PM 07-02-21: Long Term Supports and Services Review

WAG 07-02-21

All individuals applying for Long Term Services and Supports (LTSS) and individuals already active on a community case requesting LTSS are required to cooperate with the LTSS resource review process. LTSS includes Nursing Home (NH), Supportive Living Program (SLP) and Department on Aging (DOA) Home and Community Based Services (HCBS).


The resource review consists of reviewing current and past resource and income transfers. The HFS 3654 form, Additional Financial Information for Long Term Care Applicants, asks about resource and income transfers in the past five years.


The additional resource review for Long Term Care Services can occur after the initial Medicaid and admission approval.

  • Determine initial eligibility for Long Term Care Services (LTC Services) without requesting a 3654 form.
  • A 3654 form must be sent after initial approval.


Verify resource transfers for all individuals (including the community spouse) during the lookback period.  The lookback period is 60 months from the request for the state to pay for LTC services.

When a person enters an NH or SLF or applies for or begins receiving DoA HCBS waiver services, determine the resources held solely by either the LTC spouse, the community spouse, or jointly by both. Consider this combined total available to the LTC spouse. From this amount, the Community Spouse Resource Allowance (CSRA) may be deducted and transferred to the community spouse, as provided in PM 07-02-22. The remaining amount is the total amount of resources considered available to the LTC spouse.

When counting the resources of the community spouse, count the same types of resources and allow the same disregards as if the spouse was an applicant.


Community Spouse

The term "community spouse" means:

  • the spouse of an NH resident; or
  • the spouse an SLP resident; or
  • the spouse of an individual applying for or receiving DoA HCBS waiver services.

A spouse who lives in an NH/SLP or receives DoA services is not considered a community spouse.

Same-sex marriages are treated the same as opposite-sex marriages for purposes of determining if an individual requesting LTSS has a community spouse.


Completion of form HFS 3654

The HFS 3654 should be sent when a person enters an NH or SLF, or when notified that one spouse has applied for or is receiving DoA HCBS waiver services.

The additional resource review for Long Term Care Services can occur after the initial Medicaid and admission approval.

  •  Determine initial eligibility for Long Term Care Services (LTC Services) without requesting a 3654 form.
  • A 3654 form must be sent after initial approval.

See specific details below on handling the approval of LTC services.


A Customer has Active 6 Months of Medical Coverage.

Effective 04/01/2018, the HFS 3654 form does not have to be returned for persons who have been active on community medical for at least six (6) months prior to requesting Nursing Home (NH), Supportive Living Program (SLP) services, or Department on Aging (DoA) Home and Community-Based Services (HCBS).

The procedures apply to persons who move to an NH or SLP and request LTSS, and the person:

  • Lived in the community and had an active ACA or AABD community case;
  • Had been active in ACA or AABD for six consecutive months immediately prior to moving into a nursing home or supportive living program facility;
  • Has not transferred resources (including spouse) during the 60 months before requesting LTSS; and
  • Has not consulted with a financial, estate planner, or other professional regarding financial matters

The procedures also apply to persons who live in the community and have an active ACA or AABD case for a period of six consecutive months immediately before requesting DoA HCBS.

6 Months Consecutive Means:

  • No break in active status for six months;
  • Months during which a person is in active status with an income or resource spenddown count towards the six months. Months that are in unmet spenddown do not count.

This Procedure Does Not Apply to:

  • Persons applying for medical assistance and requesting LTSS;
  • Persons requesting LTSS that have had an active medical case for less than 6 months;
  • Persons requesting LTSS who have an active community case and live in an NH or SLP under private pay status;
  • Cases where the person or their spouse report resource transfers in the past 60 months; and
  • Cases where the person reports consulting with a financial, estate planner or other professional about financial matters.


Completion of form HFS 3654 and the requirement to provide financial documents no longer applies when a person has had an active community case for six months or longer immediately before requesting LTSS, UNLESS:

  • The person or their spouse has transferred resources in the past 60 months; or
  • The person has consulted with a financial, estate planner, or other professional regarding financial matters.


Processing Admits for Individuals Already Receiving Medicaid 6 months or More

  • Review IES to determine if the person has an active medical case;
    • If the person's medical case has been active for 6 consecutive months or longer immediately prior to date of admission to the facility;
      • Determine eligibility for LTC Services by entering the admission information in IES and process admit in the LTC subsystem.
      • After approval of LTC Services, send a VCL with a 3654 to the individual and appropriate parties with a 10-day due date.
        • Enter the following statement in the remark section of the VCL:
          • "Follow the instructions on the attached form to determine if you are required to complete and return the form by the due date."
        • If the 3654 is returned:
            • Review the completed form;
            • Request resource verifications, if applicable; or
          • Refer to LTC-ADI, if applicable.
        • If the 3654 is not returned, no further action is required.


Note: Do not reject an admission transaction, after 01/01/18, for failure to return completed form HFS 3654 when the person lived in the community and had an active medical case for 6 consecutive months immediately prior to admission to the facility.


Processing Admits for Individuals Receiving Medicaid with Less Than 6 Consecutive Months of Coverage

Determine eligibility for LTC Services by entering the admission information in IES and process admission in the LTC subsystem.

