Community First Choice

Revised date
Purpose statement

To explain the Community First Choice (CFC) program that provides long-term services and supports (LTSS). CFC is for people living outside of a medical institution, who are eligible for categorically needy (CN) or alternate benefit plan (ABP) scope of care through Medicaid, and who meet nursing facility level of care (NFLOC) or the criteria to reside in an Intermediate Care Facility for the Intellectually Disabled (ICF/ID). CFC starts 7/1/2015

Functional eligibility is based on a CARE assessment under Chapter 388-106 WAC and 388-828 WAC and can be authorized by Home and Community Services (HCS) or Developmental Disabilities Administration (DDA).

WAC 182-513-1210 Community First Choice (CFC) – Overview

WAC 182-513-1210  Community First Choice (CFC) – Overview

Emergency effective February 20, 2017

  1. ​Community first choice (CFC) is a Washington apple health state plan benefit authorized under Section 1915(k) of the Social Security Act.
  2. CFC enables the agency and its contracted entities to deliver person-centered home and community based long-term services and supports (LTSS) to medicaid-eligible people who meet the institutional level of care under WAC 388-106-0355. See:
    1. WAC 388-106-0270 through 388-106-0295 for services included within the CFC benefit package.
    2. WAC 182-513-1215 for financial eligibility for CFC services.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-513-1215 Community First Choice (CFC) – Eligibility

WAC 182-513-1215 Community First Choice (CFC) – Eligibility

Effective February 25, 2023

  1. A client who is determined functionally eligible for community first choice (CFC) services under WAC 388-106-0270 through 388-106-0295 is financially eligible to receive CFC services if the client is:
    1. Eligible for a noninstitutional Washington apple health (medicaid) program which provides categorically needy (CN) or alternative benefits plan (ABP) scope of care;
    2. Through September 30, 2027, a spousal impoverishment protections institutional (SIPI) spouse under WAC 182-513-1220; or
    3. Determined eligible for a home and community based (HCB) waiver program under chapter 182-515 WAC.
  2. A client whose only coverage is through one of the following programs is not eligible for CFC:
    1. Medically needy program under WAC 182-519-0100;
    2. Premium-based children's program under WAC 182-505-0215;
    3. Medicare savings programs under WAC 182-517-0300;
    4. Family planning program under WAC 182-505-0115;
    5. Family planning only under chapter 182-532 WAC
    6. Medical care services program under WAC 182-508-0005;
    7. Pregnant minor program under WAC 182-505-0117;
    8. Alien emergency medical program under WAC 182-507-0110 through 182-507-0120;
    9. State-funded long-term care (LTC) for noncitizens program under WAC 182-507-0125; or
    10. Kidney disease program under chapter 182-540 WAC.
  3. Transfer of asset penalties under WAC 182-513-1363 do not apply to CFC applicants, unless the client is applying for long-term services and supports (LTSS) that are available only through one of the HCB waivers under chapter 182-515 WAC.
  4. Home equity limits under WAC 182-513-1350 do apply.
  5. Post-eligibility treatment of income rules do not apply if the client is eligible under subsection (1)(a) or (b) of this section.
  6. Clients eligible under subsection (1) (a) or (b) of this section, who reside in an alternate living facility (ALF):
    1. Keep a personal needs allowance (PNA) under WAC 182-513-1105; and
    2. Pay up to the room and board standard under WAC 182-513-1105 except when CN eligibility is based on the rules under WAC 182-513-1205.
  7. A client who receives CFC services under the health care for workers with disabilities (HWD) program under chapter 182-511 WAC must pay the HWD premium in addition to room and board under WAC 182-513-1105, if residing in an ALF.
  8. Post-eligibility treatment of income rules do apply if a client is eligible under subsection (1)(c) of this section.
  9. A client may have to pay third-party resources as defined under WAC 182-513-1100 in addition to the room and board and participation.
  10. PNA, MNIL, and room and board standards are found at www.hca.wa.gov/free-or-low-cost-health-care/i-help-others-apply-and-access-apple-health/program-standard-income-and-resources.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-513-1220 Community First Choice (CFC) - Spousal impoverishment protections for noninstitutional Washington Apple Health clients

WAC 182-513-1220 Community First Choice (CFC) - Spousal impoverishment protections for noninstitutional Washington Apple Health clients.

Effective February 25, 2023

  1. This section is effective through September 30, 2027.
  2. The agency or its designee determines eligibility for community first choice (CFC) using spousal impoverishment protections under this section, when an applicant:
    1. Is married to, or marries, a person not in a medical institution;
    2. Meets institutional level of care and eligibility for CFC services under WAC 388-106-0270 through 388-106-0295;
    3. Is ineligible for a noninstitutional categorically needy (CN) SSI-related program:
      1. Due to spousal deeming rules under WAC 182-512-0920, or due to exceeding the resource limit in WAC 182-512-0010, or both; or
      2. In an ALF due to combined spousal resources exceeding the resource limit in WAC 182-512-0010; and
    4. Meets the aged, blindness, or disability criteria under WAC 182-512-0050.
  3. The agency or its designee determines countable income using the SSI-related income rules under chapter 182-512 WAC but uses only the applicant's or recipient's separate income and not the income of the applicant's or recipient's spouse.
  4. The agency or its designee determines countable resources using the SSI-related resource rules under chapter 182-512 WAC, except pension funds owned by the spousal impoverishment protections community (SIPC) spouse are not excluded as described under WAC 182-512-0550:
    1. For the applicant or recipient, the resource standard is $2000.
    2. Before determining countable resources used to establish eligibility for the applicant, the agency allocates the state spousal resource standard to the SIPC spouse.
    3. The resources of the SIPC spouse are unavailable to the spousal impoverishment protections institutionalized (SIPI) spouse the month after eligibility for CFC services is established.
  5. The SIPI spouse has until the end of the month of the first regularly scheduled eligibility review to transfer countable resources in excess of $2000 to the SIPC spouse.
  6. A redetermination of the couple's resources under subsection (4) of this section is required if:
    1. The SIPI spouse has a break in CFC services of at least 30 consecutive days;
    2. The SIPI spouse's countable resources exceed the standard under subsection (4)(a) of this section; or
    3. The SIPI spouse does not transfer the amount under subsection (5) of this section to the SIPC spouse by the end of the month of the first regularly scheduled eligibility review.
  7. If the applicant lives at home and the applicant's separate countable income is at or below the SSI categorically needy income level (CNIL) and the applicant is resource eligible, the applicant is a SIPI spouse and is financially eligible for noninstitutional CN coverage and CFC services.
  8. If the applicant lives in an ALF, has separate countable income at or below the standard under WAC 182-513-1205(2), and is resource eligible, the applicant is a SIPI spouse and is financially eligible for noninstitutional CN coverage and CFC services.
  9. Once a person no longer receives CFC services for 30 consecutive days, the agency redetermines eligibility without using spousal impoverishment protection, under WAC 182-504-0125.
  10. If the applicant's separate countable income is above the standards under subsections (7) and (8) of this section, the applicant is not eligible for CFC services under this section.
  11. The spousal impoverishment protections under this section expire on September 30, 2027.
  12. Standards are found at www.hca.wa.gov/free-or-low-cost-health-care/i-help-others-apply-and-access-apple-health/program-standard-income-and-resources.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

