461-7 TPL and Medical Bills

Effective Date: June 1, 2020

No previous policy

(Sections in 415 have been rewritten into 461 sections as of June 1, 2020)

Introduction

TPL refers to third party payers of medical bills for a member. A third party may be a health insurance plan, Medicare, or someone outside the member's household who pays a medical bill. If a third party will pay a member's medical bills, do not allow the expenses to meet a spenddown. Any portion of the bill the member is responsible to pay, such as deductibles or copayments, may be available to use to meet a spenddown or cost-of-care contribution.

A. Medicare

1. Do not allow a deduction for the portion of a medical service payable by Medicare. Deductibles and copayments/coinsurance the member must pay can be used to meet a spenddown. (See Table II) Also, any months in which the member is eligible for the QMB program, QMB will cover the person's Medicare deductibles and copayments. Do not allow them to meet any family member's spenddown.

a. Medicare Part B usually pays 80% of the allowed charges for outpatient services like doctor visits, therapy and lab tests, after the deductible.

b. Medicare Part A pays 100% of inpatient hospital services except for a deductible amount the patient must pay. (See Table II for the Part A deductible.)

· A member may use the Medicare deductible for a hospital stay as an incurred expense to receive Medicaid for the month the member enters the hospital.

§ Apply the inpatient deductible to the first day of the inpatient stay if the member wants to receive Medicaid for that month. Medicaid will pay any balance not used to meet spenddown. Do not carry the balance forward to any other month.

§ Even if the hospital stay spans months, the Medicare Part A deductible is not a span-month bill. It cannot be used to meet spenddown in both the month of entry and the following month.

§ If the member will not receive Medicaid in the month of entry to the hospital (i.e.: member over assets in that month), the unpaid portion may be used as a medical deduction in a later month. In that case, Medicaid will not pay the deductible because the service date was not in a Medicaid-covered month. [Note: If the member was receiving QMB in the month of service, QMB will pay the deductible.]

§ If the member qualifies for Medicaid without a spenddown in the month of entry, Medicaid will pay the Medicare deductible. Do not use it to meet a spenddown in the following month.

· A member who has TPL, like a Medi-Gap plan, in addition to Medicare, may not owe copayments or deductibles. Find out from the member what the other plan covers before allowing deductibles or copayments to meet a spenddown.

c. Part A daily copayments apply for hospital stays that exceed 60 days. Part A pays 100% of the first 20 days of skilled nursing home services. Copayments apply for skilled nursing home days 21-100. (Table II-A)

Example 1: Bertha applies for Medicaid in December 2019. She has Medicare. She went into the hospital on November 28 and was discharged on December 3. Her spenddown for Disability Medicaid in November and December will be $300 a month. She has sent in a copy of the Medicare statement showing she must pay the hospital deductible of $1340.

· First: Decide if she qualifies for SLMB or QI coverage for any of the retroactive months. Since her income is $1361, she qualifies for QI coverage for September and October. This means the state will pay her Medicare Part B premiums in those retro months. Do not use the premiums to meet her November spenddown.

· Second: Find out if she paid any other medical bills in September or October, and if she has any unpaid bills from before September. This may include pharmacy copayments. Paid bills could be used in November or December (application month), but we will use them in December in this case.

· Third: If she has unpaid bills from past months, they can be used in either November or in December (if still unpaid in December.) Since she wants both November and December, it may benefit her more to save any unpaid bills to use in December.

· Fourth: Since she has a Medicare inpatient deductible as an expense in November, that one bill will more than cover her spenddown of $300. Post the Medicare deductible for the service date of November 28th only.

o Do not post any paid bills from September or October to use in November, because she also wants December. Instead, use those paid bills in December (the application month) to help reduce the spenddown. They cannot be used past December.

o Do not post the Medicare deductible bill as an expense that begins November 28th and ends December 3. It is an expense only on the date of admission. Only use it to meet the November spenddown. Medicaid will pay the remainder.

· Fifth: Notify the member she must pay $300 of the Medicare deductible. Medicaid will pay the rest.

Example 2: Same situation as above except her monthly income is $1461. She owes a $400 spenddown in November and again in December. She is over the income limit for the QI program for the retroactive months of September and October.

· First: In this situation, apply the Medicare inpatient deductible for November 28th to meet the November spenddown. It can only be used in November.

· Second: Deduct the Medicare premiums she paid in September and October toward the December spenddown (application month). They can only be used through the application month.

· Third: Find out if she has any other medical bills she paid in September or October, or any unpaid bills from months before September. If the bills were paid in September or October, apply them in December because they cannot be used beyond December. If she has other unpaid bills (at the first of December), apply those bills to December to further reduce her spenddown. She can meet any remaining spenddown with cash, or bills for services she incurs in December (other than the hospital costs that Medicare will pay.)

