DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
Center for Medicaid and CHIP Services 
 
CMCS Informational Bulletin
 
 
DATE:   July 19, 2012 
 
FROM:   Cindy Mann, Director 
Center for Medicaid and CHIP Services (CMCS)  
 
SUBJECT:   Annual Re-determination of Medicare Part D Low-Income Subsidy Deemed 
Status (Re-deeming) 
 
CMS CONTACT: Tracey Baker, 410-786-7794, tracey.baker@cms.hhs.gov   
    
 
The Centers for Medicare & Medicaid Services (CMS) is now preparing for the annual re-
determination of Medicare Part D low-income subsidy (LIS) deemed status, also known as re-
deeming.  
 
The information below is to help states understand the process and their role in ensuring that dual 
eligible beneficiaries have timely, affordable, and comprehensive coverage under the Medicare 
Part D prescription drug benefit.   
 
General Background 
 
The Medicare LIS provides extra help for beneficiaries who have limited income and resources 
to help pay their Medicare prescription drug plans premiums, co-payments, and the annual 
deductible.  Medicare beneficiaries who automatically qualify (are deemed eligible) for LIS 
include full-benefit dual eligible individuals, partial dual eligible individuals (Qualified Medicare 
Beneficiaries (QMB-only), Specified Low-Income Medicare Beneficiaries (SLMB-only), 
Qualifying Individuals (QI)), and people who receive Supplemental Security Income (SSI) 
benefits but not Medicaid.  Additionally, individuals with limited incomes and resources who do 
not automatically qualify can apply for a LIS and have their eligibility determined by either the 
Social Security Administration (SSA) or their state Medicaid agency.  Details on the LIS benefit 
may be found in Chapter 13 of the Medicare Prescription Drug Benefit Manual at 
http://www.cms.gov/Medicare/Prescription-Drug-
Coverage/PrescriptionDrugCovContra/PartDManuals.html. 
 
Process for Re-determining LIS Eligibility for People who Automatically Qualify  
 
In July of each year, CMS begins the process of determining if beneficiaries with LIS in the 
current calendar year will automatically qualify for LIS in the next calendar year.  During this 
time, CMS will use state Medicare Modernization Act (MMA) and SSA files to initiate the 
eligibility process in re-deeming full dual and partial dual eligible individuals and SSI-only 
eligible individuals.     
Individuals reported as full-benefit dual eligible beneficiaries, partial dual eligible beneficiaries 
(QMB-only, SLMB-only, or QI), or SSI recipients for any month between July and December of 
the current year will have their LIS deemed status extended to December 31 of the next calendar 
year. For example, if a beneficiary is determined to have full or partial dual status in July 2012, 
their eligibility will be extended to December 31, 2013.  Additionally, a beneficiarys co-
payment level for 2013 will be determined by type of dual eligibility, income, and institutional 
status reported in or after July 2012. 
 
CMS will continue to look for individuals whom states report as full or partial duals after July 
and will re-deem them for the next calendar year.  For example, if a beneficiary is reported on a 
September MMA file as retroactively eligible for just the month of August 2012, the person will 
be re-deemed for 2013; if a person is reported on that same file as retroactively eligible for only 
May 2012, s/he will not be re-deemed for 2013.  
 
Finally, if a beneficiary was previously deemed eligible for LIS based on state data, but does not 
appear as subsidy-eligible in July or subsequent state MMA files, s/he will not be re-deemed for 
the next calendar year. Deemed status will end on December 31 of the current calendar year.   
 
Notices to Beneficiaries  
 
In September, CMS and SSA will issue a joint mailing to beneficiaries whose deemed status will 
not continue into the next calendar year based on their absence from the states July or August 
state MMA files or SSAs August file.  This mailing will include a personalized letter on gray 
paper from CMS explaining their loss of LIS, an SSA application for extra help, and a postage-
paid return envelope to assist the individual in re-establishing eligibility for the subsidy for the 
next calendar year.   
 
In early October, individuals who will continue to have LIS, but will have a change in their co-
payment level in the next calendar year will receive a personalized letter on orange paper from 
CMS outlining the changes that will be effective January 1.  
 
If any individual who received a gray notice informing them of their loss of deemed status 
subsequently becomes newly eligible for Medicaid in future months, CMS will mail them a new 
letter on purple paper informing them that they now automatically qualify for LIS. 
 
Model versions of these notices, along with a beneficiary fact sheet and partner tip sheet, will be 
available in August at: 
http://www.cms.hhs.gov/LimitedIncomeandResources/LISNoticesMailings/list.asp#TopOfPage.   
 
Please note that individuals who continue to qualify for LIS without any change to their 
copayment level in 2013 will not receive a notice.   
 
CMS Notification to States  
 
In September, CMS will provide a file to states identifying residents who are being notified of 
their loss of deemed status effective January 1. The file layout is attached in Appendix A.  We 
will notify you separately of the specific date that the file will be sent.   
 