The department authorizes CFC for a person who meets both:

  1. Institutional level of care based on the assessment by HCS or DDA case manager or HCS social worker; and
  2. Financial eligibility for a CN or ABP Medicaid program, including receiving CN through a HCB waiver. A person may receive both CFC and HCB waiver services at the same time.

Which community settings are used for CFC?

CFC can be authorized in a:

  1. Person's home; or
  2. HCS or DDA contracted alternate living facilities (ALF) contracted for CFC services.

What is the resource limit for CFC?

The resource limit is based on the CN or ABP program rules that the client is receiving:

  1. For people eligible under the MAGI-based programs through the Health Benefit Exchange there is no resource limit;
  2. For people eligible under Apple Health for Workers with Disabilities (HWD) there is no resource limit;
  3. For people eligible under SSI-related programs;
    1. The single person resource limit is $2,000
    2. The married couple resource limit is $3,000
    3. The married couple resource limit using spousal impoverishment is $2,000 for the recipient and $54,726 for the community spouse beginning July 1, 2015. See resource standards.

The resource standard is found on the Standards - LTC and LTSS page.

Do transfer penalties apply to CFC?

Transfer penalties do not apply to people who only receive CFC. Transfer penalties do apply to home and community based (HCB) waivers described in 182-515 WAC. If a person needs CFC in combination with HCB waiver services, transfer penalty rules described in WAC 182-513-1363 apply.

Does the home equity limit apply to CFC?

The home equity limit described in WAC 182-513-1350 applies to CFC because it is considered "Long-Term care" under the Social Security Act

How does the eligibility process work?

If the client is not eligible for MAGI we need to consider eligibility for a classic Medicaid program under one of the groups listed below.

Group Income Resources Notes
  CFC Eligibility Only (L52*)  
Group A 2-person CNIL (married plus deemed income)

$3,000 (married living together)

$2,000 (all other)

Regular S02 rules
Group B 1-person CNIL State CSRA With community Spouse (CS)
Group C SIL and state rate plus $38.84 $2,000 Not income eligible in Group A, lives in a contracted ALF
Group D SIL and state rate plus $38.84 state CSRA With CS, not resource eligible in Group C
    HCB Waiver plus CFC or HCB Waiver Eligibility (L22/L32* / L42*)  
Group 1 Otherwise eligible using Group A $2,000 (single) state CSRA with (CS) HCS & DDA
Group 2 Not Group A, but < SIL $2,000 (single) state CSRA (with CS) HCS & DDA
Group 3 Not Group 2, but < Effective MNIL $2,000 (single) state CSRA (with CS) HCS Only (no hospice only)
Coverage group Description
L51 CFC SSI
L52 CFC SSI-Related

If a client is disabled and under 65 with earnings and not eligible under group A or group B, check to see if HWD is a better option than group C or D or under HCB waiver rules. A person can receive CFC under the HWD program.

Do clients pay participation on CFC services?

Clients living at home and only receiving CFC will have no participation.

If a CFC eligible person lives in an ALF:

  1. And is eligible under Group A or Group B, this person keeps their personal needs allowance (PNA) and pays up to the Room and Board standard.
  2. And is eligible under Group C or Group D, the person keeps their PNA, pays Room and Board, and pays the remainder of their income to their provider. This total amount is called "total client responsibility"

Clients receiving CFC and waiver pay participation for both CFC and waiver services depending on setting and which administration approves the services (DDA/HCS).

Which programs are not eligible for CFC?

Title XXI Children's Health Insurance Program (CHIP) because it is not a Title XIX Apple Health program.

State-funded children

Alien emergency medical (AEM)

Medical care services (MCS)

Program of all-inclusive care for the elderly (PACE)

New freedom

Roads to community living (RCL)

Medically needy (MN)

Does spousal impoverishment apply to CFC?

If otherwise eligible under group A, group C or Health Care for Workers with Disabilities (HWD), there is no need for spousal impoverishment protections. However, if not eligible under group A or group C due to spousal deeming or resources; or if not eligible under HWD due to spousal income, we can use spousal impoverishment protections.

If an SSI-related married person is found functionally eligible for CFC, and their spouse isn’t in a medical institution, the CFC eligible person can use the financial benefits of spousal impoverishment protections in eligibility. Spousal impoverishment applies to SSI-related noninstitutional Medicaid when there is a SIPC spouse. Even using spousal impoverishment, the client applying for CFC must meet the following:

  1. Countable income in the name of the CFC eligible person must be at or below the standard for group B, group D, or HWD; and
  2. Combined resources must be at or below the state resource standard, plus $2,000 (Resources do not apply to HWD).

When we apply spousal impoverishment to CFC does it work the same as spousal impoverishment for HCB waiver?

