Division of Medicaid and Medical Assistance

Statutory Authority: 31 Delaware Code, Section 512 (31 Del.C. §512)



Title XIX Medicaid State Plan; DSSM 20620.2, Necessary Medical Care Expenses; DSSM 20995.1, Post-Eligibility Deductions

In compliance with the State's Administrative Procedures Act (APA - Title 29, Chapter 101 of the Delaware Code) and under the authority of Title 31 of the Delaware Code, Chapter 5, Section 512, Delaware Health and Social Services (DHSS) / Division of Medicaid and Medical Assistance (DMMA) is proposing to amend a rule in the Division of Social Services Manual (DSSM) used to determine eligibility for medical assistance.

Any person who wishes to make written suggestions, compilations of data, testimony, briefs or other written materials concerning extension of the this waiver must submit same to Sharon L. Summers, Policy and Program Development Unit, Division of Medicaid and Medical Assistance, 1901 North DuPont Highway, P.O. Box 906, New Castle, Delaware 19720-0906 or by fax to (302) 255-4454 by July 31, 2006.

The action concerning the determination of whether to adopt the proposed regulation will be based upon the results of Department and Division staff analysis and the consideration of the comments and written materials filed by other interested persons.


Statutory Authority

• Social Security Act §1917(c), Liens, Adjustments & Recoveries and Transfers of Assets

• 42 CFR §435.700 et seq., Specific Post-Eligibility Financial Requirements for the Categorically Needy

• 42 CFR §435.832, Post-eligibility Treatment of Income of Institutionalized Individuals: Application of Patient Income to the Cost of Care


On April 18, 2006, CMS issued Regional Memo 06-04. This memorandum addresses the treatment of medical and remedial care expenses incurred as a result of the imposition of a penalty for transferring assets for less than fair market value under the Medicaid post-eligibility treatment of income.

Under section 1917(c) of the Social Security, certain individuals who dispose of assets for less than fair market value are subject to imposition of penalty. The statute provides that during the penalty period such individuals are ineligible for Medicaid payment for nursing facility services, and for comparable long-term care services provided in institutions other than nursing homes, in an individual’s home, or in a community setting. The length of the period of ineligibility (known as the penalty period) is directly related to the uncompensated value of assets that were transferred.

Because Medicaid is not paying for a person’s nursing home care during a penalty period, an individual subject to a transfer of assets penalty is responsible for paying for that care him or herself. At the end of the transfer of assets penalty period, such an individual may have incurred nursing facility and other penalized expenses that remain unpaid.

Once the penalty period expires, the individual can become eligible for Medicaid payment for nursing home or similar care, at which point the individual also becomes subject to the post-eligibility treatment of income process as set forth in regulations at 42 CFR §435.700 et seq. and 42 CFR §435.832.

Summary of Proposal

In compliance with recent clarification of federal regulations, DMMA will amend the provisions governing incurred medical expenses that may be considered allowable deductions in the determination of patient liability. DMMA amended policies will clarify that the State will not allow any expenses incurred during a penalty period to be used in the post-eligibility period for the purposes of long-term care services.

The following provisions contained in DSSM and the Title XIX Medicaid State Plan will be amended: DSSM 20620.2.2, 20620.2.3, 20995.1 and State Plan Supplement 3 to Attachment 2.6-A.

The proposed amendment is subject to approval by the Centers for Medicare and Medicaid Services (CMS).



Revision: HCFA-PM-3 (BERC) Supplement 3 to ATTACHMENT 2.6-A

MAY 1985 Page 1

OMB NO.: 098300193





The deduction for medical and remedial care expenses that were incurred as the result of the imposition of a transfer of assets penalty period is limited to zero.



20620.2.2 Necessary Medical Care

Cost of necessary medical care not covered under the recipient's medical insurance, Medicaid or Medicare but recognized under state law may be set aside from his/her income. The care must be ordered by a professional, such as a physician, dentist, optometrist, physical therapist, etc. For items such as dentures and hearing aids to be approved a medical professional will have to state, in writing that the patient will benefit medically (as opposed to cosmetically only). Other approved medical care items which might occur frequently are eye exams, eyeglasses, dental care, prostheses and appliances.

When in doubt as to whether the care is recognized under state law or is appropriate to be charged to the patient under this policy, consult the Medical Review Team Long Term Care Operation’s Administrator. The recipient and the provider must understand that these are not Medicaid payments but are an arrangement between recipient and provider, and that it is the responsibility of the recipient, or his representative to see that payments are made. If both parties are agreeable, payments may be spread out over a period of months.

20620.2.3 Prior Medical Costs

Medical costs incurred in a prior period of ineligibility (if approved by Medicaid) may be protected from his/her income. Costs incurred in a period of ineligibility must be approved by the Medicaid State Office prior to being protected and will only be considered if incurred within 30 days of the beginning date of Medicaid eligibility.

The recipient's reimbursement level and patient pay amount must be identified. Medicaid will protect at the Medicaid reimbursement rate, not the private pay rate.

The period of ineligibility may be caused by excess resources or excess income.

Protections for which the individual is seeking coverage will not be granted if the ineligible period occurred during a transfer of assets penalty phase.

20995.1 Post - Eligibility Deductions

Post-eligibility determination is revised to allow the following deductions from the income of the institutional spouse. The deductions must be taken in the following order.

a. Personal Needs Allowance for the institutional spouse

The personal needs allowance amount is $30 per month for SSI recipients, and $44 per month for all others. If the institutionalized spouse is employed, personal needs may range from $50 up to the Adult Foster Care rate per month. See Section 20620.1 Personal Needs.

b. Community Spouse Income Allowance

The community spouse monthly income allowance is the amount of income necessary to bring the spouse's monthly otherwise available income up to:

• the applicable percent of the FPL for two, plus

• an additional amount for excess shelter

The total amount available to the community spouse may not exceed "Cap for Minimum Monthly Maintenance Standard". This standard usually changes each January based on the Consumer Price Index for Urban Consumers.

c. Family Allowance.

d. Items for which protection of income has been approved by the Long Term Care Coordinator Operation’s Administrator and/or incurred medical expenses of the institutionalized spouse.

10 DE Reg. 52 (07/01/06) (Prop.)