Policy Tweaks Scare Medicaid Geeks

When it comes to Medicaid planning, truly the devil is in the details; and the “details” are found in the Michigan Department of Health and Human Services (MDHHS) policy manuals, most often the Bridges Eligibility Manual (the “BEM”). MDHHS has announced several language revisions to a variety of BEM items, all taking effect October 1.  Folks that have been in this game long enough know that such revisions often mean mischief and that, especially during this haunted season, odds are high that there will be more tricks than treats in this bag of goodies.

Waiver Rewrite (BEM 106)

The Medicaid Waiver program (aka “the MI Choice Program”) allows persons qualified for long term care Medicaid benefits to receive services in their homes. Waiver benefits have been around awhile now, but the way the eligibility rules apply to Waiver have remained uncertain.  As of October 1, the Waiver eligibility rules will be much better organized and laid out in much more detail in the new BEM 106.  That’s a treat.

Among the clarifications are the rules for how an initial asset assessment (the “IAA”) is triggered for Waiver applicants, and how a divestment penalty is triggered. These clarifications raise concerns.

The IAA is important because it provides the date which is used for a married person to calculate their protected spousal amount (aka “community spouse resource allowance”). For traditional Medicaid long term care programs, the IAA is triggered when someone enters the hospital or a long term care facility for at least 30 days.  Now, for Waiver applicants, the IAA can also be triggered when the Medicaid applicant has begun:

Receiving appropriate home and community based services specified under the approved state waiver; see Exhibit I in this item. They do not have to receive these services from a waiver agent listed below, but the services must be received from a person or entity certified (or licensed) by the state to provide the services. See below for verification of services received.

So, it seems that a person can now trigger their own Medicaid Waiver IAA date by hiring in-home caregivers (or perhaps it will have to be nurses) that are licensed by the State. That seems to give people, and perhaps planners, more control over the IAA trigger date and may be a treat.  We’ll see.  Cautious optimism here.

Of greater concern in the new BEM 106 is the language that relates to the trigger for the divestment penalty and the way that intersects with the language defining “approved for waiver.” What is says is that the divestment penalty begins “on the date which all criteria listed under the approved for waiver section in this item has been confirmed.”  The “Approved for Waiver” section provides the following:

Approved for the waiver means:

  • The agent conducted the assessment, and
  • There is an available wavier slot for the individual’s placement and
  • A person-centered plan of service has been developed and
  • The participant received, or expects to receive, supports coordination services from the agent with appropriate waiver services for at least 30 consecutive days.

The agent determines the waiver approval date and termination date. The agent is responsible for advising the appropriate local Michigan Department of Health and Human Services (MDHHS) office of these dates. The agent is responsible for advising the appropriate local MDHHS office the dates of enrollment and disenrollment information in CHAMPS.

This seems to leave all control in the hands of the Waiver Agent, and will also depend on slot availability. This will make divestment planning strategies for Waiver clients much less predictable.  Definitely room for mischief here. Call this a trick.

Assets (BEM 400)

As of October 1, the language in BEM 400 that allows real estate to be considered unavailable during periods in which the property is listed for sale has been tweaked in three respects.

First, the policy has been modified by the addition of the following sentence: “If after a length of time has passed without a sale, the sale price may need to be evaluated against the definition of fair market value.”

Second, it now says “The asset becomes countable when a reasonable offer is received.”

Third, the non-salable exemption will not be applied to the initial asset assessment (IAA).

While none of these changes seem particularly egregious, one always wonders why DHHS would go through the trouble to include them if there isn’t some hidden agenda. But then maybe I’ve become too cynical.

The October 1 changes to BEM 400 also include beefed up language to clarify that assets remains an available resources during periods in which the applicant is waiting for a conservator (or guardian) to be appointed. So even though you may have no power of attorney or other legal ability to spend down or otherwise qualify for Medicaid, the fact that the assets exist is all that matters.  The cost of the delay of obtaining court authority falls on the applicant.  That has always been the rule. So, again, one is curious about the need for these clarifications.

Divestment (BEM 405)

BEM 405 now includes an eerily vague and portentous provision that says: “purchasing an asset which decreases the group’s net worth and is not in the group’s financial interest” is a transfer of assets, and apparently also per se “divestment.” Definitely an invitation to mischief and definitely a trick.

Divestment policy will now define “putting assets or income into a Limited Liability Company (LLC)” as a transfer of assets which presumably means it can be analyzed as possible divestment. A trick.

BEM 405 policy has been clarified to address situations where past divestment activity is subsequently discovered and reported. The new language provides that the penalty period starts on the “first day after timely notice is given.”  Maybe not a treat, but I’m ok with this.

Conclusion

There are other tweaks to the aforementioned BEMs and tweaks to other BEMs not discussed above, but these seem to me the most curious. To read the entire bulletin with links to the policy, click here.  Happy Halloween.

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Divestment Rules for Medicaid Waiver Clarified – Maybe

A policy bulletin has been issued by the Michigan Department of Health and Human Services which provides additional direction on when and how a divestment penalty period runs for persons otherwise eligible of Medicaid Home and Community Based Waiver services (aka the ”MIChoice” program).

Click here to read the policy bulletin, which takes effect October 1, 2018.