Yes. When a client is on CFC only and is married, spousal impoverishment rules, described in WAC 182-513-1220 (for CFC), apply just like WACs 182-513-1350, 182-515-1509, and 182-515-1514 (for waiver). However, since a CFC only person doesn’t participate, post eligibility protections do not apply.

Even though spousal impoverishment rules apply to the G03 program, there is no post eligibility spousal or dependent allocation, because there is no "participation" under the G03 program. Clients must still pay room and board and their remaining income towards total client responsibility.

Spousal impoverishment doesn't apply to modified adjusted gross income (MAGI) clients.

Can a client receive both CFC and waiver services? What about hospice?

Yes. Clients can receive CFC, waiver and hospice at the same time. Waiver will be the priority program, CFC and hospice will be services. The programs will all be identified on the INST screen in ACES mainframe or Institutional Care in ACES 3G.

Are full benefit dual eligible (FBDE) recipients who receive CFC-only exempt from Medicare Part D copayments in the same way as HCB waiver recipients?

No. Under the Low Income Subsidy (LIS) Program, dual eligible clients who receive CFC-only will not be LIS 3 (like HCB waiver and institutional clients), and are subject to Medicare Part D copayments.

If a client has high Medicare Part D costs, financial staff should coordinate with social services to move the client to a HCB waiver if possible.

What if someone on CFC needs a service only available under a waiver?

If a client is on CFC only, and needs a waiver service, financial staff will receive a communication from either the HCS social worker 14-443 or DDA case manager 15-345 informing of the change. The client will remain on the waiver until their next annual assessment or significant change.

Worker Responsibilities

For CFC only, if the client is active on SSI-related CN medical a program change is needed. The social worker/case manager will notify the financial worker of the start date and type of service via the 14-443 or 15-345. The financial worker will indicate CFC. This information is coded on the institutional care tab in ACES 3G or INST screen in ACES mainframe. This AU will be managed by DDA or HCS financial worker.

For clients not on Medicaid who are under age 65 and not on Medicare, a MAGI determination through the Healthplanfinder needs to be made first.

For clients who need classic Medicaid, determine eligibility under groups A, B, C, or D. Follow eligibility requirements for Medicaid.

If the client is not eligible under groups A, B, C, or D, determine eligibility under HCS Home and Community based (HCB) waivers . The financial worker will need to notify the social worker or case manager using the barcode 07-104, indicating that HCB waiver rules are needed for CN eligibility. If DDA is unable to authorize services under a waiver, send a 07-104 to HCS intake for an HCS waiver assessment.

National Immigration Law Center guide

Revised date

The National Immigration Law Center (NILC) publishes the "Guide to Immigrant Eligibility". This Guide contains descriptions and pictures of key citizenship and immigration documents and information on how to decipher the coding on these documents.

The NILC Guide is maintained by the National Immigration Law Center and may not contain a complete list of immigrant statuses and documents. If you encounter an individual with a status or document that is not on these lists, or an individual claims legal status but has no supporting documentation, please contact HCA Area Representative.

Hospice changes or death reported

Revised date

For active CN or ABP medicaid programs, hospice at home is a covered service, so a program change is not required.

  • The hospice election should be updated on the institutional care screen for aged, blind, or disabled (ABD) medicaid programs; under home and Community Based Services, code hospice with the hospice service start date and Health Care Authority (MA) as approval source. The correct ProviderOne ID number should be used; this will send approval, change, and termination letters to the hospice provider.

For a client that is active on S95 or S99 (including spend-down in M status), an ACES program change may be needed if the client is requesting hospice coverage if elected in a facility for more than 30 days.

  • Add an L32 program to the existing active medical assistance unit.
  • Determine eligibility for the L32 hospice program following instructions under the hospice applications section.
  • If the client is found financially eligible for L32, the certification end date should match the certification end date of the original medical assistance unit.
  • If the client is found financially eligible, the Approval for Hospice Services award letter (00002-18) should generate and is also sent to the hospice provider based on the institutional care screen.

See the special circumstances section for instruction on active MN Medicaid client entering a nursing facility.

Hospice short stay

A client may elect hospice for less than 30 days

The hospice election should be updated using the short stay screen instead of the institutional screen when stays are 29 days or less.

See short stays for additional information.

Reporting hospice revocation

Hospice revocation is reported on the Hospice Notification form 13-746 by the hospice provider. 

  • The hospice revocation should be updated in the month of revocation and ongoing months, if applicable.
  • If the client’s L32 Medicaid terminates due to no services, the client should be reconsidered for other Medicaid programs for the remainder of their certification period.
  • If the hospice services were received in a nursing facility or medical institution and the client will remain in the institution after revocation, the client’s eligibility should be reviewed due to the dissimilar financial eligibility factors for institutional Medicaid programs (for example, transfers would potentially apply without a hospice election). This would also apply to clients discharging home on home and community based waiver services.

Reporting date of death for a hospice client 

Date of death is reported on the Hospice Notification form 13-746 by the hospice provider.

  • If the client was a recipient of CN A/B/D medical or was receiving MN coverage because their spenddown had already been met, the FSS does not need to do a program change. Hospice services at home are covered.

 If the hospice services were received in a nursing facility, medical institution, or hospice care center, a short stay award letter can be provided if needed for billing. 

  • If the client is deceased and a pending application is on file, follow the  application  instructions on the Hospice Applications manual page for either the L32 hospice program or noninstitutional Medicaid CNP.  An eligibility determination is still required and the hospice agencies must still be notified timely of the approval or denial. 
  • If the client is deceased and there is no application prior to the date of death, a representative may apply on the client’s behalf.

Confidentiality data sharing

Revised date
Purpose statement

To describe how the Health Care Authority or DSHS receives information from other sources regarding an applicant’s or recipient’s eligibility for Apple Health.

Quality assurance and post eligibility reviews

Revised date
Purpose statement

The Health Care Authority or its designee conducts routine case reviews to determine the accuracy of an individual's Apple Health coverage. Individuals are required to provide all information requested during a quality assurance review. There are three types of quality assurance reviews.

