Please see this answer from @RichardG.
Under IRS Notice 2014-7, certain payments received by an individual care provider under a state Medicaid Home and Community-Based Services Waiver (Medicaid waiver) program are difficulty of care payments excludable from income under § 131 of the Internal Revenue Code.
The IRS rules that define compensation for purposes of the Roth IRA deduction exclude "Any amounts (other than combat pay) you exclude from income, such as foreign earned income and housing costs." Since you can exclude the payment from income, the income cannot be counted for purposes of calculating your Roth IRA contribution.