Home and Community Based Services Manual


2.00 Medicaid Eligibility

Revised - February 2026

Introduction

The Medicaid program was authorized by federal legislation in 1965 through Title XIX of the Social Security Act. Medicaid provides health care access to low-income persons who are age 65 or over, blind, an adult with a disability, families with dependent children, pregnant women in poverty, refugees and children in state care. Missouri’s Medicaid program is funded by multiple sources: the Federal Government, Department of Health and Human Services (DHHS), Centers for Medicare & Medicaid Services (CMS) and Missouri taxes. The Department of Social Services (DSS), MO HealthNet Division (MHD), is the designated state agency that administers the Medicaid program in Missouri.

Purpose

A Home and Community Based Services (HCBS) participant must have Medicaid benefits to qualify for HCBS. This policy will explain eligibility, special circumstances, definitions and Medicaid Eligibility (ME) codes related to various Medicaid benefits.

Eligibility

Individual eligibility for Medicaid benefits is determined by DSS, Family Support Division (FSD) based on specific program eligibility requirements.

HCBS is authorized by the Department of Health and Senior Services (DHSS), Division of Senior and Disability Services (DSDS). HCBS is available to individuals who meet specific eligibility requirements including, but not limited to:

  • An appropriate Medicaid Eligibility Code
  • Determined eligible for Medicaid benefits that reimburse for HCBS
  • Agreeable to participate in a face-to-face assessment and development of a person-centered care plan (PCCP)
  • Determined to meet nursing facility Level of Care (LOC)
  • Assessed to have an unmet need(s) which can be met through the authorization of HCBS
  • Assessed to meet the eligibility requirements for authorized service(s) as described in Chapter 3

Potential participants must have active Medicaid benefits before an initial referral can be made for HCBS with the following exceptions provided under the Special Circumstances section:

  • Unmet spenddown liability if eligible for Home and Community Based (HCB) Medicaid
  • Qualified Income Trust (QIT)
  • Division of Assets Specified
  • Low Income Medicare Beneficiary 2 (SLMB 2)

The electronic case record provides information to assist with Medicaid eligibility status determination. The eligibility status will display on each participant’s banner in the electronic case record. The latest information may take up to 48 hours to display.  All active ME codes will display in the ME Codes field and reflect the start and end dates of eligibility. If the participant has spenddown, a Managed Care Health Plan or a Ticket to Work, this will be reflected in the “Lock Ins” field along with the start and end dates. If a participant does not have active Medicaid, the participant's banner will display “None” in red font. DSDS staff or designee shall utilize the appropriate DSS eligibility systems to verify Medicaid benefits and gross income. 

All active ME codes will display in the ME Codes field and reflect the start and end dates of eligibility. If the participant has spenddown, a Managed Care Health Plan or a Ticket to Work, this will be reflected in the “Lock Ins” field along with the start and end dates. If a participant does not have active Medicaid, the participant's banner will display “None” in red font. 

DSDS staff or designee shall utilize the appropriate DSS eligibility systems to verify Medicaid benefits and gross income.

Spenddown and HCB Medicaid - Referrals

A spenddown is a monthly premium payment that participants must meet before Medicaid benefits become active. Individuals who meet Medicaid eligibility requirements, but have income over the monthly limit, may meet eligibility for spenddown coverage.  

HCB Medicaid eligibility rules provide for a higher income threshold for individuals who meet the requirements for and have a need for Aged and Disabled Waiver (ADW) services. HCB Medicaid eligibility may assist with meeting spenddown and requires coordination between FSD and DSDS. The FSD HCB Medicaid Referral (IM-54A) shall be used as communication between the agencies regarding HCB Medicaid eligibility requirements. DSDS staff shall take the appropriate action if a potential participant appears eligible for HCB Medicaid and potentially eligible for an Aged and Disabled Waiver service during the initial assessment, reassessment and PCCP maintenance process. 