  1. Quality assurance reviews conducted by the Division of Program Integrity (DPI): These reviews are conducted according to Federal guidance for the purposes of Medicaid Eligibility Quality Control (MEQC).
  2. Payment Error Rate Measurement (PERM) reviews are conducted every third year by the Center for Medicare & Medicaid Services (CMS).
  3. Post eligibility reviews are conducted on Apple Health approvals for MAGI-based coverage. These reviews target approvals where electronic verification suggests the applicant was not eligible or electronic verification was not present. Refer to the approved Washington State Verification Plan.

Hospice applications - clients not eligible for a noninstitutional CN program

Revised date
Purpose statement

HCB Waiver rules can be used to provide hospice services for clients in the community who are not otherwise eligible for any other CN, MN, or ABP program. The HCB Waiver rules may be more beneficial spenddown rules. When these rules are used, there is post eligibility treatment of income, also known as participation toward the cost of care. 

If a client is in a nursing facility or hospice care center:

  • For the aged/blind/disabled group, use the hospice institutional rules if in the institution 30 days or more.
  • For a MAGI coverage group, the client remains on the MAGI program.

Hospice - applications - client is not otherwise eligible for a noninstitutional CN program.

In ACES, screen in a L32 medical coverage group. If the hospice election date is within 90 days of the application date and the hospice election notice was received timely (within 5 business days of election), consider retro coverage under the L32 program back to the election date as long as the client is income and resource eligible in each of the prior months and is related to the L32 program.

  1. How the client is related to an L32 program?
    1. Refer to WAC 182-515-1505 Financial Eligibility Requirements for long- term care services under COPES when L32/hospice rules are used to determine eligibility and the client is not residing in a medical institution. For those residing in a medical institution, follow the rules in WAC 182-513-1315.
    2. A client must be aged, blind or disabled to be eligible for this program. Follow office procedures to request a Non-Grant Medical Assistance (NGMA) determination from DDDS if no disability has been established.
  2. Household Composition
    1. The ineligible spouse is coded as a spouse on the household composition screen using the SP code. Update the spouse's income and resources on their own screens. The shelter costs are coded on the spouse's shelter screen.
    2. If there are dependents, they should be coded in the household as NM if the client has dependents in household. The dependents are counted on long term care expenses screen with the number of dependents, their income, and whether they are residing with the community spouse.
  3. Resources
    1. Resource standards for the L22/Hospice program follow institutional SSI related rules. The application should list all assets owned by the client including their primary residence; the client may be subject to estate recovery. Applications should not be denied when resource limits exceed $2000 for a single client or $3000 for a married client.
    2. A client may reduce their excess resources in the month of application by any unpaid medical expenses for which they are liable. This can include health insurance, Medicare premiums, deduction and coinsurance charges and any necessary medical care recognized under state law, but not covered under the state's Medicaid plan. The amount of excess resources is limited to the amounts indicated in WAC 182-513-1350.

Refer to WAC 182-513-1350 for more information on resource eligibility for institutional programs.

Example: A married couple one applying for hospice. Their combined available resources total $35,000. In this example, the community spouse* is allowed the Spousal Resource Transfer Maximum under institutional Medicaid rules.
*A community spouse is a person who does not receive institutional, waiver or hospice services and who is legally married to an institutionalized client.

The L95 and L99 MN program for hospice is only used in medical institutions such as a nursing facility or a hospice care center. There is no MN hospice program under the L95 and L99 outside of a medical institution.

See LTC income and resource standards chart

Follow Equal Access - Necessary Supplemental Accommodation (NSA) and long-term service and supports procedures. 

Statement of Hmong or Highland Lao Tribal membership

Revised date

Statement of Hmong or Highland Lao Tribal Membership

I declare, under penalty of perjury, that I was a Hmong or Highland Laotian tribe member when the tribe assisted the U.S. military during the Vietnam era (8/5/64 to 5/7/75).

Signature

Date

400 Series reason codes

Revised date
Purpose statement

400 Series Reason Code Protocols

Go to the Reason Code Link chart to link directly to a specific reason code or scroll through the list below.

For ACES Procedures go to ACES Letters in the ACES User Manual.

Reason Code Reason Code Description WAC References - Classic Medicaid Free Form Text - Classic Medicaid WAC References - MAGI-Based Medicaid Free Form Text - MAGI-Based Medicaid
401 Over Resources
You have too many resources to get assistance right now. See WAC rule (Washington Administrative Code):
388-513-1350
388-470-0005
388-400-0070
Your resources cannot be more than $ __ (specify resource limit for household size). See the attachment for more information on how we figured out your resources.    
410
  • You don't qualify for Long Term Care (LTC) services because the equity in your home is over the $500,000 limit.
  • You may receive LTC services if we approve an undue hardship waiver. We approve hardship waivers when you can show that without LTC services:
    • You will be deprived of housing, food, clothing or medical care.
    • Your life or health will be endangered.
  • Your request must:
    • Tell us in writing the reason you need an undue hardship waiver.
    • Be signed and returned within 30 days of the date of denial or termination of LTC services.
    • Include the name, address and telephone number of the person writing the request.
    • You may authorize your representative, guardian, or facility where you live to file an undue hardship waiver request for you.
182-513-1350
182-513-1367
Explain the equity value we are counting and how we arrived at that number.    
416 You have a penalty period because you gave something away or sold it for less than fair market value. You can only get benefits now if you prove you cannot pay for your housing, food, clothing, or health needs. 388-488-0005
388-400-0070
Explain the equity value we are counting and how we arrived at that number    
417 You transferred, gave away, or sold resources for less than fair market value. This is called uncompensated value. 182-513-1363
182-513-1364
182-513-1365
None required    
460 Payment standards are changing. You do not have administrative hearing rights based on a change in payment standards. 388-478-0020
388-418-0020
None required    

Treatment of entrance fees for people residing in continuing care or life care communities

Revised date
Purpose statement

Treatment of entrance fees in a continuing care retirement community or life care community is considered a resource available to the client in certain conditions.

