(c) In denying or terminating eligibility, comply with the notice and hearing requirements of Part 431, Subpart E of this subchapter.

§ 433.149 Restoration of rights.

If an individual's Medicaid eligibility ends, the agency must immediately restore to him any future rights to benefits assigned under § 433.146, using whatever method is least burdensome to the individual.

COOPERATIVE AGREEMENTS AND INCENTIVE PAYMENTS

§ 433.151 Cooperative agreements and incentive payments-State plan options. A plan that provides for assignment of rights may provide for written cooperative agreements for enforcement of rights to, and collection of, third party benefits. These agreements may be with the State title IV-D agency, any other State agency, courts, law-enforcement officials, and other States. If a plan provides for cooperative agreements, it must provide that the specific agreement requirements in § 433.152, and the incentive payment requirements in §§ 433.153 and 433.154 are met.

§ 433.152 Requirements for cooperative agreements for third party collections. (a) All agreements must specify(1) The terms for referral of cases; (2) How and by whom priorities will be set for collection activities;

(3) Which agency will make collections and distribute them;

(4) The terms of reimbursement by the agency for functions performed under the agreement by another agency;

(5) The duration of the agreement; and

(6) Provisions governing any other matters of common concern to the agencies.

(b) Agreements with title IV-D agencies must also specify that the Medicaid agency will

(1) Refer only absent parent cases; and

(2) Provide full reimbursement of all functions performed by the IV-D agency under the agreement.

(c) The Medicaid agency must retain final responsibility for third party liability collection functions that are not covered by cooperative agreements.

§ 433.153 Incentive payments to States and political subdivisions.

(a) When payments are required. The agency must make an incentive payment to a political subdivision, a legal entity of the subdivision such as a prosecuting or district attorney or a friend of the court, or another State that enforces and collects medical support and payments for the agency.

(b) Amount and source of payment. The incentive payment must equal 15 percent of the amount collected, and must be made from the Federal share of that amount.

(c) Payment to two or more jurisdictions. If more than one State or political subdivision is involved in enforcing and collecting support and payments:

(1) The agency must pay all of the incentive payment to the political subdivision, legal entity of the subdivision, or another State that collected medical support and payments at the request of the agency.

(2) The political subdivision, legal entity or other State that receives the incentive payment must then divide the incentive payment equally with any other political subdivisions, legal entities, or other States that assisted in the collection, unless an alternative allocation is agreed upon by all jurisdictions involved.

435.602 Limitation on the financial responsibility of relatives.

435.603 Applications for other benefits. 435.604 Assignment of rights to benefits.

Subpart H-Financial Requirements for the Categorically Needy

435.700 Scope.

FINANCIAL REQUIREMENTS APPLICABLE TO OPTIONAL GROUPS: FAMILIES AND CHILDREN 435.711 General requirements. 435.712 Financial responsibility of spouses and parents.

FINANCIAL ELIGIBILITY REQUIREMENTS APPLICABLE TO OPTIONAL GROUPS: THE AGED, BLIND AND DISABLED IN STATES COVERING INDIVIDUALS RECEIVING SSI

435.721 General requirements. 435.722 Individuals in institutions who are eligible under a special income level. 435.723 Financial responsibility of spouses. 435.724 Financial responsibility of parents for blind or disabled children. 435.725 Post-eligibility treatment of income and resources of institutional

ized individuals: Application of patient income to the cost of care.

FINANCIAL ELIGIBILITY FOR THE AGED, BLIND, DISABLED IN STATES USING MORE RESTRICTIVE REQUIREMENTS THAN SSI

435.731 General requirements for deter

mining income eligibility in States using more restrictive requirements than SSI. 435.732 Procedures for determining income

eligibility.

MEDICALLY NEEDY INCOME STANDARDS

435.811 General requirement.

435.812 Medically needy income standard for one person.

435.813

[Reserved]

435.814 Medically needy income standard for two persons.

435.816 Medically needy income standards for three or more persons.

FINANCIAL RESPONSIBILITY OF RELATIVES 435.821 Financial responsibility of relatives: Families and children.

435.822 Financial responsibility of relatives of aged, blind, or disabled individuals in States using SSI eligibility requirements.

435.823 Financial responsibility of relatives of aged, blind, or disabled individuals in States using more restrictive requirements than SSI.

MEDICALLY NEEDY INCOME ELIGIBILITY 435.831 Income eligibility.

435.832 Post-eligibility treatment of income and resources of institutionalized individuals: Application of patient income to the cost of care.

MEDICALLY NEEDY RESOURCE STANDARDS 435.840 Medically needy resource standards for individuals and two-person families.

435.841 Medically needy resource standards for families of three or more per

sons.

DETERMINING ELIGIBILITY ON THE BASIS OF RESOURCES

435.845 Medically needy resource eligibility.

Subpart J-Eligibility in the States and District of Columbia

Sec.

435.900 Scope.

GENERAL METHODS OF ADMINISTRATION 435.902 Consistency with objectives and

statutes.

435.903 Simplicity of administration. 435.904 Adherence of local agencies to State plan requirements.

APPLICATIONS

435.905 Availability of program information.

435.906 Opportunity to apply. 435.907 Written application.

435.908 Assistance with application.

435.909 Automatic entitlement to Medicaid following a determination of eligibility under other programs.

435.910 Use of social security number.

DETERMINATION OF MEDICAID ELIGIBILITY 435.911 Timely determination of eligibility. 435.912 Adequate notice. 435.913 Case documentation. 435.914 Effective date.

