Medicaid Policy                                                                 

825-5.5 Income Rules to Use for Overpayments and Understatements of Liability

Effective Date: March 1, 2017

Previous Policy

 

Verify the member’s or family’s income that should have been used to determine eligibility and liability for each month in the overpayment period.

Rules and Methodology for determining monthly income:

Anticipating income:  When calculating an overpayment or understated liability based on unreported income, use the actual unreported income. The method for anticipating income in 435-2 is unnecessary because you will have or will get a history of the previously unreported income the member or family received.

If the member accurately reported, at the time of application, income from a full time job and the agency used the method for anticipating income from that job, do not use actual income from that full time job to calculate an overpayment or understated liability for that month of application.

However, if the member also had a part time job and did not report that income, then use actual income from the part time job to calculate the overpayment or understatement of liability.

For other situations, use the medical assistance rules and methods that applied to the type of income and medical assistance coverage group involved.  

For MAGI-based coverage groups use the MAGI methodology found in 440.  The determination of a MAGI best estimate is found in 435-2 A.  

For non-MAGI-based Medically Needy family groups, use the method based upon the income type as described in 435-2 B.

Wages

Use the rules and methods described in 435-2, A and B, to decide the amount of monthly wages during the overpayment period.

Factoring Wages

Follow the rules in 435-2 B to decide when to factor the wages for the Non-MAGI-Based family related medical assistance. MAGI-Based groups do not factor wages

Self-Employment Income

Use the method in 419-3 and 419-4 to determine the monthly amount of self-employment income for each month in the overpayment period for both MAGI and Non-MAGI-Based groups.

Contract Income

Use the method in 435-2, A and B, for contract income.

Unearned Income

Use the rules in section 415 to determine the amount of the unearned income to count.

Lump Sums

Use the rules in section 421 to determine the amount of the lump sum payment.