M21-1 Manual / Part IX, Subpart iii, Chapter 2, Section A
Pension Reductions for Medicaid-Covered Nursing Facility Care
M21-1, Part IX, Subpart iii, Chapter 2, Section A
Overview
In This Section | | This section contains the following topics:| Topic | Topic Name |
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| 1 | General Information on Pension Reductions for Medicaid-Covered Nursing Facility Care | | 2 | Medicaid Definitions | | 3 | Identifying Medicaid-Covered Facilities | | 4 | Verifying Nursing Facility Status and Medicaid Plan Coverage | | 5 | Effective Dates for Payments Related to Nursing Facility/Medicaid Status - No Running Award | | 6 | Effective Dates for Reductions - Running Award | | 7 | Retroactive Increase for Running Awards During Period of Medicaid-Covered Nursing Facility Care | | 8 | Restoration of Benefits From the $90 Nursing Facility/Medicaid Rate Upon Discharge or Change in Status | | 9 | Elections Involving Pension Entitlement |
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1. General Information on Pension Reductions for Medicaid-Covered Nursing Facility Care
2. Medicaid Definitions
Introduction | | This topic contains information on Medicaid definitions, including- definition of
- Medicaid plan
- Medicaid-approved nursing facility, and
- covered by a Medicaid plan
- State Medicaid Home and Community-Based Waiver Program, and
- when the Medicaid eligibility process begins.
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IX.iii.2.A.2.a. Definition: Medicaid Plan | | A Medicaid planis a State plan for medical assistance per Title XIX, section 1902(a), of the Social Security Act (42 U.S.C. 1396a(a)).Medicaid is available only to certain low-income individuals and families. Medicaid does not pay money to individuals; instead, it sends payments directly to health care providers. |
IX.iii.2.A.2.b. Definition: Medicaid-Approved Nursing Facility | | A Medicaid-approved nursing facility is a nursing facility other than a State home that is approved to accept Medicaid patients per Title XIX, section 1919, of the Social Security Act (42 U.S.C. 1396r).References: For information on- identifying Medicaid-approved nursing facilities, see M21-1, Part IX, Subpart iii, 2.A.3.a, and
- the Medicaid policy for residential care settings for each State, see the U.S. Health and Human Services’ website, State Residential Care and Assisted Living Policy.
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IX.iii.2.A.2.c. Definition: Covered by a Medicaid Plan | | A beneficiarycovered by a Medicaid planfor services furnished by the nursing facility, has been found eligible for Medicaid coverage for services that the nursing facility provides.The facility is reimbursed under Medicaid for services furnished to the extent that the expenses- qualify for payment under the State’s Medicaid plan, and
- are not payable by a third party.
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IX.iii.2.A.2.d. State Medicaid Home and Community-Based Waiver Program | | Some beneficiaries receive Medicaid-paid services under a State Medicaid Home and Community-Based Service Waiver Program. If Waiver Program Medicaid Services are being received in an assisted living facility, personal care home, the person’s home, or any other facility that is not listed on the Medicare’s Nursing Home Compare website, then the beneficiary is not considered to be in a Medicaid-approved nursing facility, and is therefore not subject to the reduction to $90 under 38 U.S.C. 5503(d). |
IX.iii.2.A.2.e. When the Medicaid Eligibility Process Begins | | The beneficiary’s Medicaid eligibility process begins when the beneficiary files an application with the local Medicaid office. The date of receipt of the application generally determines the effective date of Medicaid coverage. When Medicaid coverage is established, a decision notice includes the effective date for the coverage. Reference: For information on confirming the status of Medicaid coverage, see M21-1, Part IX, Subpart iii, 2.A.4.h. |
3. Identifying Medicaid-Covered Facilities
Introduction | | This topic contains information on identifying Medicaid-covered facilities, including- identifying Medicaid-approved nursing facilities, and
- beneficiaries in State homes.
