South carolina department of health and human services medicaid policy and procedures manual



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204.08 Subsidized Adoption


(Eff. 01/01/14)

204.08.01 Special Needs Children Receiving an Adoption Subsidy


(Eff. 01/01/14)

Medicaid is available to children with special needs who receive an adoption subsidy. To qualify under this coverage group, the following requirements must be met:




  • A Medicaid application must be filed;

  • The child must be under age 21;

  • The child must have a medical or rehabilitative need that existed before entering into a state adoption assistance agreement;

  • The adoption assistance agreement must verify the medical or rehabilitative need;

  • The adoptive placement would not have been made without an adoption subsidy; and

  • The income must be below 62% of the FPL for one person that was in effect at the time the adoption assistance agreement was executed. Only the income of the child is considered. The adoptive parent’s income is not counted. The adoption subsidy is never counted as income in determining Medicaid eligibility for the child, regardless of category.

The non-financial criteria such as residence, citizenship, and Social Security Number must also be met. Citizenship and Identity do not have to be verified. Refer to MPPM 102.04.09 through 102.04.14 to determine the alien status of non-citizen children.


Note: If siblings reside in the same adoptive home, they are treated as individuals. Each child’s income is measured against the FPL for one person that was in effect at the time the adoption assistance agreement was executed.

204.08.01A Verification


(Eff. 01/01/14)

The Adoption Subsidy Agreement, DSS Form 3052, can be used to identify the child’s special needs. A money payment is not required for Medicaid purposes. Verify that the child had special medical or rehabilitative needs before entering the adoption agreement, and the adoption would not have been made without an adoption subsidy may be addressed in the agreement.



204.08.01B The Virtual Record


(Eff. 01/01/14)

The virtual record for State Subsidized Adoptive Children with Special Medical or Rehabilitative Needs must contain:


  • DHHS Form 3400, Healthy Connections Application

  • SSN or proof of application for a Social Security Number

  • Copy of adoption assistance agreement

  • Verification of special medical or rehabilitative need (could be addressed in the adoption assistance agreement)

  • Verification of child’s income

  • DHHS Form 1250A-ME, Regular Foster Care Worksheet and Budgeting Record

  • IEVS documentation



204.08.01C Annual Review and Eligibility Determination


(Eff. 01/01/14)

If the child is eligible at the initial determination, the DHHS Medicaid Eligibility Worker enters data into ACCESS to authorize Medicaid benefits, and eligibility does not need to be reviewed. As long as the adoption agreement is in effect, the child will remain eligible until age 21. The Eligibility Worker must close the case effective the month following the month in which the child reaches age 21.


If the child is not eligible at the initial determination because of the child’s income, eligibility should be determined in another category, and the adoptive parents’ income is counted. The parents’ income is not counted in Special Needs and IV-E Adoptions

204.08.02 Children Placed for Adoption from Foster Care


(Eff. 01/01/14)

A child placed in foster care before adoptive placement is likely to have an active Medicaid case. When the adoptive placement is made, the DSS adoption specialist must notify the DHHS Medicaid Eligibility Worker. The DHHS Medicaid Eligibility Worker must terminate eligibility for the child and send the case record to the DSS county/regional adoption office. The DSS county/regional adoption office will keep the case record until the adoption is finalized and then seal the Medicaid case along with other records.


When an application is made for Medicaid benefits for the child, the application must be filed in the county where the adoptive placement is made, using the child’s birth name. If age is questionable, medical records under the child’s birth name should be used as verification. Since no parent has legal responsibility for the child, neither the DHHS Form 2700 ME, Medical Support Referral Form, nor the DSS Form 2738, Foster Care–Child Support Referral Form, is necessary.
An adoptive parent’s income is not counted in determining the adopted child’s eligibility before the adoption is final. If the adoptive placement is disrupted before the adoption is finalized, the DSS adoption specialist must notify the DHHS Medicaid Eligibility Worker to close the case that was established for the child. The DSS adoption specialist must return the original Medicaid case record to the DHHS Medicaid Eligibility Worker. A new application may be filed due to the child being returned to a foster care placement.
If the adoptive placement is not disrupted and the child continues to be eligible for Medicaid after the adoption is finalized, the adoptive parents must provide the DHHS Medicaid Eligibility Worker with the child’s adopted name and Social Security Number. The adoptive parent must also provide the child’s amended birth certificate when:


  • The child’s age is questionable; or

  • Eligibility for the Parent/Caretaker Relative (PCR) category is being considered, and relationship to the qualifying child is questionable.



204.08.03 Children Placed for Adoption and Not Placed in Foster Care


(Eff. 01/01/14)

If a Medicaid-eligible pregnant woman plans to release her baby for adoption as soon as it is born, the infant placed for adoption is deemed Medicaid-eligible for one year. If the adoption becomes final after the child has turned one year old and the child has received continuous coverage (12 months of eligibility), the income of the adoptive parents must be counted. However, the adoptive parents’ income is not counted in Special Needs and IV-E Adoptions. If the child is ineligible for Medicaid after the adoption is finalized, the DHHS Medicaid Eligibility Worker must close the case.






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