following mandatory payroll deductions:

• Income tax
• Social Security tax
• Required retirement withholdings
• Required uniform expenses

Due to automation limitations and requirements, special treatment for the co-payment occurs when the person:

• receives certain Department of Veterans Affairs (VA) benefits; or
• does not have vendor payment coverage due to a transfer penalty or a substantial home equity disqualification.

People whose VA benefits are capped at $90 per month keep the full $90 as a personal needs allowance (PNA).

The VA pension amount for an institutionalized Medicaid recipient without a spouse or child (or in the case of a surviving spouse, no child) cannot exceed $90 per month. Do not use the $90 VA pension to determine how much a person in an institutional setting must pay to the facility toward the cost of care. Do not count the limited VA pension, up to the amount of $90, as income in the eligibility or co-payment budget. There is no interaction between the reduced pension and the PNA. If the veteran has income from other sources, the income from other sources may be considered countable for co-payment purposes. HHSC performs the co-payment calculations to determine the amount of the veteran’s liability toward the cost of care.

The VA $90 capped pension is included in the PNA calculation in the system.

• For a non-SSI Medicaid recipient in an institutional living arrangement who does not have a VA pension capped at $90 per month, the total PNA will be up to the current maximum of $75.
• For a non-SSI Medicaid recipient in an institutional setting who has a VA pension capped at $90 per month, the total PNA may be up to $165 ($90 VA plus up to $75 PNA).
• For a Medicaid recipient living in an ICF-IID facility, the $90 VA capped pension and PNA calculation do not impact the protected earned income allowance.

If the veteran does not have another source of income to deduct the $75 PNA from, the PNA is the VA $90 capped pension, and the co-payment is zero. If the veteran’s other source of income is less than $75, the PNA is $90 plus the amount of other income, not to exceed $75. The PNA deduction comes first in the order of all co-payment deductions, including those for incurred medical expenses (IMEs).

Note: Refer to E-4300, VA Benefits, for treatment of payments from the Department of Veterans Affairs. Refer to E-4311.2, $90 VA Pension and Institutional Setting, for automation limitations and the VA $90 capped pension.

If the person is eligible for Medicaid but has a transfer of assets penalty or a substantial home equity disqualification, follow Appendix XXIII, Procedure for Designated Vendor Number to Withhold Vendor Payment. For policy information on transfer penalties and substantial home equity disqualifications, refer to the following:

• Chapter I, Transfer of Assets
• F-3600, Substantial Home Equity
• F-3610, Persons Impacted by Substantial Home Equity Disqualification
• F-3620, Persons Not Impacted by Substantial Home Equity Disqualification
• F-3630, When the Equity Value is Greater Than the Limit
• F-3640, Reverse Mortgage or Home Equity Loan
• F-3650, Documentation
• F-3660, Undue Hardship

Use the following budget steps to determine the co-payment for a person or couple.

Step 1. Determine the person's monthly net earned and gross unearned income.

Notes:

• VA aid and attendance benefits, housebound allowances, and reimbursements for unusual or continuing medical expenses are exempt from both eligibility and co-payment. However, if these payments are deposited into a qualifying income trust (QIT) account, they are countable for co-payment.
• Do not consider child support as a deduction from a person’s co-pay if it is withheld from unearned income because of garnishment. Refer to E-1400, Garnishment or Seizure.

Step 2. Add net earned and gross unearned income.

Step 3.

Individual Budget

Subtract the personal needs allowance of $75 from available income for an individual budget. Subtract the guardian fee allowance and the Medicare Part B premium, if applicable. Subtract incurred medical expenses. Subtract the home maintenance allowance, if applicable. The remainder is the co-payment.

Couple Budget

Subtract the personal needs allowance of $150 from the combined available income for a couple budget. Subtract the guardian fee allowance and the Medicare Part B premium, if applicable. Subtract incurred medical expenses. Subtract the home maintenance allowance, if applicable. Divide the remainder by 2 to determine the co-payment for each spouse.

Revision 09-4; Effective December 1, 2009

For Companion Cases, see Chapter J, Spousal Impoverishment.

Revision 12-3; Effective September 1, 2012

For individuals and couples, follow the steps in this section.

HHSC nets the person's and spouse's earned income each month by subtracting the following mandatory payroll deductions:

• income tax,
• Social Security tax,
• required retirement withholdings, and
• required uniform expenses.

H-5110 ICF/IID Individual

Revision 24-1; Effective March 1, 2024

Determine the person’s monthly net earned and gross unearned income.

Determine the personal needs allowance (PNA) for a person as follows:

Person earns $30 or less.

Step	Description
1.	Deduct the $75 PNA from the unearned income.
2.	To the extent the unearned income is less than $75, deduct the difference from the net earned income.
3.	Deduct all remaining net earned income up to $30.
4.	Add the deductions from steps 1 through 3 to determine the total PNA/PEI allowance.

Note: The total PNA/PEI must be at least $75.

Example: Person receives $300 RSDI and earns $30 per month.

Step	Description
1.	$300 unearned – $75 PNA = $225
2.	NA
3.	$30 earned – $30 PEI = $0
4.	$75 PNA + $30 PEI = $105 PNA/PEI

Person's earnings exceed $30 but not $120.

Step	Description
1.	Deduct the $75 PNA from the unearned income.
2.	To the extent the unearned income is less than $75, deduct the difference from the earned income.
3.	Deduct $30 from the remaining net earned income, plus one-half of the remainder.
4.	Add the deductions from steps 1 through 3 to determine the total PNA/PEI deduction.

Example: Person earns $120 per month and receives $15.50 SSI.