HCBS Referral - Spenddown Not Met 

  • Spenddown liability must be met for the current date before a referral for HCBS can be processed. Upon receipt of an initial referral for a potential participant who is not eligible for HCB Medicaid and has not met their spenddown, DSDS staff shall inform them of the following: 
  • A referral cannot be completed because the spenddown liability has not been met for the current date 
  • Contact FSD for information on Medicaid benefits 
  • Contact the HCBS Intake Customer Service Center to initiate a referral once Medicaid benefits are active 

HCBS Referral and HCB Medicaid Referral - Spenddown Not Met

Potential participants who have not met their spenddown at the time of referral may be eligible for HCB Medicaid if they meet the age, income and ADW criteria, as outlined in Missouri’s Medicaid Program policy. If they appear to be HCB eligible, DSDS staff shall:  

  • Refer the potential participant to FSD  
    • If HCB Medicaid criteria is met, FSD will complete an IM-54A and initiate the HCBS referral.  
  • Perform an assessment upon receipt of the IM-54a referral form 

If LOC is met, DSDS staff shall: 

  • Fill in the appropriate fields on the IM-54A indicating LOC eligibility status 
  • Submit the IM-54a to the FSD HCB Processing Center 
  • Upload IM-54a into the participant’s electronic case record 
  • Include an ADW authorization on the care plan

If LOC or ADW eligibility is not met, or the initial assessment was not completed, DSDS staff shall: 

  • Proceed with the adverse action process 
  • Complete the appropriate fields on the IM-54A and submit to the FSD HCB Processing Center 
  • Upload IM-54a into the participant’s electronic case record

HCBS Referral - Spenddown Met 

Upon receipt of an HCBS referral for a potential participant who has met the spenddown for the current date, DSDS staff shall complete the referral. An assessment shall be scheduled and completed.  

If LOC is met, DSDS staff shall:  

  • Proceed with developing a PCCP and coordinate service delivery with the selected HCBS provider  
  • Inform the participant that Medicaid will only reimburse for HCBS during periods when the monthly spenddown liability has been met  
  • The participant will be responsible for paying for the cost of any HCBS provided during periods when the monthly spenddown liability has not been met.   

If LOC is not met, DSDS staff shall proceed with the adverse action process. 

HCBS Referral and HCB Medicaid Referral – Spenddown Met 

If a potential participant has met their spenddown at the time of the initial referral and appears to meet the HCB eligibility, DSDS staff shall: 

  • Initiate the FSD HCB referral (IM-54A) 
  • Upload the IM-54A into the electronic case record 
  • Submit the IM-54A to the FSD HCB Processing Center 

Spenddown and HCB Medicaid - Reassessment

A participant with spenddown coverage must have met the spenddown liability at least once within the previous three (3) months to continue with the reassessment process. DSDS staff or designee shall:  

  • Review the Medicaid eligibility within the participant’s electronic case record and/or DSS systems to verify that Medicaid benefits are currently active.
  • If the spenddown liability has been met at least once within the previous three (3) months, DSDS staff or designee shall complete the reassessment process. 
  • If the spenddown liability has not been met for the current date and has not been met at least once within the previous three (3) months, DSDS staff, or designee, shall initiate the adverse action process.

At the time of reassessment, DSDS staff shall determine if a participant with spenddown coverage meets the eligibility criteria for HCB Medicaid. If a participant meets HCB Medicaid eligibility criteria, DSDS staff or its designee shall: 

  • Initiate the FSD HCB referral (IM-54a) and submit to the FSD HCB Processing Center 
  • Upload the IM-54a into the electronic case record  

When DSDS staff or its designee identifies that a current participant with HCB Medicaid no longer meets HCB criteria, (e.g. removal of waiver service, HCBS case closure, participant death), DSDS staff shall: 

  • Proceed with the adverse action process if appropriate 
  • Fill in the appropriate fields on the IM-54A indicating HCB ineligibility status 
  • Upload the IM-54a into the participant’s electronic case record  
  • Submit the IM-54a to the FSD HCB Processing Center, notifying them of HCB ineligibility.  

Qualified Income Trust (QIT)  

Individuals with income higher than HCB Medicaid requirements may still qualify for HCB Medicaid by diverting a portion of their income into a QIT (i.e., Miller Trust). QIT is limited to persons needing Medicaid for nursing facility care or services provided through the ADW. This process is also initiated by FSD through the IM54a. 

Division of Assets 

Division of Assets may be used to prevent spousal impoverishment. Federal law provides a way to protect a portion of assets and income for a “community spouse” whose spouse is receiving vendor nursing care or HCBS. 

Specified Low Income Medicare Beneficiary 2 (SLMB2)

SLMB2 is a program that can help qualifying individuals with Medicare premiums, co-insurance and deductibles. SLMB2 beneficiaries may be HCB Medicaid eligible if all requirements are met; however, the participant must choose which coverage (HCB Medicaid or SLMB coverage) to have. IM54A referrals from FSD indicating an SLMB-2 shall be accepted and processed. 

