in-20240724-IR-405230819FRA: Amends 405 IAC 2-1-1 to clarify definitions. Amends 405 IAC 2-1-2 to comply with federal code. Amends 405 IAC 2-3-1.1 to provide guidance on asset transfers. Amends 405 IAC 2-6-3 to maintain foster child Medicaid coverage. Adds 405 IAC 2-3-26 to implement rules for the treatment of resources being computed. Adds 405 IAC 2-3-27 to provide guidance on services agreements, personal needs contracts, or personal care agreements; 405 IAC 2-3-28 to clarify spousal impoverishment limits. Adds 405 IAC 2-3-29 to define "Miller Trust" and "Qualified Income Trust". Repeals 405 IAC 2-6-2. Effective 30 days after filing with the publisher.

Final Rule LSA Document #23-819 DIGEST Sec. 1. The following definitions in this section apply throughout this article: Sec. 2. (a) In addition to the requirements of 470 IAC 2.1-1-2, each applicant and member, or the an individual authorized to act in the individual's on their behalf, must be interviewed by the office at the time of the initial investigation and at each annual reinvestigation of eligibility. (b) The initial investigation interview required under subsection (a) may be conducted: (c) The annual reinvestigation interview required under subsection (a) may be conducted: (d) An application Applications for Medicaid shall be are filed on the form prescribed by the division. (e) The An applicant or a member may use an authorized representative to apply for Medicaid, to represent the applicant or member in all interviews, and to notify the division of any changes. The authorization must be in writing submitted under 42 CFR 435.907(a), except as provided in subsections (g) and (h). (f) Notwithstanding the availability of an authorized representative, the division may require personal contact with the an applicant or a member in order to obtain gather information necessary for the determination of determining eligibility. (g) The parents of an applicant or a member under less than eighteen (18) years of age may apply for Medicaid on behalf of the applicant or member without the written authorization specified in subsection (e). (h) The written authorization specified in subsection (e) shall is not be required if medical documentation signed by a licensed physician shows that the an applicant or a member is medically unable to provide such an authorization. This subsection shall does not apply if the applicant or member is deceased at the time the application is being made. (i) Unless there is a legally authorized agent, such as an authorized representative, employees of nursing facilities may not be interviewed on behalf of a resident in their facility unless certified medical documentation shows the applicant or member is medically incapable of being interviewed and there is no one else to act on the applicant or member's behalf. This subsection shall does not apply if the applicant or member is deceased. (j) If a member dies before an interview for Medicaid benefits and there is not a valid authorized representative on file with the family and social services administration, only a personal representative as defined under 45 CFR 164.502(g)(4) may complete the interview. (j) (k) For any an applicant or a member of long term care services, the an application of the individual for such assistance, including any recertification of eligibility for such assistance, shall must disclose a description of any interest the individual or community spouse has in an annuity, or similar financial instrument as may be specified by the Secretary of Health and Human Services, regardless of whether the annuity is irrevocable or is treated as an asset, as follows: (k) (l) The division will shall accept an application for Medicaid signed with an electronic signature. (l) (m) An applicant or a member who does not meet meeting the requirements of this section shall be is ineligible for Medicaid. (m) (n) The formal initial investigation interview required under subsection (a) is not required for individuals subject to the modified adjusted gross income methodology set forth under 42 CFR 435.603. Sec. 1.1. (a) The following definitions apply throughout this section: (b) A look back date is sixty (60) months before the first date as of which the an individual both: (c) If an applicant or a member of Medicaid, or the spouse of an applicant or a member, disposes of assets for less than fair market value on or after the look back date, the applicant or member is ineligible for Medicaid for services described in subsection (e) for a period of time known as the penalty period, The penalty period which is equal to the number of months specified in subsection (g), and shall begin begins on the later of the first day of the month in which assets have been transferred for less than fair market value, or the date on which the individual would be is eligible for services described in subsection (e), based on an approved application for such assistance without regard to any penalty periods, whichever is later, and which does not occur during any other period of ineligibility. (d) A transfer of assets includes any cash, liquid asset assets, or property that is transferred, sold, given away, or otherwise disposed of as follows: (e) During the penalty period, an institutionalized individual is ineligible for Medicaid for the following services: (f) If an individual is ineligible for Medicaid for services under this section, expenses for those services are not allowable medical expenses in calculating an individual's nursing home liability for any a month of Medicaid eligibility. (g) The number of months of ineligibility shall be is equal to the total, cumulative uncompensated value of all assets transferred by the an individual, or the an individual's spouse, on or after the look back date specified in subsection (b), divided by the average monthly cost to a private patient of nursing facility services in the geographic area, that includes including the county where the individual resides at the time of application. As used in this subsection, "geographic area" means the region identified in Section 2640.10.35.20 of the Family and Social Services Administration Program Policy Manual for Cash Assistance, Food Stamps, and Health Coverage. If, in calculating the period of ineligibility a fractional period of ineligibility is determined, the state shall not round down or otherwise disregard any fractional period of ineligibility. (h) This subsection applies to the transfer of a stream of income, including but not limited to, the transfer of the income generated by income-producing real property. The uncompensated value of income transferred is determined by calculating the greater of the: (i) When an individual accepts a rental payment that is less than the fair market rental value for income-producing property, the uncompensated value of the transfer is determined by: (j) This subsection applies to a transfer of assets that results resulting from failure to take action to receive assets to which one is entitled to receive by law. No penalty will be is imposed if any of the following circumstances applies: apply: (k) An applicant or a member shall not be ineligible remains eligible for Medicaid under this section if any of the following apply: (l) For transfers of income-producing real property not used in a trade or business on and after July 1, 2003, six thousand dollars ($6,000) of the equity value can may be transferred without penalty if the transferred property produces an annual income of at least three hundred sixty dollars ($360). If the equity value of the property is less than six thousand dollars ($6,000), the property can may be transferred without penalty if the property produces an annual income of at least six percent (6%) of the equity. This six thousand dollars dollar ($6,000) exemption is a single, one (1) time exemption that applies applying to the total value of all the income-producing real property transferred by the an applicant during the applicant's lifetime. If the property does not produce an annual income of at least six percent (6%) of the lesser of six thousand dollars ($6,000) or the equity value, the entire equity is the uncompensated value. (m) In the case of If a transfer by the spouse of an applicant or a member that results in a period of ineligibility for Medicaid, the office shall apportion apportions the period of ineligibility, or any portion part of that period, between the applicant or member and the applicant's or member's spouse, if the spouse otherwise becomes eligible for Medicaid, as specified in regulations promulgated adopted under 42 U.S.C. 1396p(c)(4) by the Secretary of Health and Human Services. Sec. 17. (a) As used in this section, "institutionalized spouse" and "community spouse" have the meanings set forth in 42 U.S.C.A. 1396r-5(h)(1). (b) (a) The income eligibility of an institutionalized applicant or member with a community spouse shall be is determined in accordance with under 405 IAC 2-1.1-5(g). (c) (b) If an applicant or a member is determined eligible for Medicaid under subsection (b) (a), posteligibility treatment of income to calculate the amount of income to be paid to the institution is determined as follows: (d) (c) The spousal allocation calculated in subsection (c)(2) (b)(2) is deducted from the institutionalized applicant's or member's income only to the extent that it is actually made available to, or for the benefit of, the community spouse. (e) (d) "Dependent family member", for the purpose of determining the allocation in subsection (c)(3) (b)(3), is a person listed, as follows, who resides residing with the community spouse: (e) A community or an institutionalized spouse may request a finding of exceptional circumstances resulting in significant financial duress, which are those that leave the community spouse unable to pay reasonable bills and expenses. The following requirements apply to a determination of significant financial duress: (f) A community or an institutionalized spouse dissatisfied with a determination made under 42 U.S.C. 1396r-5(e)(2) may request a hearing. (g) The request for a fair hearing must comply with the form and time requirements of 405 IAC 1.1-1-3(b) and 405 IAC 1.1-1-3(c). The standards in 405 IAC 1.1-1-3 apply to a fair hearing under subsection (f). (h) Resulting orders from a state court or administrative proceeding are enforced as follows: Sec. 26. (a) The rules for treatment of resources are computed under 42 U.S.C. 1396r-5(c). (b) For purposes of this section, the term "resources" does not include resources excluded under section: (c) For purposes of this section, resources are defined as cash, liquid assets, or any real or personal property an individual or an individual's spouse owns and is able to convert to cash. (d) When the computation of spousal share at the time of institutionalization is calculated under 42 U.S.C. 1396r-5(c)(1), retirement accounts either or both spouses have an ownership interest in are included in the total value of resources. After eligibility is determined, any account solely in the community spouse's name is no longer counted in the institutionalized member's budget, unless excepted under section 1.2 of this rule. Sec. 27. (a) For purposes of this section, "agreement" refers to a services agreement, personal needs contract, or personal care agreement. To be considered an allowable transfer of assets as described in 42 U.S.C. 1396p(c)(2), an agreement must adhere to the following requirements: (b) The rate of pay for care provided to an applicant or a member in an agreement must be commensurate with a reasonable wage, based on fair market value, frequency, and duration of the services. (c) A detailed log of the services provided to an applicant or a member in an agreement must be maintained and include the following: (d) An agreement must provide for services for the benefit of an applicant or a member and cannot be retroactively dated or applied before the date the contract was notarized. (e) Lump sum payments for future services are not valid and may result in a transfer of property penalty. (f) An individual care provider under an agreement cannot provide services to an applicant or a member for more than sixteen (16) hours a day. Duplicate services cannot be provided by multiple care providers to the same applicant or member. (g) Valid services do not include being on call or available to provide potential services to an applicant or a member. (h) Services provided under an agreement for an applicant or a member may include the following: (i) For ongoing Medicaid members, an agreement cannot duplicate services already provided or allowable under the Medicaid program. Sec. 28. Spousal impoverishment protections do not apply when both spouses are in an institution as defined by 405 IAC 2-1-1(6). Sec. 29. (a) For purposes of this section, the following definitions apply: (b) Individuals residing in nursing homes or receiving home and community based waiver services that have income over the SIL must create a trust and request approval for Medicaid. (c) A transfer of resource penalty does not apply to a trust if the trust is: (d) Under 42 U.S.C. 1396p(d)(4)(B)(ii), upon the death of a beneficiary, the state of Indiana receives the remaining funds in a trust up to the amount of Medicaid expenditures paid on the member's behalf. (e) Allowable distributions from a trust include the following: (f) A trust must be funded at least each month in the amount of the beneficiary's monthly income exceeding the SIL. (g) Funds in a trust must: Sec. 3. (a) Beginning January 1, 2014, an individual who: (b) The office shall not consider the income or resources of an individual described in subsection (a) when determining eligibility.