Step	Description
1.	$15.50 unearned – $75 PNA = –$59.50
2.	$120 net earned – $59.50 = $60.50
3.	$60.50 remaining net earned – $30 = $30.50 divided by 2 = $15.25
4.	$12.50 + $59.50 + $30 + $15.25 = $117.25 PNA/PEI

Person's earnings exceed $120.

Step	Description
1.	Deduct the $75 PNA from the unearned income.
2.	To the extent the unearned income is less than $75, deduct the difference from the first $120 of the net earned income.
3.	Of the monies remaining from the first $120 of net earned income, deduct $30 and one-half of the remainder.
4.	Deduct 30 percent of the net earnings in excess of $120.
5.	Add the deductions from Steps 1 through 4 to determine the total PNA/PEI allowance.

Example 1: Person receives $300 RSDI and earns $250.

Step	Description
1.	$300 unearned – $75 PNA = $225
2.	NA
3.	$120 earned – $30 = $90 divided by 2 = $45
4.	$250 earned – $120 = $130 x .30 = $39
5.	$75 PNA + $30 + $45 + $39 = $189 PNA/PEI

Example 2: Person receives $7.50 SSI and earns $130.

Step	Description
1.	$7.50 unearned – $75 = –$67.50
2.	$120 earned – $67.50 = $52.50
3.	$52.50 remaining earned – $30 = $22.50 divided by 2 = $11.25
4.	$130 earned – $120 = $10 x .30 = $3
5.	$7.50 + $67.50 + $30 + $11.25 + $3 = $119.25 PNA/PEI

References

• Subtract the guardian fee allowance, if applicable.
• Subtract incurred medical expenses.
• Subtract the home maintenance allowance, if applicable.
• The total net earned income and gross unearned income minus the total personal needs allowance and other allowable deductions is the co-payment.

H-5120 ICF/IID Couple

Revision 24-1; Effective March 1, 2024

Determine the personal needs allowance for a couple as follows:

1. If neither spouse has earned income, or if the only spouse with earned income does not have an ICF/IID level of care, the personal needs allowance for the couple is $75 for each spouse.
2. If either spouse is an ICF/IID person who has monthly earned income, determine the personal needs allowance for each separately based on their individual monthly incomes.

Note: If one spouse has a level of care other than an ICF/IID level of care, the personal needs allowance for that individual is $75, even if the individual has earned income. Combine the individual personal needs allowance for the couple.

Subtract the total personal needs allowance from the total of net earned income and gross unearned income of the couple.

References

• Subtract guardian fee allowance, if applicable.
• Subtract incurred medical expenses.
• Subtract home maintenance allowance, if applicable.
• Divide the remainder by two to determine the co-payment for each spouse.

H-5130 ICF/IID Companion

Revision 24-1; Effective March 1, 2024

A separate deduction for maintenance of the home is not allowable in companion cases.

The spousal allowance provides for home maintenance in those cases.

Use the following steps to determine the co-payment budget for a companion situation:

Step	Procedure
1	Determine the countable net earned and gross unearned income of the person.
2	Subtract the personal needs allowance, including the protected earned income allowance (if any) of the person based on his own net income. Subtract guardian fee allowance, if applicable.
3	Add the spouse's countable net earned and gross unearned income to the remainder.
4	Subtract the spousal allowance.
5	If there are no dependents, go to Step 6. If there are dependents, determine the dependent allowance. Subtract the dependent allowance.
6	Subtract incurred medical expenses.

The remainder is the co-payment.

Example: The couple has the following income:

Person	Spouse
$250	RSDI	$800	Net Earnings
$130	Net Earnings

Calculation for personal needs and protected earned income allowance:

Person	Spouse
$250	RSDI unearned income
− $75	PNA
$175	remainder

Calculation for protected earned income when earnings are greater than $120:

Person	Spouse
$120	Deduct $30 from the first $120 of net earned income
− $30
$90	divided by 2 = $45 and get one-half the remainder

Calculation for 30% of earnings in excess of $120:

Person	Spouse
$130	Net earnings
− $120	First $120 of net earned income
$10	x .3 = $3 (30% of earnings in excess of $120)

Calculation for Total PNA/PEI:

Person	Spouse
$75	PNA
+ $30	$30 deduction
+ $45	One-half the remainder deduction
+ $3	(30% of earnings in excess of $120)
$153	Total PNA/PEI

Co-payment calculation:

Step	Procedure	Amount
	RSDI	$250
	Net earnings	+ $130
Step 1:	Total	$380
Step 2:	Total PNA/PEI	− $153
	Income available for diversion	$227
Step 3:	Spouse's income	+ $800
	Total	$1,027
Step 4:	Spousal allowance	− $2,841
Step 5:	NA
Step 6:	NA
	Co-payment	$0

Revision 09-4; Effective December 1, 2009

SSI persons who enter a Medicaid long-term care facility can continue to receive their community-based SSI payment in the following situations:

• Section 1619 eligibility
  
  Disabled individuals with earnings greater than the SSI benefit rate can continue to receive SSI or Medicaid benefits or both under Section 1619 of the Social Security Act (Public Law 99-643, effective July 1, 1987). These individuals can receive the community-based SSI payment for two months after the month of entry to a Medicaid facility.
   
• Temporary institutionalization
  
  Effective July 1, 1988, Public Law 100-203 allows SSI persons who meet certain requirements to continue receiving their SSI benefits while they are temporarily confined to a medical facility.
  
