This category applies to those institutional arrangements in which Medicaid cannot make payments on behalf of eligible individuals' care in that institution.
This includes not only care received in nonmedical facilities (e.g., penal institutions, elderly high rises, etc.) but also non-approved care or ineligibility for payment of care in medical facilities (e.g., inappropriate ACH placements, non-Medicaid certified facilities, persons assessed or reassessed as not in need of nursing facility care through the CARE assessment or resident status review process or persons who are ineligible for payment due to transfer of property provisions.)
See PM2012-09-01, Re: Inpatient Hospital Coverage for Inmates of State Correctional Institutions and PM1999-10-02, Law Enforcement Custody and State Psychiatric Hospital Admissions.
The following provisions apply to an individual in a penal institution:
In rare instances a person considered in custody could also be in one of the statuses referenced in this paragraph. Such person could receive assistance. Either the court record or a document in the possession of the client should be available to clearly establish any of these statuses.
NOTE: Since "house arrest" is a term used across the state for a variety of situations, this status cannot be used to confirm eligibility requirements. It is only an indication to look for another status in determining eligibility. It is recognized that many clients considered in house arrest will be eligible for assistance as there will be no actual custody indication.
NOTE: If the child was not released prior to the expiration of the CE/review period, coverage would not be reinstated without a new application or review form.
See 8111.3 regarding qualifying youth under the CAA and limited services provided under Medicaid/CHIP in the 30 days prior to release .
Medical eligibility may be determined for persons residing in other non-Medicaid approved institutional settings provided the individual is eligible under the MA, Medicaid poverty level, or Medically Needy program criteria. Eligibility shall be determined using independent living procedures and guidelines set forth in 4300 and subsections, 7240, 7330, 7530, and 8171.
While the Medicaid inmate payment exclusion applies to incarcerated individuals in most cases, federal legislation under the Consolidated Appropriations Act (CAA) of 2023 requires that certain services must be covered by Medicaid and CHIP for incarcerated youth and adults up to 21 who are post-adjudication (or sentencing) and within 30 days of their release date if they qualify for Medicaid and CHIP programs. This means that when a Medicaid/CHIP recipient or an individual who qualifies for Medicaid/CHIP under the age of 21, or an AGO eligible individual age 26 or under becomes incarcerated, the facility must ensure that certain services are provided for the required timeframe and that the Medicaid/CHIP agency is billed for these services.
The population qualifying for special services under this policy are defined as eligible juveniles and children or young adults who meet the following criteria:
The special services referred to above consist of screening and diagnostic services (also referred to as EPSD) and targeted case management (TCM) or case management only for CHIP.
This category applies to those institutional arrangements in which Medicaid, or state only assistance where noted, can make payments on behalf of eligible individuals' care in that institution. These arrangements include Medicaid certified adult care homes (including facilities under a Denial of Payment for New Admissions penalty), hospitals, state institutions and Medicaid enrolled free-standing psychiatric hospitals. It also includes hospice care provided within an adult care home.
For residents of assisted living/residential health care facilities, independent living budgeting applies and Medicaid payment is not available unless approved through an HCBS plan (see 8200).
Care may be either temporary or long term as defined by 8113 below. Payment for MediKan applicants/recipients may be approved if all the requirements for the specific facility are met and the length of stay will not exceed the month of entrance and two following months.
An adult care home may be either a nursing facility (NF), intermediate care facility for individuals with intellectual disabilities (ICF-IID) or nursing facility for mental health (NF-MH). Two state hospitals have been certified as ICF-IIDs. (See 8112.4) Eligibility for medical assistance for ACH residents is determined using the long term care procedures and guidelines contained in this section. See 8114 for screening requirements.
Parsons State Hospital and Kansas Neurological Institute have been certified as intermediate care facilities for individuals with intellectual disabilities. Although they are state institutions, eligibility for medical assistance for residents is determined using the long term care procedures and guidelines contained in this section and there is no age limitation related to eligibility.
Effective July 1, 2026, Medicaid institutional coverage for placement in an Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID, including state-operated ICF/IID facilities, requires prior approval from the Kansas Department for Aging and Disability Services (KDADS). Prior approval is verified through a KDADS prior authorization approval letter which must be included in the case record prior to level of care (LOC) approval.
