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expense qualifies, regardless of whether retroactive coverage is requested or approved. (1) An expense incurred during the three (3) month retro-period must be unpaid as of the date the agency received the request, unless it was incurred in a month that Medicaid LTSS coverage was active. (2) An expense incurred while Medicaid LTSS is active may be paid or unpaid. 3. Limits – If all of the above conditions apply, the expense may still not be allowed in certain circumstances: a. Expense in penalty period. An expense cannot be deducted for an LTSS service incurred during a penalty period in due to an uncompensated transfer. However, non-LTSS expenses, such as primary, acute or subacute care services incurred during a period of ineligibility, may be an allowable expense if all other conditions are met. b. Used for other reductions. The expense must not have been treated as or paid: (1) To reduce excess resources – an expense paid by an applicant to meet resource eligibility limits cannot be deducted in the income calculation. (2) As an income exclusion or deduction – an expense previously used as a deduction in the income calculation cannot be used under this section. 4. Charges Not Allowed – Under current Federal Regulations, the following services are not allowable expense deductions when provided to a Medicaid applicant: a. Personal Items. Items such as shampoo, toothpaste or dental floss; b. Elective or Expanded Services. Optional or elective features to services and supports that are not medically necessary, such as a motorized wheelchair, prescription sunglasses, elective treatments or procedures for non-medical purposes; c. Provider travel. A charge for a provider to travel to an applicant’s residence when no medical service is provided. 5. Deduction Timeline – Allowable expenses are deducted in the LTSS income calculation for the month in which the expense is incurred.