WAC 182-513-1396 People living in a fraternal, religious, or benevolent nursing facility.

WAC 182-513-1396 People living in a fraternal, religious, or benevolent nursing facility.

Effective February 20, 2017

  1. The agency or its designee determines apple health coverage under noninstitutional rules for a person who meets all other eligibility requirements and lives in a licensed, but nonmedicaid-contracted facility operated by a fraternal, religious, or benevolent organization.
  2. Nothing in subsection (1) of this section prevents the agency or its designee from evaluating contracts with facilities not described in subsection (1) of this section.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

WAC 182-513-1397 Treatment of entrance fees for people residing in a continuing care retirement community or a life care community.

WAC 182-513-1397 Treatment of entrance fees for people residing in a continuing care retirement community or a life care community.

Effective February 17, 2017

  1. A person's entrance fee in a continuing care retirement community or life care community is an available resource to the person, to the extent that:
    1. The person has the ability to use the entrance fee, or the contract provides that the entrance fee may be used, to pay for care should other resources or income of the person be insufficient to pay for care;
    2. The person is eligible for a refund of any remaining entrance fee when the person dies or when the person terminates the continuing care retirement community or life care community contract and leaves the community; and
    3. The entrance fee does not confer an ownership interest in the continuing care retirement community or life care community.
  2. Nothing in subsection (1) of this section prevents the agency or its designee from evaluating contracts with facilities not described in subsection (1) of this section.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying information

Residents of continuing care retirement or life care communities, fraternal, religious, or benevolent nursing facilities often sign life care contracts with the facility. These contracts offer institutional and/or medical care in exchange for the surrender of the client's income and resources. See WAC 182-513-1397 regarding the treatment of the entrance fee for individuals that reside in a continuing care retirement or life care community. An entrance fee is considered an available resource based on the criteria in this WAC.

Worker responsibilities

  1. If the client signed a contract for life care, consider the following to determine if adequate consideration was received when assets were transferred to the facility:
    1. The amount of the client's assets surrendered under the contract
    2. The client's cost of care up to the date of application for LTC services
  2. Follow the required equal access procedures described in WAC 182-503-0120 when appropriate.

Allowable medical expenses

Revised date
Purpose statement

This section gives a listing of allowable medical or remedial services and expenses that are allowed to reduce participation or used in MN spenddown. This is not a complete list, but an aid to use when to determine whether a claimed medical expense is allowed to reduce participation or used to meet spenddown.

Medical expenses specific to long-term care

WAC 182-513-1350 (6) (b) gives the criteria for allowable medical expenses used to reduce excess resources. DDA Waivers, HCS CN Waivers, Hospice and participation rules point to this WAC as to allowable out-of-pocket medical expenses.

  • Premiums, deductibles, and coinsurance/copayment charges for health insurance and Medicare premiums
  • Necessary medical care recognized under state law, but not covered under the state's Medicaid plan;
  • Necessary medical care covered under the state's Medicaid plan incurred prior to Medicaid eligibility.
  • Expenses for nursing facility care are reduced at the state rate for the facility that the client owes the expense to
  • As long as the incurred medical expenses:
    • Were not incurred more than three months before the month of the Medicaid application;
    • Are not subject to third-party payment or reimbursement
    • Have not been used to satisfy a previous spend down liability
    • Have not previously been used to reduce excess resources
    • Have not been used to reduce client responsibility toward cost of care
    • Were not incurred during a transfer of asset penalty described in WAC 182-513-1363.
    • Are amounts for which the client remains liable.
  • Expenses not allowed to reduce excess resources or participation in personal care are:
    • Unpaid expense(s) prior to HCBS Waiver eligibility to an adult family home (AFH) or boarding home is not a medical expense.
    • Personal care cost in excess of approved hours determined by the CARE assessment described in 106 WAC is not a medical expense

Covered Items Under Medicare, Medicaid or a Medicare/Medicaid Managed Care Plan is not an allowable Deduction From Participation

Medical services covered by Medicare, Medicaid or covered under a Washington Apple Health (WAH) - managed care plan is not an allowable deduction from Long-term care participation because it is considered "covered". WAH-managed care is formally known as Healthy Options (HO) If the client's medical practitioner indicates an item or service is medically necessary and the item or service is denied, the client must file an appeal with Medicare, Medicaid or the WAH managed care plan. The reduction of participation is the last resort after all other resources are pursued. Most medically necessary items should be covered by either Medicare, Medicaid fee-for-service or WAH managed care under the scope of care. This includes transportation cost, over the counter items, cough and cold products, vitamins, topical and durable medical equipment and supplies, incontinent supplies, foot care, hearing aids, that are covered by Medicare, Medicaid or WAH managed care. See: Long-term care and WAH managed care See: Long-term care insurance and third party resources.

What if a client chooses a non-Medicare/Medicaid contracted provider?

If a client chooses to go to a non-Medicaid contracted provider or outside the Washington Apple Health (WAH) managed care network, the charge is the client's responsibility as the service is covered under their Medicare, Medicaid or WAH managed care plan. Health Care Authority (HCA) has an agreement to pay for health care services that is signed by the provider and client. HCA 13-879 The exception is when a client has "creditable" insurance coverage through their retirement, pension, employer sponsored plan or COBRA continuation plan. These client's may have copayments. These copayments are an allowable deduction only if Medicaid does not pay the copayments due the provider not having a Medicaid contract. Individuals with creditable insurance coverage are not limited to Medicaid contracted providers. An exception to rule (ETR) may be requested through the HCS Regional Designee for HCS cases or Marcie Birdsall for DDA cases if a client goes out of network due to special circumstances.

Health Care Authority links - What is covered under Medicaid?

What if the item is covered, but there is no contracted provider in the area?

There are situations where a needed contracted Medicaid provider is not available within a reasonable distance. The most common situation is when a client is unable to find a Medicaid contracted dentist within a reasonable distance.

