Commonwealth of Massachusetts
Executive Office of Health and Human Services
Division of Medical Assistance
600 Washington Street Boston, MA 02111 www.mass.gov/dma

MassHealth Eligibility Letter 107 September 1, 2003

TO:

Division Staff

FROM:     Douglas S. Brown, Acting Commissioner
RE:	Income First Deeming
The Division will implement a change in the way the fair-hearing officer determines how an increase in the minimum monthly maintenance needs allowance for the community spouse may be funded.
This change mandates that the institutionalized spouse’s income be deemed first and then additional marital assets may be deemed to meet any shortfall.
These regulations are effective September 1, 2003.
MANUAL UPKEEP

Insert
520.017 (1 of 2) 520.017 (2 of 2) 520.018 520.026 (1 of 5)

Remove
520.017 (1 of 2) 520.017 (2 of 2) 520.018 520.026 (1 of 5)

Trans. By
E.L. 97 E.L. 65 E.L. 63 E.L. 99

130 CMR: DIVISION OF MEDICAL ASSISTANCE
Trans. by E.L. 107
MASSHEALTH
FINANCIAL ELIGIBILITY	Chapter     520
Rev. 09/01/03	(1 of 2)    Page	520.017
(e) After the initial 90-day period or the extension is over, the Division will count all assets that remain in the institutionalized spouse's name in determining his or her eligibility.
 (4)	Retroactive Eligibility. In determining the eligibility of the institutionalized spouse for the three-month retroactive period before application in a continuous period of institutionalization, the Division deducts the amount defined in 130 CMR 520.016(B)(2) from the couple's total countable assets.
 (5)	Eligibility of the Community Spouse. The amount defined in 130 CMR 520.016(B)(2) must be counted in determining the community spouse's eligibility for MassHealth.
520.017:  Right to Appeal the Asset Allowance or Minimum-Monthly-Maintenance-Needs Allowance
 (A)	Request for an Adjustment to the Community Spouse's Asset Allowance. After the institutionalized spouse has applied for MassHealth Standard and has received a notice of approval or denial for MassHealth Standard, either spouse may appeal to the Board of Hearings to request an adjustment to the asset allowance. The purpose of the adjustment is to generate sufficient income, as determined by the Division, for the community spouse to remain in the community.
 (B)	Minimum-Monthly-Maintenance-Needs Allowance. The minimum-monthly-maintenance-needs allowance is the amount needed by the community spouse to remain in the community. This amount is based on a calculation that includes the community spouse's shelter and utility costs in addition to certain federal standards, in accordance with 130 CMR 520.026(B)(1).
 (C)	Adjustment of the Amount of Asset Allowance. If either spouse claims at a fair hearing that the amount of income generated by the community spouse's asset allowance as determined by the Division is inadequate to raise the community spouse's income to the minimum-monthly-maintenance-needs allowance, the fair-hearing officer will determine the gross income available to the community spouse as follows.

 (1)	The fair-hearing officer will determine the gross amount of income available to the community spouse. The fair-hearing officer will include the amount of the income that would be generated by the spouse’s asset allowance if the asset allowance were invested in an account and generating income equal to the highest rate quoted in the Bank Rate Monitor Index as of the hearing date.
 (2)	If the community spouse’s gross income under 130 CMR 520.017(C)(1) is less than the minimum-monthly-maintenance-needs allowance (MMMNA), then the fair-hearing officer will allow an amount of income from the institutionalized spouse (after the personal-needs deduction described in 130 CMR 520.026(A)) that would increase the community spouse’s total income to equal, but not to exceed, the MMMNA. 130 CMR 520.017(C)(2) will apply to all hearings held on or after September 1, 2003, regardless of the date of application.

130 CMR: DIVISION OF MEDICAL ASSISTANCE
Trans. by E.L. 107
MASSHEALTH
FINANCIAL ELIGIBILITY	Chapter     520
Rev. 09/01/03	(2 of 2)    Page	520.017
(3) If after the fair-hearing officer has increased the community spouse’s gross income under 130 CMR 520.017(C)(1) and (2), the community spouse’s gross income is still less than the MMMNA, then the fair-hearing officer will increase the community spouse’s asset allowance by the amount of additional assets that, if invested at the highest rate quoted in the Bank Rate Monitor Index as of the hearing date, would generate sufficient income to raise the income total to the MMMNA.
(D) Adjustment to the Minimum-Monthly-Maintenance-Needs Allowance Due to Exceptional Circumstances. After the institutionalized spouse has received notice of either approval or denial for MassHealth Standard, either spouse may appeal to the Board of Hearings the calculation of income available to the community spouse and request an increase in the MMMNA, based on exceptional circumstances, as defined in 130 CMR 520.017(D)(1).
(1)	Exceptional Circumstances. Exceptional circumstances exist when there are
circumstances other than those already taken into account in establishing the maintenance
standards for the community spouse under 130 CMR 520.026(B) and these circumstances
result in significant financial duress. Since the federal standards used in calculating the
MMMNA cover such necessities as food, shelter, clothing, and utilities, exceptional
circumstances are limited to those necessities that arise from the medical condition, frailty, or
similar special needs of the community spouse. Such necessities include, but are not limited
to, special remedial and support services and extraordinary uncovered medical expenses.
Such expenses generally do not include car payments, even if the car is used for
transportation to medical appointments, or home-maintenance expenses such as security
systems and lawn care.
 (a)	In determining an increased MMMNA, the fair-hearing officer will ensure that no expense (for example, for food or utilities) is counted more than once in the calculation.
 (b)	If the community spouse lives in an assisted-living facility or similar facility and requests an increase in his or her minimum-monthly-maintenance-needs allowance, the fair-hearing officer will review the housing agreement, service plan, fee schedule, and other pertinent documents to determine whether exceptional circumstances exist. Additional amounts will be allowed only for specific expenses necessitated by exceptional circumstances of the community spouse and not for maintaining any pre-set standard of living.
(2)	Determination of Increase for Exceptional Circumstances. If the fair-hearing officer
determines that exceptional circumstances exist, the fair-hearing officer may increase the
community spouse’s MMMNA to meet the expenses caused by the exceptional
circumstances as follows.
(a) The fair-hearing officer will first verify that the calculation of the gross income of the community spouse in determining the existing spousal-maintenance-needs deduction includes the income generated by the community spouse’s asset allowance. If the community spouse has no assets remaining from the allowance, he or she must verify the dollar amount of the remaining assets, if any, and how the money was spent. The fair-hearing officer will consider how the assets were spent in determining whether or not significant financial duress exists.
(b) The fair-hearing officer will determine the revised MMMNA by including in the calculation the amount needed to meet the exceptional circumstances.