· Alternative consideration: If Bertha only needs Medicaid for November, and does not want December, then use the Medicare premiums paid in September and October toward her November spenddown. Also apply any other bills from those months. Then, meet any remaining spenddown with the Medicare inpatient deductible she incurred in November.

2. QMB recipients: If a doctor accepts a patient who has Medicare and QMB, the doctor must accept QMB as full coverage. Do not allow a deduction for the Medicare co-payments or deductibles incurred in QMB months. [Remember though, when first making a decision that someone qualifies for QMB, the benefit effective date is the month after the agency makes the eligibility decision. This means the member may owe Medicare copayments in prior months.]

a. The bill is considered "paid-in-full" even if the QMB payment is zero.

b. Unlike QMB, the SLMB and Qualifying Individuals (QI) programs do not pay Medicare co-payments and deductibles. Allow Medicare co-payments and deductibles as medical bills to meet a Medicaid spenddown for SLMB or QI recipients (as long as there is no other third party payer.)

[Remember a person on QI coverage cannot receive ongoing Medicaid. If a QI member needs to meet spenddown ongoing, close the QI program.]

c. Medicare Part D copays may be used as a medical deduction to reduce or meet the spenddown.

§ Nursing home residents and home and community based waiver members do not have Part D copays.

B. Insurance Coverage (TPL)

1. When insurance or a liable third party may pay the bill, allow only the portion of the expense that is the member's anticipated obligation.

2. Call the insurance company or third party, if needed, to find out what portion they will pay and what portion the member must pay.

a. Make a best estimate of how much the TPL will pay based on past evidence of payments when possible.

b. Determine if the insurance company has paid anything on the bill. Do not use the portion of the expense that the insurance is obligated to pay.

c. An insurance company may pay the member directly, and the provider may remain unpaid. Verify the member's obligation for the bills.

§ If the member is receiving Medicaid, the member must send those payments to the Office of Recovery Services.

d. If the insurance has paid or will pay part of the bill, only allow as a medical expense the amount the insurance will not cover.

e. Call the ORS Medicaid Information Unit only when you cannot obtain correct information from the member or the insurance company. (See Table IX for the number for ORS.)

f. If the bill is a deduction with a balance that is available for more than one month, adjust the member's obligation amount for future months once you know what the TPL will pay.

3. See section 825 if you allow a medical bill and later find out a third party paid some or the entire expense that was used to meet spenddown.

C. Payments from Other Individuals

If someone outside the member's household who does not have a legal obligation to pay the member's expenses pays any medical bills for the member, treat the payment as a bill the member is obligated to pay.

· If it is unpaid at the first of the month in which the member wants to meet the spenddown, treat it as unpaid. Decide if the expense is an incurred medical bill or a medical deduction (461-5) and follow the applicable policy for how to apply bills. (461-8)

· If it was paid in a retroactive month, or the application month, follow the policy for bills paid in a retroactive or application month (461-5).

· If the bill was paid in full before the beginning of the retroactive period, it cannot be used to meet a spenddown.

· Do not apply any of the bill toward a spenddown after the month it has been paid in full. [Exception applies to bills paid in the retroactive months.]

D. Medicaid

1. members may use Medicaid-payable expenses as incurred bills when other policy requirements are met.

· If the medical service is received in the Medicaid benefit month for a person included in the medical coverage and is for a type of service Medicaid would cover for that person, the cost of the service is considered an incurred bill for that month.

· Incurred medical bills do not become medical deductions in following months. This is because the member became eligible for Medicaid in the month the service was received, and any balance not used to meet the member's spenddown in that month will be paid by Medicaid.

2. Medicaid co-payments and co-insurance are not allowable medical bills.

3. If a member has a Medicaid health plan and receives services from an out of network provider, Medicaid will not cover the bill. If the member receives services from an out of network provider, or a non-Medicaid provider, for a medically necessary services, the bill may be used as a medical deduction to meet the spenddown.

4. Remember that for in-patient hospital services received in a Medicaid month, Medicaid recipients must pay a Medicaid co-payment.

a. Consider the full cost of the spenddown amount and the Medicaid inpatient co-payment.

b. Decide if the spenddown can be reduced with health insurance premiums or old medical bills the member still owes.

c. The expenses Medicaid would cover need to be more than any spenddown remaining after deducting health insurance premiums and old medical bills.

d. If the sum of the spenddown and the Medicaid hospital co-payment is not less than the expenses Medicaid will cover, it does not benefit the member to receive Medicaid.

e. There is no Medicaid co-payment for Medicare services for members with QMB.