An exception to rule (ETR) may be requested. The reasoning must be documented. A medical expense is not allowed at the private rate if the care/expense is available under the Medicaid rate.

ETR requests for a medical deduction that is listed as a covered item under Medicare, Medicaid or HO must go through the HCS Regional Financial Program Manager for HCS offices. For DDA cases, an ETR request to reduce participation for a covered item must go through HCS HQ Marcie Birdsall.

Example: An exception to rule (ETR) can be considered for any medically necessary expense to reduce participation if an item is needed right away and the client has requested an appeal through Health Care Authority, Medicare or the WAH managed care plan. ETRs are forwarded to the HCS Regional designee (Financial Program Manager). DDA LTC Specialty unit ETR requests are forwarded to Marcie Birdsall.

Incontinence supplies

A common expense turned in as a participation deduction is incontinence supplies.

Incontinence supplies are covered under Medicare/Medicaid. If the client is in need of more supplies than normally allowed, a medically necessary justification may be requested by Medicare or Health Care Authority in order to authorize more supplies.

Do not allow incontinence supplies as a participation deduction.

Medication organizers/bubble packing

Bubble-packing prescription drugs is not an allowable expense from participation.

Facilities such as adult family homes, assisted living and nursing facilities have specific regulations that ensure the proper labeling and organizing of a client's medication.

If a facility chooses to send the medications to a vendor to be bubble-packed, it is not an allowable deduction from participation.

What does Medicare cover?

Individuals on Medicare and Medicaid are called Full Benefit Dual Eligible (FBDE). Individuals on institutional Medicaid and HCB waivers do not have copayments toward Medicare services.

Individuals on institutional and HCBS waiver services on Medicare D for prescription drugs may have a premium cost that is an allowable medical deduction if the client has chosen a non-benchmark Medicare D PDP.

Drugs that are allowed under ANY PDP formulary under Medicare D, but not allowed in the specific PDP the client has chosen is not an allowable deduction from participation. Guidance from CMS has indicated if the drug is in any formulary it is a covered item.

Individuals on "credible coverage" for prescriptions are not enrolled in Medicare D. Prescription copayments due to credible coverage insurance is an allowable medical deduction from participation.

Medicare has a web tool to check for covered items under the Medicare program.

CMS notice to providers regarding QMB and Medicaid eligible clients. Providers are not allowed to charge QMB clients copayments.

If you have an institutional or HCB Waiver client being charged a Medicare D copayment, refer them back to the provider and indicate if the provider doesn't refund the copayment, the client will need to call the 1-800-MEDICARE helpline.

LTC and Medicare C and D charges

Medicare Programs describes Medicare programs, buy-in, Medicare buy-in unit contact information, what is Medicare and the different Medicare programs. This includes information on Medicare A, B, C and D and referral numbers for help on Medicare related issues.

Medicaid Covered Drugs for Part D Dual Eligible

CMS guidance on expenses related to Medicare D for spenddown

Medicare and Long-Term Care link has detailed information on Medicare and long-term care including participation issues.

Medicare and spenddown

Medicare premiums and LTC overview

Once a LTC client is eligible for Medicaid, the Medicare premiums are paid.

Allow a Medicare premium deduction that is considered out-of-pocket to the client. Don't allow a Medicare premium that will be covered under a Medicare Savings Program (MSP) or a state buy-in program.

S05/SLMB eligibility is effective up to 3 months prior to the date of application if eligible.

S03/QMB eligibility is effective the first of the following month the client is determined eligible. Allow the Medicare A/B premium as a participation reduction in the month(s) prior to the S03 opening.

Medicare D/Low income subsidy is for all active MSP or Medicaid clients. It is effective immediately. Client's can choose a nonbenchmark plan which may have additional premium costs that is allowed as a participation deduction. Institutional and HCB Waiver clients have no Medicare D copayments.

For individuals not eligible for a Medicare Savings Program (MSP), it takes approximately two months before the department begins paying state buy-in. Allow the Medicare A/B premium as a participation reduction. This should only occur when there is a retro or historical opening prior to MSP eligibility.

For questions related to insurance or Medicare premium payments, contact HCA Coordination of Benefits section at 1-800-562-3022 EXT: 1-6129 or email.

If using the contact us email, use the client button. Indicate your contact information and question. Indicate you are a financial worker and your office. Include the ACES client ID.

HCA no longer pays Medicare C premiums with the exception of a small existing caseload subject to funding (these cases were grandfathered for Medicare C payment).

Spenddown

For more information on Medical Spenddown such as base periods, medical transportation, public programs and ACES screens see Spenddown

The spenddown clarifying information gives guidance as to allowable medical expenses:

What about expenses paid with a credit card

What about expenses sent to a collection agency.

What are the differences between expenses allowed to reduce participation and those used in MN spenddown?

The medical expense chart used for MN spenddown is the same basic guideline used to reduce participation for LTC programs.

There are situations that are unique to long term care programs.

  • Expenses incurred during a LTC transfer penalty are not allowed to reduce participation.
  • For LTC, a medical expense prior to eligibility must be unpaid. For spenddown, expenses incurred and paid 3 months prior to the application can be used.
  • Private personal care cost in excess of approved hours determined by the CARE assessment described in 106 WAC is not a medical expense.
  • Unpaid expenses prior to HCBS Waiver eligibility to an adult family home (AFH) or boarding home is not a medical expense. This applies to both participation and MN spenddown. These facilities are not medical facilities. Another term for AFH and boarding homes is alternate living facility (ALF).
  • Expenses of the community spouse or family members. This includes health insurance premiums. If the health insurance premium is for the couple, we allow one half of the expense for the LTC recipient if we are unable to determine the amount of the LTC recipient's share.
  • Health insurance premiums paid by a 3rd party including HCA COB unit are not used to reduce participation. Health insurance premiums paid on a client's behalf by COB are considered an income deduction for the MN Spenddown program.
  • Medical expense deduction from participation that is a covered item under the state plan is not allowed as a deduction if the client was on Medicaid during the date of service.
  • Medical expense deduction for copayments or deductibles from participation that is a covered item under Medicare is not allowed as a deduction if the client was on Medicaid and QMB during the date of service.
  • Medical expense deduction from participation that is a covered item under the Managed Care plan (formerly Healthy Options) is not allowed as a deduction if a client chooses the service outside of the Healthy Options network.
  • Liquid supplements (such as Ensure, Resource) are covered by HCA Medicaid when medically necessary. Liquid supplements (enteral nutritional products) not approved by HCA are not considered a medical expense used to reduce participation even if the client has a medical prescription.
  • Effective 11/22/2012 reasonable limits on allowable medical expense deductions described in WAC 182-513-1350 was final.
    • Expenses for nursing facility care are reduced at the state rate for nursing facility care that is owed by the client prior to Medicaid eligibility. It is based on the state rate for the particular facility the bill was incurred.
    • Medical expenses incurred more than three months before the month of application is not an allocable medical deduction to reduce participation.