  These continued benefits may be made for up to three months after the month of entry if:
  • the individual notifies the SSA that he expects to be in a medical facility for at least a full calendar month but for fewer than 90 days;
  • SSA receives a physician's certification within 10 days after the close of the month of admission. The physician certifies that the individual is likely to leave the facility no later than the 91st consecutive day after admission; and
  • SSA receives evidence within 10 days after the close of the month of admission that the individual needs to maintain and provide for the expenses of the home or living arrangement to which he may return.

In each situation, the SSI person is allowed to keep SSI benefits for the first two or three calendar months, respectively, after the month of entry. Neither law affects the SSI benefit for the month of entry. Because the Nursing Home Billing System generally does not consider the SSI benefit toward calculating the co-payment for months after the month of entry, do not process Form H1259, Correction of Applied Income, for these cases.

H-6210 Manual Certification Procedures

Revision 16-3; Effective September 1, 2016

Some SSI recipients do not appear on the SDX tapes and therefore are not shown as Medicaid eligible on HHSC's computer system. Cases that are provided Medicaid coverage by means of a manual certification include the following:

• Prior SSI recipients who are not currently eligible and who were never certified for Medicaid on HHSC's computer system;
• SSI recipients who are issued a check manually by the Social Security district office;
• SSI recipients shown on the Social Security master file but not shown on HHSC's computer system; and
• SSI applicants with unpaid or reimbursable medical bills in Texas who move out of the state before SSI eligibility is approved.

The Social Security district office must initiate the manual certification procedure. When applicable, the Social Security district office completes a manual certification form and mails it to HHSC's Data Integrity department. Data Integrity certifies these persons for ME – Temporary Manual SSI. These persons are sent a Your Texas Benefits Medicaid ID card by the state office. A person remains certified for ME – Temporary Manual SSI Medicaid until the person's information appears on the SDX tape or until SSA submits a manual request to deny the eligibility. Cases for persons certified for ME – Temporary Manual SSI must be manually updated by the Social Security district office.

If an SSI recipient contacts a Social Security office requesting assistance in obtaining a Your Texas Benefits Medicaid ID card, the recipient's current Medicaid status must be determined before a manual certification form is initiated. When a request is received by the SSA representative regarding the current eligibility status of the SSI recipient, the eligibility specialist provides the requested information by verifying the recipient's status through system inquiry or via regional procedures.

If Medicaid status cannot be determined locally, the Social Security representative submits a manual certification form, assuming that the SSI recipient is not certified for Medicaid. (If the SSI recipient is currently certified as Medicaid eligible, the form is retained in state office for future reference.)

If an SSI recipient contacts HHSC requesting assistance in obtaining a Your Texas Benefits Medicaid ID card, obtain the name, address and Social Security number. Perform inquiry through the automated systems to verify Medicaid status. If the SSI recipient is not certified for Medicaid, or if current status cannot be determined, inform the Social Security district office that a manual certification is needed.

If an SSI recipient is certified for Medicaid but circumstances exist that may have stopped the receipt of the Your Texas Benefits Medicaid ID card, refer the recipient to the Social Security district office. If no change in circumstances occurred, send an email to Data Integrity, ME Unit.

Data Integrity attempts to resolve the problem and reports the action taken. Notify the Social Security district office (using Form H1016, Supplemental Security Income Referral) of any change reported by SSI recipients.

Reminder: Manual certifications are sent to state office by SSA when SSA cannot process the SSI certification on the SDX due to systems limitations. Do not issue a Form H1027 for manual certifications unless authorized by Data Integrity in state office.

H-6220 Emergency Manual Certification

Revision 16-3; Effective September 1, 2016

In some instances, it may be necessary for a newly certified SSI recipient to obtain emergency medical services before the receipt of the Your Texas Benefits Medicaid ID card. The SSA representative determines if the recipient's situation is considered a medical emergency. If the representative determines that a medical emergency does exist, the following procedures are followed by the department and SSA to ensure that the recipient has access to the appropriate services.

An eligible SSI recipient who has not received his Medicaid number and the Your Texas Benefits Medicaid ID card and has a medical emergency may request immediate assistance in obtaining an emergency Medicaid certification. In this situation, the local SSA representative contacts a local Medicaid eligibility specialist or supervisor.

When the SSA representative contacts you regarding the current eligibility status of the SSI recipient, provide the requested information by verifying the recipient's status through system inquiry or regional procedures. The SSA representative informs HHSC staff:

• that an emergency manual certification is being sent to the Data Integrity in state office and about the nature of the recipient's emergency; and
• identification information for the recipient, including:
  • name;
  • Social Security number;
  • address;
  • telephone number; and
  • special instructions needed for contact.

Data Integrity staff expedite the processing of the emergency Medicaid certification. Section staff also contacts local HHSC staff to authorize completion of the appropriate Form H1027.

When authorization is received from Data Integrity staff, expedite the delivery of the form to the recipient and, if necessary, notify the provider of the recipient's Medicaid eligibility.

Reminder: Emergency manual certifications are orally expedited to HHSC for the purpose of issuing an appropriate Form H1027. A newly certified SSI recipient usually does not yet have a Medicaid number. Do not issue Form H1027-A until authorized to do so by Data Integrity in state office. 

H-6230 SSI Payment Placed in Suspense by SSA

Revision 11-1; Effective March 1, 2011

An SSI recipient may be eligible to receive an SSI payment, but does not receive it because of some problem. Problems may occur because of a change of address, returned check, change of payee or other reasons that cause the payment to be placed in suspense.

A suspense code on the SDX tape is interpreted as a denial of Medicaid because the person is not receiving an SSI payment. When the person is reinstated in a current pay status, Medicaid eligibility is also reinstated.