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Change Date | | February 9, 2021 |
IX.iii.2.A.3.b. Beneficiaries in State Homes | | Per 38 U.S.C. 5503(d), beneficiaries who are in State Veterans Homes are exempt from the $90 limit on pension benefits. Do not reduce pension under these provisions if the Medicaid-approved nursing facility is a State Veterans Home per 38 CFR 3.551(i). Reference: For more information on which facilities qualify as approved State Veterans Homes, see the National Association of State Veterans Homes’ website. |
4. Verifying Nursing Facility Status and Medicaid Plan Coverage
Introduction | | This topic contains information on verifying nursing facility status and Medicaid plan coverage, including- applying for Medicaid
- determining Medicaid eligibility
- when review and confirmation of nursing facility/Medicaid status is required
- when a Medicaid application is pending concurrently with a claim for Department of Veterans Affairs (VA) benefits
- assumed Medicaid coverage when determining VA benefits
- action required when there is
- no running award and Medicaid status must be confirmed, and
- a running award and it appears reduction under 38 CFR 3.551(i) would apply
- confirming Medicaid status
- obtaining Medicaid status information on incompetent Veterans, and
- when Medicaid coverage is terminated.
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Change Date | | February 9, 2021 |
IX.iii.2.A.4.a. Applying for Medicaid | | A Department of Veterans Affairs (VA) pensioner is not required to apply for Medicaid. However, a Medicaid applicant must apply for all benefits to which they may be entitled before Medicaid payments are made to reimburse a facility. |
IX.iii.2.A.4.b. Determining Medicaid Eligibility | | In determining Medicaid eligibility, a Medicaid office considers the amount of income remaining after deducting certain allowances for needs not met by the facility.A Medicaid office can process Medicaid applications and determine eligibility while claims for other benefits are pending. Medicaid eligibility is re-determined at least annually.Note: The income limit for a Medicaid applicant is determined by the State Medicaid plan and may differ from State to State. |
IX.iii.2.A.4.c. When Review and Confirmation of Nursing Facility/Medicaid Status Is Required | | When a current-law pension beneficiary who has neither spouse nor child is residing in a nursing facility, but not at VA expense- determine if the
- nursing facility is Medicaid approved, and
- beneficiary is covered by a Medicaid plan for services furnished by the nursing facility, and
- confirm the date the beneficiary was admitted to the nursing facility.
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IX.iii.2.A.4.d. When a Medicaid Application Is Pending Concurrently With a Claim for VA Benefits | | A Medicaid application can be pending simultaneously with a claim for VA benefits. Medicaid eligibility can be established retroactive to the date of application and can be effective from the month of admission to the Medicaid approved facility.When a beneficiary has a Medicaid application pending, assume that the beneficiary will be covered by a Medicaid plan retroactive to the date of admission to the nursing facility. Advise the beneficiary of this in any applicable contact/correspondence with the beneficiary related to this assumption. |
IX.iii.2.A.4.e. Assumed Medicaid Coverage When Determining VA Benefits | | Assume that Medicaid coverage began the month of admission to a Medicaid-approved nursing facility if- a beneficiary is found to be Medicaid eligible (or the beneficiary has a Medicaid application pending), but
- the date that the Medicaid coverage began (or will begin) cannot be specifically determined.
Advise the beneficiary that VA has assumed that Medicaid coverage began the date of the beneficiary’s admission to the nursing facility, and if the assumption is incorrect, the beneficiary should provide confirmation of their Medicaid status. |
IX.iii.2.A.4.f. Action Required When There Is No Running Award and Medicaid Status Must Be Confirmed | | Delay the award action pending confirmation of a beneficiary’s Medicaid status when the beneficiary- lives in a nursing facility, but does not have a running award, and
- is a
- Veteran who has neither spouse nor child
- surviving spouse without children, or
- surviving child.
Reference: For information on confirming a beneficiary’s Medicaid status, seeM21-1, Part IX, Subpart iii, 2.A.4.h. |
IX.iii.2.A.4.g. Action Required When There Is a Running Award and it Appears Reduction Under 38 CFR 3.551(i) Would Apply | | When the case of a beneficiary with a running award is reviewed for any reason, and it appears that the $90 nursing facility/Medicaid reduction under 38 CFR 3.551(i) would applyImportant: - A beneficiary may waive the 60-day due process period by requesting an immediate reduction in payments.
