SUBJECT:
REDUCTION IN THE MEDICAL ASSISTANCE (OAA/PTD) INCOME LIMIT
MANUAL REVISION #21: SECTIONS 0800.005.00 AND 0805.015.45
DISCUSSION:
Senate Bill 539 (2005) changed the Medical Assistance (MA) income limit in RSMo. Section 208.151.1(24) for eligibility determinations based on old age assistance (OAA) and permanent and total disability (PTD) criteria effective August 28, 2005. The statute now sets the non-spend down income limit at the Supplemental Security Income (SSI) payment maximum, unless a higher limit is authorized by annual appropriations. House Bill 11 (2005) appropriated funds to set the income limit at 85% of the Federal Poverty Level (FPL). This reduces the monthly income limit from $798.00 to $678.00 for individuals and from $1,070.00 to $909.00 for married couples. The new income limits are effective September 1, 2005.
There is no change to the MA income limit for eligibility determinations based on aid to the blind (AB) criteria. Also, the change has no effect on eligibility determinations based on institutional care (vendor) or receipt of home and community based (HCB) waiver services.
All MA (OAA/PTD) non-spend down and spend down recipients active on June 24, 2005, with income above 85% FPL, will be notified of the change by a system generated letter. County offices will receive a report of all cases notified of the change. For cases processed after June 24, 2005, follow the instructions in the section labeled “Action on Cases Processed After June 24, 2005”.
NOTICES TO NON-spend down CASES CHANGING TO spend down
On June 30, 2005, an Adverse Action Notice (samples attached) is being mailed to non-spend down recipients with net income above 85% of the FPL who were active on June 24, 2005. The Adverse Action Notice informs the recipients they will no longer be eligible on a non-spend down basis effective September 1, 2005, and of their spend down amount. The notice gives the recipient until July 11, 2005, to request a hearing and includes the date and time the hearing will be held. The hearings are scheduled for July 12 through August 3, 2005.
NOTICES TO CURRENT spend down RECIPIENTS
On June 24, 2005, an Adverse Action Notice (samples attached) will be mailed to recipients who were spend down as of June 14, 2005. For cases approved as or adjusted to spend down from June 15 through June 24, 2005, the Adverse Action Notice will be mailed on June 30, 2005. The Adverse Action Notice informs the recipients the non-spend down income limit is lowered to 85% of the FPL, effective September 1, 2005. Single individuals are informed their spend down is increasing by $120.00 per month and married couples are informed their spend down is increasing by $161.00 per month. Notices mailed June 24 give recipients until July 5, 2005 to request a hearing. The June 30th notices give recipients until July 11, 2005 to request a hearing. The notices include the date and time the hearing will be held, if requested. Hearings are scheduled for July 6 through July 27, 2005 for recipients notified on June 24. For those notified June 30, hearings are scheduled for July 12 through July 28, 2005.
MASS ADJUSTMENT
September 2005 spend down invoices (mailed August 2, 2005) for recipients with income above 100% FPL will be based on income information in the system on July 29, 2005. The surplus in the system will be increased by $120 for single individuals and by $161 for couple cases in order to notify the recipients of the correct spend down amount for September. The MPNI screen will show the amount of spend down based on a non-spend down income limit of 85% FPL.
On August 6, 2005, all MA (OAA/PTD) cases will be adjusted by reducing the expense amount in Field 33 of IMU5 to 85% of the FPL, which will increase the surplus amount in Field 35.
For cases changing from non-spend down, level of care (loc) “T” with sanction reason “T”, to spend down the sanction reason will be changed to “S” with a Medicaid begin date of September 1, 2005. On the MXIX and IXIX screens the non-spend down (loc/reason T/T) coverage segment will show an end date of August 31, 2005, the spend down (loc/reason T/S) segment will show a begin date of September 1, 2005. These cases will be sent a spend down invoice for September on August 9, 2005.