Long term care may be provided in a distinct or separate unit of a general hospital or in a swing bed in certain general hospitals.
The institutional base period provisions of 8130 and subsections do not apply to general hospital stays. A short term stay as described in 8113 shall be budgeted as independent living with a six month base period. A long term stay shall be budgeted as institutional living with a one month base period beginning with the month after the month hospitalization began.
See Policy Memo1999-10-02 re: Law Enforcement Custody and State Psychiatric Hospital Admissions
An IMD is a hospital, nursing facility or other institution engaged in providing diagnosis, treatment or care of persons with mental diseases. Except for certain situations involving state hospitals, as noted in item (3) below, FFP is not available for a person between the ages of 21 and 64 residing in an IMD. However, state-only coverage is provided to some persons. Persons otherwise ineligible cannot obtain eligibility until release from the facility. Temporary absences to seek medical or other care, such as a general hospital admission, unless the person has been formally released from the IMD, are not covered. These individuals continue to be considered patients of the facility. Persons absent from the facility due to a trial home visit are also considered patients of the facility. However, persons who are released under the condition of outpatient treatment are not considered patients of the facility and may be eligible for medical assistance. Eligibility for medical coverage may begin the month of release from the facility. The general types of IMD arrangements and the general eligibility rules of the arrangements follow.
There are currently two state hospitals with inpatient psychiatric units meeting the criteria of this item: Larned State Hospital and Osawatomie State Hospital. Persons admitted to these facilities are not eligible if they are under the jurisdiction of law enforcement. See Policy Memo 99-10-02 for a list of civil and criminal commitments. Persons in the sexual predator treatment unit at Larned State Hospital are not considered to be under the jurisdiction of law enforcement and may be eligible for medical assistance.
For eligible patients, long term care procedures and guidelines are applicable, including financial eligibility in 8160 and 8170 and the spousal impoverishment provisions of 8144.
For individuals receiving coverage through CHIP who enter a state mental health hospital, CHIP coverage continues through the month of entrance and following month, regardless of anticipated length of stay. CHIP coverage terminates at the end of the period and any continuing eligibility is determined under the Medicaid program. No patient liability is determined during this period; however, any premium obligation continues.
When a current Medicaid recipient between the ages of 21 and 65 is admitted to a psychiatric unit of a state hospital, eligibility shall be terminated effective the last day of the month the client was admitted and the case may be closed.
For eligible patients, long term care procedures and guidelines are applicable, including financial eligibility in 8160 and 8170 and the spousal impoverishment provisions of 8144.
NOTE: A Youth Residential Center is not a PRTF and is considered a community-based placement. Independent living rules are applicable for youth living in these arrangements.
Residents of a PRTF who are under age 21 (age 22 if receiving treatment in a PRTF or state hospital on their 21st birthday) are potentially eligible for Medicaid assistance. Older individuals are not eligible.
Residents must be screened eligible for admittance into the PRTF by a certified individual approved by KDHE-DHCF. In limited situations, emergency admissions may be allowed. A contracted entity is responsible for entering all prescreening results in the MMIS, where payments are edited to ensure the child meets the necessary level of care.
The facility is responsible for submitting a MS-2126 for each resident in which Medicaid assistance is requested. The PRTF must indicate if a screening has been completed. If it is reported a screening has been completed, then the individual is deemed to meet appropriate level of care for purposed of the eligibility determination. If they report the screening has not been completed, contact the Mental Health Consortium to determine if an exemption is applicable.
If the stay is anticipated to last at least 30 days, long term care procedures and guidelines are applicable for the eligibility determination. In most instances, coverage under the LTC program (see 2663 and 8183) is available. If the stay is anticipated to last less than 30 days, the stay is considered temporary and independent living budgeting applies. In these cases, eligibility is determined according to the prior living arrangement.
For youth entering a facility for a stay anticipated to exceed 30 days and who is receiving Medicaid prior to entering the facility, the case must be adjusted according the following rules:
A patient liability must be determined for all residents whose stay will exceed 30 days (including all LTC eligibles). For persons eligible under the temporary care provisions, the patient liability is $0 unless the youth is part of a Medically Needy plan with an unmet spenddown. In these instances, Medically Needy rules are applicable.