- Do not request re-certification of previously approved medical expenses when it appears reduction under 38 CFR 3.551(i) would apply, unless there is reason to question the validity of the previously approved medical expenses.
Examples:Situation 1: A Veteran with no dependents is receiving maximum pension benefits with prospective medical expenses based on assisted living fees since 2015. During October 2019, VA is notified by the administrator of a nursing facility that the Veteran entered a Medicaid approved nursing facility on September 15, 2019 as a patient; and the Veteran has been approved for a Medicaid plan. Result: Follow the due process procedures described in M21-1, Part X, Subpart ii, 3.A to reduce benefits to $90 date last paid. Do not request re-certification of previously approved medical expenses. Situation 2: A Veteran with no dependents is receiving maximum pension benefits with prospective medical expenses based on assisted living fees since 2015. During October 2019, VA is notified by the administrator of a nursing facility that the Veteran entered a Medicaid approved nursing facility on September 15, 2019 as a patient; and the Veteran has been approved for a Medicaid plan. The administrator also indicates that the Veteran left the previous assisted living facility in June 2017. Result: Follow the due process procedures described in M21-1, Part X, Subpart ii, 3.A to reduce benefits to $90 date last paid. Request medical expense information for the years 2017, 2018, and 2019 since the administrator informed VA that the previously approved prospective medical expenses changed during 2017. |
IX.iii.2.A.4.h. Confirming Medicaid Status | | Follow the steps in the table below to confirm the beneficiary’s Medicaid status.| Step | Action |
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| 1 | Determine whether the facility is Medicaid approved.Reference: For information on determining whether a facility is Medicaid approved, see M21-1, Part IX, Subpart iii, 2.A.3.a. | | 2 | If the facility is approved, determine- whether the nursing facility is providing Medicaid-covered care (or whether a Medicaid application is pending)
- the date Medicaid coverage began (or the date VA will assume that Medicaid coverage began, if the exact date cannot be determined)
- the date the beneficiary entered the nursing facility, and
- whether the beneficiary is a patient or resident of the facility.
If all information above is available within the electronic claims folder (eFolder), no further action is required. If information is still required to obtain the beneficiary’s Medicaid status, go to step 3. | | 3 | When it is necessary to obtain the beneficiary’s Medicaid status, contact either the- beneficiary
- fiduciary
- nursing home, or
- local Medicaid office.
If the beneficiary’s Medicaid application is pending, assume Medicaid-covered care in accordance with the provisions in M21-1, Part IX, Subpart iii, 2.A.4.d and e. | | 4 | Document the information obtained through telephone contacts or written correspondence for the eFolder.Note: Use VA Form 27-0820b, Report of Nursing Home or Assisted Living Information, for this purpose. |
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IX.iii.2.A.4.i. Obtaining Medicaid Status Information on Incompetent Veterans | | The fiduciary activity may be able to provide information on the Medicaid status of incompetent beneficiaries for whom they provide fiduciary oversight. |
IX.iii.2.A.4.j. When Medicaid Coverage Is Terminated | | When Medicaid eligibility is terminated, the Medicaid office provides formal notice, including the termination date.Medicaid is terminated prospectively at the end of the first calendar month that begins more than 10 days from the date of notice.Examples:- If notice is given March 1, Medicaid is terminated April 1.
- If notice is given March 25, Medicaid is terminated May 1.
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5. Effective Dates for Payments Related to Nursing Facility/Medicaid Status - No Running Award
Introduction | | This topic contains information on effective dates for pension payments related to nursing facility/Medicaid status when there is no running award, including- action to take when there is no running award for claims involving the $90 limitation required by 38 CFR 3.551(i)
- determining when to pay the $90 rate required by 38 CFR 3.551(i) in an original or supplemental award, and
- an example of an original pension award involving a Medicaid application.
