8172 Eligibility for Persons in Medicaid - Approved Institutions - Financial eligibility shall be determined by first computing a monthly patient liability. The patient liability is a monthly amount the individual is responsible for paying toward his or her care cost each month, if the provisions of 8172.2 (1) are met. The patient liability is the amount of income in excess of the LTC standard. As noted in 8150, all exempt and nonexempt income is considered. Where applicable, the liability should take into account the amount of any income allocation in accordance with the provisions of 8143 (4) or 8144.2. The patient liability is further reduced by allowable medical expenses.

 

8172.1 Allowable Medical Expenses - To be allowed against the patient liability, expenses must be incurred in the current eligibility base or 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 another patient liability, client obligation or spenddown 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.

 

Allowable expenses can be applied to a future month's patient liability when it is not possible to account for the expenses in the month they are incurred because of the use of a one-month base period.

 

Medical Expense Limitations -

 

  1. An expense must be the responsibility of the customer to be allowable. The portion of any expense assumed by a third party, whether legally liable or not, negates the individual's responsibility to pay and therefore, are not allowable, except for expenses assumed by a third party as per 7532.3. 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. Also see item (2)(b) below regarding expenses which are the responsibility of the nursing facility. Medical bills transferred to a collection agency for repayment are considered the responsibility of the individual.
     

  2. For due and owing expenses the following rules apply:
     

    1. For unpaid expenses, the total amount due and owing on the first day of the base periods 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 period is allowable.
       

    2. 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 on the initial medical expense as well as payments made are required.


    3. For expenses from an assisted living or residential treatment facility, only the medical portion of the monthly charge is allowable. If the facility is able to sufficiently verify the medical-only portion of the bill, that amount is allowable. If the facility is not able to sufficiently separate out the medical-only portion of the bill from the non-medical, the HCBS cost of care as determined in the current plan of care may be used as the allowable cost for each full month.

    4. 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 nursing home patient liability, even if still due and owing by the recipient.
       

  3. Allowable Expenses - Services must be verified to be allowed. The following are considered allowable services or items:
     

    1. 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. See policy memo 99-10-04 for guidelines on applying premiums prior to accretion to buy-in. 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.
       

    2. If medically necessary, all expenses for medical services incurred by the individual beginning with the first month of eligibility, are allowable. See Appendix item #P-1 for a list of medically necessary services and items.
       

      For nursing facility residents, items and services which are the responsibility of the facility to provide are not allowable. The NF is required to ensure that residents receive all medically necessary items, including those routine services and supplies which facilities are required to make reasonable accommodations to supply to their residents. Products which can be purchased over the counter or are regularly available without a prescription are the responsibility of the NF. Providers are expected to stock a variety of product choices for each major type of routine supply (at least two). If a resident elects to use a product other than the similar products the NF stocks, the resident will assume responsibility for the costs of the item, but it is not allowable against the patient liability. A complete list of services which are considered the responsibility of the facility is found at in the Adult Care Home Provider Manual, Section 8400. KDOA is responsible for maintaining this list.

       

8172.2 Application of Patient Liability - If the individual passes the 300% special income test as described in 7430(4) and 8160(3), Medicaid coverage shall be approved if otherwise eligible and the patient liability applied. If the individual fails the 300% test, eligibility shall be determined under the Medically Needy (MN) program and the following provisions apply:


  1. If the patient liability does not exceed the cost of care in the facility, the individual is eligible for institutional coverage. The institutional standard (8160), budgeting methodology (8120) and base period (8131) apply. The Spousal Impoverishment provisions of 8144 apply.

  2. If the patient liability exceeds the cost of care in the facility, the individual is not eligible for institutional coverage. The independent living standard (7430(2)), budgeting methodology (4300) and base period (7330) apply. The Spousal Impoverishment provisions of 8144 do not apply.

    There is no coverage for nursing facility services. The estimated cost of services at the facility at the private pay rate may be applied against the spenddown.

    See 7430(4), 8120(4) and 8160.

    Note: The monthly Medicaid rate for the facility is determined by multiplying the Medicaid daily rate by 31.

 

8172.3 Retroactive Patient Liability Changes - A change to an established patient liability must be made prior to the first day of the base period, except as noted below, as timely and adequate notice requirements permit (see 1430 and subsections). Generally, the patient liability is finalized beginning the first day of the month the liability is effective, and no additional changes are to be made to the amount. However, the following situations must be acted upon and a liability change may result. Proper notification is issued to both the recipient and the facility:

 

  1. A change in living arrangement requires a budgeting change, resulting in a reduced liability for the current calendar month or a past month. These situations generally involve an individual moving from a LTC/NF arrangement to Medically Needy, HCBS or Working Healthy. The resulting change is acted upon beginning the month the new arrangement begins or a following month, depending on the age of the individual and spousal impoverishment.
     

  2. An agency error has resulted in an overstated liability for the current calendar month or a past month. These include situations where an error was made by the agency, which resulted in an overstated liability for one or more of these months. Also included are situations in which the intended liability did not transmit to the MMIS appropriately, but adequate and timely (if applicable) notice requirements were met at the time of the change. Understated liabilities may be changed only if the customer and facility were timely notified of the liability change and the new liability did not transmit to the MMIS appropriately. Supervisory approval is needed to authorize the retroactive liability change in these situations.