Example: Jana is a 15 year old Poverty level children's program recipient who receives $160.00/month in child support.
She enters a PRTF for a stay not expected to exceed 30 days. Because this is a temporary stay, she remains part of the original Poverty level children's program plan. Jana's patient liability is $0, as there is no medically needy plan.
If Jana's stay is expected to exceed 30, she is removed from the Poverty level children's program plan and a new application is requested to determine eligibility based on institutional rules. Jana is determined eligible under the LTC program and her patient liability is $98.00 ($160 - $62).
The facility is responsible for notifying the eligibility worker of the PRTF dismissal as quickly as possible. The eligibility worker shall adjust eligibility appropriately, with independent living rules applicable beginning the month of discharge for HCBS, Poverty level Programs and Caretaker Medical determinations and the month following the month of discharge for all others.
NOTE: Although the parent or caretaker with whom the child resides may “receive” child support payments, they are considered countable income for the child per 6220 (4).
Individuals whose stay in a Medicaid approved institution will not exceed the month of entrance and the following two months are considered to be in temporary care and eligibility is to be determined under independent living methodologies. The person would be treated as though he or she were still living in the community and be included in either an individual or family group assistance plan as appropriate. However, this provision would not be applicable to the extent that it conflicts with the requirements of 8143 regarding separate budgeting for institutionalized spouses and 8144.2 regarding application of the spousal impoverishment income provisions.
NOTE: A stay shall be defined as any continuous period of institutionalization, whether in a hospital, nursing facility, other institution, or a combination of one or more.
On the other hand, long term care shall be generally defined as a stay which will exceed the month of entrance and the following two months except when spousal impoverishment provisions apply as indicated below. Long term care policies would be applicable beginning with the month of entrance for children under the age of 18 entering an institutional arrangement or the month following the month of entrance for adults, except that financial eligibility methodologies will vary for individuals in adult care homes based on whether or not the individual meets the monthly liability amount as specified in 8172.
For institutionalized spouses for whom the spousal impoverishment provisions of 8144 and subsections are applicable and for children under the age of 18 as described in 2666 and 8183, long term care shall be defined as a stay which will last at least 30 consecutive days.
If the stay does not exceed this time period, independent living methodologies (including HCBS or PACE) would be applicable as noted above. If the stay is determined to exceed this time period, long term care policies would be applicable beginning with the month following the month of entrance except for those persons in which application of the spousal impoverishment provisions of 8144.2 are more beneficial. In addition, financial eligibility methodologies will vary for individuals in adult care homes based on whether or not the individual meets the monthly liability amount as specified in 8172.
If the individual enters the institution from an HCBS arrangement, the requirements of 8173 apply.
NOTE: If an individual is initially processed as being in temporary care and the stay exceeds those time lines, long term care policies shall then be applied beginning in the third month following the month of entrance.
All individuals applying for admission to a nursing facility, either as private pay or under medical assistance must have a needs assessment completed to determine if nursing facility level of care is appropriate. The assessment will also determine if the individual has mental illness or an intellectual disability (or related condition) and is in need of specialized services. KDADS is responsible for management of the assessment process. The current screening instrument, the Client Assessment, Referral and Evaluation (CARE) is completed by assessors through the local ADRC. The CARE process also incorporates federal Pre-admission Screening and Resident Review (PASRR) requirements. The CARE includes a Level I assessment, which is completed for all persons. A Level II evaluation is completed if mental illness or an intellectual disability is indicated through the Level I.
For most persons seeking medical assistance in a nursing facility or nursing facility for mental health, a level of care (LOC) threshold must be met. The threshold, determined by KDADS, is commonly referred to as functional eligibility. The need for a functional eligibility determination must be evaluated for all individuals requesting medical assistance reimbursement of facility expenses. The CARE is the primary instrument used for making a functional eligibility determination, along with the Uniform Assessment Instrument (UAI) and the Multiple Data Set (MDS) in limited situations LOC information is obtained through KDADS using the ES-3164 on the online CARE inquiry system.