Cases placed in suspense and the reasons for suspension may be recognized by the denial code shown on the SSI case screen. The codes are:

Code	Eligibility	Reason
S04	Suspended	Disability decision pending
S05	Suspended	Substantial, gainful activity development pending
S06	Suspended	Recipient's address unknown
S07	Suspended	Returned checks for other than address, payee change or death of payee
S08	Suspended	Representative payee development pending
S09	Suspended	Recipient refuses to cooperate
S20	Suspended	Potential rollback case or no disability payment made before 7-73
S21	Suspended	The recipient is presumptively disabled and has already received payments

If an SSI recipient whose case is in a suspense status contacts HHSC, ask the recipient to contact SSA so that the cause of the suspense action may be promptly resolved. Unless an emergency situation exists, do not contact SSA to initiate a manual certification for the recipient. If SSA verifies that the recipient has been denied SSI assistance because of entry into a Medicaid facility, take an MEPD application for assistance. 

H-6240 Residence in a Public Institution or Acute Care Hospital

Revision 13-1; Effective March 1, 2013

Eligibility for recipients in acute care hospitals is determined using the SSI federal benefit rate.

Generally, a person is not eligible for SSI if he/she is a resident of a public institution throughout the calendar month. The following definitions apply for purposes of this policy:

Institution — An establishment that makes available some treatment or services, besides food and shelter, to four or more persons who are not related to the proprietor.

Public institution — An establishment that is operated or controlled by federal or state or government unit, or a political subdivision, such as the city or county.

Except for patients in Medicaid facilities and certain persons described in this section, persons who are inmates and live in public institutions throughout the calendar month are not eligible for medical assistance:

• A person is considered a resident of a public institution if he receives the substantial portion of his food and shelter while living in the institution. This is true whether he is receiving treatment and services available in the institution or whether he or someone else is paying for his food, shelter and services. A person is not considered a resident of a public institution if he lives in a public educational institution and is enrolled in or registered for the institution's educational or vocational training.
• A person is considered to be living in an institution throughout the calendar month if she lives there from the first day of a month through the last day of that month. SSA considers a person to be living in an institution continuously if she transfers from one institution to another or is temporarily absent without being discharged. A person is also considered a resident of an institution throughout a month if she:
  • is born in the institution and remains throughout the rest of the month of her birth; or
  • lives in an institution on the first day of a month and dies in the institution during that month.
• A person who is placed in a Medicaid-certified facility (Medicare-SNF, NF or ICF/IID) after permanent release from a jail, prison, reformatory, or other correctional or holding facility is not considered to be under the control of that institution. In these cases, the person could be eligible for Medicaid if he meets all eligibility criteria.

Some persons may be eligible for SSI although they are residents of a public institution throughout the month. These exceptions are as follows:

• A person lives throughout the calendar month in a medical care facility, and Medicaid pays or is expected to pay more than 50% of the person's cost of care.
• A person lives for:
  • part of the month in a public institution; and
  • the rest of the month in a public or private medical care facility in which Medicaid pays or is expected to pay more than 50% of the person's cost of care.
• A person lives in a publicly operated community residence that serves no more than 16 residents. Community residences, for this purpose, do not include medical care facilities, educational or vocational training institutions, jails or other facilities for restraint of prisoners or persons being held pending disposition of legal charges. 

H-6250 Residence in a Medical Care Facility

Revision 11-1; Effective March 1, 2011

SSI uses a reduced federal benefit rate of $30 for individuals and $60 for couples if:

• they live in a public or private medical care facility; and
• Medicaid pays, or is expected to pay, more than 50% of the cost of the individual's or couple's care; or
• a child under age 18 lives in a medical care facility where a substantial part (more than 50%) of the cost of his care is paid by a health insurance policy issued by a private provider of such insurance, or where a substantial part (more than 50%) of the cost of his care is paid for by a combination of Medicaid payments and payments made under a health insurance policy issued by a private provider of such insurance.

Note: The reduced federal benefit rate applies for an SSI recipient during the penalty period when there has been a transfer of assets. (See Chapter I, Transfer of Assets.)

Reduced benefits apply in the following situations:

• An individual or couple lives in one or more medical care facilities throughout the calendar month, and Medicaid pays, or is expected to pay, more than 50% of the cost of care in each facility.
• An individual or couple lives for a part of the month in a public institution and the rest of the month in a public or private medical care facility in which Medicaid pays, or is expected to pay, more than 50% of the cost of care.
• A child under age 18 lives for part of a month in a public institution and for the rest of the month in a public or private medical care facility where a substantial part (more than 50%) of the cost of care is being paid under a health insurance policy issued by a private provider or by a combination of Medicaid and payments under a health insurance policy issued by a private provider.

If an individual or couple lives in more than one private medical facility throughout a calendar month, and Medicaid pays less than 50% of the cost of care in at least one of the facilities, the individual or couple may be entitled to the full SSI federal benefit rate.

In some instances, Medicaid liability may exist for only part of a month, even though the individual or couple lives in one private Medicaid facility throughout that month. The variables that would affect Medicaid liability include, but are not limited to, the medical effective date, level-of-care/medical necessity determination effective date and the 30-day limit on hospital services. If these limitations would cause Medicaid to pay for less than 50% of the cost of care, the affected individual or couple may be entitled to the full SSI federal benefit rate.

Medicaid also does not pay for nursing facility care when the PASARR assessment indicates that placement is not appropriate. 