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Change Date | | February 27, 2026 |
IX.iii.2.A.5.a. Action to Take When There Is No Running Award for Claims Involving the $90 Limitation Required by 38 CFR 3.551(i) | | Use the table below to determine the actions to take when there is no running award, the beneficiary (Veteran or surviving spouse) has no dependents or is a surviving child, and it is confirmed that the beneficiary is in a Medicaid-approved nursing facility. | If the beneficiary is in a Medicaid-approved nursing facility, and any of the following apply … | Then … | | is covered by a Medicaid plan for services furnished by the nursing facility | | | states that they are covered by a Medicaid plan | | has a Medicaid application pending |
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IX.iii.2.A.5.b. Determining When to Pay the $90 Rate Required by 38 CFR 3.551(i) in an Original or Supplemental Award | | Use the table below to determine when to pay the $90 nursing facility/Medicaid rate required by 38 CFR 3.551(i) in an original or supplemental award involving Medicaid-covered nursing home care (NHC). | If the effective date of the pension or Dependency and Indemnity Compensation (DIC) award is ... | Then ... | | one or more months earlier than the month in which Medicaid coverage began (or VA assumes it began) | - pay full benefits from the beginning of the award through the end of month in which the Medicaid coverage began, and
- reduce to $90 effective the first day of the following month.
| | in the same month or after the month Medicaid coverage began (or VA assumes it began) | pay $90 from the beginning of the award. |
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IX.iii.2.A.5.c. Example: Original Pension Award Involving Medicaid Application | | Situation:- The Veteran’s original pension claim, received on October 14, 2020, shows the Veteran has no dependents, resides in a nursing home, and has applied for Medicaid.
- The nursing home is Medicaid approved per Medicare’s Nursing Home Compare website.
- According to the nursing home manager, the Veteran’s Medicaid application is still pending.
Action:- Assume Medicaid will be approved retroactive to October 2020.
- Award pension of $90 per month per 38 CFR 3.551(i) from November 1, 2020, which is the earliest effective payment date for this award.
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6. Effective Dates for Reductions - Running Award
Introduction | | This topic contains information on the effective dates for reductions to $90 based on 38 CFR 3.551(i) when there is a running award, including- action required for running awards based on nursing facility/Medicaid status
- establishing and maintaining controls for the proposed adverse action for reductions based on nursing facility/Medicaid status
- determining the effective date of reductions based on nursing facility/Medicaid status, and
- beneficiary liability for overpayment for excess pension paid over the $90 nursing facility/Medicaid rate.
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Change Date | | February 9, 2021 |
IX.iii.2.A.6.a. Action Required for Running Awards Based on Nursing Facility/Medicaid Status | | Ensure all steps in the table below are completed for $90 reductions based on nursing facility/Medicaid status as required by 38 CFR 3.551(i). Note: For beneficiaries whose full benefits are already $90 per month or less, reductions for Medicaid do not apply.| Step | Action | | 1 | Complete all development. | | 2 | Send a notice of proposed action, if not already sent. | | 3 | Allow for the time period for submitting additional evidence. | | 4 | Reduce the award to $90 per month as of the effective date shown in M21-1, Part IX, Subpart iii, 2.A.6.c. | | 5 | Provide notification of the decision as stated in M21-1, Part VI, Subpart i, 1.B.1.b. |
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IX.iii.2.A.6.b. Establishing and Maintaining Controls for the Proposed Adverse Action for Reductions Based on Nursing Facility/Medicaid Status | | See M21-1, Part X, Subpart ii, 3.B for detailed procedures for establishing and maintaining controls, once a notice of proposed adverse action is sent for $90 reductions based on nursing facility/Medicaid status as required by 38 CFR 3.551(i). Clear the end product (EP) 135, and establish an EP 600 at the time a notice of proposed adverse action is released to the beneficiary for this issue. Exception: If the adjustment based on nursing facility/Medicaid status includes an administrative grant of aid and attendance (A&A), clear an EP 120 instead of EP 135. |
IX.iii.2.A.6.c. Determining the Effective Date of Reductions Based on Nursing Facility/Medicaid Status | | Under 38 CFR 3.103(b)(2), the effective date of a reduction of current-law pension to or for a nursing facility/Medicaid covered beneficiary is the latest of the following dates:- the first day of the month after the month
- in which Medicaid coverage begins, or
- following 60 days after issuance of a reduction notice, or
- the earliest date on which payment may be reduced without creating an overpayment (that is, the date of last payment).