Individuals who are determined to be exempt from a CARE assessment, as described in 8114.1 and 8114.2, do not require a LOC determination, nor are they negatively impacted by a LOC score below the threshold.
NOTE: The CARE assessment requirements in this section do not apply to ICF/IID admissions. See 8112.2 for ICF/IID prior approval requirements.
Unless delayed or not required as per Section 2.1.4 of the KDADS Level I CARE Manual payment to the facility shall not be approved until the CARE is completed (or the PASRR requirements have been otherwise satisfied as per KDADS) and the individual has been found to meet LOC requirements.
A CARE assessment may be delayed if the individual is admitted under a special or emergency admission as defined by KDADS. Emergency admissions are made in specified situations, such as an APS placement, to allow the individual to obtain immediate care. Special admissions are made for a specified period of time, generally 7 to 30 days, as determined by KDADS. If the individual is otherwise eligible, payment shall be made during the special admission period. However, persons seeking reimbursement for services following the expiration of the special or emergency period must have a CARE completed and meet level of care. Payment to the facility shall terminate following the special or emergency period if the CARE is not completed but may be reinstated when the CARE is completed.
Example 1: A 7-day emergency admission is made for an individual on 06-01-04. A CARE assessment is subsequently completed on 06-14-04 and the individual is found in need of care. Payment may be approved for the first 7 days of the stay through the emergency admittance policy. However, continued payments cannot resume until 06-14-04, when the required follow up CARE was completed. There is no Medicaid reimbursement for payment between 06-08-04 and 06-13-04.
Example 2: Individual is admitted under a 30-day special admission on 07/01. On 07/20 the recipient is still at the facility, so a LOC score is requested. Verification of the CARE/LOC is received on 07/27 stating client meets the LOC. Payment now continues beyond day 30 because the CARE has been completed and LOC has been met.
For situations not exempt or delayed from CARE, no reimbursement for NF care will be made prior to the completion of the CARE and any necessary Level II screen. If a CARE is completed and the client meets the level of care, Medicaid payment may be approved beginning with the date the CARE assessment was completed. When NF reimbursement is denied for an individual who is otherwise eligible for reimbursement solely because of the delayed CARE, the individual is not responsible for any NF costs during the period of delay. These costs are assumed by the nursing facility.
Verification that the beneficiary has met necessary level of care is required. For the majority of individuals, KDADS will compute a Level of Care score and document the determination on the online ES-3164. This will be completed within 10 working days of receiving the request for the determination. However, for persons referred for a Level II evaluation, no LOC score will be computed. Appropriateness of placement is determined by the Level II evaluation, which override, any Level I score. The Level I score will not be communicated if a Level II has been completed. A Level II evaluation may find the individual is approved for a limited stay only. In these situations, payment is approved for the duration of the limited stay only. Medicaid reimbursement terminates at the end of the period unless a subsequent screen provides for extended payment. A new online ES-3164 must be sent to the KDADS CARE Coordinator to determine if a new assessment has been completed. The request is initiated 10-days prior to the expiration of the limited stay.
Persons with a Level II approval may be served in an NF or NF MH. However, a Level II evaluation must be completed indicating a need for MH level of care prior to approval for an NF MH placement. Persons without an appropriate Level II finding are not eligible in an NF MH.
The following persons are exempt from a LOC determination:
If the client was assessed as appropriate for NF Level of CARE, the client may choose to receive NF care, HCBS or PACE (if available). If the individual chooses NF placement, financial eligibility shall be determined using procedures outlined in 8172.
If an individual residing in an NF does not meet the necessary criteria because a current CARE has not been completed or level of care is not met, financial eligibility is determined according to the procedures outlined in 8171.
Eligible individuals in Medicaid approved nursing facilities will be reassessed for the need for NF level care on a recurring basis through the MDS assessment. Individuals identified as high functioning and for whom placement in a less intensive HCBS care setting is being sought will be placed in resident status review. The individual must cooperate in this process and accept appropriate care and services that are available in a less intensive setting. Failure to do so will lead to termination of nursing facility payment. The designated case manager will notify agency staff when the need to terminate payment is required and action to do so must be based on timely and adequate notice. Eligibility would also be adjusted accordingly.