Medicaid: post-eligibility income deductions for pre-existing medical expenses

E. R. vs DMAHS and Department of Health and Senior Services

OAL docket no. HMARP 09910-09, Final Agency Decision dated April 12, 2010.

In this case, attorney Lauren S. Marinaro secured a  Post-Eligibility Medical Expense Income Deduction (PEME) for her client per 42 USC 1396a(r)(1)(A) to pay off the Medicaid recipient’s outstanding pre-eligibility assisted living health care expenses.The Division of Medical Assistance and Health Services (DMAHS) adopted the Initial Decision of the Administrative Law Judge (ALJ), which reversed the County Board’s decision to deny this Medicaid recipient a Post-Eligibility Medical Expense Income Deduction (PEME).

The basic rule in N.J.A.C. 10:71-5.7 and 42 USC 1396a(q) is that all of the Medicaid recipient’s income must be turned over to the facility as a cost share, except for authorized deductions. The PEME deduction is contained in the federal statute 42 USC 1396a(r)(1)(A), but is missing from the state’s regulations. It enables some of the income to be allocated to pay off leftover medical bills. For the months during which this deduction is made, Medicaid’s share of the nursing home cost would be greater. After the deduction ends, the cost-shares wiill be recalculated.  Of course, if the community spouse requires this income for their own support, great care should be used in deciding which strategy is most beneficial for the couple.

For legal advice on PEME deduction opportunities as well as  Medicaid planning, applications and fair hearing appeals, call us at 732-382-6070