No turnaround IM-5’s are produced for this adjustment.
Beginning August 8, 2005 the system will require the new expense amount ($678 or $909) to be entered on all MA (OAA/PTD) cases with a loc/reason of T/T (non-spend down) or T/S (spend down). A separate memorandum will be issued on processing cases after August 6, 2005 for eligibility periods prior to September 1, 2005.
HEARING PROCEDURES
Clients have a right to appeal the reduction of the MA non-spend down income limit. The caseworker must screen hearing requests to determine if the change in state law is the sole reason for the request; however, the Hearing Unit will make the final decision on this issue. If a hearing is requested by the date on the Adverse Action Notice, staff must determine if the request is due to the change in state law or for another reason. For example, if the recipient agrees with the income, allowable deductions, and household composition used to determine their eligibility, this indicates they are only in disagreement with the change in state law. To determine if the request is solely due to the change in state law, the caseworker must explain and discuss the following with the recipient:
- Inform the recipient that the Medical Assistance non-spend down income limit has been lowered from $798.00 to $678.00 for a single person and from $1,070.00 to $909.00 for married couples.
- Explain how their specific budget was calculated to arrive at the spend down amount.
- Ask the recipient if they agree with the amount of income and insurance premiums used to determine their eligibility.
- If the recipient agrees with the budgeted amounts, ask if the only disagreement they have is with the reduction in the income limit.
If the recipient disagrees with the amount of gross income or insurance premiums used in the budget, the hearing is for something other than the change in state law.
If the reason for the hearing request is for a reason other than the change in state law, benefits must continue, pending the outcome of the hearing. Normal hearing procedures will apply to these requests. The caseworker will advise the claimant to disregard the hearing date shown on the advance notice because they will be notified by the Hearing Unit of a new hearing date. To prevent a case from being changed from non-spend down to spend down on August 6, 2005 staff must enter net income of less than 85% FPL in field 34 of IMU5. The correct net income amount must be entered once the hearing decision is received.
If the reason for the hearing request is solely due to the change in state law, no action needs to be entered in IMU5. Staff must clearly indicate on the Application for State Hearing (IM-87) form whether the reason for the hearing is the change in state law or something else. The IM-87 must be faxed and the original mailed to the Hearing Unit on the date the request is made to ensure that hearings on these cases are held as soon as possible.
ACTION ON CASES PROCESSED AFTER JUNE 24, 2005
Until the mass adjustment takes place, staff must continue to process MA (OAA/PTD) cases based on a non-spend down income limit of 100% of the FPL. However, for new approvals and budget adjustments completed after June 24, 2005, staff must determine if the net income exceeds 85% of the FPL.
For new approvals with income above 85% FPL, the worker must use the attached MA Transition Approval Notice to notify the client that they will either become spend down or have an increased spend down amount effective September 1, 2005. After the mass adjustment on August 6, 2005, continue to use this letter for any case approved for months prior to September 2005 with income above 85% FPL.
For budget adjustments on active non-spend down cases from June 27 through August 31, 2005 where the new income exceeds 85% FPL, send the attached Non-spend down to spend down Adverse Action Notice to inform the client of the change to spend down. This notice cites RSMo. 208.151, SB 539 (2005), and HB 11 (2005) as the legal basis. For budget adjustments after August 31, 2005 use the regular Adverse Action Notice (IM-80) to notify these type cases of the change to spend down, include state regulation 13 CSR 40-2.200 as the legal basis.
NECESSARY ACTION:
- Review this memorandum with appropriate staff.
- Review cases and adjust manually as needed.
- Beginning June 27, 2005, use the MA Transition Approval Notice as the approval letter for any MA (OAA/PTD) case with income above 85% FPL eligible for coverage prior to September 1, 2005.
DS
Attachments:
MA to spend down - Individual 
MA to spend down - Couple
spend down Increase - Individual
spend down Increase - Couple
Non-spend down to spend down Adverse Action Notice 