  • After LTC Services is approved, send a VCL with a 3654 to the individual and appropriate parties with a 10-day due date.
    • The VCL needs must include the following statement, "If the 3654 is not returned, the LTC Services will be terminated."
    • If the 3654 is not returned;.
      • Update IES accordingly and sent out 360 NOD.
      • Discharge the customer in IES and MMIS.
        • The discharge date should be the day following the date the caseworker takes action to discharge the customer.
          • Ex. The 3654 was due back 10/10. The caseworker reviewed the case on 10/25; the 3654 was not returned. The caseworker discharges the customer same day and enters a discharge date of 10/26/2024.
      • Reject TAN and update TAN status code.
      • Complete and send IL 444-1010 Admit Rejection Letter to the provider and upload a copy to the ECR.
      • Only the LTC Services are terminated. Individuals may still be eligible for Medicaid.
    • If the 3654 is returned,
      •  Review the completed form 
      •  Request resource verifications if applicable; or
      •  Refer to LTC-ADI, if applicable.

NOTE: If the 3654 is received before the application or determination of LTC Services is approved, review the form and process accordingly before approving LTC Services.


Processing New Applications for Individuals in a NH or SLP:

Determine eligibility for LTC Services at the same time the Medicaid eligibility is determined.

Individuals Eligible Under the ACA Adult Group

If the individual qualifies to receive coverage under the ACA, resource information is not required. However, a five-year lookback is still required to review the transfer of resources.

  • Approve the individual for ACA and LTC Services by processing the admit in IES, answering "not required" to the 3654 dropdown response and completing the admit in the LTC subsystem.
  • After initial approval, send a VCL with a 3654 to the individual and appropriate parties with a 10-day due date.
    • The VCL needs to include the following statement, "If the 3654 is not returned, the LTC Services will be terminated."
    • If the 3654 is not returned; change the 3654 dropdown response to "no", discharge the individual from the facility, update IES accordingly, and send out notices.
      • Reject TAN and update TAN status code.
      • Complete and send IL 444-1010 Admit Rejection Letter to the provider and upload a copy to the ECR.
      • Only the LTC Services are terminated. Individual may still be eligible for Medicaid.
    • If the 3654 is returned;
      • Review the completed form 
      •  Request resource verifications if applicable; or
    •  Refer to LTC-ADI, if applicable.

NOTE: If the 3654 is received prior to approval of the application or determination of LTC Services, review the form and process accordingly before approving LTC Services.


Individuals Eligible Under AABD Programs

If the individual qualifies to receive coverage under AABD, eligibility for LTC Services will be determined at the same time.

Current income and current resource verifications will be required for approval of an application. The LTC individual and the community spouse are required to provide essential information regarding the income and resource values owned by either or both spouses. See PM 07-02-00: Aid to the Aged, Blind, and Disabled (AABD) for more information on assets and PM 08-02-00: Aid to the Aged, Blind, and Disabled for information on income.

  • If backdating is requested, bank account statements are required for each requested backdated month.
    • Use the verified amount of nonexempt resources available on the first day of each individual month that backdating is requested before any income has been added or expenses paid. Refer to PM 15-04-01: Resources (AABD) for additional policy
  • Eligibility for each month of medical backdating is determined separately. Do not use the resource amount as of the day of decision for any backdated month. Additionally, excess resources are not reduced in backdated months. Resource reductions start the month following the month in which the application was received.
  • For the application month, use the most current verified amount minus any countable net income received for that month.
  • If the individual qualifies, approve the individual for AABD and LTC Services by processing the admit in IES, answering "not required" to the 3654 dropdown response and completing the admit in the LTC subsystem.
  • After initial approval, send a manual VCL with a 3654 to the individual and appropriate parties with a 10-day due date.
    • The VCL needs must include the following statement, "If the 3654 is not returned, the LTC Services will be terminated."
    • If the 3654 is not returned; change the 3654 dropdown response to "no", discharge the individual from the facility, update IES accordingly, and send out notices.
        • Reject TAN and update TAN status code.
        • Complete and send the IL 444-1010 Admit Rejection Letter to the provider and upload a copy to the ECR.
      • Only the LTC Services are terminated. Individuals may still be eligible for Medicaid.
    • If the 3654 is returned:
      • Review the completed form 
      •  Request resource verifications if applicable; or
      •  Refer to LTC-ADI, if applicable.

NOTE: If the 3654 is received before the application or determination of LTC Services is approved, review the form and process accordingly before approving LTC Services.



New Applications for DoA HCBS Waiver

DoA applicants who do not return the completed and signed Form 3654 are ineligible for LTC benefits due to non-cooperation but may be approved for community medical coverage, if eligible.


Redetermination

HFS 3654 is not required at redetermination, but should be completed when:

  • An individual's financial circumstances change,
  • An individual is discharged from a facility and readmitted more than a year later,
  • An individual marries or divorces while outside LTC (even if for less than a year).


LTC-ADI Required Referrals

The Long Term Care - Asset Discovery Investigation Unit (LTC-ADI) reviews applications and redeterminations for individuals requesting and receiving Long Term Supports and Services (LTSS) who reside in a nursing or supportive living facility or receive DoA HCBS waiver services when information reported is questionable or unexplained.

The Medical Field Operation (MFO) Offices and Family and Community Resource Centers (FCRC) are required must refer applications and redeterminations that meet the referral criteria to the LTC-ADI Unit.

If the case meets the specific criteria after reviewing the application, data received from the Asset Verification System (AVS), the HFS 3654 form, the redetermination form, or any verifications provided, refer it to the LTC-ADI Unit. All applicable documentation should be uploaded to the electronic case record(ECR).

  • Transfers totaling $25,000 or more during the 5-year look-back period
  • Evidence of estate planning, including but not limited to:
    • Trusts
    • Annuity
    • Promissory Notes
    • Contract for Deed
    • Caregiver Contracts
  • Consultation with a financial planner for estate planning purposes
  • Any other reason the caseworker deems appropriate (explanation required)


Note: Accept the old form HFS 3654 when it is sent in place of the new revised form.