7123 Other Budgeting Provisions (Medical Assistance) - The following additional budgeting provisions apply to the medical assistance programs.

1. Income Averaging - For independent living applications involving a 6 month base period, if an average cannot initially be established, an estimate shall be used to compute countable income or determine the amount of spenddown. Once the average has been determined, the budget for the eligibility base period shall be recomputed using actual amounts received for the months prior to the month the average is implemented. The average shall then be budgeted for the remainder of the base. For independent living and long term care applications where a 1-month base period is used, an estimate shall also be used until an average has been determined, but the re-budgeting process is not applicable.
   
   Income may be estimated when there is a change in circumstance. For re-computing eligibility based on a change in income, use the average in place prior to the month of change. In addition, project anticipated income beginning with the month of change.
   
   A new computation is required whenever income terminates and there continues to be a spenddown or patient liability in place. When re-computing income for an independent living base period, the average in place prior to the income termination shall be used. If there will be only one month of irregular earnings within the eligibility base period, the actual amount for that month will be considered if it is known in time to adjust the budget within the eligibility base period. For persons in long term care, the average in place prior to the income termination shall be used. 2.
   
   
2. Reasonable Compatibility - This provision is only applicable to the Medically Needy (MN), MediKan and Medicare Savings Programs (MSP – QMB, LMB and ELMB). It does not apply to long term care (LTC) or Working Healthy (WH).
   
   Reasonable compatibility is the earned income verification standard used to determine if the information reported by the consumer is consistent with data received through the tiered verification provisions contained in 1322.4
   
   If the source information is reasonably compatible with the consumer statement, additional information may not be requested from the consumer. The reported information is considered verified.
   
   To make the comparison, the income amounts from both the consumer and the source are converted to a monthly amount. There is reasonable compatibility when the amount reported by the consumer is either:
   
   
   1. greater than the source amount, or
      
      
   2. not less than 80% of the source amount.
   
   The reasonable compatibility test is performed separately for each individual with reported earnings. All earnings from all sources (including multiple jobs) for each individual are combined into one income amount when preforming the test. Once the reported income amount has been verified as reasonably compatible, that amount shall be budgeted. Any earned income not verified in this manner must be verified in accordance with 1322.4(1)(d) . See Appendix Item W-17 (Reasonable Compatibility Tool).


3. Budgeting Method - This provision is only applicable to the Medically Needy (MN), MediKan and Medicare Savings Programs (MSP – QMB, LMB and ELMB). If reported income is verified through either the Tier 3 or Tier 4 process described in 1322.4, the amount of income budgeted on the medical assistance program will depend on the level of verification received.
   
   
   1.  Full Month - If a full month (at least 30 days) of income verification is received, a prospective amount based on the verification received shall be determined and budgeted in place of the reported amount.
      
      
   2.  Partial Month - If less than a full month (less than 30 days) of income verification is received, or it cannot be determined if the verification represents a full month, a prospective amount shall be determined based on the partial verification received. The greater of either the reported amount or the prospective amount based on the partial verification received shall be budgeted.
      
      Note: Verification received from either a KDOL – BARI/BASI or DCF income record (cash or food assistance program) under the Tier 3 process shall always be considered a partial month for purposes of this provision.
      
      
4. Additional Budgeting Provisions - The following budgeting provisions apply where multiple programs are involved for the same individual(s).
   
   
   1. Application - Where eligibility for multiple program types is being determined for the same individual at the time of application, if the use of reasonable compatibility is not required for all the programs, eligibility shall be determined for all programs without using reasonable compatibility.
      
      An example would be where a nursing home resident applies for long term care (LTC) and MSP coverage. The MSP application requires the use of reasonable compatibility. The LTC application does not. Eligibility for both LTC and MSP shall be determined by verifying actual income.
      
      
   2.  Program Added - Where a program using reasonable compatibility is being added to a program not using reasonable compatibility or vice versa, eligibility shall be determined for all programs without using reasonable compatibility beginning with the first month of eligibility for the added program.
      
      
   3.  Transition to New Program - Where eligibility transitions from a program using reasonable compatibility to a program not using reasonable compatibility, eligibility shall be determined for the new program without using reasonable compatibility. Where eligibility transitions from a program not using reasonable compatibility to one that does, the current budgeting in place shall continue to be applied to the new program through the end of the existing review period.