The point of the policy seems to be that under federal law there was uncertainty about how to start a divestment penalty period running for persons in waiver programs, like MIChoice. The source of this clarification is a federal directive to state Medicaid directors that explains why there is perceived confusion about this issue.  In fact, I think the federal letter does a better job of explaining the issue than the State Policy Bulletin.  Click here to read that letter.

In any event, the powers that be have decided that the penalty period begins to run when the person applying for MIChoice services is deemed otherwise eligible for the program, which is a four part test:

  • determined that the applicant meets financial and non-financial requirements for Medicaid;
  • determined that the applicant meets the level of care criteria for the 1915(c) waivers;
  • determined that the applicant has an individual person-centered service plan in place; and
  • confirmed there is an available waiver slot for the applicant’s placement.

Well, BEM 405, page 14, already says:

The penalty period starts on the date which the individual is eligible for Medicaid and would otherwise be receiving institutional level care (LTC, MIChoice waiver, or home help or home health services), and is not already part of a penalty period.

As far as I can tell, this current Michigan policy seems to be in line with the new proposed policy. It certainly seems consistent with the federal directive, which simply says:

the penalty period start date for a 217 applicant is no later than the point at which a 217 applicant would otherwise be receiving HCBS waiver coverage based on an approved application for such care but for a penalty

If you want to worry about something, you might look to the State’s decision to include the requirement that there be an open slot to start the penalty running. That might prove challenging for planners in the future.

So, in the end, I’m not sure how things change with this new policy, or if they really do. Nonetheless BEM 405 will presumably be rewritten to conform with the bulletin and those who practice in this area may run into snags, or avoid snags, as a result.

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New Medicaid Policy on VA Income

Understanding the way Medicaid programs treat income-like benefits paid by the Veterans Administration have always been confusing (at least to me). Until now, Medicaid policy on the subject was sparse.  Good news, as of April 1, we have a lot more detail.  Bad news, I still don’t understand.

It’s important because people who can combine VA benefits (especially Aid and Attendance) with Medicaid Waiver or PACE benefits, have more options. And it comes up a lot.  But it’s dicey because if a client accesses VA benefits and by doing so receives income that puts them even one dollar over the income cap, they lose the ability to obtain benefits through either Waiver or PACE.

At least part of the confusion stems from the fact that the checks a Veteran (or their spouse) receives from the VA typically represent a composite of pensions and supplemental payments (or as Medicaid calls them “allowances”). The challenge is determining how much, if any, of a check they receive is going to be considered income when applying for Medicaid benefits. (Veterans who were injured in service receive “compensation.”  Compensation is clearly income, and is not the subject of this blog post.)

As of April 1, DHHS issued expanded language in BEM 503 (click here to read the bulletin). The BEM now says:

Bridges counts the gross amount of the pension or compensation as unearned income.

Exceptions:

  • Bridges excludes any portion of a payment resulting from an Aid and Attendance or Housebound allowance; see VA Aid and Attendance and Housebound Allowances in this item.
  • Bridges may exclude augmented benefits; see Augmented Benefits in this item.

Bridges excludes any portion of a payment resulting from unusual medical expenses; see VA Adjustment for Unusual Medical Expenses in this item.

So it clearly says they will exclude “any portion resulting from unusual medical expenses” and “any portion of the payment resulting from Aid and Attendance or Housebound Allowance.”  (emphasis added).

Then it says:

Payments are made to veterans, spouses of disabled veterans, and surviving spouses who are:

      •  Housebound.

      •  In regular need of the aid and attendance of another individual.The payment is included with the pension or compensation payment.Bridges excludes as income and as an asset the portion of a VA pension or compensation that is the aid and attendance or house-bound allowance.

Again “excluded,” but again, that annoying word “portion.”

And it says:

VA increases some pension and compensation payments due to unusual medical expenses.

Bridges excludes the increase due to unusual medical expenses as income and as an asset.

OK, so we have an “Aid and Attendance benefit” and a “housebound benefits.” Both excluded. Likewise, increases resulting from unusual medical expenses are excluded.  But we are told that these payments may only represent aportion of the payment that Veteran or his/her spouse receives, and that it is only this “portion” that is excluded.  So naively, I ask: What portion? How do we calculate it?  How do we prove what it is?

Well, policy says:

These allowances are not identifiable on a check stub or award letter. Accept the client’s statement that the payment does not include any of these additional allowances.

But I’m not asking about how to prove that the payment does not include an excluded “allowance.” I want to show that it does include an allowance, and I want it to be excluded.  Although the VA will, upon request, provide a written explanation of benefits, the process for obtaining that information is slow, unreliable, and often incomplete; especially with respect to unusual medical expenses.

There’s more – and you can read it yourself. I know I can be dense.  So I asked some of the smartest people I know (Thanks Amy and David), yet I remain uncertain.

I believe the changes were intended to make things better. After all, the State clearly understands that every Federal dollar they capture from the Veterans Administration is one less dollar they have to spend; and that forcing people who would otherwise be getting Waiver or PACE services into nursing homes because they went over the income cap doesn’t help anyone.

I don’t like posting information that doesn’t provide guidance – but thought: (1) some of you might not be aware of the changes, and (2) maybe it will make more sense to you. If so, please feel free to drop me a line.

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