REDETERMINATIONS OF MEDICAID ELIGIBILITY 435.916 Periodic redeterminations of Medicaid eligibility.

435.919 Timely and adequate notice. 435.920 Verification of SSNs.

FURNISHING MEDICAID

435.930 Furnishing Medicaid.

Subpart K-Federal Financial Participation 435.1000 Scope.

FFP IN EXPENDITURES FOR DETERMINING ELIGIBILITY AND PROVIDING SERVICES

435.1001 FFP for administration. 435.1002 FFP for services. 435.1003 Recipients determined ineligible for SSI.

435.1004 Recipients overcoming certain conditions of eligibility.

LIMITATIONS ON FFP

435.1005 Recipients in institutions eligible under special outside standard. 435.1006 Recipients of optional State supplements only.

435.1007 Medically needy.

435.1008 Institutionalized individuals. 435.1009 Definitions relating to institutional status.

REQUIREMENTS FOR STATE SUPPLEMENTS 435.1010 Requirement for mandatory State

supplements.

(a) This section provides a brief explanation of Medicaid eligibility as affected by changes in the cash assistance programs under the Social Security Act.

(b) Medicaid eligibility before enactment of Pub. L. 92-603—(1) Required coverage of the categorically needy.

(i) Before enactment of the Social Security Amendments of 1972 (Pub. L. 92-603, October 30, 1972), which established the Federal program of Supplemental Security Income (SSI), States were required to make all recipients of cash assistance eligible for Medicaid. Cash assistance was provided through Federally-assisted, State-administered programs to needy individuals in four categories: Those age 65 or over (title I, Old Age Assistance), the blind (title X, Aid to the Blind), the disabled (title XIV, Aid to the Permanently and Totally Disabled), and certain types of families (title IV-A, Aid to Families with Dependent Children). At State option, cash assistance to the aged, blind, and disabled could be made available under a consolidated program of Aid to the Aged, Blind, and Disabled (title XVI).

(ii) Because an eligible individual had to be both categorically related (that is, eligible as aged, blind, disabled, or a member of a family with children deprived of the support of at least one parent) and financially eligible on the basis of income and resources, recipients of cash assistance were termed categorically needy.

(2) Optional coverage of the categorically needy. States could elect to cover selected groups of individuals under Medicaid who were financially eligible for cash assistance but ineligible because of certain other requirements, or

who did not wish to receive cash assistance. Individuals eligible under these optional coverage provisions were considered as categorically needy and were eligible for the same services provided under Medicaid to cash assistance recipients.

(3) Coverage of the medically needy. (i) States could limit coverage under Medicaid to the categorically needy or could, in addition, extend Medicaid to aged, blind, or disabled individuals, or members of families with dependent children, who had too much income to be eligible for cash assistance but not enough for medical care. These individuals were termed "medically needy." A State could set higher levels of income and resources for determining eligibility for Medicaid than those used in determining eligibility for cash assistance. Whether it used higher levels for the medically needy or the same level as for the categorically needy, the State had to deduct an applicant's incurred medical expenses from income in determining his eligibility for Medicaid. As a result, unlike eligibility for cash assistance, eligibility under the medically needy coverage provision did not depend solely on the absolute amount of an individual's income.

(ii) Because a State would be covering more people under the medically needy program, it was permitted to provide more limited Medicaid services to the medically needy than to the categorically needy.

(c) Changes in cash assistance resulting from enactment of Pub. L. 92-603(1) Supplemental Security Income. Pub. L. 92-603 established a Federal program of cash benefits for the aged, blind, and disabled under a new title XVI of the Act. The SSI program, administered by the Social Security Administration, became effective January 1, 1974, and replaced the previous programs for the aged, blind, and disabled in all jurisdictions of the United States except Puerto Rico, Guam, and the Virgin Islands. In addition to establishing uniform nationwide eligibility standards and requirements, the new title expanded the definition of disability to include individuals under age 18. It also provided for State supplements to the Federal SSI benefit.

(2) Mandatory State supplements. In general, most individuals who had been receiving cash assistance under State programs that had used more liberal eligibility requirements than SSI were deemed to meet the new SSI requirements for purposes of Medicaid coverage. In addition, States that had been making higher payments to individuals under the previous programs of cash assistance were required to pay the difference between the SSI benefit and the previous payment. States must provide Medicaid to recipients of these mandatory State supplements.

(3) Optional State supplementation. States may also pay optional cash supplements either to all aged, blind, and disabled SSI recipients or only to reasonable classifications, such as the aged. Under certain conditions, States may provide Medicaid to optional supplement recipients.

(d) Changes in Medicaid eligibility as a result of Pub. L. 92-603-(1) General. In view of the projected increase in the number of individuals who would qualify for cash assistance under SSI, Pub. L. 92-603 changed the requirements for Medicaid coverage in that States are no longer required to cover all aged, blind, and disabled cash (SSI) recipients. It did not change the mandatory coverage of all AFDC recipients.

(2) SSI option. States may make SSI recipients eligible for Medicaid. In addition, they may provide Medicaid to individuals receiving only optional State supplements.

(3) Restricted eligibility ("section 209(b)") option. Section 209(b), Pub. L. 92-603 (section 1902(f) of the Act), permits States to limit Medicaid eligibility for the aged, the blind, or the disabled to individuals who meet eligibility requirements more restrictive than those under SSI. However, States exercising this option must deduct SSI, optional State supplements, and incurred medical expenses from income in determining Medicaid eligibility.

Thus, there is no fixed income ceiling under this option; it permits any aged, blind, or disabled individual with enough medical expenses to become eligible.