Reasonable Explanation at RD

The method of reasonable explanation is now included as part of the Medi-Cal eligibility verification process and allows the flexibility to request and accept an explanation to resolve certain income discrepancies for MAGI and Non-MAGI Medi-Cal at application and annual redeterminations. The reasonable explanation process will assist with the unwinding of the Covid-19 Public Health Emergency (PHE) and will continue after the PHE unwinding period has concluded.

Reasonable Explanation at RD for MC Income

For MAGI Medi-Cal, when income is not E-Verified from the Federal Data Services Hub (FDSH) or any electronic data source, the EW can provide the beneficiary an opportunity to explain the discrepancy that is consistent with current information found in the beneficiary’s file and that explains the difference. As Non-MAGI Medi-Cal eligibility rules are not determined in CalHEERS, EW’s can provide Non-MAGI beneficiaries an opportunity to explain discrepancies between self attested income and discrepancies with data found in electronic sources, including (but not limited to):

• Medi-Cal Eligibility Data System (MEDS)

• Income Eligibility and Verification System (IEVS)

NOTE: EWs must continue to follow guidance for acceptable e-verifications for Non-MAGI Medi-Cal. When an applicant or beneficiary is being evaluated for Non-MAGI eligibility and a discrepancy is found and the EW obtains a reasonable explanation that verifies the discrepancy, but would result in a share-of-cost (SOC) or higher SOC, the EW must obtain additional verification before continuing with the eligibility determination.

Reporting of Reasonable Explanation

A reasonable explanation can be used when income is not E-Verified in any of the following scenarios related to the Medi-Cal application or renewal process:

• When the Individual completes their redetermination by phone or in person, and the EW can gather a reasonable explanation while speaking with the Individual,

• When a redetermination is submitted by mail, fax, or electronically without income verification and the EW can contact the Individual by phone or their preferred method of contact to obtain a reasonable explanation, or

• A redetermination is submitted without income verification, and the county sends a written request, through the request for information form (e.g., MC 355), after attempts to reach the applicant or beneficiary by phone or through their preferred method of contact were not successful. A reasonable explanation would not be applicable for individuals with unsatisfactory immigration status as their self-attested income information cannot be verified against electronic data sources. EWs must continue to follow up by requesting paper documentation to administratively verify the self-attested income.

Reasonable Explanation Form

(DHCS 7103) EWs that are unable to obtain a reasonable explanation in person or through phone may send the “Request For Additional Income Information For Medi-Cal” Form (DHCS 7103) in addition to the appropriate request for information form (i.e, MC 355, CW 2200) in an attempt to obtain a reasonable explanation and/or manual verification.

Note: The DHCS 7103 is not to be mailed to the applicant as an independent form and needs to be utilized in conjunction with another request for verification form (i.e, MC 355, CW 2200). The due date on the DHCS 7103 should be the same as the verification form it is sent with

List of Reasonable Explanations for Income Discrepancies

The following reasonable explanations are not intended to be an exhaustive list. An applicant or beneficiary may have other causes that are not included, which can be accepted. When applicable, EWs must evaluate the reasonable explanation whether through phone or in writing, that is consistent with current information found in the beneficiary’s file and that explains the discrepancy. If the individual provides one (1) of these explanations, eligibility will be based on their self-attestation.

Changes in employment or income, such as:

• Job Loss,

• Decrease in hours,

• Working on commission

• Fluctuating income

• Seasonal income, or

• Self-employment related reason

Changes in household, such as:

• Marital status, or

• household member moving in or out of the home

Life Events, such as:

• Homelessness,

• Victim of identity theft,

• Victim of a natural disaster, or

• Intimate partner violence

Determining Medi-Cal Eligibility Based on Reasonable Explanation

Requesting additional income verification is unnecessary when a reasonable explanation is obtained. EWs may proceed with processing the renewal if the reasonable explanation resolves the discrepancy and is consistent with information available to the county. Thoroughly document in case narratives if an explanation was obtained either verbally or in written form.

Reasonable Explanation and Covered California

Covered California has its own verification process for consumers eligible for financial assistance when income is not reasonably compatible. Covered California financial assistance programs will not be affected by reasonable explanation since the income attestation must be within the Medi-Cal income limits, and this policy is for Medi-Cal only cases. (This is true to individuals that are in Carry Forward which require the EW to review and confirm updates.)

