7123 Other Budgeting Provisions

The following additional budgeting provisions apply to the medical assistance programs.

Income Averaging - For independent living applications involving a 6-month base period, if an average cannot initially be established, an estimate shall be used to compute countable income or determine the amount of spenddown. Once the average has been determined, the budget for the eligibility base period shall be recomputed using actual amounts received for the months prior to the month the average is implemented. The average shall then be budgeted for the remainder of the base. For independent living and long term care applications where a 1-month base period is used, an estimate shall also be used until an average has been determined, but the re-budgeting process is not applicable. process is not applicable. Income may be estimated when there is a change in circumstance. For re-computing eligibility based on a change in income, use the average in place prior to the month of change. In addition, project anticipated income beginning with the month of change. A new computation is required whenever income terminates and there continues to be a spenddown or patient liability in place. When re-computing income for an independent living base period, the average in place prior to the income termination shall be used. If there will be only one month of irregular earnings within the eligibility base period, the actual amount for that month will be considered if it is known in time to adjust the budget within the eligibility base period. For persons in long term care, the average in place prior to the income termination shall be used.

Reasonable Compatibility - This provision is only applicable to the Medically Needy (MDN), MediKan and Medicare Savings Programs (MSP – QMB, LMB and ELMB). It does not apply to long term care (LTC) or Working Healthy (WKH). General Provisions – Reasonable compatibility is the earned income and zero earned income verification standard used to determine if the information reported by the consumer is consistent with data received through the tiered verification provisions contained in 1322.4 . The amount of reported income which is considered reasonably compatible shall be budgeted for eligibility purposes. Sufficient information must be provided to complete the reasonable compatibility test. In situations where the consumer has reported an hourly wage but failed to report the number of hours worked per week, the self-attestation can be determined using an assumed 40 hours per week. When an hourly wage is provided along with a range of hours, the average of the range of hours is used. Applicable data sources are The Work Number and the wage records on KDOL (BASI). When The Work Number is used, the income from the most recent 30 days will be compared to the reported income. When KDOL (BASI) is used, the income from the most recent quarter of the two prior quarters is used to determine an average monthly amount and then compared to the reported income to determine if it can be accepted as verification. If the source information is reasonably compatible with the consumer statement, the reported information is considered verified. Additional information may not be requested from the consumer. Individual Test – The reasonable compatibility test is performed separately for each individual in the household with reported earnings and individuals who report they do not have earned income or fail to answer questions about earned income on their application. All earnings from all sources (including multiple jobs) for each individual are combined into one income amount when performing the test. To make the comparison, the income amounts from both the consumer and the source are converted to a monthly amount. There is reasonable compatibility when one of the following occurs: No earnings were reported and both data sources do return any earned income, The amount reported by the consumer is greater than the amount received from at least one data source for the applicable time frame, or The difference between the amount reported by the consumer and one data source is no greater than 20% of the self-attested amount. Fails Test – When reported zero earned income is not determined to be reasonably compatible, Tier 3 income sources (see 1322.4(1)(c) ) are used in the order presented: The Work Number (TALX) – When The Work Number/TALX returns wage information, staff will evaluate the check dates returned on the Reasonable Compatibility Detail page. If the latest check date is older than 30 days from the date the Reasonable Compatibility Test was completed, this is indicative that there has been a change in income. The lack of reported earnings is accepted and considered verified. If the latest TALX check date is within the last 30 days from the date the Reasonable Compatibility Test was completed, staff will obtain the TALX Monthly Income Amount from the Reasonable Compatibility Test Detail in KEES and use this for the determination. If the consumer later contests the use of this income, proof of the end of the income would be required and the eligibility will be redetermined if appropriate. If the consumer contests after the time frame identified in 1414.2 , send to KDHE Policy Team for direction. Case Record – When KDOL (BASI) wages are returned for the quarter prior to the current quarter, staff shall research the case file for income verification or information that may indicate the recent loss of employment. A manual search of the non-medical case file shall be completed if information is not found in the medical case file. If an explanation is found that substantiates the report of no earned income, then further research into the KDOL (BASI) wages are not required. The lack of reported earnings is accepted and considered verified. If not substantiated, proceed to Tier 4 (see 1322.4 (1)(d) ) and contact the consumer. If no earned income was reported, and no earnings are found in both TALX and KDOL (BASI), or earned income is found in KDOL (BASI) in the quarter prior to current, the reported zero income is considered verified. See also 1322 and subsections for information about interfaces checked to confirm the existence of SSA or Unemployment payments. If earnings are reported and have been verified as reasonably compatible, the reported amount shall be budgeted. When reported earnings are determined not to be reasonably compatible, Tier 3 sources are used in the order presented: The Work Number (TALX) – When Work Number/TALX data is not successful in establishing reasonable compatibility in Tier 2, the income details may be used to verify income reported. Staff will obtain the TALX Monthly Income Amount from the Reasonable Compatibility Test Detail in KEES and use this for the eligibility determination. If TALX data is not available, proceed to researching the case record. NOTE : TALX will usually provide a prospective amount for this purpose, but in some instances, it will use an actual amount (i.e., a sum vs. an average) depending on the information provided by the employer. Case Record – The medical and non-medical case file shall be searched for hard copy verification of the reported earned income. For earned income, this could be in the form of paystubs or a statement from an employer. When processing an application, the date of wage verification must be within the three months prior to the month of application. When processing a review or change, the wage verification must be from the three months prior to when the initial reasonable compatibility test was run through the final processing date. Collateral Contact – Collateral contact shall be made to verify the reported information, when deemed appropriate. If verification cannot be made via collateral contact, proceed to Tier 4 verification. Request Information – If the earnings cannot be verified using the above methods, Tier 4 verification is used as outlined in 1322 and subsections. A request for information is sent to the individual and “the last 30 days of income” is requested as proof. Reviews – As part of the review process (see 9310 ), KEES will run a Reasonable Compatibility (RC) batch which will be used to determine the medical review type (passive or pre-populated) for all individual recipients due for review. Due to this, when a pre-populated review is being processed, an RC test might not be required. If the consumer has not reported any changes in income, and the income passed the Reasonable Compatibility Test that was executed by the batch, it is not necessary to re-run the RC test. The passing RC test executed by the batch is used for the review determination. If the RC test executed by the batch did not pass, it should still be re-run by the worker at the time of processing, even if no income has been reported as there may be new data present in KDOL (BASI) or The Work Number (TALX) for the comparison. The RC test completed as part of the review batch is valid until the end of the third month following the month the test was executed. A new RC test is required for any review with an older RC test.