H-6260 Facility Administrator Responsibilities

Revision 13-1; Effective March 1, 2013

If an individual who is receiving or who is potentially eligible to receive SSI benefits enters a Medicaid facility (Medicare-SNF, NF or ICF/IID), refer the administrator to the Nursing Facility Requirements for Licensure and Medicaid Certification Handbook for appropriate procedures. The administrator should notify SSA that an SSI recipient has entered the facility. For potential SSI recipients, the administrator is responsible for contacting SSA to secure a protected date of filing for SSI and to ensure that an eligibility determination is completed.

H-6270 SSI Monitoring

Revision 12-1; Effective March 1, 2012

Upon notification or discovery of a person receiving SSI entering an institutional setting, determine if the SSI will continue upon entry or if the SSI will be denied.

If the recipient's SSI benefits are anticipated to continue, send Form H1224, SSI Monitoring Letter, to the recipient, spouse or authorized representative.

Do not send Form H1224 if the recipient's SSI benefits are anticipated to be denied as a result of entry into the facility.

Reference: See B-7200, SSI Cash Benefits Denied Due to Entry into a Medicaid Facility.

Note: In addition to providing verification of the recipient's income and resources, Form H1224 is used to obtain information regarding transfers of assets by an SSI recipient.

After eligibility for ME-SSI benefits is reported to HHSC and admission forms and medical necessity or level of care are processed, the Service Authorization System Online (SASO) is updated with a co-payment. Review the SASO co-payment for accuracy. (See Chapter H, Co-Payment.) If correct, no action is needed. If incorrect, complete Form H1259, Correction of Applied Income (The Amount You Pay to the Facility), and enter changes into SASO. Remember to hold for 12 days if the co-payment is being increased. When Form H1259 is processed to correct co-payment, the co-payment change requires a "force" action in SASO. If ongoing co-payment has a force, future updates will not reflect in SASO. If the recipient does not have income other than SSI, no further monitoring is required. Check co-payment in SASO for accuracy. If the recipient has variable income along with SSI, monitor the case every six months.

If the recipient has other non-variable income along with SSI, a periodic review is required to ensure that the payment plan is correct. Conduct the periodic review at least every 12 months. Use the same procedure for reviews as is used for initial monitoring.

Revision 09-4; Effective December 1, 2009

Under Title XVIII of the Social Security Act, Medicare Part A coverage includes payment for limited nursing facility (NF) care as an extension of hospital care.

Medicare covers a maximum of 100 days in a skilled nursing facility (SNF), also referred to as extended care facilities. A team, consisting of physicians and nurses, determines whether the person meets Medicare's criteria for SNF at admission and at weekly reevaluations. Many persons do not use the entire 100 days, or may have hospital readmissions during their SNF period. A return to the hospital is not part of the available 100 days.

Medicare covers all charges for the first 20 days of SNF care. The following 80 days are coinsurance days. Medicare covers all of the medical expenses during this period; the person pays a coinsurance rate toward room and board. Medicare-covered services in an NF include skilled nursing care, physician services, physical/occupational/speech therapy, prescriptions, routine dental care and room and board.

For a Medicaid applicant or person who is certified for Medicare payments while in a Medicare SNF, Medicare pays the entire bill for the first through the 20th day. There is no coinsurance for that period. The person is eligible for coinsurance vendor payment beginning on the 21st day. Coinsurance continues through the 100th day if the person's stay is covered by Medicare.

A person can be certified for Medicaid during the entire SNF period, provided the person resides in a Medicaid NF. A co-payment is calculated for the coinsurance period, with vendor payment covering the balance of the SNF rate. There is no co-payment for the first 20 days of full SNF coverage.

Notes:

• Begin the eligibility determination process when a person files an application for Medicaid upon admission to the Medicare-SNF part of a Medicaid facility.
• Because the person must have been in a hospital for at least three days before SNF admission, always explore prior medical coverage. Reminder: The special income limit is applicable once the person (or couple) has been confined to one or more Medicaid-approved long-term care facilities (Medicare-SNF, NF or ICF/MR) for at least 30 consecutive days.
• Accept the Medicare determination of need for SNF care as a medical necessity determination.
• The NF must submit documentation that sets the rate at which the facility is paid.

Under certain limited conditions, Medicare will pay some NF costs for Medicare beneficiaries who require skilled nursing or rehabilitation services. To be covered, the person must receive the services from a Medicare-certified SNF after a qualifying hospital stay. A qualifying hospital stay is the amount of time spent in a hospital just before entering a nursing facility. This is at least three days. Care must begin within 30 days after leaving the hospital. The person’s doctor must order daily skilled nursing or rehabilitation services that the person can get only in an SNF. "Daily" means seven days a week for skilled nursing services and five days a week or more for skilled rehabilitation services.

Revision 09-4; Effective December 1, 2009

Number of Days	Person's Responsibility	Medicare's Responsibility
1-20	Nothing	Everything
21-100	20% skilled nursing facility care co-payment per day paid after 20 days of care (21-100). See Appendix XXXI, Budget Reference Chart.	The rest
Over 100	Everything	Nothing

Revision 12-3; Effective September 1, 2012

• Community Attendant Services (CAS) (ME-Community Attendant) coverage, provides Medicaid payment for attendant care only. This coverage does not provide for nursing facility (NF) vendor payment, doctor visits, hospital stays, medically necessary items or prescription drug coverage.
• Regular Medicaid coverage provides Medicaid payment for NF vendor payment, doctor visits, hospital stays, medically necessary items or prescription coverage. Medicaid is the payer of last resort and a medical necessity is required for vendor payment in an NF. Vendor payment is also subject to co-payments. Medicaid coverage provides for payment of prescription drug coverage, except when the person is dually eligible for both Medicare and Medicaid.
• Qualified Medicare Beneficiary (MC-QMB) coverage indicates that Medicaid pays the Medicare premiums, deductibles and co-insurance, including Medicare-covered hospital and NF stays.

