B-7400, Application for Institutional Care

Revision 12-3; Effective September 1, 2012

HHSC is responsible for processing Medicaid applications for certain residents of Medicaid facilities (Medicare SNF, NF, ICF/IID and institutions for mental diseases (IMD)). To qualify for medical assistance for institutional care, a person must:

  • meet the 30-consecutive-day stay requirement (for verification and documentation requirements, see Appendix XVI, Documentation and Verification Guide);
  • meet financial criteria; and
  • have an approved level of care or medical necessity determination.

Reference: Section B-6300, Institutional Living Arrangement.

HHSC processes:

  • initial applications from persons whose income is equal to or in excess of the reduced SSI federal benefit rate; and
  • reapplications for Medicaid from persons who will be or have been denied SSI on the basis of excess income because the SSI federal benefit rate has been reduced after entry into a Medicaid facility.


B-7410 Persons Under Age 22

Revision 09-4; Effective December 1, 2009

State law (Chapter 242, Health and Safety Code) requires that community resource coordination groups (CRCG) be notified when a recipient under age 22 with a developmental disability enters an institutional setting. HHSC must notify the CRCG in the county of residence of the recipient's parent or guardian within three days of the recipient's admission.

The name and telephone number of the appropriate CRCG can be obtained by calling the CRCG state office at 1-866-772-2724. A CRCG list is available on the Internet at: /services/service-coordination/community-resources-...

Documentation of the notification to the CRCG should be filed in the case record.


B-7420 Level of Care/Medical Necessity

Revision 20-4; Effective December 1, 2020

To be eligible for Medicaid in an institutional setting, a person must have an approved level of care (LOC) for an intermediate care facility for persons with intellectual disabilities (ICF/IID) or an approved medical necessity (MN) with a nursing facility LOC. Texas Medicaid & Healthcare Partnership (TMHP), the state Medicaid claims administrator, is responsible for determining MN for recipients in Medicaid certified facilities.

Do not approve a person for medical assistance for institutional care unless the person has been in a Medicaid facility for at least 30 days and has an approved LOC or MN determination.

For applicants residing in a Medicare skilled nursing facility, the Medicare determination of need for care is acceptable as verification of a valid MN determination. Form 3071, Recipient Election/Cancellation/Discharge Notice, substitutes for the MN determination when hospice is elected as referenced in A-5200, Hospice in a Long-Term Care Facility.

Use the previous LOC or MN determination if:

  • a person is being reinstated for assistance (a case that was denied in error or a request for a program transfer from SSI to MEPD institutional care); and
  • vendor payments were made to the Medicaid facility up to the date of denial based on the previous LOC or MN determination.

Program Support Unit (PSU) staff are responsible for providing verification of an approved LOC or MN determination for a person applying for a Home and Community Based Services (HCBS) waiver program.

An approved MN determination for HCBS waiver eligibility is valid to complete a program transfer from an HCBS waiver Medicaid program to the appropriate institutional care program.

A permanent MN determination remains valid at reapplication if a denied Medicaid recipient is discharged from a Medicaid facility for not more than 30 days.

If the LOC or MN determination is still pending prior to certification and the person meets all other eligibility criteria, place the application on delay pending the approved LOC or MN. If verification of the LOC or MN is not received before the end of the delay period, deny the application for no LOC or MN. If the LOC or MN determination is denied, deny the application.

Reopen the application if verification of an approved LOC or MN is received within 90 days of the date of denial following policy in B-5000, Previously Completed Application.

Related Policy

Previously Completed Application, B-5000
Establish Processing Deadlines, R-3100
Documentation and Verification Guide, Appendix XVI


B-7430 Reserved for Future Use

Revision 20-4; Effective December 1, 2020


B-7431 Denial of Level of Care/Medical Necessity Determination

Revision 13-4; Effective December 1, 2013

If a level of care/medical necessity determination is denied for an MEPD recipient, initiate denial procedures immediately.

A recipient may continue to be Medicaid-eligible as long as the recipient meets all eligibility criteria and:

  • has a diagnosis of mental illness, intellectual disabilities or a related condition;
  • no longer meets the medical necessity criteria; and
  • has lived in a nursing facility for 30 months before the date medical necessity is denied and chooses to remain in the facility.

If the recipient has not been in the facility for 30 months, regular Medicaid denial procedures apply.

If an MEPD recipient in a private Medicaid facility is denied solely because of no level of care/medical necessity determination, refer the person to SSA if available income is less than the SSI full federal benefit rate. Refer SSI recipients who are denied a level of care/medical necessity determination to SSA for rebudgeting to the full federal benefit rate.


B-7440 Alternate Care Services

Revision 21-3; Effective September 1, 2021

Information about all available long-term services and supports must be provided to long term care recipients, their authorized representatives (ARs) and at least one family member of the recipient, if possible. This allows them to make an informed decision about service options.

Form H1204, Long Term Care Options, provides information on available long-term services and supports. It is included with the TF0001, Notice of Case Action, for all MEPD certifications, except for recipients residing in state supported living centers, state hospitals and state centers.

If an applicant, recipient, AR or family member(s) has questions about available long-term care services, refer them to 2-1-1 for current information.

Form H1746-A, MEPD Referral Cover Sheet, includes an "LTSS Information Shared" checkbox. Referring agencies will select the box to indicate that Form H1204 has been shared with the person.


B-7450 Medicaid Certified Person Enters Nursing Facility or Home and Community-Based Services Waiver Program

Revision 22-2; Effective June 1, 2022

Eligibility Systems and Payment Systems

Service Authorization System Online (SASO) identifies the recipient as Service Group 1 and allows vendor payment when:

  • an active recipient with coverage Code R (either Long Term Care or Texas Works) enters a nursing facility; and
  • has a valid medical necessity and facility admission.

The system also automatically assigns a Code 60 (authorization for unlimited medications). This allows all medications to be paid through the vendor drug benefit.

If the nursing facility stay is temporary and the recipient returns home before being transferred to institutional Medicaid, no action is required. Retroactive coverage code changes are not needed.

Texas Works Medicaid to MEPD

If an active Texas Works Medicaid recipient enters a facility for a long-term stay, TIERS receives the nursing facility admission information from the DADS webservice interface. TIERS automatically denies the Texas Works Eligibility Determination Group (EDG) and creates a pending ME-Nursing Facility EDG. An H1200 Application for Assistance - Your Texas Benefits must be received before testing for ME-Nursing Facility Medicaid. Disposition of both EDGs must be coordinated. There is no need for retroactive coverage code changes. Vendor payment and medications are authorized through SASO.

If a facility notifies HHSC that an active Texas Work Medicaid recipient has entered the facility, staff should advise the facility that an application is required. Once the application is received, process as any other application and coordinate with Texas Works.

Community to Nursing Facility or Home and Community-Based Services Waiver Eligibility Considerations

If an active MEPD Medicaid or Medicare Savings Program recipient enters a facility for a long-term stay or requests waiver services, before completing a program transfer, staff must address all factors that may impact eligibility or co-payment. Staff must explore transfer of assets and substantial home equity and provide required information about annuities, estate recovery and long-term care options. 

Related Policy

Medicaid Estate Recovery Program Notification Requirements, B-2600
Alternative Care Services, B-7440
Notice Requirements for Application and Redeterminations, F-7250
Medicaid Coverage Issues Related to Nursing Facility Costs, H-7300
Medicare Skilled Nursing Facilities, R-1210
Notices, R-1300