Note: If an expense was used to meet a prior spenddown or to reduce excess resources for LTC programs, it cannot be used to reduce participation. This is the same rule as the spenddown program. An expense is allowed once.

Expenses of a medically necessary service animal

A description of service animals is described in WAC 388-473-0040 food for service animals as an ongoing additional requirements. Although this section describes when to authorize food for services animals of an SSI or TANF recipient, it can also be used as a guideline when determining if expenses related to a service animal can be used as a medical expense.

In order for expenses related to a service animal to be used as a medical expense:

Consult CARE and the client's social service specialist/case manager as to whether the service animal is medically necessary. If the social service specialist is unable to determine if the service animal is medically necessary get a statement by the client's physician/practitioner as to why the expense is medically necessary.

The service animal must be performing a task that is necessary for the health and safety of the individual.

For LTC recipients with service animals that are on SSI, consider food for service animals as an ongoing additional requirement. If authorized, do not allow the food as a medical expense to reduce participation.

Medical expenses and room and board

Noncovered necessary medical expenses is an allowable deduction to determine the client's participation. For HCBS Waiver clients residing in alternate living facilities, it is not an allowable deduction from room and board without an exception to rule (ETR).

Submit an ETR request to the HCS regional designee for a medical expenses that would have been used to reduce participation if there had been available participation.

Room and board for ABD cash recipients is not reduced by medical expenses. Do not refer ABD cash cases for an ETR.

Reducing room and board is the last resort as it is state funded. If the expense can be deducted through participation, but takes a few months because of low participation, use that method rather than an ETR to reduce room and board.

Medicare supplements, called Medigap are not an allowable ETR from room and board if the client is eligible for a Medicare Savings Program (MSP), this is because MSP covers the same thing as a Medigap plan. For more information see What about Medicare Insurance Supplements, also called Medigap plans. (scroll down to this section).

See: HCS Waivers, Room and Board, ETRs and Bed holds.

DDA Waiver has a process to reduce room and board for necessary medical expenses and guardianship fees. DDA has authorized the case manager as the designee to approve these costs from room and board. DDA case-managers notify the financial worker via the DSHS 15-345.

Any deduction from room and board must be coded as an ETR in ACES 3G in the decision tree under the Institutional Care/Expenses.

TPL, COB, Premium Assistance program

Medical Assistance-Third party liability

Long-term care and Third Party Resources, LTC Insurance

When to allow medical expenses

Changes including medical expenses must be reported within the timeframes outlined in WAC 182-504-0110. WAC 182-504-0105

Effective 10/2013 WAC 182-504-0105 Washington Apple Health - Changes that must be reported will be used for all medical including institutional medical programs.

If a medical expense is not reported within required time frames, we are not able to use the expense as a post eligibility deduction for institutional Medicaid. For HCBS Waiver, we may allow a medical expense if unpaid as long it meets the criteria in WAC 182-513-1350 (6) and (7).

If a medical expense increases and is not reported within time frames, we can't go back historically and change the amount. If a medical expense ends, (such as a health insurance premium), and it is not reported timely, it is an overpayment.

In order to allow a medically necessary noncovered item, we will need verification:

  • Of the cost
  • Item is prescribed by an allowable practitioner and is considered a medically necessary item
  • Item is not covered by Medicare, Medicaid or WAH managed care. Most medically necessary items should be covered for individuals receiving long-term care. Any item indicated on the covered list, including over the counter items such as cough/cold medications or vitamins cannot be allowed as a participation deduction.
  • For durable medical equipment (DME) or environmental modifications, check with the social worker/case manager as to whether it should be covered under the HCBS Waiver? Most DME is covered under the Medicaid scope of care or HCBS Waiver. HCBS MB H13-030 dated June 24, 2013 has more information regarding DME vendors.

If the reported expense appears to be covered, send a letter explaining why the expense is not allowed using the text templates that include the rule.

Send the medical expense fact sheet to all new openings and clients that turn in expenses that are not allowed as a participation reduction.

Noncovered allowable medical expenses. Differences in how we apply the medical deduction in institutional medical and HCBS Waiver

Once it is determined the medically necessary expense is allowed as a deduction, there is differences in institutional and HCBS Waiver cases on when we allow the medical deduction.

Post eligibility participation (WAC 182-513-1380, WAC 182-515-1509, WAC 182-515-1514)

There are 3 methods of allowing expenses in post eligibility described in WAC 182-504-0120 (11) for institutional programs and WAC 182-504-0120 (12) for HCB Waivers.

Federal guidance allows method 1 or 2 for institutional cases. (Those residing in medical institutions).

Federal option allows method 3 for HCBS Waivers.

Method 1: Allow the expense in the month it was incurred; or

Method 2: Estimate medical expense incurred in the preceding period, not to exceed 6 months if the expenses are expected to continue. (Method 2)

   a. At the end of the prospective period, or if there is a significant change of 25%, the expense is reconciled for the next time period.

   b. A reconciliation is required, at least every 6 months when using method 2. Use barcode ticklers to track the expenses and reconciliation period.

   c. Use the Method 2 training instructions and calculator and document that method 2 is being used to estimate medical expenses.

