Section R. 330.8242 - Ability-to-pay determinations based on total financial circumstancesRule 8242.
(1) If a responsible party's ability-to-pay is determined pursuant to section 819 of the mental health code, 1974 PA 258, MCL 330.1819, all the following provisions apply:(a) The financial determination based on the responsible party's total financial circumstances must consider all the following as specified in the process and table in subrule (2)(i) of this rule: (i) Qualifying income and protected income.(ii) Net liquid assets and protected assets.(iii) Applicable poverty guidelines for family size.(iv) Excess medical expenses.(v) Court-ordered payments, including those payments from a divorce decree.(vi) Student loan payments.(vii) Additional tax obligations assessed by municipal, county, state, or federal taxing authorities.(b) If the responsible party is the individual and is a family of 1 who has no expenses other than room and board expenses in an inpatient, specialized residential, or supported independent housing, an alternate full financial determination under subrule (2) of this rule must be completed that does not take into consideration all the provisions specified in R 330.8242. This alternate full financial determination must only include the following:(i) Qualifying income and protected income.(ii) Net liquid assets and protected assets.(iii) The personal needs allowance under the medical assistance program or its successor.(iv) Expense deduction equal to the provider payment rate for appropriate living arrangements allowed under the medical assistance program or its successor.(c) When determining ability-to-pay for an individual receiving inpatient services, one half of any compensation paid to the individual for performing labor under section 736 of the mental health code, 1974 PA 258, MCL 330.1736, must be protected.(d) Protected assets must be the same asset limit amounts allowed for the Medicaid group 2 category under the medical assistance program or its successor.(e) The department shall develop policies, procedures, and other tools for use in calculating a responsible party's ability-to-pay under these rules.(2) The public mental health system full financial consideration ability-to-pay process and table is described as follows: (a) Determine the percent of poverty specified as the current federal minimum mandatory income level to qualify for medical assistance programs or its successor as specified in the patient protection and affordable care act of 2010, Public Law 111-148, or its successor.(b) Determine net assets by subtracting all costs incurred to liquidate liquid assets, including protected assets, from liquid assets.(c) Determine qualifying income.(d) Deduct from qualifying income to determine total income available for cost of care for all the following: (ii) Poverty guideline for family size at percent or poverty determined in subdivision (a) of this subrule.(iii) Excess medical expenses.(iv) Court ordered payments, including a divorce decree.(v) Student loan payments.(vi) Additional tax obligations assessed by municipal, county, state, or federal taxing authority. The result is income available for cost of care.(e) Divide qualifying income from subdivision (c) of this subrule by the poverty guidelines for family size at 100% of poverty and convert to a percentage.(f) Match percentage determined in subdivision (e) of this subrule to the table in subrule (3) of this rule to determine the percent of income available for cost of care to charge as ability-to-pay.(g) Multiply the percentage determined in subdivision (f) of this subrule by the income available for cost of care determined in subdivision (a) of this subrule. The result is the annual ability-to-pay from income.(h) Add net assets from subdivision (b) of this subrule to the annual ability-to-pay from income determined from subdivision (g) of this subrule. The result is the annual ability-to-pay.(3) The following income and ability-to-pay crosswalk table must be used in the determination of the percent income for subrule (2)(f) of this rule. Qualifying Income as a Percent of applicable poverty guidelines. | % Of Income charged as Ability- to-Pay |
100% | 0% |
101 - 200% | 10% |
201 - 250% | 15% |
251 - 300% | 20% |
301 - 400% | 25% |
401+ | 30% |
(4) The alternate calculation process for full financial consideration for ability-to-pay is as follows: (a) Determine net assets by subtracting all costs incurred to liquidate liquid assets and protected assets from liquid assets.(b) Determine qualifying income.(c) Deduct from qualifying income, as applicable, all the following: (ii) Personal needs allocation.(iii) Expense deduction equal to the provider payment rate for appropriate living arrangements as allowed under the medical assistance program or its successor. The result is the income available for the cost of care.(d) Add net assets from subdivision (a) of this subrule to income available for cost of care from subdivision (c) of this subrule. The result is the annual ability-to-pay.Mich. Admin. Code R. 330.8242
1997 AACS; 2022 MR 18, Eff. 9/27/2022