SR 99-38 Dated 10/99

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SUMMARY

An institutionalized individual may voluntarily allocate to a community spouse all or a portion of his or her income that is subject to allocation. The amount allocated depends on the community spouse’s income and allowable expenses as noted in AAM Section 627.03, Allocation to a Community Spouse. Currently, the maximum monthly income allowance for the community spouse is $2,049, unless a higher amount is established through a court order or fair hearing.

This SR provides the criteria that the Fair Hearings Officer must use to determine if a higher income amount can be allocated based on exceptional circumstances resulting in significant financial duress. Revisions to AAM 627 have been made to reflect this new policy.

In addition, policy has been added to clarify the State’s "income first" approach to allocation of additional resources to the community spouse by a Fair Hearings Officer in the event that the original spousal resource allowance does not generate sufficient income to raise the community spouse’s income to the level of the maximum maintenance allowance. AAM 419 has been revised accordingly.

BACKGROUND

Exceptional Circumstances Resulting in Significant Financial Duress

Federal Medicaid regulations require States to allow community spouses and institutionalized individuals to request a fair hearing to document that the District Office’s determination of income to be allocated from the institutionalized individual is insufficient to meet the spouse’s needs and would result in significant financial duress for the community spouse. Federal law also allows states to establish specific criteria to define circumstances which result in significant financial duress for community spouses, and permits the Fair Hearings Officer to set a higher monthly income allowance when such criteria are met.

To date, New Hampshire had no specific criteria or definition of "circumstances which result in significant financial duress," leaving Fair Hearings Officers to make these judgements on an individualized, case-by-case basis. This SR releases these criteria, effective October 1, 1999.

Income First Policy for Increasing the Spousal Resource Allowance to Compensate for Insufficient Income

Federal law also allows a Fair Hearings Officer to increase the amount of resources allocated to a community spouse (the community spouse resource allowance) if the amount of income generated by those resources is insufficient to raise the community spouse’s income to the maximum maintenance income level, but leaves it to the States to establish the conditions under which this change to the resource allowance may occur.

New Hampshire has chosen the "income first" approach, under which a change in the community spouse resource allowance may only occur after the institutionalized spouse has allocated the maximum amount of his or her income available for allocation to the community spouse.

POLICY

Exceptional Circumstances Resulting in Significant Financial Duress

If either spouse verifies at a fair hearing that the community spouse needs a higher income allowance than determined pursuant to AAM 627.03, Allocation to a Community Spouse, the Fair Hearings Officer may allocate an additional sum from the institutionalized individual’s available income to provide for unmet needs when it can be documented that the community spouse is experiencing exceptional circumstances which have resulted or will result in significant financial duress.

The following is an all-inclusive list of exceptional circumstances resulting in significant financial duress:

 costs of medical, remedial, or other support services, including medical insurance, necessary for community spouses to maintain themselves in the community;

 cost of repairs which are necessary to maintain the home in a livable condition;

 cost of repairs to appliances within the home;

 cost of repairs or maintenance of one vehicle, including insurance and registration;

 costs associated with unforeseen circumstances such as fire or flood which result in loss of housing, clothing, household goods or other necessities; and

 costs for items or services which have been certified in writing by a physician as being medically necessary to maintain the community spouse in the community.

Acceptable documentation of the above costs is a currently dated bill or written estimate from the provider which indicates the amount of the expense.

When the Fair Hearings Office determines that significant financial duress exists as a result of one or more of the costs described, the community spouse’s income allowance must be adjusted by the District Office as follows:

 If the cost is a one time expense and the institutionalized individual has sufficient monthly income to allocate to the community spouse to cover the cost, the allowance is adjusted only in the month that the expense is approved.

 If the cost is a one time expense and the institutionalized individual has insufficient monthly income to allocate to the community spouse to cover the cost, the cost is prorated and the allowance adjusted for the specific number of months required to accommodate the expense.

 If the cost is an ongoing expense, the allowance is adjusted for the specific number of months for which the ongoing expense exists, if known, or until a change is reported.

NOTE: It is the responsibility of the institutionalized individual or authorized representative to report whenever there is a change in any of the factors involved in the computation of allocated income. Patient liability must be adjusted accordingly to reflect actual income, expenses, and deductions.

Income First Policy for Increasing the Spousal Resource Allowance to Compensate for Insufficient Income

The Fair Hearings Officer may increase the community spouse resource allowance by an amount sufficient to generate additional income to the community spouse, if both of the following conditions are met:

 the institutionalized spouse has allocated the maximum amount of income available for allocation, and

 the Fair Hearings Officer has determined that the community spouse resource allowance, in relation to the amount of income it generates, is inadequate to raise the community spouse’s income to the level of the maximum maintenance allowance (see AAM 627.03).

ADULT ASSISTANCE MANUAL REVISIONS

 Section 419.03, Determining the Protected Resource Amount, has been revised to add the "income first" policy.

 Section 627.03, Allocation to a Community Spouse, has been revised to add references to "significant financial duress" and to new Section 627.04.

 New Section 627.04, Criteria for Increased Income Allocation Due to Significant Financial Duress, has been added to the AAM.

 Section 627.11 was slightly rewritten to clarify that the need for and/or amount of income allocated to a spouse or dependent(s) must be verified when a request for allocation is made, at redeterminations, and whenever there is a change in any of the factors involved in the computation of allocated income. The italized text revises the last clause of the first sentence, which had ambiguously referred to "...a change in the amount."

IMPLEMENTATION

Beginning October 1, 1999, the Fair Hearings Office will apply the new criteria to fair hearings based on exceptional circumstances resulting in significant financial duress held on or after that date.

CLIENT NOTIFICATION

Clients and their community spouses will be notified on an as needed basis.

TRAINING

No training is planned or needed.

DISPOSITION

This SR may be destroyed or deleted after its contents have been noted, and if appropriate, its posting instructions have been carried out.

DISTRIBUTION

This SR will be distributed according to the electronic distribution list for Division of Family Assistance policy releases. This SR, and revised On-Line Manuals, will be available for agency staff in the On-Line Manual Library, and for public access on the Internet at http://www.dhhs.state.nh.us, effective October 4, 1999.

This SR, and printed pages with posting instructions, will be distributed under separate cover to all hard copy holders of the Adult Assistance Manual.

DFA/SJC/ry:s