DEPARTMENT OF HEALTH AND HUMAN SERVICES

BEHAVIORAL HEALTH AND DEVELOPMENTAL DISABILITY

ADMINISTRATION

FINANCIAL LIABILITY FOR MENTAL HEALTH SERVICES

Filed with the secretary of state on September 20, 2022

These rules become effective 7 days after filing with the secretary of state.

(By authority conferred on the department of health and human services by sections 114,

818, and 842 of the mental health code, 1974 PA 258, MCL 330.1114, 330.1818, and

330.1842)

R 330.8005, R 330.8239, R 330.8240, R 330.8242, and R 330.8279 of the Michigan

Administrative Code are amended, as follows:

PART 8. FINANCIAL LIABILITY FOR BEHAVIORIAL HEALTH SERVICES

SUBPART 1. DEPARTMENT OF HEALTH AND HUMAN SERVICES

R 330.8005 Definitions.

Rule 8005. As used in this part:

(a) "Assets" means real and personal property that is owned, in whole or in part, by the

responsible party and that has cash value or equity value.

(b) "Department" means the department of health and human services.

(c) "Dependent" means an individual who is allowed as an exemption under section 30

of the income tax act of 1967, 1967 PA 281, MCL206.30.

(d) “Excess medical expenses” means medical and dental expenses that exceed the

threshold dictated by section 16 of the internal revenue code of 1986, 26 USC 213, that

would be allowed to be deducted on itemized tax returns, less expenses for medical

health services for the individual paid to the department or community mental health

services programs.

(e) “Family of 1” means the individual who has no dependent.

(f) “Family of 2” means the individual and their spouse.

(g) “Family size” means a family unit consisting of the individual, spouse, and

dependents.

(h) “Individual” means the individual, minor or adult, that receives services from the

department or a community mental health services program or from a provider under

contract with the department or a community mental health services program.

(i) “Liquid asset” means an asset that can be easily converted to cash. Examples of

liquid assets include, but are not limited to, the following:

August 31, 2022

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(i) Checking and savings accounts.

(ii) Cash.

(iii) Certificates of deposit.

(iv) Treasury bills.

(v) Money market investments.

(vi) Bonds.

(vii) Marketable securities, including stocks and bonds.

(viii) Pensions.

(ix) Deferred compensation.

(x) Annuities.

(xi) Other funds that can be withdrawn or used as collateral for a loan.

(j) “Poverty guidelines” means the version of the poverty threshold as issued annually

by the United States Department of Human Services.

(k) "Protected assets" means the portion of assets, as specified in these rules, that must

not be considered when the total financial circumstance is used to determine financial

liability.

(l) "Protected income" means the portion of income, as specified in these rules, that

must not be considered when the total financial circumstance is used to determine

financial liability.

(m) “Qualifying income” means income from whatever source derived, regardless of

whether the source is reported on federal or state returns. Qualifying income includes,

but is not limited to, the following:

(i) Earned and unearned income.

(ii) Government benefits.

(iii) Other entitlements.

(n) “Responsible party” means a person who is financially liable for services furnished

to an individual, including the individual, and, as applicable, the individual’s spouse and

parent or parents of a minor.

(o) "Spouse" means the legal marriage partner of the individual.

(p) "Undue financial burden" means a determination of ability-to-pay that would unduly

impact the health and well-being of the individual or dependents to access the basic

necessities of life, including, but not limited to, food, housing, clothing, and healthcare.

R 330.8239 Determination of ability-to-pay for non-residential services; parents of an

individual; member or non-member of the household.

Rule 8239. (1) A responsible party’s ability-to-pay for nonresidential services must be

the amount established by this rule’s non-residential ability-to-pay table based upon

the responsible party’s qualifying income and the most current poverty guidelines. The

responsible party’s ability-to-pay must be established on a per-session, monthly, or

annual basis, and the basis selected, and methodology used must be identified and

described in the department’s and community mental health services program’s written

policies.

(2) The ability-to-pay for a parent of an individual must be determined, as follows:

(a) If the parents of an individual, or the individual and spouse, are members of the

same household, the department or community mental health services program shall use

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the combined qualifying income to determine the ability-to-pay.

(b) If the parents of an individual, or the individual and spouse, are not members of the

same household, the ability-to-pay of each parent or of the individual and their spouse is

determined separately.

(c) A parent shall not be determined to have an ability-to-pay for more than 1 individual

at any 1 time, and a parent's total liability for 2 or more individuals shall not exceed 18

years.

(d) If either parent or either spouse has been made solely responsible for an

individual's medical and hospital expenses by a court order, the other parent or spouse

is determined to have no ability-to-pay.

