A. The Medicaid agency Department of Medical Assistance Services (DMAS) meets the requirements of 42 CFR 435.725 42 CFR 435.733, 42 CFR 435.832, and § 1924 of the Social Security Act, in that the agency DMAS will deduct amounts for incurred expenses for medical or remedial care that are not subject to payment by a third party, including medically necessary or remedial care recognized under state law but not covered under the state's Medicaid plan, subject to reasonable limits as specified in subsection B of this section.

B. All medical or remedial goods and services not subject to payment by a third party and not covered reimbursed by Medicaid but recognized under state law must be medically necessary as determined by the attending provider and prescribed or ordered by a physician, dentist, podiatrist or other practitioner with prescribing authority pursuant to Virginia law. The maximum amount that may be deducted from the patient's income for nursing facility residents shall be the maximum amount reimbursed by the higher of either Medicare or Medicaid for the same noncovered items or services.

C. If neither Medicaid nor Medicare has an allowed amount for the service rendered, then DMAS will protect from the individual's income: For medical and remedial goods and services costing more than $500, the maximum amount that may be deducted from the patient's income shall be the lower of:

1. For services, the amount of the provider's usual and customary charge the Medicaid rate for the same items or services, or, if there is no Medicaid rate, 80% of the Medicare rate for the same items or services; or

2. For supplies and durable medical equipment, the actual invoice cost plus the lesser of either: the provider's usual and customary charge; or

a. The labor charges; or

b. A 30% mark-up from the invoice.

3. the provider's billed amount.

D. Claims for incurred medical or remedial care expenses must be submitted to DMAS or its designee within 90 calendar days after the invoice date.

E. No deductions shall be permitted for medical or remedial care expenses that were incurred as the result of imposition of a transfer of assets penalty period.