CWA 208804 (09/08/2023)
Tax garnishment did not reduce patient liability

DHA Case No. CWA 208804 (Wis. Div. of Hearings and Appeals September 8, 2023) (DHS) ↓ Download PDF

The Medicaid Eligibility Handbook counts some income even though it is unavailable—garnishments, for example. In this case, the petitioner had $300 garnished monthly for a tax debt but his patient liability was not reduced to compensate. ALJ John Tedesco applied the straightforward MEH rule and concluded the agency was correct, leaving the petitioner with no way to pay both the tax debt and the full patient liability.

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Preliminary Recitals

Pursuant to a petition filed on May 27, 2023, under Wis. Admin. Code § HA 3.03, to review a decision by the Burnett County Department of Social Services regarding Medical Assistance (MA), a hearing was held on August 2, 2023, by telephone.

The issue for determination is whether the agency correctly included garnished sums as part of petitioner’s available and countable income when calculating his patient liability.

There appeared at that time the following persons:



Department of Health Services
1 West Wilson Street, Room 651
Madison, WI 53703
By: Emily Tribby
Burnett County Department of Social Services
7410 County Road K, #280
Siren, WI 54872

John P. Tedesco
Division of Hearings and Appeals

Findings of Fact

  1. Petitioner (CARES # —) is a resident of Polk County.
  2. Petitioner applied for long-term care MA on 5/12/23. He asked that this be backdated to February.
  3. Petitioner was admitted to — on 4/27/23.
  4. The county agency calculated petitioner’s monthly patient liability for his nursing home care at $2,890.30 from his admission date forward.
  5. That calculation involved consideration of a consent judgment for $67,885 against petitioner which is being paid out of his retirement annuity paid by the —. The judgment stems from a tax liability to the U.S. government. Petitioner currently has nearly $300 garnished from his monthly retirement payment in satisfaction of the tax debt.
  6. Petitioner appealed on the basis that the amount he actually receives in income per month is less than his current patient liability.
  7. Petitioner currently resides at — nursing home.


After an institutionalized person is determined eligible for MA, a county agency must calculate the amount of income the institutionalized person must contribute to defray the cost of care incurred by MA on his or her behalf on a monthly basis. This is referred to as the person’s “patient liability.” The calculation begins with gross income, and only a few items may be subtracted as deductions. These include the statutory $45 personal deduction, a health insurance expense deduction and, in some cases, a home maintenance deduction. Wis. Admin. Code §DHS 103.07(1)(d), and the federal rule at 42 C.F.R. §435.725 – .832. The formula for calculating the patient liability amount is set out at Medicaid Eligibility Handbook (MEH), §27.7.1, found online at

Petitioner argued at hearing that he cannot pay the current patient liability because the liability has been determined to be $2890.30 per month. He argues that he only receives $2,581.83 per month because nearly $300 is garnished from each monthly payment. Thus, there is no practical way he can pay the patient liability.

Under the Wisconsin Medicaid program rules garnished sums are to be included in the initial total available income of a member:

General Rules:

    1. Only count income when it is available.
    2. Some income is disregarded (see SECTION 15.3 EXEMPT AND DISREGARDED INCOME).
    3. Always use gross income when calculating income.
    4. Some income, even though it is unavailable income, must be counted (e.g., garnishments).

Income is available if all the following are true:

  1. It is actually available.
  2. The person has a legal interest in it.
  3. The person has the legal ability to make it available for support and maintenance.

Note: Available income can include more than a person actually receives if amounts are withheld from earned or unearned income because of a garnishment or to pay a debt or any other legal obligation

Wisconsin Medicaid Eligibility Handbook at Section 15.1.5 (boldface emphasis added).

Application of these rules results in the current scenario for petitioner as set forth in the note above. While this is unfortunate, I see no way that I can ignore the clear language of this rule provision. It appears to me that the agency correctly determined the patient liability.

While I mentioned at the time of hearing that I could write a proposed decision in this case due to what seemed like an odd result, I had not yet looked at the applicable rule. The rule seems clear and I have no reason to issue this decision as a proposed one seeking clarification from the department.

Conclusions of Law

The county agency correctly included even the garnished sum as available income for petitioner.



That this appeal is dismissed.

[Request for a rehearing and appeal to court instructions omitted.]

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