(e) The ability-to-pay of the parent or spouse made solely responsible by court

order must be determined in accordance with this section. The ability-to-pay of a

parent made solely responsible by court order must be reduced by the amount of child

support the parent pays for the individual.

(f) If an individual receives services for more than 1 year, the department or

community mental health services program must annually redetermine the adult

responsible parties' ability-to-pay.

(3) An ability-to-pay may be determined on a per-session basis for nonresidential

services other than respite care services. During a calendar month, the per-session

ability-to-pay must not be more than the monthly ability-to-pay amount determined

from the non-residential ability-to-pay process and table specified as follows:

(a) Determine the percent of poverty specified as the current federal minimum

mandatory income level to qualify for medical assistance program or its successor, as

specified in the patient protection and affordable care act of 2010, Public Law 111-148,

or its successor.

(b) Multiply 100% of poverty guideline income for family size by the percentage

determined in subdivision (a) of this subrule. The result is the income level at which the

responsible party will have zero ability-to-pay from this table.

(c) Determine qualifying income.

(d) Divide qualifying income by income calculated in subdivision (b) of this subrule

and convert to a percentage.

(e) Match the percentage determined in subdivision (d) of this subrule to the table in

subrule (4) of this rule to determine the percent of income to charge as the ability-to-pay.

(f) Deduct from qualifying income the poverty guideline income for family size

determined in subrule (b) of this rule, at which the responsible party will have zero ability-

to-pay. The result is income available for cost of care.

(g) Multiply the percentage determined in subrule (e) of this rule by income available

for cost of care determined in subrule (f) of this rule. The result is the annual ability-to-

pay.

(4) The following income and ability-to-pay crosswalk table must be used in the

determination of the percent income for subrule (3)(e) of this rule.

Qualifying income as percent of applicable

poverty guidelines charged as ability-to-pay

Percentage of Income

100%

101 - 125%

0%

3%

4

126 - 150%

151 - 175%

176 - 200%

201 - 225%

226 - 250%

251 - 275%

276 - 300%

301 - 325%

326 - 350%

351 - 375%

376 - 400%

401 +

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

(5) The per-session ability-to-pay is applicable to each session of service provided to

all individuals for whom the responsible party has an obligation to pay under section

804 of the mental health code, 1974 PA 258, MCL 330.1804, but may not be, in

aggregate, more than the monthly ability-to-pay amount.

(6) A responsible party who has been determined under the medical assistance program

or its successor to be Medicaid eligible is determined to have a $0.00 ability-to-pay for

all mental health services other than inpatient. The ability-to-pay for inpatient services

must be the amount determined as the patient pay amount by the medical assistance

program or its successor.

(7) If the ability-to-pay for parents is assessed separately and their combined ability-to-

pay is more than the cost of services, then the charges must be prorated based on the ratio

of each parent’s income.

(8) A responsible party may request a new determination, based on the party’s total

financial circumstances, within 30 days after notification of the initial determination

made from the ability-to-pay process and table specified in subrule (4) of this rule.

(9) Parents of children receiving public mental health services under the home and

community-based waivers are determined to have a $0.00 ability-to-pay for the services

provided as part of the community-based waivers for children. Parents shall

independently arrange and pay for services that exceed or are not included in the services

provided under the home and community-based waivers for children if the parent desires

expanded services or those services are not included.

R 330.8240 Determination of fee for respite services.

Rule 8240. (1) The fee for respite services for a full day or any portion of the day must

be determined by dividing the monthly ability-to-pay amount determined from the non-

residential table specified in R 330.8239 by 30 and rounding up to the nearest dollar but

must not be more than the cost of services. A responsible party may request a new

determination under R 330.8239(8).

(2) Respite fees charged during a calendar month may not be, in aggregate, more than

the monthly ability-to-pay amount determined from the non-residential table.

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R 330.8242 Ability-to-pay determinations based on total financial circumstances.

Rule 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 these 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:

(i) Protected income.

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(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%

10%

15%

20%

25%

30%

101 - 200%

201 - 250%

251 - 300%

301 - 400%

401+

(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:

(i) Protected income.

(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.

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R 330.8279 Undue financial burden.

Rule 8279. A responsible party’s ability-to-pay must not create an undue financial

burden that does either of the following:

(a) Unduly impacts the health and well-being of the individual or their dependents as

determined by the ability to access the basic necessities of life, including, but not limited

to, food, housing, clothing, and healthcare.

(b) Deprives the party and his or her dependents of the financial means to maintain or

reestablish the individual in a reasonable and appropriate community-based setting.