Note: When the beneficiary willfully conceals information necessary to make the reduction, the date of reduction is the first day of the month following the month in which the willful concealment occurs. |
IX.iii.2.A.6.d. Beneficiary Liability for Overpayment for Excess Pension Paid Over the $90 Nursing Facility/Medicaid Rate | | A nursing facility/Medicaid covered beneficiary is not liable for excess pension paid over the $90 monthly limit, unless VA failure to reduce the amount is due to the beneficiary’s willful concealment of information necessary to make the reduction. |
7. Retroactive Increase for Running Awards During Period of Medicaid-Covered Nursing Facility Care
Introduction | | This topic contains information on retroactive increases for running awards during a period of Medicaid-covered nursing facility care, including- nursing facility/Medicaid beneficiaries without dependents receiving $90 or less
- action required when a nursing facility/Medicaid-covered beneficiary receives a retroactive increase
- an example of a retroactive increase for a nursing facility/Medicaid-covered beneficiary
- no retroactive increase in monthly rate after Medicaid coverage begins for beneficiaries receiving over $90 per month
- continuing the $90 nursing facility/Medicaid limit
- making a retroactive increase for nursing facility/Medicaid beneficiaries subject to 38 CFR 3.551(i), and
- example of a retroactive increase
- pending a notice of proposed adverse action for $90 nursing facility/Medicaid rate, and
- when a notice of proposed adverse action is required for $90 nursing facility/Medicaid rate.
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Change Date | | November 18, 2019 |
IX.iii.2.A.7.a. Nursing Facility/
Medicaid
Beneficiaries Without Dependents Receiving $90 or Less | | When monthly benefits are $90 or less for nursing facility/Medicaid beneficiaries who would otherwise be subject to the $90 limit per 38 CFR 3.551(i), an adjustment for nursing facility/Medicaid status does not apply. However, if monthly benefits become greater than $90 through retroactive increase, the $90 limit for nursing facility/Medicaid status does apply. |
IX.iii.2.A.7.b. Action Required When a Nursing Facility/Medicaid-Covered Beneficiary Receives a Retroactive Increase | | If a beneficiary is eligible for a retroactive increase, and the retroactive increase involves a period where nursing facility/Medicaid-covered status, subject to the $90 limit stated in 38 CFR 3.551(i), begins, pay the retroactive increase through the last day of the calendar month in which Medicaid coverage began, with payment then limited to no more than $90 from the first day of the next month. A notice of proposed adverse action is not required as long as the action does not reduce a running award or create an overpayment. |
IX.iii.2.A.7.c. Example: Retroactive Increase for a Nursing Facility/Medicaid-Covered Beneficiary | | Situation:- A Veteran, current-law pension beneficiary has been receiving Medicaid- covered nursing facility care since September 7, 2019.
- The Veteran received pension at the rate of $70 per month effective January 1, 2019, and $74 per month effective December 1, 2019.
- In 2020, the Veteran reports 2019 medical expenses that result in increased pension rates of $105 per month from January 1, 2019, and $110 per month from December 1, 2019.