130 CMR: DIVISION OF MEDICAL ASSISTANCE
Trans. by E.L. 107
MASSHEALTH
FINANCIAL ELIGIBILITY	Chapter     520
Rev. 09/01/03	Page	520.018
(c) The fair-hearing officer will compare the revised MMMNA to the community spouse’s total income. If the community spouse’s total income is less than the amount of the revised MMMNA, the fair-hearing officer will first deduct the personal-needs allowance from the institutionalized spouse’s countable-income amount and then a spousal-maintenance-needs deduction needed to reach the revised MMMNA.
520.018: Transfer of Resources Regardless of Date of Transfer
 (A)	The provisions of 42 U.S.C. 1396p apply to all transfers of resources. In the event that any portion of 130 CMR 520.018 and 520.019 conflicts with federal law, the federal law supersedes.
 (B)	The Division will deny payment for nursing-facility services to an otherwise eligible nursing-facility resident as defined in 130 CMR 515.001 who transfers or whose spouse transfers countable resources for less than fair-market value during or after the period of time referred to as the look-back period.
 (C)	The denial of payment for nursing-facility services does not affect the individual’s eligibility for other MassHealth benefits.
520.019: Transfer of Resources Occurring on or after August 11, 1993
 (A)	Payment of Nursing-Facility Services. The Division will apply the provisions of 130 CMR 520.018 and 520.019 to nursing-facility residents as defined at 130 CMR 515.001 requesting MassHealth payment for nursing-facility services provided in a nursing facility or in any institution for a level of care equivalent to that received in a nursing facility or for home- and community-based services provided in accordance with 130 CMR 519.007(B).
 (B)	Look-Back Period. Transfers of resources are subject to a look-back period, beginning on the first date the individual is both a nursing-facility resident and has applied for or is receiving MassHealth Standard. This period generally extends back in time for 36 months. The look-back period for transfers of resources from a revocable trust to someone other than the nursing-facility resident, or transfers of resources into an irrevocable trust where future payment to the nursing-facility resident is prevented, is 60 months.
 (C)	Disqualifying Transfer of Resources. The Division considers any transfer during the appropriate look-back period by the nursing-facility resident or spouse of a resource, or interest in a resource, owned by or available to the nursing-facility resident or the spouse (including the home or former home of the nursing-facility resident or the spouse) for less than fair-market value a disqualifying transfer unless listed as permissible in 130 CMR 520.019(D), identified in 130 CMR 520.019(F), or exempted in 130 CMR 520.019(J). The Division may consider as a disqualifying transfer any action taken to avoid receiving a resource to which the nursing-facility resident or spouse is or would be entitled if such action had not been taken. Action taken to avoid receiving a resource may include, but is not limited to, waiving the right to receive a resource, not accepting a resource, agreeing to the diversion of a resource, or failure to take legal action to obtain a resource. In determining whether or not failure to take legal action to receive a resource is reasonably considered a transfer by the individual, the Division will consider the specific circumstances involved. A disqualifying transfer may include any action taken which would result in making a formerly available asset no longer available.

130 CMR: DIVISION OF MEDICAL ASSISTANCE
Trans. by E.L. 107
MASSHEALTH
FINANCIAL ELIGIBILITY	Chapter     520
Rev. 09/01/03	(1 of 5)    Page	520.026
(1)	The Division determines the MMMNA by adding the following amounts:
 (a)	$1,515 (the federal standard maintenance allowance); and
 (b)	an excess shelter allowance determined by calculating the difference between the standard shelter expense of $455 and the shelter expenses for the community spouse's principal residence, including:
(i) the actual expenses for rent, mortgage (including interest and principal), property taxes and insurance, and any required maintenance charge for a condominium or cooperative; and
(ii) the applicable standard deduction under the Food Stamp Program for utility expenses. If heat is included in the rent or condominium fee, this amount is $237. If heat is not included in the rent or condominium fee, this amount is $391.
 (2)	The maximum-monthly-maintenance-needs allowance is $2,267 per month, unless it has been increased as the result of a fair-hearing decision based on exceptional circumstances in accordance with 130 CMR 520.017(D).
 (3)	If the institutionalized individual is subject to a court order for the support of the community spouse, the court-ordered amount of support must be used as the spousal-maintenance needs deduction when it exceeds the spousal-maintenance-needs deduction calculated according to 130 CMR 520.026(B) or resulting from a fair hearing.
(C) Deductions for Family-Maintenance Needs.
(1) The Division allows a deduction from the income of a long-term-care resident to provide for the maintenance needs of the following family members if they live with the community spouse:
(a)	a minor child — a child under age 21 of either member of the couple;
(b)	a dependent child — a child over age 21 who is claimed as a dependent by either
spouse for income-tax purposes under the Internal Revenue Code;