7532 Financial Eligibility in the Medically Needy Programs (Spenddown) - Financial eligibility exists if allowable incurred medical expenses, as specified in this section, equal or exceed the spenddown for the base period and resources do not exceed program limits. Expenses used to satisfy the spenddown amount remain the responsibility of the individual and are not subject to Medicaid reimbursement. See 7430 (2) for establishing the spenddown amount.
7532.1 Limitations on Allowable Medical Expenses - To be allowed toward the spenddown, expenses must be incurred in the current eligibility base or, if incurred outside of the current eligibility base and the individual was legally obligated to pay the expense on the first day of the base and such expense has not been previously applied to spenddown in any other base period in which the spenddown was ultimately satisfied. This includes instances when the individual has taken out a loan to pay the expense or charged the balance on a credit card. Medical bills transferred to a collection agency for repayment are considered the responsibility of the individual.
All expenses which are incurred by persons in the assistance plan as well as those incurred by legally responsible family group members are allowable within the limitations described in this section. This includes expenses for persons who are not otherwise eligible for Medicaid (such as a non-disabled, non-aged spouse).
The amount of the expense allowable is determined according to the following:
The portion of the expense assumed
by a third party, whether legally liable or not, negates the individual's
responsibility to pay; therefore, such medical expenses cannot be
considered against the spenddown. This includes the portion of any
allowable medical expense paid by Medicare or other health insurance.
The portion not covered by insurance (such as the copayment or deductible)
or not assumed by another third party is allowable. Prescription drug
expenses which are not covered under the Medicare Part D plan are
allowable if an exception to coverage has been rejected by the plan.
See 7532.2 for exceptions when expenses are
allowable when paid by a third party.
Current expenses must be incurred
and do not actually have to be paid to be allowed against the spenddown.
For due and owing expenses the following
rules apply:
For unpaid expenses, the total
amount due and owing on the first day of the base period is allowable,
except for the portion used in a previous base or obligated by
a third party. Bills used against a prior spenddown may be allowed
in a subsequent base period only if the prior spenddown was not
met. Only the portion still due and owing on the first day of
the current base is allowable.
For expenses paid with a loan
or credit card, only the unpaid portion of the loan or credit
card balance attributable to the original medical expense is allowable.
This is determined by subtracting all payments made on the loan
or card balance from the original expense amount less any third
party payments. Verification of the initial medical expense as
well as payments made are required.
A long term care share of cost (nursing home patient liability, HCBS client obligation, or PACE participant obligation) determined by the agency for a covered month is never allowable as a medical expense against a Medically Needy (MN) spenddown, even if still due and owing by the recipient or spouse.
7532.2 Allowable Expenses - "See Policy Memo #99-10-04 re: "Application of Medicare Premiums to Spenddown".
To be allowed against spenddown, items or services must be medically necessary. See Appendix Item P-1 for a list of medically necessary services and items. Medically necessary items or services received by the individual or legally responsible family group member in the home are allowable. Verification of the expense is required. Expenses are not allowable until the service has been delivered or the item has been received, except as noted below.
The pro rata portion of medical
insurance premiums for the number of months covered in the eligibility
base period regardless of the actual date of payment, past or future,
are allowable. This includes all types of health insurance plans,
including limited coverage plans providing for single disease or specialized
coverages, such as long term care, cancer, prescription drug or hospitalization
plans. However, premiums for some hospital indemnity plans which pay
a flat rate (such as a per day or per occurrence payment) are not
allowable unless payment is dependent upon the insured receiving certain
services or treatments. Each policy must be reviewed to determine
if the premium is allowable.
Medicare premiums not covered by buy-in are also allowable.
Premiums which are subject to buy-in are not allowable even if the
client pays them (or they are withheld) prior to completion of the
buy-in process as such amounts are subject to reimbursement to the
Medicare beneficiary. Additional costs paid for Medicare Advantage
policies are not reimbursed through buy-in but are an allowable medical
insurance premium. Additional premiums paid by the beneficiary for
Part D coverage are allowable if not subject to reimbursement by the
Subsidy. This includes surcharges for late enrollment and charges
to upgrade the plan above the basic level.
Nursing facility charges reasonably expected to be provided within the base period, up to the private rate for individuals whose patient liability exceeds the monthly state rate as described in KEESM 8172.2 (2). Charges in a non-Medicaid approved facility, including those incurred during a transfer penalty, are not allowable (see 8111).
7532.3 Expenses Paid by a Third Party - Medically necessary expenses paid for by a public program funded by the State (or political subdivision of the State, such as a county), other than Medicaid, can be applied to spenddown. Only the portion of the expenses funded by the public program is allowable unless the client will continue to be obligated for the remaining portion of the bill. Such an expense is allowable in the base period in which it was incurred. Examples include expenses paid by Vocational Rehabilitation, the Family Support Program, Kansas Health Insurance Program for the uninsurable, certain programs administered by the Department of Health and Environment, such as those through Children with Special Health Care Needs, the Infant/Toddler Program and Other Title V programs and non- Title II AIDS Drug Assistance Program/Ryan White (see 2694) payments. Also included are services paid by Donated Dental Services, Adult Emergency Support Services/APS Emergency Funds, the Community Support Medication Program and expenses subsidized on services received through a Community Mental Health Center or Community Developmental Disability Organization. For prescription drugs purchased with a Medicare Approved Drug Discount Card (see 2911) the pre-discount cost of the item is allowable toward spenddown. The entire cost of the item is allowable even if the $600 credit was used to purchase the drug. Services provided for or paid through Hill-Burton funds, Federal Ryan White funds or the Kansas Farmworker Health program are NOT allowable.