Examples:

Recipient 1 — When a person with only MC-QMB (also known as a Pure Q) enters a skilled nursing facility (SNF) from a hospital, Medicare will cover 100% of the SNF vendor costs for days 1-20. Medicare will cover 80% of the SNF vendor costs for days 21-100. As a Pure Q person, Medicaid's Q covers 100% of the remaining 20% of the SNF vendor costs for days 21-100. The person will not be responsible for the remaining 20% of the SNF vendor costs (the Medicare co-payment per day for days 21-100). As a Pure Q person, the person is not responsible for the amount of co-payment a Medicaid person must pay for nursing care.

Note: If the person does not remain a Pure Q recipient and becomes certified for full Medicaid, use the Recipient 2 example.

Recipient 2 — When a person living in the community enters an SNF from a hospital and is dually eligible for both Medicare and Medicaid (MQMB), Medicare will cover 100% of the SNF vendor costs for days 1-20. Even though the person is Medicaid eligible, test the person for institutional coverage that is subject to transfer of assets and excess home equity policy. The 30-day stay requirement is not necessary. If the recipient is Medicaid eligible for vendor payment:

• Make retroactive adjustments to ensure the correct benefits are reflected in the system of record if necessary.
• The recipient will not be responsible for the remaining 20% of the SNF vendor costs (the Medicare co-payment per day for days 21-100).
• The recipient will have a calculated Medicaid co-payment beginning day 21 and continuing.
• Notify the recipient of the responsibility for the Medicaid co-payment.

Recipient 3 — When a CAS recipient (ME-Community Attendant) recipient who has Medicare but not MC-QMB enters an SNF from a hospital, Medicare will cover 100% of the SNF vendor payment for days 1-20. Medicare will cover 80% for days 21-100. The recipient’s Medicaid eligibility in an NF needs to be determined. Test the person for institutional coverage that is subject to transfer of assets and excess home equity policy. The 30-day stay requirement is necessary. If the recipient is Medicaid-eligible for vendor payment:

• Make retroactive adjustments to ensure the correct benefits are reflected in the system of record if necessary.
• The recipient will not be responsible for the remaining 20% of the SNF vendor costs (the Medicare co-payment per day for days 21-100).
• The recipient will have a calculated Medicaid-co-payment beginning day 21 and continuing.
• Notify the recipient of the responsibility for the Medicaid-co-payment.

If the person is not Medicaid-eligible for vendor payment and is not eligible for Pure Q, use the chart in Section H-7200, Medicare-Related Financial Responsibilities for Skilled Nursing Facility Care. Deny the person and send the appropriate denial notice. There will not be a calculated Medicaid-co-payment.

Recipient 4 — When a CAS (ME-Community Attendant) recipient with Qualified Medicare Beneficiary (MC-QMB) only enters an SNF from a hospital, Medicare will cover 100% of the SNF vendor payment for days 1-20. Medicare will cover 80% for days 21-100. The recipient's Medicaid eligibility in an NF needs to be determined. Test the person for institutional coverage that is subject to transfer of assets and excess home equity policy. The 30-day stay requirement is necessary. If the recipient is Medicaid eligible for vendor payment:

• Make retroactive adjustments to ensure the correct benefits are reflected in the system of record if necessary.
• The recipient will not be responsible for the remaining 20% of the SNF vendor costs (the Medicare co-payment per day for days 21-100).
• The recipient will have a calculated Medicaid-co-payment beginning day 21 and continuing.
• Notify the recipient of the responsibility for the Medicaid-co-payment.

If the person is not Medicaid eligible for vendor payment but is eligible for Pure Q, notify the recipient and use the Recipient 1 example.

Revision 09-4; Effective December 1, 2009

The medical effective date for a person in a Medicare skilled nursing facility (SNF) potentially can be as early as the first day of the month of entry to the nursing facility or the first day of a prior month. If eligible, this will ensure payment of any other medical expenses (including returns to the hospital during the initial 20 days of full Medicare coverage). At certification, the eligibility worker must verify and document in the case record that either the person:

• remains in the SNF section, or
• has been discharged to Medicaid.

Medicare approval of the applicant for the SNF meets the medical necessity (MN) requirement. If the medical effective date (MED) is prior to the applicant's move to Medicaid days in the facility, the MN requirement has been met.

Note: If the person remains in the SNF when the case is certified, it is recommended that a special review be scheduled to monitor for the completed MN determination when SNF does end.

Examples:

• Marsha Ford is admitted to an SNF as full Medicare on 11-15-XX. The 21st SNF day is 12-05-XX. Form H1200 is received 12-14-XX. Application is ready to certify 01-03-XX. The eligibility worker verifies that the person has unpaid/reimbursable hospital bills for 11-XX. Ms. Ford is still in the SNF days and has met all eligibility criteria as of 12:01 a.m. 11-01-XX. MED = 11-01-XX. Co-payment begins 12-05-XX.
• Fred McDaniel is admitted to an SNF as full Medicare on 03-24-XX. The 21st SNF day is 04-13-XX. Form H1200 is received 04-05-XX. He is discharged from the SNF to Medicaid on 05-20-XX. Application is ready to certify 06-15-XX. Mr. McDaniel meets all eligibility criteria as of 12:01 a.m. 03-01-XX. MED = 03-01-XX. Co-payment begins 04-13-XX. MN is not necessary, as MED is prior to discharge to Medicaid.