Method 3: When there is a change in income, or allowable expenses, changes the amount of the cost of your care for a home and community-based waiver or service, we calculate the new participation amount effective the first of the month following the date the change was reported, except that the new participation amount will be effective the month the change occurs if the change is the loss of an income source that you report within thirty days of the change.

For additional information on Method 1, Method 2 and Method 3 go to the financial SharePoint site, financial training under the policy and program changes. HCB Waiver-Method 3

What if a provider appears to be charging a client extra?

If a Medicaid or Medicare/Medicaid client is turning in medical expense charges that appear to be covered or the client is being charged the difference between the Medicaid or Medicare rate, you may need to refer the situation for an investigation.

  • Nursing facility, Assistance Living, Group Homes or Adult Family homes contact: Residential Care Services (RCS) complaint email box Complaint Resolution Unit (DSHS/RCS)
  • All other Medicaid providers contact the Health Care Authority. Include your name, phone number, client and provider information and what the issue is.
  • Refer complaints regarding Medicare claims to 1-800-Medicare
  • If provider fraud is suspected, follow the procedures in HCS MB H13-011 issued 3/5/2013: procedures for report suspected fraud.

Practitioners

Allowable practitioners
  • ARNP advanced registered nurse practitioners
  • CRN certified registered nurses
  • DC chiropractors
  • DDS dentists, denturist, orthodontist, periodontitis
  • Dental hygienists
  • DO osteopath
  • DPM podiatrists
  • Electrotherapist
  • Hydro therapist
  • Inhalation/respiratory therapists
  • MD physicians
  • Midwives
  • OD optometrist
  • Opticians
  • PA physicians assistants
  • Pharmacists
  • Physical Therapists
  • Psychologists/psychiatrists
  • Speech therapists
  • X-ray technicians
Allowable practitioners with a documented referral from an M.D., D.O., D.D.S., OR A.R.N.P.
  • Acupuncturist
  • Dietitians
  • Licensed massage therapist
  • Naturopaths
Nonallowable practitioners
  • Herbalists
  • Holistic healers
  • Homeopaths
  • Hypnotists
  • Masseurs or manipulators
  • Medical cannabis distributor
  • Practitioners not licensed under Washington State law
  • Psychic or faith healers
  • Sanipractors
  • Veterinarians (unless the expense is for a medically necessary service animal)
Nonallowable expenses, services, and supplies
  • Services obtained out of the US
  • Interest and fees incurred on an unpaid medical bill
  • Durable medical equipment or modification approved under the HCBS Waiver program for individuals receiving Waiver services is not an allowable participation deduction
  • Insurance premiums for policies that pay a cash benefit to the insured and the benefit is not intended to reimburse a provider.

    These premiums are not health insurance but pay directly to the insurance holder under certain conditions. (usually a daily rate when the client is unable to work, in the hospital or has a certain type of medical condition).

    Contact the carrier to find out if it is a health insurance or one of these policies that pay a cash benefit to the client and not a provider because of a health condition.

    This does not include LTC insurance. LTC insurance premiums are an allowable deduction.

    LTC insurance policies waive the premiums when the client starts receiving benefits from the LTC insurance. Once the client is accessing LTC insurance, remove the premium as a deduction.

  • In home cooking/cleaning services/yard work/property maintenance
  • Telephone charges including long-distance charges
  • Commercial diet clinics, gyms and pools that are not monitored by a licensed physical therapist
  • Toiletries such as toothpaste, shampoo, personal grooming products
  • Private alternate living facility (ALF) charges are not considered a medical expense.
    • See WAC 182-513-1205 for possible eligibility of Medicaid using rules for individuals living in state contracted ALFs.
  • Drugs not approved by the Federal Drug Administration (FDA)
  • Out of state billings for medical services not recognized under Washington State law.
  • Items covered under Medicare, Medicaid or a Healthy Options plan is not an allowable deduction from long-term care participation. If a client chooses to go to a non-Medicaid/Medicare contracted provider or outside the healthy options managed care network, the cost is their responsibility.
  • Food/special diets is not a medical expense
  • Nutritional supplements unless prescribed as medically necessary. Examples are enteral liquid and powdered supplements.
  • For active Medicaid clients, liquid supplements that are medically necessary are covered by Health Care Authority (HCA). Liquid supplements (enteral supplements) not approved by HCA are not considered a medically necessary expense to be used to reduce participation.
  • Food items are covered under the basic food program, consider eligibility for basic food for individuals not in a facility claiming food items as a medical expense.
    AFH, Assisted living facilities, NF and RHCs are required to provide meals taking into account an individuals special dietary needs. Meals are included in the daily rate.
  • Over the counter drugs and medications not prescribed or considered not medically necessary. Many over the counter drugs, medications and vitamins are covered by Medicaid.
  • Health camps, trips or retreats
  • Medical cannabis. Cannabis is not an approved prescription drug under the Federal Food, Drug and Cosmetic Act and has not been approved by the FDA for treatment.
  • Unpaid participation incurred while active on a Medicaid program
  • Dietetics
  • Spouse's unpaid medical expenses are not allowed to reduce participation.

Note: LTC medical expenses are indicated on the LTCX screen. The MEDX screen is used for recipients on other programs such as food assistance. Non-Medicare health insurance premiums are indicated on the MEDX screen for noninstitutional spenddown cases. Make sure the medical expense is indicated on the LTCX and MEDX screen when a LTC recipient is on food assistance.

ACES and medical expenses

Institutional Care in ACES 3G decision tree used in institutional Medicaid programs to indicate medical expenses.

Expenses in ACES 3G decision tree used to indicate health insurance premiums for spenddown. Used to indicate all medical expenses for food assistance including COPES HCBS Waivers participation.

ACES on line summary and detail used to indicate medical expenses for spenddown.

ACES-LTC

ACES-Medical expenses as a deduction