8270 Financial Eligibility - Financial eligibility shall be determined by first computing a monthly client obligation. The client obligation is a monthly amount the individual is responsible for paying toward his or her cost of care each month. The client obligation is the amount of income in excess of the appropriate income standard.
The following persons shall not have a client obligation for services, regardless of monthly income: SSI recipients (including those eligible under 1619(b) provisions); persons eligible under the MA CM group and persons eligible under the protected groups of 2680 (e.g., Pickle).
Countable income is considered in determining the client obligation (see 8250). Where applicable, the obligation should take into account the amount of any income allocation in accordance with the provisions of 8243 (3) or 8244.2. The client obligation is further reduced by allowable medical expenses.
8270.1 Allowable Medical Expenses - To be allowed against the client obligation, 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 expenses have 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.
Allowable expenses can be applied to a future month's client obligation 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.
Expense
Limitations:
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. Medical bills transferred
to a collection agency for repayment are considered the responsibility
of the individual.
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 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.
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.
Allowable Expenses - Services must be verified to be allowed. The following are considered allowable services or items:
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. 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.
If medically necessary, all expenses for medical services incurred by the individual beginning with the first month of eligibility, are allowable. Items or services expected to be paid by the Medicaid program, regardless of whether eligibility has been determined or not, are not allowable. See Appendix item P-1 for a list of medically necessary services and items.
8270.2 Application of Client Obligation - If the individual passes the 300% special income test as described in 7430(4) and 8260(3), Medicaid coverage shall be approved if otherwise eligible and the client obligation applied. If the individual fails the 300% test, eligibility shall be determined under the Medically Needy (MN) program and the following provisions apply:
If the client obligation exceeds
the cost of care for the HCBS services (8200.3),
the individual is not eligible for HCBS coverage. The independent
living standard (7430(2)), budgeting
methodology (4300) and base period (7330) apply. The Spousal Impoverishment provisions
of 8244 do not apply.
See 7430(4), 8120(4)
and 8260.
8270.3 Retroactive Client Obligation Changes - A change to an established HCBS client obligation 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 client obligation is finalized beginning the first day of the month the obligation 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:
A change in living arrangement requires
a budgeting change, resulting in a reduced client obligation 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 situation. Although a patient liability may be adjusted
due to these situations, client obligations would rarely, if ever,
be adjusted because of a living arrangement change.
An agency error has resulted in
an overstated obligation 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 obligation for one or more of these
months. Also included are situations in which the intended obligation
did not transmit to the MMIS appropriately, but adequate and timely
(if applicable) notice requirements were met at the time of the change.
Understated obligations may be changed only if the customer and facility
were timely notified of the liability change and the new obligation
did not transmit to the MMIS appropriately. Supervisory approval is
needed to authorize the retroactive liability change in these situations.
In either situation, the liability must be recomputed for the appropriate
months. Appropriate changes may be applied in one of two methods. In the
majority of HCBS situations the total amount of the overstated obligations
are to be reduced from any future months obligations. If there is no ongoing
client obligation to credit or if it is so small that it cannot be reasonably
expected that the credit will be fully allowed within 12 months, changes
shall be made to the existing client obligation for the months involved.
These changes will be communicated to the MMIS and require the case manager/waiver
manager to modify the existing plan of care and adjust the assignment
of the obligation for each month involved.
Retroactive obligation changes are not appropriate to account for incorrect
liabilities due to a client error, including the failure to report a change.
In these situations, changes which result in an overstated obligation
for the months involved are not reacted upon. For example, a client with
a supplemental health insurance plan fails to report the increase in the
monthly premium from $75 to $100, which took place in January, until May
15. The change results in an overstated obligation for the months of January
- May, and are, therefore, not reacted upon. The change is made for June
and subsequent months.
In addition, retroactive patient liability changes are not appropriate
to account for non-covered expenses which, because assistance has been
terminated, have not yet been allowed. This would include closures for
death and loss of Kansas residency.
For understated liabilities which are the result of the client's failure to report a required change or other client error, overpayments may result. Again, retroactive patient liability changes are not appropriate to account for overpayments.
8271 Reserved