---
kind: "section"
citation: "42 C.F.R. § 435.735"
title: "42"
number: "435.735"
heading: "Post-eligibility treatment of income and resources of individuals receiving home and community-based services furnished under a waiver: Application of patient income to the cost of care."
url: "https://uscodex.org/cfr/42/435.735"
---

# §435.735. Post-eligibility treatment of income and resources of individuals receiving home and community-based services furnished under a waiver: Application of patient income to the cost of care.

- (a) The agency must reduce its payment for home and community-based services provided to an individual specified in [paragraph (b)](#b) of this section, by the amount that remains after deducting the amounts specified in [paragraph (c)](#c) of this section from the individual's income.
- (b) This section applies to individuals who are eligible for Medicaid under [§ 435.217](/cfr/42/435.217.md), and are eligible for home and community-based services furnished under a waiver of State plan requirements specified in [part 441](/cfr/42/part441.md), subpart [G](/cfr/42/subpartG.md) or [H](/cfr/42/subpartH.md) of this subchapter.
- (c) In reducing its payment for home and community-based services, the agency must deduct the following amounts, in the following order, from the individual's total income (including amounts disregarded in determining eligibility):
  - (1) An amount for the maintenance needs of the individual that the State may set at any level, as long as the following conditions are met:
    - (i) **The deduction amount is based on a reasonable assessment of need.**
    - (ii) The State establishes a maximum deduction amount that will not be exceeded for any individual under the waiver.
  - (2) For an individual with only a spouse at home, an additional amount for the maintenance needs of the spouse. This amount must be based on a reasonable assessment of need but must not exceed the higher of—
    - (i) The more restrictive income standard established under [§ 435.121](/cfr/42/435.121.md); or
    - (ii) **The medically needy standard for an individual.**
  - (3) **For an individual with a family at home, an additional amount for the maintenance needs of the family.** This amount must—
    - (i) Be based on a reasonable assessment of their financial need;
    - (ii) Be adjusted for the number of family members living in the home; and
    - (iii) Not exceed the higher of the need standard for a family of the same size used to determine eligibility under the State's approved AFDC plan or the medically needy income standard established under [§ 435.811](/cfr/42/435.811.md) for a family of the same size.
  - (4) Amounts for incurred expenses for medical or remedial care that are not subject to payment by a third party, including—
    - (i) Medicare and other health insurance premiums, deductibles, or coinsurance charges; and
    - (ii) Necessary medical or remedial care recognized under State law but not covered under the State's Medicaid plan, subject to reasonable limits the agency may establish on amounts of these expenses.

## Notes

### Amendments

[46 FR 48540, Oct. 1, 1981, as amended at 50 FR 10026, Mar. 13, 1985; 57 FR 29155, June 30, 1992; 58 FR 4932, Jan. 19, 1993; 59 FR 37716, July 25, 1994]

### Authority

Authority: 42 U.S.C. 1302.

### Source

Source: 43 FR 45204, Sept. 29, 1978, unless otherwise noted.

### Amendments

[46 FR 48540, Oct. 1, 1981, as amended at 50 FR 10026, Mar. 13, 1985; 57 FR 29155, June 30, 1992; 58 FR 4932, Jan. 19, 1993; 59 FR 37716, July 25, 1994]