Issue Alert - Michigan Poverty Law Program

Issue Alert – Six month housing
allowance for short stay Medicaid-funded
nursing home residents (BEM 100)
Document Actions
March, 2011
Program Area:
Issue Summary:
Medicaid funded nursing home residents whose doctors certify
they are likely to remain in the nursing home six months or less
can apply for a “Special Director” Exception to permit them to
divert income to pay necessary expenses to maintain their home
rather than using their income for their patient pay obligation to
the nursing home. Directions for caseworkers regarding how
and when to adjust beneficiaries’ patient pay amounts after an
exception has been granted are now included in BEM 100, p. 9,
effective May 1, 2010 but this is not particularly useful or
relevant because caseworkers are not really involved in this
exception process. For the time being, both evaluating the
exception request itself and ensuring that the patient pay
amount is changed are handled by DCH staff in Lansing,
not the caseworker. Eventually, DHS caseworkers will take
over this responsibility.
Persons Affected:
Medicaid funded nursing home residents whose doctors certify
they are likely to return home within six months.
For More
Michigan Poverty Law Program, 3490 Belle Chase Way, Suite
50, Lansing, MI 48823. Phone: (517) 394-2985, x 231. Fax:
(517) 394-4276
Pursuant to 42 CFR 435.725(d), states may permit Medicaid funded nursing home
residents to use their income to maintain their homes for up to six months instead of
paying the majority of their incomes to their nursing homes as their patient cost of
care. During the last year, Michigan’s Medical Services Administration (MSA) has
begun implementing this federal option as a benefit available through a Special
Medicaid Director’s exception. MSA may eventually expand this option so that
individual caseworkers are permitted to adjust the beneficiary’s patient pay amount
without first obtaining approval from the Medicaid Director.
What's Happening?
MSA now has the capacity to change the patient pay amount in DHS’s Bridges
computer system when an exception request is approved. Originally, once MSA
approved an exception request, it would reduce the patient pay amount to zero.
More recently, MSA has reduced the patient pay amount only by the amount of
expenses the beneficiary submits. We understand that for administrative ease,
MSA plans to reduce the patient pay amount by a standard amount in the future
regardless of the actual housing costs the beneficiary submits.
We understand that most requests are being granted within a couple weeks and
that the process is going quite smoothly in most cases. MSA reports it gets more
requests each month. If requests do not have adequate paperwork or more
information is needed, MSA staff contact the person requesting the exception to
explain what is needed.
Denials are generally issued for the following reasons: the resident is an SSI
recipient (and therefore has no patient pay amount that could be adjusted), the
resident has left the nursing facility (although a request may occasionally be
approved even after the resident leaves the facility in compelling cases), or the
resident is not a Medicaid beneficiary. In addition, denials are issued if the
resident has already received a six month allowance during a previous stay or
stays or has been in the nursing home longer than 6 months. Otherwise, most
requests are approved.
*Update 8/8/11: Individuals should always apply for an exception while they
reside in the nursing home. If they apply after they leave the facility, the request
will be denied. If a patient pay amount has not been established by DHS before
the resident leaves the facility, the exception request will be denied but the
recipient will be informed that he or she can reapply for the exception once the
patient pay amount has been established.
If an individual applies for Medicaid while in the facility but returns home before
the Medicaid application has been approved, the Bridges system should not
establish a patient pay amount for the resident’s stay and no exception will be
required. Some DHS workers are hand calculating a patient pay amount in these
circumstances; this practice should be reported to the Medicaid Policy office at
DCH and the patient pay amount should be rescinded.
What Should Advocates Do?
.Advocates for Medicaid beneficiaries in nursing home who seek to maintain their
homes and whose doctors are willing to certify they are likely to go home within six
months should request an exception. Nursing home staff may also make requests on
behalf of residents. To do so they must provide:
1.Authorization to disclose protected health information,
DCH-1183 available at . Applicants MUST use this form;
no other release will be accepted even though this form is cumbersome and
2. Proof of housing expenses, such as rent or mortgage payments ,
utilities, real estate taxes, and telephone (to keep service on).. Expenses such as car
payments or auto insurance and internet fees are not countable as a Medicaid expense.
3. Physician statement verifying this individual is medically
likely to return home within six months. The physician’s name should be printed
legibly along with his or her qualification (M.D. or D.O.) and the physician statement
should include the resident’s date of admission to the facility.
The information should be submitted to:
Special Director Exception Request
Eligibility Policy Section
P.O. Box 30479
Lansing, MI 48909
Verifications may also be faxed to (517) 241-8969. Advocates should indicate on the
cover sheet the verifications pertain to a Special Director Exception Request.
Applications can also be to emailed directly to the staff person who handles these
requests: Anne Kennedy:
Issues to be addressed:
1. Some doctors are refusing to take the time to write the necessary letter for
2. Nursing homes have complained in the past that they do not receive
reimbursement promptly from the state to make up for the lost patient pay
3. Most residents and many advocates and professionals remain unaware of this
4. MSA has failed, despite repeated requests, to issue a simple instruction sheet
advising applicants how to submit these requests.
5. We have asked the Department to reconsider the policy of denying applications
because the resident has been in the nursing home more than six months, even
if he or she will be leaving the facility within the next 6 months since these
denials are not clearly required by federal law.
Finding Help
Long-term care ombudsman, Centers for Independent Living staff, Home and
Community Based Waiver Program staff, and staff of the Michigan Poverty Law
Program and Michigan Disability Rights Coalition have experience requesting these
exception requests. For assistance with a request that has already been submitted,
contact the Michigan Poverty Law Program or the Michigan Disability Rights
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