Result: Pay $105 per month from January 1, 2019 (or February 1, 2019, if 38 CFR 3.31 applies), and $90 per month from October 1, 2019. |
IX.iii.2.A.7.d. No Retroactive Increase in Monthly Rate After Medicaid Coverage Begins for Beneficiaries Receiving Over $90 per Month | | Once Medicaid nursing facility coverage is established, limit the beneficiary’s award to $90 per month for any period after the month in which Medicaid coverage began. However, the actual reduction to $90 may take place months after the Medicaid coverage began. Therefore, when a greater rate of payment is established, based on a change in circumstances, no retroactive increase can be made for any period after the month in which Medicaid-covered nursing facility care began. The monthly benefits received during this time cannot be increased, because $90 per month should have been paid. |
IX.iii.2.A.7.e. Continuing the Nursing Facility/
Medicaid $90 Limit | | The effective date of the $90 limited nursing facility/Medicaid rate is binding on retroactive award adjustments. |
IX.iii.2.A.7.f. Making a Retroactive Increase for Nursing Facility/Medicaid Beneficiaries Subject to 38 CFR 3.551(i) | | For nursing facility/Medicaid beneficiaries subject to the $90 limit, per 38 CFR 3.551(i), make any retroactive increase (such as need for A&A established, or income change due to unreimbursed nursing home fees or other medical expenses) in accordance with the facts found. Award the beneficiary increased benefits through the end of the month in which Medicaid coverage began. Then, continue the old rate, from the first day of the next month after Medicaid coverage began, through the month before the $90 limited rate begins.Note: Complete the appropriate Veterans Benefits Management System – Award screens when adjusting a beneficiary’s award to $90. Do not establish a withholding to adjust for the $90 per month limit. |
IX.iii.2.A.7.g. Example: Retroactive Increase Pending a Notice of Proposed Adverse Action for $90 Nursing Facility/Medicaid Rate | | Situation: - A Veteran pension beneficiary is admitted to a nursing home on March 20, 2020.
- Medicaid coverage began in May 2020, and the reduction to $90 is pending a notice of proposed adverse action.
- Entitlement to A&A is now established, based on nursing home patient status.
Result: - Adjust the beneficiary’s running award to pay the A&A rate from April l, 2020.
- Reduce the award to the rate without A&A from June 1, 2020.
- Further reduce the award to the $90 nursing facility/Medicaid rate following the expiration of the notice of proposed adverse action period.
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IX.iii.2.A.7.h. Example: Retroactive Increase When a Notice of Proposed Adverse Action Is Required for $90 Nursing Facility/Medicaid Rate | | Situation: - A Veteran beneficiary received pension at the rate of $200 per month effective January 1, 2019, and $212 per month effective December 1, 2019.
- 2020 correspondence from the Veteran indicates the Veteran is receiving Medicaid and is entitled to a retroactive adjustment for medical expenses.
- A review of the evidence shows that the Veteran has been receiving Medicaid covered NHC since September 2019.
Result: - The medical expense adjustment results in a new pension rate of $300 per month from January 1, 2019 (or February 1, 2019, if 38 CFR 3.31 applies) and $316 per month effective December 1, 2019.
- Pay the increase to $300 per month from January 1, 2019, (or February 1, 2019, if 38 CFR 3.31 applies).
- Pay the previous rate of $200 per month effective October 1, 2019, (first of the month after Medicaid coverage began).
- Pay the previous rate of $212 effective December 1, 2019, and continue that rate pending notice of proposed adverse action to $90 per month.
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8. Restoration of Benefits From the $90 Nursing Facility/Medicaid Rate Upon Discharge or Change in Status
Introduction | | This topic contains information on restoration of full benefits from the $90 nursing facility/Medicaid rate upon discharge from a nursing facility, change to nursing home private pay status, or establishment of a dependent, including- cases in which a limited $90 nursing facility/Medicaid rate no longer applies with a change in status
- effective dates for restoration to the full rate of pension from the $90 nursing facility/Medicaid rate
- considering Veteran admitted to a VA medical center (VAMC) who is currently receiving the $90 nursing facility/Medicaid rate, and
- effective dates to award or restore DIC when the $90 nursing facility/Medicaid rate no longer applies.
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Change Date | | February 27, 2026 |
IX.iii.2.A.8.a. Cases in Which a Limited $90 Nursing Facility/Medicaid Rate No Longer Applies With a Change in Status | | A beneficiary’s full monthly pension or DIC award should be restored, from the $90 nursing facility/Medicaid rate- upon discharge from Medicaid-covered nursing facility care
- upon return to private pay status in a Medicaid-approved nursing facility, or
- with the establishment of a spouse or dependent child.