Service Authorization System Online (SASO) reflects future co-payment amounts. These amounts are based on the amount of each individual's income that is reported.

If a recipient is living in a long-term care facility other than a state supported living center or a state center, use Form H1259, Correction of Applied Income, to correct co-payment amounts in TIERS.

Note: The nursing facility is required to refund co-payment overcharged to the recipient. Reconciliation does not apply to home and community based waivers or assisted living facilities.

 

H-8110 Adjustments from Income Averaging

Revision 12-1; Effective March 1, 2012

When income is averaged, review the case at least every six months and reconcile the budget according to the monthly income actually received. If both the projected average income and the actual monthly income are each less than $2, or if the difference between the two is less than $1, then reconciliation is not required. If co-payment must be increased or decreased because of income averaging, use Form H1259, Correction of Applied Income, to correct retroactive periods. Notify the recipient about the correction to co-payment. Send copies of this notice and Form H1259 to the nursing facility. For ongoing adjustments, submit through the automated system.

Note: Make corrections in the Service Authorization System Online (SASO).

Although reconciliation is not required for certain small amounts, reconcile whenever the recipient requests it.

If the variable income adjustment is a positive number (the recipient underpaid co-payment), add the adjustment to the co-payment for the most recent month in the reconciliation period.

Example: If reconciling the period of October through March, the most recent month in the reconciliation period is March. Form H1259 is sent to the recipient and nursing facility, and after 12 days the co-payment is adjusted in SASO in the most recent month.

There is no month-by-month adjustment in the reconciliation period (October-March) in SASO for this underpayment. Page 2 of Form H1202-A, MAO Worksheet – Income Changes, may be used to assist in calculating the correct reconciliation period and the most recent month in the reconciliation period.

 

H-8120 Other Adjustments

Revision 12-3; Effective September 1, 2012

When adjustments for retroactive periods are needed for reasons other than to reconcile for income averaging, use the following procedures:

For MEPD cases, use Form H1259, Correction to Applied Income, only to report retroactive decreases in a recipient's co-payment. If the recipient's correct co-payment is more than that reported on the Service Authorization System Online (SASO) see H-8200, Procedures Relating to Overpayments, through H-8230, Cases Not Submitted for Prosecution. To update a recipient's co-payment for future months, process through the automated system. The effective date of the change shown in SASO is based on the effective date of the disposition action in the automated system.

For SSI cases, use Form H1259 to report any changes in co-payment. Increases in co-payment are effective the first day of the month after the date Form H1259 is completed. If the recipient's correct co-payment is more than that reported on SASO, use procedures in H-8200. The procedures for correcting co-payment do not apply to cases of fraud. In conducting a review or verifying co-payment, do not submit Form H1259 if fraud is indicated. Follow fraud procedures outlined in the Fair and Fraud Hearings Handbook.

 

H-8210 Willful Withholding of Information

Revision 10-1; Effective March 1, 2010

In the Medicaid program, fraud means deliberate misrepresentation or willful withholding of information for the purpose of obtaining public assistance, either for self or another individual.

Clearly indicate willful withholding of information that affects eligibility or the amount of co-payment. Do not accuse recipients of fraud.

Reference: For further explanations of fraud referral procedures, refer to the Fair and Fraud Hearings Handbook.

Willful withholding of information includes:

• willful misstatements, oral or written, made by a recipient or authorized representative in response to oral or written questions from the department concerning the recipient's income, resources or other circumstances that may affect the amounts of benefits. These misstatements may include understatements or omission of information about income and resources.
• willful failure by the recipient or authorized representative to report changes in income, resources or other circumstances that may affect the amounts of benefits, if the department has clearly notified the recipient or authorized representative of his obligation to report these changes.

When a recipient or authorized representative signs the application/review form, he certifies that he understands that failure to fulfill his obligation to provide correct, complete information and to keep the department informed of changes may be considered willful withholding of information. Because of this willful withholding of information, the department is allowed to recover the overpayments.

 

 

H-8220 Overpayments Resulting from Suspected Fraud

Revision 10-1; Effective March 1, 2010

In cases of suspected fraud, follow these steps:

Step	Procedure
1	Certify continued assistance in the correct amount or deny the case. Observe notification of adverse action and appeal procedures.
2	To report waste, abuse or fraud, please use the HHSC online reporting form at oig.hhsc.texas.gov, TIERS, GWS or call toll-free 1-800-436-6184.
3	Complete periodic and special reviews while the case is investigated for suspected fraud. Contact the Investigations Division to determine whether the periodic review may cause problems or advise them of changes in circumstances. Example: The authorized representative who is suspected of willfully withholding information dies after the report is submitted to the Investigations Division. Contact the Investigations Division and advise them of the individual's death.

 

 

H-8230 Cases Not Submitted for Prosecution

Revision 10-1; Effective March 1, 2010

If the prosecuting attorney or the investigator determines that the case is not suitable for prosecution, the investigator tries to arrange a voluntary plan of restitution.

If the investigator does not arrange repayment, the MEPD staff is informed that the case not presented for prosecution and no plan of repayment arranged. Seek restitution for the amount of overpayment.

If the investigative unit does schedule repayment, you will be notified via Form H1018, Overpayment Claim. Seek restitution for the amount of the uncollected overpayment.

H-8310 Restitution Defined

Revision 12-4; Effective December 1, 2012

Restitution is securing payment from a recipient when fraud is not indicated or pursued and when the recipient has been undercharged co-payment because of previously unreported or under-reported monthly income or resources that do not involve income averaging.