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  CMS will also provide data on the MMA state response file on the re-deemed status of those 
reported on a given file.  For example, the results of data submitted by the state for  
re-deeming on July 12 will appear on the CMS-generated MMA response file that will be sent 
back to the state within an estimated 48 hours, or by July 14.  The following data will appear in 
the response file when the beneficiary has been re-deemed:  
     Beneficiary Copay Type = D 
    Beneficiary Copay Level = 1, 2, or 3  
    Copay Start Date = 01/01/2013 
    Copay End Date = 12/31/2013 
 
What Do States Need to Do?  
 
We cannot overemphasize the importance of ensuring the accuracy and completeness of the state 
MMA files submitted starting in July for the process of re-determining deemed status. States 
inclusion or exclusion of beneficiaries from their July through December 2012 MMA files will 
determine whether those beneficiaries will be deemed eligible for the low-income subsidy for 
2013.   
 
We strongly recommend that states use the information in our September redeem file to screen 
these individuals for eligibility for Medicaid or any of the Medicare Savings Programs, or to 
work with them to apply for LIS.   
 
Additional Information  
 
CMS will continuously provide the resources and assistance people need to make sure that 
everyone who qualifies receives help paying for Medicare prescription drug coverage.  In 
support of this effort, we are working with your offices, SSA, State Health Insurance and 
Assistance Programs (SHIPs), physicians, pharmacists, prescription drug plans, and hundreds of 
partner organizations across the country to reach beneficiaries with messages and guidance.  Our 
customer service representatives at 1-800-MEDICARE are prepared to answer questions and to 
guide beneficiaries through the process of applying for LIS, and relevant information is posted 
on our consumer website, www.medicare.gov. 
 
CMS appreciates states continued assistance in ensuring that dual eligible beneficiaries have 
timely, affordable, and comprehensive coverage under the Medicare Part D prescription drug 
benefit.   
 
Attachment 
 
Appendix A - Exchange Name: DEEMLS 
Table 1: This is the first record of the file. It will only occur once. 
Table 2: This record will contain beneficiary information. It may occur multiple times. 
Table 3: This is the last record of the file. It will only occur once. 
 
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  Table 1: Annual State File for Beneficiaries Who Lost Deeming Status Header Record 
  Data Field  Length  Position  Form Valid Values 
at 
   Header Code  6  1  ...  6  CHAR  DEEMLS 
  State Code  2  7    8  CHAR  State Code 
  Sending Entity  8  8  ...  16  CHAR  CMS      CMS + 5 spaces 
  Run Date of the file  8  17    24  CHAR  CCYYMMDD 
  Filler  576  25  ...  600  CHAR  spaces 
Record Length =   600           
 
Table 2: Annual State File for Beneficiaries Who Lost Deeming Status Detail Record 
Data Field  Length  Position  Format  Valid Values 
  Record Type  3  1  ...  3  CHAR  DTL 
  Beneficiarys Health Insurance Claim or     12  4  ...  15  CHAR   
  Railroad Board Number 
  Representative Payee Name  40  16  ...  55  CHAR  spaces if no Payee 
  Beneficiarys Name  40  56  ...  95  CHAR   
  Beneficiarys Address Line 1  40  96  ...  135  CHAR    
  Beneficiarys Address Line 2  40  136  ...  175  CHAR    
  Beneficiarys Address Line 3  40  176  ...  215  CHAR    
  Beneficiarys Address Line 4  40  216  ...  255  CHAR    
  Beneficiarys Address Line 5  40  256  ...  295  CHAR    
  Beneficiarys Address Line 6  40  296  ...  335  CHAR    
  Beneficiarys City  27  336  ...  362  CHAR   
  Beneficiarys State  3  363  ...  365  CHAR   
  Beneficiarys Zip Code  10  366  ...  375  CHAR   
  Cluster Identification Code  14  376  ...  389  CHAR    
  Beneficiarys Date of Birth  8  390  ...  397  CHAR  CCYYMMDD 
  Beneficiarys Social Security Number  9  398  ...  406  CHAR  spaces if SSN does 
not exist 
  Filler  132  407  ...  538  CHAR  spaces 
  Co-Payment Level for Current Calendar   1  539  ...  539  CHAR  1, 2, or 3 
  Year 
  Co-Payment Level for Next Calendar Year  1  540  ...  540  CHAR  1, 2, or 3 
  Reason Code for Current Calendar  Year  2  541  ...  542  CHAR  1, 10, or 2A 
  Reason Code for Next Calendar Year  2  543  ...  544  CHAR  1, 10, or 2A 
  Start Date for Current Calendar Year  8  545  ...  552  CHAR  MMDDCCYY 
  End Date for Next Calendar Year  8  553  ...  560  CHAR  MMDDCCYY 
  Filler  40  561  ...  600  CHAR  spaces 
Record Length =   600           
 
   
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  Table 3: Annual State File for Beneficiaries Who Lost Deeming Status Trailer Record 
Data Field  Length  Position  Format  Valid Values 
Trailer Code  6  1  ...  6  CHAR  TRLRLD 
State Code  2  7  ...  8  CHAR  State Code 
Sending Entity  8  9  ...  16  CHAR  CMS     CMS 
+ 5 spaces 
Run Date of File  8  17  ...  24  CHAR   
Filler  9  25  ...  33  CHAR  spaces 
Record Count  9  34  ...  42  ZD   
Filler  558  43  ...  600  CHAR  spaces 
Record Length =   600           
 
 
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