Budgeting Method - This provision is only applicable to the Medically Needy (MN), MediKan and Medicare Savings Programs (MSP – QMB, LMB and ELMB). If reported income is verified through either the Tier 3 or Tier 4 process described in 1322.4 , the amount of income budgeted on the medical assistance program will depend on the level of verification received. Full Month - If a full month (at least 30 days) of income verification is received, a prospective amount based on the verification received shall be determined and budgeted in place of the reported amount. For new applications, a full month of income verification exists when the agency has verification of 30 days of consecutive earnings received by the wage earner within the period beginning 30 days prior to the application date and ending on the date the application is processed. When processing a review or case change, the income verification provided must be from the three months prior to the month the Reasonable Compatibility test is initially run through the final processing date. Partial Month - If less than a full month (less than 30 days) of income verification is received, or it cannot be determined if the verification represents a full month, a prospective amount shall be determined based on the partial verification received. The greater of either the reported amount or the prospective amount based on the partial verification received shall be budgeted. When determining the prospective amount for new applications, the acceptable time frame for income verification must be dated within three months prior to the application month. When processing a review or case change, the income verification provided must be from the three months prior to the month the Reasonable Compatibility test is initially run through the final processing date. NOTE : Verification received from either a KDOL – BARI/BASI or DCF income record (cash or food assistance program) under the Tier 3 process shall always be considered a partial month for purposes of this provision.

Additional Budgeting Provisions - The following budgeting provisions apply where multiple programs are involved for the same individuals). Application - Where eligibility for multiple program types is being determined for the same individual at the time of application, if the use of reasonable compatibility is not required for all the programs, eligibility shall be determined for all programs without the reasonable compatibility. An example would be where a nursing home resident applies for long term care (LTC) and MSP coverage. The MSP application requires the use of reasonable compatibility. The LTC application does not. Eligibility for both LTC and MSP shall be determined by verifying actual income. Program Added - Where a program using reasonable compatibility is being added to a program not using reasonable compatibility or vice versa, eligibility shall be determined for all programs without using reasonable compatibility beginning with the first month of eligibility for the added program.

Transition to New Program - Where eligibility transitions from a program using reasonable compatibility to a program not using reasonable compatibility, eligibility shall be determined for the new program without using reasonable compatibility. Where eligibility transitions from a program not using reasonable compatibility to one that does, the current budgeting in place shall continue to be applied to the new program through the end of the existing review period.