Reasonable Explanations That Would Not Verify Discrepancies for MAGI and Non-MAGI

If an individual provides a reasonable explanation that is not supported by known information to the county, it would not be considered an explanation that reasonably explains the discrepancy. Reasonable explanation examples that would not resolve an income discrepancy and would require the EW to request further documentation would include but are not limited to:

• Reporting of one or multiple employers not available in the case, or

• Report of receiving income from the following that are not included in the case such as:

Dividends, Royalties, or Capital Gains.

EWs must continue to take the appropriate action, either a denial or discontinuance, on an application or case if the applicant or beneficiary does not provide the necessary information within the requested time frame.

Examples

Example# 1: Mr. Gomez submits his annual redetermination through the mail without income verification included. The reasonable explanation obtained reveals previously unreported income information.

Mr. Gomez receives the annual redetermination packet as his Medi-Cal case did not auto-renew. Mr. Gomez completes all forms and mails them back to the local county office self-attesting that Burger King remains his only income and what was previously reported is the same. The EW that is assigned the beneficiary annual redetermination reviews all paperwork and notices that income verification was not included with the returned documents.The EW notices that the preferred method of contact for beneficiary is by phone and the EW is able to contact Mr. Gomez. The EW informs the client that he did not include income verification upon returning the annual redetermination packet which is required to complete the financial eligibility determination since income was unable to be verified. The EW then reads the list of reasonable explanations, to Mr. Gomez to determine if any of the explanations apply. The client explains that their employment has not changed with Burger King and is unable to explain why the income has not verified however, he did mention that he started to earn money by mining crypto-currency on the side.

Outcome: Since income could not be electronically verified for the earned income and Mr. Gomez was unable to provide reasonable explanation, the EW would then proceed with mailing the client the appropriate forms requesting manual verification of his earned income from Burger King, along with proof of income for the crypto-currency. The EW documents that a reasonable explanation could not be obtained, and the steps taken to resolve the discrepancy.

Example# 2: Mixed Household consisting of Mrs.Chen (62 years old) and Mr. Chen (70 years old) complete the annual redetermination for Medi-Cal through CalHEERS. A discrepancy is found between an IEVS recipient report and self-attested income information for Mr. Chen.

Mrs. Chen (62) and Mr. Chen (70) receive the annual redetermination packet as their Medi-Cal case did not auto renew and completed their annual redetermination through the CalHEERS portal, including uploading income verification documents. Mrs. Chen self-attests to monthly earned income and Mr. Chen continues to self-attest to monthly RSDI income. Mr. Chen contacts their local county office to make sure it has been received and speaks with a EW. The EW handling the call reviews all paperwork and documents submitted, including a previously received IEVS Recipient Report and finds earned income with the Social Security Number of Mr. Chen, and informs him of the discrepancy. The EW then reads the list of reasonable explanations to the client to determine if any of the explanations apply. Mr. Chen informs the EW that he has been a victim of identity theft and that their Social Security Number has been used for multiple instances, including for employment. Mr. Chen states he filed a police report and informed all credit bureau agencies of the situation.

Outcome: The EW finds that the explanation provided by Mr. Chen reasonably explains the IEVS discrepancy. The EW documents the reasonable explanation in the case file and proceeds with the eligibility determination without requiring further financial documentation from the married couple.

Example# 3: Mixed household consisting of Mrs. Lopez (62 years old) and Mr. Lopez (70 years old) complete the annual redetermination for Medi-Cal through CalHEERS. A discrepancy is found for Mr. Lopez regarding unearned income.

Mrs. Lopez (62) and Mr. Lopez (70) receive the annual redetermination packet as their Medi-Cal case did not auto renew and completed their annual redetermination through the CalHEERS portal, including uploading income verification documents for Mrs. Lopez only. The wife self-attests to monthly earned income and Mr. Lopez self-attests to now receiving monthly Social Security income. The husband contacts their local county office to make sure it has been received and speaks with a EW. The EW handling the call reviews all paperwork and documents submitted and notices that income for Mr. Lopez was not submitted. The EW completes an ex parte review to verify the Social Security income by reviewing all information previously documented on file, including IEVS and MEDS, and is unable to verify the Social Security income for the husband. The EW then reads the list of reasonable explanations to Mr. Lopez to determine if any of the explanations apply. He informs the EW that none of the explanations apply and explained that they had just begun earning the Social Security and did not upload any verification for their income.

Outcome: Since the Social Security income for Mr. Lopez failed the ex parte review, and he was unable to provide a reasonable explanation, the EW would then proceed with mailing Mr. Lopez the appropriate forms requesting manual verification of his Social Security income.