NOTE: For purposes of the food assistance medical expense deduction, these expenses are not allowable as a food assistance expense, with the exception of amounts that the individual is actually billed for and expected to pay. For example, a Community Mental Health Center charges on a sliding scale and expenses are actually paid by a public program as described above. $90 is the charge per visit if the individual does not meet income guidelines, however, the individual meets income guidelines and is only charged $9. For spenddown purposes, the $90 is allowed and for food assistance purposes, the $9 charge is allowed as a medical expense.
7532.4 Meeting a Spenddown and Application of Medical Expenses - When allowable incurred medical expenses equal or exceed the spenddown amount, eligibility exists. The spenddown for the entire eligibility base must be met before there is eligibility. Once met, eligibility exists for all months of the base period in which categorical, non-financial, general and other financial eligibility criteria are met.
Expenses are applied in the order they are received. However, different methods are actually used to account for the expenses, depending upon the type, source and date of service. Because of this, the process to meet a spenddown is the responsibility of both the eligibility worker and the fiscal agent.
DCF
Responsibility - The eligibility worker is responsible
for determining the appropriate eligibility base period and the total
spenddown amount. In addition, eligibility staff shall reduce the
total spenddown amount by the following allowable expenses, which
have been reported and verified. These are documented on the KAECSES
MEEX screen:
Health insurance premiums;
Expenses for non-participating
members of the assistance plan;
Due and owing expenses;
Allowable nursing facility/institutional
expenses (excluding general hospital).
No other medical expenses are to be entered on the
KAECSES MEEX screen for persons attempting to meet a spenddown. If
these expenses satisfy the spenddown in full, the individual will
be eligible for reimbursement of medical expenses immediately.
MMIS Responsibility -The above information is then sent to the MMIS, where a medical assistance benefit plan of medically needy will be assigned. The presence of a medically needy benefit plan will identify the individual as a person with a spenddown.
A medical card is issued for each participating member
of the assistance plan. Medicaid providers who deliver medically necessary
services and items shall bill the Kansas Medical Assistance Program
(KMAP) using the information on the card. All medical expenses may
be direct billed to MMIS, not just those covered by the KMAP. If the
spenddown has not yet been satisfied, expenses which have been incurred
in the base period are applied to reduce the amount of remaining spenddown,
subject to TPL limitations. The amount actually billed will be allowed
toward spenddown, as providers are restricted to billing at their
usual and customary rate. The remaining portion of expenses coming
through a Medicare crossover claim that are not subject to reimbursement
through the QMB program are also applied toward the spenddown.
All claims received by the fiscal agent will have a Potential Provider Payment (PPP) status determined. The status indicates if the service is a Medicaid covered service which, if the client were not on spenddown, could potentially be paid by the Medicaid program.
The fiscal agent will send weekly notifications to
those cases which experience activity on the spenddown in the past
week. The notice will itemize all allowable expenses directly billed
to the MMIS or through the Beneficiary Billed claims explained in
item (3) below.
Beneficiary
Billed Claims - In the event an individual receives an
allowable service and the provider cannot direct bill for the service
(e.g., item from a non-Medicaid provider or an expense from a Medicaid
provider prior to case approval) a special process has been established
to allow such expenses to be used toward the spenddown. Persons must
obtain from the provider of the medical service a completed form ES-
3170, Beneficiary/Patient Spenddown Billing Form.
The form will capture the necessary information to input a special
claim, called a Beneficiary Billed Claim, into the MMIS. This process
will also be used to provide for some non-Medicaid covered items and
services which cannot be direct billed to Medicaid. The completed
form shall be submitted to the eligibility worker for review. If the
expense is allowable, the eligibility worker is responsible for input
into the MMIS. Items and services billed through the ES-3170
may only be applied toward spenddown and are not considered for payment
even if the expense isn't ultimately used toward the spenddown.
Spenddown
Met - When the total spenddown has been satisfied, the
spenddown is considered met for the base period. Bills used to meet
the spenddown remain the responsibility of the individual. A combination
of accounting methods may be used to actually meet the spenddown.
However, the bills used to meet the spenddown are not altered unless
the new expenses are listed in (1) above, items a - d or if the last
bill used to meet the spenddown was a non-Medicaid covered expense.
In this case, if other Medicaid-covered bills have already been applied,
the non-Medicaid covered expenses shall be used in full, thus making
the Medicaid -covered expenses potentially eligible for reimbursement.
When the spenddown is met, the fiscal agent will produce an itemize
list of expenses used to meet the spenddown. The list will not include
those expenses listed in (1) above, items a - d. A copy of this notice
will be sent to the assigned eligibility worker.
Changes
in Spenddown Amount and Status - When changes occur that
ultimately impact the total spenddown amount (e.g., changes in income
or changes in the assistance plan), the new spenddown amount will
be sent to the fiscal agent. Timely and adequate notice is required
when reacting to a change to increase the spenddown amount or change
the spenddown status from met to unmet. The following rules apply:
For unmet spenddowns that remain
unmet, the new spenddown amount will be effective upon receipt.
For unmet spenddowns which have
been reduced and when applied expenses exceed the new spenddown,
the spenddown will now be considered met and only those expenses
which aren't subject to potential Medicaid payment and enough
expenses which are subject to Medicaid payment to satisfy the
spenddown.
For spenddowns which have been
met that are reduced, the expenses used to meet the spenddown
will be reviewed and those which are subject to Medicaid reimbursement
will be eliminated in reverse date order.
For spenddowns which have previously been met are increased, the case will be put back into spenddown status and the new spenddown amount will be applied the month following the month the new amount is received or the second month following, depending upon negative action deadline.