Note: If the beneficiary transfers from one facility to another, the status of Medicaid coverage must be re-determined. |
IX.iii.2.A.8.b. Effective Dates for Restoration to the Full Rate of Pension From the $90 Nursing Facility/Medicaid Rate | | Restore the beneficiary’s full rate of pension, including A&A, without regard to the provisions of 38 CFR 3.31, if awarded but not paid due to the $90 nursing facility/Medicaid limitation from the date- of discharge or release from the institution providing Medicaid-covered nursing facility care
- on which an institutionalized beneficiary returns to private pay status, or
- on which the beneficiary gains a spouse or dependent child.
When adding a dependent, add the dependent to the award in accordance with the provisions of 38 CFR 3.31.Example:Situation: - A single Veteran is receiving care in a Medicaid-covered nursing facility. The Veteran is eligible for A&A.
- On October 14, 2020, the Veteran marries. The Veteran’s spouse has no income.
Result: Adjust the pension award to- remove the $90 limit, and pay the increased A&A rate, effective October 14, 2020, and
- add the spouse to the award effective November 1, 2020 (per 38 CFR 3.31).
Note: If the spouse’s income had reduced the pension rate to below $90 per month, the spouse would have been added to the award on October 14, 2020, the date of marriage. Reference: For more information on the effective date to restore DIC benefits, see M21-1, Part IX, Subpart iii, 2.A.8.d. |
IX.iii.2.A.8.c. Considering Veteran Admitted to a VAMC Who Is Currently Receiving the $90 Nursing Facility/Medicaid Rate | | When a Veteran, who is currently receiving the $90 nursing facility/Medicaid rate, is admitted to a VA medical center (VAMC), the length of time Medicaid continues to cover nursing home expenses, in order to hold a bed, varies from State to State. Therefore, continue the $90 nursing facility/Medicaid payment until Medicaid indicates that the Veteran is no longer covered by Medicaid. |
IX.iii.2.A.8.d. Effective Dates to Award or Restore DIC When the $90 Nursing Facility/Medicaid Rate No Longer Applies | | When evidence is received within a year of the date Medicaid coverage terminated showing a beneficiary getting the $90 rate is no longer receiving such coverage, and the claimant is entitled to DIC benefits, award or restore DIC benefits as of the date Medicaid coverage terminated.If the evidence is received more than one year from the date Medicaid coverage terminated, DIC benefits will be awarded or restored the later of either the- date the evidence was received, or
- date entitlement arose.
Notes: - A DIC rating may be required prior to paying the DIC benefits if Survivor’s Pension was paid as the greater benefit and a rating was not previously completed for service-connected death.
- The delayed payment provisions of 38 CFR 3.31 do not apply in this situation, because the award of DIC is considered an exception under 38 CFR 3.31 (c)(3)(iii).
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9. Elections Involving Pension Entitlement
Introduction | | This topic contains information on elections involving pension entitlement, including- entitlement under more than one law
- awarding Veterans Pension at the $90 nursing facility/Medicaid rate instead of compensation as the greater benefit
- surviving spouses entitled to DIC and Survivors Pension at the $90 nursing facility/Medicaid rate
- awarding Survivors Pension at the $90 nursing facility/Medicaid rate instead of DIC as the greater benefit
- action required when a surviving spouse’s election is received for the $90 nursing facility/Medicaid rate
- election between pension programs for nursing facility/Medicaid beneficiaries
- deferring award action for prior law pension beneficiaries who elect the $90 nursing facility/Medicaid rate as the lesser benefit, and
- confirmation of election of $90 nursing facility/Medicaid rate as the lesser benefit for prior law pension beneficiaries.
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Change Date | | February 27, 2026 |
IX.iii.2.A.9.a. Entitlement Under More Than One Law | | For information on the procedures to follow for entitlement under more than one law after an election is received, see M21-1, Part VI, Subpart ii, 1.A.4. |
IX.iii.2.A.9.b. Awarding Veterans Pension at the $90 Nursing Facility/Medicaid Rate Instead of Compensation as the Greater Benefit | | Use the table below to determine the actions to take when a beneficiary is entitled to both Compensation (at a rate greater than the $90 rate) and Veterans Pension at the $90 nursing facility/Medicaid rate.| Step | Action | | 1 | Determine if the Veterans Pension beneficiary is- a Veteran with no dependents
- covered by Medicaid
- in a Medicaid approved nursing facility, and
- is entitled to
- compensation at a rate greater than $90, and
- Veterans Pension at the $90 nursing facility/Medicaid rate.