Blind Pension (ME Code 02)

Blind Pension provides assistance to blind individuals who do not qualify under the Supplemental Aid to the Blind law and who are not eligible for Supplemental Security Income benefits. Eligible individuals receive a monthly cash grant, as well as MO HealthNet coverage. ME Code 02 will only reimburse for state plan services. Participants with ME Code 02 are not eligible for any waivered services. The electronic case record will only display services for which the participant is eligible. If a participant has a waiver service that was previously authorized, but Medicaid eligibility changes to ME Code 02, DSDS staff shall:    

  • Initiate the adverse action process to close the waiver service 
  • Close all prior authorized waiver services 

Ticket to Work Health Assurance (ME Code 85)

The Ticket to Work Health Assurance (TWHA) program provides Medicaid coverage, including HCBS, for persons with disabilities ages 16 through 64 who are employed. Like spenddown coverage, TWHA coverage has a monthly premium payment that participants must meet before Medicaid benefits become active. The TWHA field in the electronic case record system will only display for ME Code 85 participants and show paid or not paid. 

TWHA - Initial Assessment  

The TWHA (ME code 85) premium liability must be met for the current date before a referral for HCBS can be processed. Upon receipt of a referral for a potential participant with an unmet TWHA premium liability, DSDS staff shall inform the participant: 

  • A referral cannot be completed because the TWHA premium has not been met for the current date  
  • To contact FSD for information on Medicaid benefits 
  • To contact the HCBS Customer Service Center to initiate a referral once Medicaid benefits are active 
  • Upon receipt of a referral for a potential participant who has met the TWHA premium for the current date, DSDS staff shall complete the initial assessment. If LOC is met DSDS staff shall: o
    • Proceed with developing a PCCP and coordinating with the selected HCBS provider(s)  
    • Inform the participant that Medicaid will only reimburse for HCBS during periods when the monthly TWHA premium liability has been met.
    • The participant will be responsible for paying for the cost of any HCBS provided during periods when the monthly liability has not been met.  
  • If LOC is not met, DSDS staff shall proceed with the adverse action process.

TWHA - Reassessment

A participant with TWHA coverage must have met the TWHA premium liability at least once within the previous three (3) months to continue with the reassessment process. DSDS staff shall review Medicaid eligibility within the participant’s electronic case record and/or DSS systems to verify that Medicaid benefits are currently active.  

If the TWHA premium has been met for the current date or has been met at least once within the previous three (3) months, DSDS staff or its designee shall:  

  • Complete the reassessment process within the participant’s electronic case record 

If the TWHA premium has not been met for the current date and has not been met at least once within the previous three (3) months DSDS staff shall:  

Transfer of Property Penalty

Participants with a transfer of property penalty have limited Medicaid benefits and are not entitled to ADW services. FSD determines the length of the penalty if a participant has sold, traded, or given away property for which fair and valuable consideration was not received. The Transfer of property does not apply to State Plan or any additional waivers. 

NOTE: Transferring of income into a QIT does not constitute a Transfer of Property Penalty.  

The Transfer of Property field is not automatically populated at this time in the electronic case record. DSDS staff shall review the LXIX screen in the DSS Network to determine Transfer of Property. 

Managed Care

Upon receipt of a referral for an individual enrolled in a Managed Care Health Plan where requested services cannot be authorized, DSDS staff shall refer the individual to the Managed Care Health Plan via the Notice of Closure form.  

When an individual displays as having dual codes and one is Managed Care, the electronic case management system will display “Lock Ins: Managed Care” on the banner. DSDS staff shall not proceed with any actions and shall refer the individual to the Managed Care Health Plan via the Notice of Closure form.  

ME Code E2 (Medicaid Expansion) 

Individuals with an ME code E2 (Medicaid Expansion) are eligible only for Consumer Directed Services (CDS), regardless of Managed Care lock-in status. When a participant with an ME Code E2 is requesting or is authorized for services and has dual codes, DSDS staff shall refer them to FSD to discuss appropriate ME code options. 

ME Code 05 (Adult Family) 

An individual cannot receive HCBS with an ME Code 05. The participant will need to contact FSD to “opt out” of Managed Care Medicaid or change their Medicaid eligibility code altogether to request or receive HCBS. 

Participants may “opt out” of Adult Family Medicaid (ME 05) if they meet one of the following criteria: 

  • Eligible for Supplemental Security Income (SSI) 
  • Enrolled in Special Health Care Needs Program 
  • Disabled and 18 years of age or younger 

This information also pertains to the ME Codes on the Medicaid Eligibility Chart, indicated as a Managed Care Health Plan. 

NOTE: The electronic case record system will not allow further action on individuals who receive Managed Care on the date of request.  

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