Children's Waivers and Medicaid Eligibility

Illinois Department of Human Services
Division of Developmental Disabilities
Information Bulletin

Children's Waivers and Medicaid Eligibility
June, 2016


This Informational Bulletin serves to address an issue regarding appropriate Medicaid enrollment for Children's Waiver Participants and inform stakeholders about a payment edit that will impact billings for any children authorized for services in the Developmental Disabilities Children's Support and Residential Waivers.


Currently, Medicaid matching funds are being lost because Children's Waiver Participants are not enrolled properly in the State's Medicaid Program. In order to ensure proper enrollment, Independent Service Coordination (ISC) Agencies should adhere to the following directions.

Process and Procedures

With regard to the two Developmental Disabilities Children's Waivers, the Illinois Department of Healthcare and Family Services (HFS) All Kids Unit is responsible for processing medical applications for persons under the age of 18 years old.

  1. When sending an application to All Kids, please write: DD WAIVER in red on the envelope and on the first page of the application. The Illinois Department of Human Services Family and Community Resource Center (FCRC-Local Office) is responsible for processing medical applications of persons age 19 through 21.

    Medical applications sent to the All Kids Unit must include:

    • A cover letter;
    • The DD Waiver service award letter;
    • Proof of parent's income (Proof of income is still required despite being waived), and;
    • all other required verifications.
  2. For Children already receiving Medicaid medical benefits please send a copy of the DD Waiver service award letter with a cover letter to the All Kids Unit attention Matt Gurney at  

    Remember: The DHS FCRC is responsible for processing medical applications of persons age 19 through 21.

The following excerpt is language from the DHS Policy Manual that addresses the application protocol:

PM 06-11-03-f: The Division of DD will forward verifications of the waiver approval to the Individual Service Coordination Agents (ISC). The ISC agent will forward the medical application, cover memo, and a copy of award letter to the HFS All Kids Unit or to the FCRC. The Division of DD issues an award letter to the DHS liaison when approved for waiver services.

Please see the full PM 06-11-03 is on the DHS web site.

Note:  In order to capture federal matching funds, the All Kids Unit or FCRC must code the enrollment with the appropriate eligibility category for the two Children's Waivers. For their staff to do that correctly, it is important that ISC agencies follow the instructions above. We are enhancing our payment edits to maximize Federal matching funds. As a result, provider billings will reject if a child does not have the proper Medicaid coding.

A child on active Medicaid will need to have the correct code to allow for the agency providing service to get payment reimbursement. An example of incorrect coding would be if the child is on an All Kids Share/Premium case. The reject code assigned to this new edit is: 9D - "Ineligible type of Medicaid enrollment-Contact ISC for New Application".

Effective Date: Immediately

This Information Bulletin reflects current policy and processes. If you have questions regarding this subject information, please contact Jay Bohn at