Restitution applies only to recipients in intermediate and skilled nursing facilities and in community-based ICF/IID facilities. The department does not seek restitution from recipients or recipients' authorized representatives for vendor payments made to state supported living centers or state centers. The department does not seek restitution from recipients or recipients' authorized representatives on home and community based waiver cases, including those living in assisted living facilities.

 

H-8320 Restitution Procedures

Revision 12-1; Effective March 1, 2012

Recipients or responsible relatives for recipients must notify the department within 10 calendar days of changes in income, resources and other circumstances that affect the amount of benefits received. Any department employee who receives or obtains information from or about a recipient is responsible for relaying the information immediately to the appropriate eligibility specialist. If a recipient has been undercharged co-payment because of previously unreported or under-reported monthly income or resources that do not involve income averaging, and fraud is not indicated, pursue voluntary restitution. Discuss the situation with the recipient and send Form H1225, Restitution. Record restitution requests in case comments.

Calculate the amount of restitution based on the difference between the correct daily co-payment and the previously collected daily co-payment. Multiply this amount by the number of days the recipient was in the facility. For months in which a recipient was ineligible, the amount of restitution sought is the total amount of vendor payments made by the department for those months. Include the reason for the restitution request on Form H1225.

With the following exception, do not request restitution for the current month until the month is over. If ineligibility is a result of resources on hand and the recipient will be ineligible until resources are reduced, restitution may be requested for a current month.

Overpayments of restitution are refundable from Fiscal Management Services.

 

H-8330 Overpayments Considered for Restitution

Revision 13-1; Effective March 1, 2013

HHSC pursues restitution for MEPD and SSI cases if the overpayment is not the result of department error or income averaging and any of the following situations occur:

• Actual income received in any month varies by $5 or more from budgeted income.
• Fraud is suspected and cumulative vendor payment does not exceed $100.

Note: If the difference between the actual and projected income is the result of income averaging and you are submitting Form H1259, Correction of Applied Income, do not pursue restitution. However, if the budget must be corrected for both income averaging and a lump-sum payment, reconcile the averaged income and seek restitution for the lump-sum payment.

• Changes in income were not reported within 10 days from receipt. Restitution is requested beginning with the month the increased income was received.
• A lump-sum payment (including income excluded for eligibility as irregular or infrequent income) raises income more than $5 for any month.
• Initial payment plan (co-payment) for an SSI recipient is understated by $5 or more.
• A recipient is advised about the correct amount of co-payment on the appropriate notification form, but a lower amount appears on the Patient Status Payment Plan Notice because of a processing or coding error.
• A recipient is determined to be ineligible for the month because of unreported or under-reported resources that exceed program limits.
• ICF, SNF or ICF/IID vendor payments have been continued for a denied recipient pending an appeal, and the hearing officer upholds the denial. Seek restitution for the total amount of the vendor payment made between the initial denial effective date and the date payment stops after the hearing decision. If payments are discontinued because the recipient is denied a level of care, the department requests restitution for vendor payments made after the original level-of-care denial date (as shown on Texas Department of State Health Services Form X-27).
• Co-payment has been continued at a lower level pending an appeal of an increase, and the hearing officer sustains the increase. Seek restitution for the difference between the old and new co-payment amounts for the period from the effective date of the original increase until the date of the appeal decision.
• Income tax refunds are subject to restitution policy (in the month of receipt) for co-payment purposes to the extent that withholding tax was excluded in the co-payment budget.

 

H-8340 Overpayments Not Considered for Restitution

Revision 09-4; Effective December 1, 2009

HHSC does not seek restitution for MEPD and SSI cases in any of the following situations:

• Cumulative overpayment is $5 or less (for any month).
• Overpayment of over $100 is referred for fraud.
• Overpayment is the result of the department's computation error or failure to act on available information.
• A change in regular monthly income (not lump-sum payment) is reported within 10 days of receipt. The department does not seek restitution for the month of receipt or for the subsequent month if the 10-day advance notice period extends beyond the department's computer cutoff date for that month.
• Income is incorrect as a result of an automated across-the-board adjustment.
• The resource limitation was met on the first day of the month. If a recipient's resources exceed the limit during the month, the department does not collect restitution for partial months.
• Co-payment is based on income averaging.

 

H-8350 Steps for Submitting Restitution Payment

Revision 19-4; Effective December 1, 2019

Step	Procedure
1	Obtain the recipient's cashier's check, money order or personal check in whole dollar amounts.
2	Give the recipient the original Form H4100, Money Receipt.
3	Attach the first copy of Form H4100 to the payment, and send to: Texas Health and Human Services Commission Fiscal Management Services ARTS Billing P.O. Box 149055 Austin, TX 78714-9055
4	Record the payment on the worksheet. Note: Submit payments to Fiscal Management Services on the day of receipt.

Related Policy

Restitution Defined, H-8310
Restitution Procedures, H-8320

 

H-8360 Steps for Requesting a Refund of Restitution Overpayment

Revision 19-4; Effective December 1, 2019

Recipients can request a refund if an incorrect amount of restitution is collected because the recipient was not in the facility for the full month and the refund amount is greater than $1.00.  

To request a refund:

Step	Procedure
1	Determine and document the amount of the refund on the worksheet.
2	Send a memo to: Texas Health and Human Services Commission Fiscal Management Services ARTS Billing P.O. Box 149055 Austin, TX 78714-9055 Include the following information: date of restitution payment and Form H4100, Money Receipt, receipt number; amount of refund due; name of the recipient; and recipient's Social Security number. Request a copy of voucher for case record

Related Policy

Restitution Defined, H-8310
Restitution Procedures, H-8320