If yes, go to Step 2.If no, disregard the remaining steps in the table and pay compensation as the greater benefit.
| | 2 | Award Veterans Pension at the $90 rate as the greater benefit. | | 3 | Inform the Veteran that compensation is the greater VA benefit, but that- the $90 per month Veterans Pension
- is protected for Medicaid purposes, and
- may provide the Veteran more money for personal use, and
- compensation can be elected at any time in the future by submitting a written request expressing a desire to receive that benefit.
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IX.iii.2.A.9.d. Awarding Survivors Pension at the $90 Nursing Facility/Medicaid Rate Instead of DIC as the Greater Benefit | | Use the table below to determine the actions to take when a surviving spouse may be granted DIC and is also eligible for the Survivors Pension $90 nursing facility/Medicaid rate.| Step | Action | | 1 | Determine if the surviving spouse is- in a Medicaid approved facility
- covered by Medicaid
- without dependents, and
- entitled to DIC.
If yes, go to Step 2.If no, disregard the remaining steps in the table and pay DIC. | | 2 | Award Survivors Pension at the $90 nursing facility/Medicaid rate as the greater benefit without- a formal election, or
- reelection.
| | 3 | Inform the surviving spouse that DIC is the greater monetary VA benefit, but that the lesser monetary benefit of $90 per month Survivors Pension- is protected for Medicaid purposes
- may provide more money for personal use, and
- DIC can be elected at any time in the future by submitting a written request expressing a desire to receive that benefit.
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IX.iii.2.A.9.e. Action Required When a Surviving Spouse’s Election Is Received for the $90 Nursing Facility/Medicaid Rate | | When an election is received from a surviving spouse eligible for the $90 nursing facility/Medicaid rate, take action to award $90 per month Survivors Pension from the date last paid. Follow due process procedures for running awards. Do not create an overpayment.Important: A beneficiary may waive the 60-day due process period by requesting an immediate reduction in payments. |
IX.iii.2.A.9.f. Election Between Pension Programs for Nursing Facility/Medicaid Beneficiaries | | Defer award action if the $90 per month nursing facility/Medicaid rate is less than the current monthly rate under the prior pension law, when an election of current-law pension is received from a Medicaid beneficiary who is a- Veteran or surviving spouse currently receiving Section 306 Pension or Old-Law Pension, or
- surviving spouse receiving Spanish American War Pension.
Exception: Do not defer award action if the Veteran or surviving spouse, or their fiduciary, requests an immediate reduction to the $90 nursing facility/Medicaid rate. |
IX.iii.2.A.9.g. Deferring Award Action for Prior Law Pension Beneficiaries Who Elect the $90 Nursing Facility/Medicaid Rate as the Lesser Benefit | | If award action must be deferred when an election of current-law pension is received from a prior pension law beneficiary eligible for the $90 nursing facility/Medicaid rate as the lesser benefit, inform the Section 306 or Old-Law Pension Medicaid beneficiary by a locally-generated letter- the exact monthly rates payable under each law for the periods indicated, and
- that further action on the election will not be taken unless they furnish a signed statement expressing a desire to receive the lesser benefit.
Note: At the time of the deferral letter, clear the EP 150. |
IX.iii.2.A.9.h. Confirmation of Election of $90 Nursing Facility/Medicaid Rate as the Lesser Benefit for Prior Law Pension Beneficiaries | | Do not maintain a control for confirmation of the election of the $90 nursing facility/Medicaid rate, as the lesser benefit, for prior law pension beneficiaries. When confirmation of the election is received, award $90 per month current-law pension from the date last paid.Note: No overpayment will be created when an election between pension programs is processed. |
Source: VA M21-1 Adjudication Procedures Manual, M21-1, Part IX, Subpart iii, Chapter 2, Section A (U.S. government work, reproduced for reference). Browse all sections →