A. Method of Meeting a Spenddown
After deducting health insurance premiums, a member may use medical bills to reduce or meet the spenddown. (431-1.1) Then decide if there are old bills Medicaid will not pay. If so, the member may use those to reduce or meet spenddown before applying current month bills (incurred bills) or cash.
B. Questions to Ask Before Using Medical Bills
1. What is the date of service of the bill?
· We must know the service dates to apply the bill correctly.
2. Is the medical bill an incurred bill or a medical deduction?
· This is critical to know, because the rules on how to apply bills are different for incurred bills and medical deductions. (461)
3. Do the service dates span calendar months?
· Services like a hospital stay that spans calendar months may be available to meet more than one month's spenddown.
· This is not true for Medicare recipients, though. (461-7-to see how to apply Medicare inpatient deductible.)
4. Is the bill paid or unpaid (and if paid, when was it paid in full)?
· Use payments a member is making in the month of payment. After a bill is fully paid, it cannot be used in future months (with some exception for payments made during the retroactive period.)
5. Has the agency used the bill before to meet a spenddown?
· Do not use a medical bill again after the amount has been used to meet a spenddown.
6. Has the agency allocated the bill to meet a spenddown during a month in which the member did not meet the spenddown?
· If so, the bill may be available to use for a current month if it is still owed to the provider and the member is obligated to pay it.
7. Was the member eligible for the Qualified Medicare Beneficiary (QMB) program in the month of service?
· If the member received a service Medicare will cover in a month the member has QMB coverage, QMB will pay the Medicare deductibles and copayments. Do not use it to meet spenddown.
8. Is the member in a nursing home or on a Home and Community Based Waiver?
C. How to Apply Medical Bills
Unless specifically requested by the member, use medical bills in the following order:
1) deductions before incurred medical bills;
2) paid bills before unpaid bills.
This helps maximize the amount available to meet a spenddown, and leaves as many unpaid, incurred bills as possible for Medicaid to pay.
Allow a bill sent to collections if the collection entity is "in-house". Bills sent to an outside collection entity can only be used to the extent the provider will receive funds collected. (For example, the provider may receive 40% of collected amounts, so allow that portion as a medical bill.)
Use your best judgment about what will benefit the member the most. For example, use bills from months the member will not be eligible for Medicaid before incurred bills (i.e.: incurred bills are for services received during the month the member wants Medicaid that Medicaid can pay.)
1. Paid Bills. Use bills the member has paid, or is making payments on if the bill has not been used before.
· If the bill is not fully paid, at the least, use the amount the member pays in the benefit month they want to meet spenddown. This is because we cannot use that paid amount in later months. (See exception for payments made in retroactive months, Sec. 461-5 If the bill is not fully paid, use up to the full, unpaid amount as needed.
· If the member is making payments on more than one medical bill, apply the payments made in the benefit month on each bill before you apply any unpaid portion to meet that month's spenddown.
Example: Member has a $3000 emergency room bill and a $500 doctor bill from February. She applies for Family Medically Needy in June. She is making monthly payments on the bills. Her June spenddown is $960. She paid $100 on the hospital bill and $25 on the doctor bill in June.
· Apply the $100 payment and the $25 payment made in the application month.
· Also, apply any payments she made in the retroactive months before applying other expenses.
· If she has any other paid bills from the retroactive period, apply those before applying unpaid expenses.
· The portion of these bills that is unpaid at the beginning of June may also be used to meet the spenddown, as needed. Don't enter the paid and unpaid portion separately, or it will look like two different services.
· If the member has made payments on medical bills in a retroactive month or the application month, you can allow the expense in the month the member makes the payment through the application month. (See 3. Below.) This includes bills paid with a credit card in a retroactive month or the application month.
· Medical bills paid in full by credit card are no longer owed to the provider. If they were paid off before the retroactive period, do not allow the bill as a deduction. Do not allow the monthly payments a member makes to the credit card company for such bills, either. Payments to the credit card company are not a medical expense.
2. Services Received Before the Current Retroactive Period. If the member has applied before, eREP may have some medical bills posted from a previous eligibility period. The expense must either be unpaid at the beginning of the month it will be used, still owed to the provider, and the member must be obligated to pay it, or it must have been paid during a retroactive month or the application month.
a. Bill not used for spenddown before. Determine if the bill was used to meet spenddown during any previous Medicaid months.
· Do not allow the amount of a bill used to meet a spenddown in any prior month.
· The bill cannot have been an "incurred" bill. This means it was an expense for services Medicaid would pay, received in an eligible month, by the eligible member. There is one exception:
i. If the provider will not bill Medicaid because the service was received before the eligibility date or the provider is not a Medicaid provider, allow the amount the member owes that has not been used to meet a spenddown. Verify whether the provider will bill Medicaid, and if the expense is still owed. Post it as a medical deduction.
Example: Member received physical therapy on May 5th. She later applies for and becomes eligible for Medicaid without a spenddown for May; eligibility decision was made June 8th. In October, the member owes a spenddown to receive Medicaid. She still owes the payment for the physical therapy, because the provider accepted her as private pay, not Medicaid eligible. The amount the member owes can be used to meet the October spenddown.
b. Unpaid bills: If the bill is unpaid at the beginning of the month in which the member wants to meet spenddown, the bill can be used in that month. Allow any balance not used to meet the spenddown in a later retroactive month or the application month. The balance not used during the retroactive months or the application month can be used in months after the application if that balance is still unpaid. Verify the unpaid amount each month. If the member pays more than the amount used to meet spenddown, adjust the available amount for later months so only the unpaid amount is available.
c. Paid bills: Amounts the member paid on old bills during a retroactive month can be used in that month or a later retroactive month through the application month. Any part of the bill that was paid before the start of the retroactive period cannot be used in any month. Only unpaid portions may be carried past the application month.
Example 1: Member applies in May for medically needy coverage for May. The member was on Medicaid in January, and used a hospital bill from November to meet the spenddown. The balance was $6500; $1000 was used in January leaving $5500 unused. The worker verifies that $5000 is still unpaid at the beginning of May. The $5000 is available to meet the May spenddown.
Example 2: Same situation as in 1, except that the member made payments in March & April of $500 each. The May spenddown is $750. The payments in March & April were made in retroactive months. Use those payments to meet the $750 May spenddown. The $250 paid in March & April that was not used for the May spenddown cannot be used in any month after May. If the member does not make any payments on the bill in May, there would still be $5000 unpaid at the beginning of June. We have used $1750 toward spenddowns (January $1000; May $750). This leaves $4750 of the bill available for months after May, and that should be reflected on the available amount. To use for future months, the bill must be unpaid at the beginning of such month, and must be owed to the provider.
3. Retroactive Period and Application Month Services. Use paid and unpaid bills from the retroactive period as follows.
· Use bills paid in the retroactive months or the application month before using unpaid bills.
· A bill paid in a retroactive or application month (incurred or medical deduction) can be used in the month of service, a retroactive month after the month of service, or the application month. If the date of service was before the start of the retroactive month, see #2 above.
· An unpaid, incurred bill can be used in the month of service. Do not carry any balance forward to a future month because Medicaid will pay the remainder once eligibility is established. Incurred bills cannot be combined with cash to meet the spenddown.
· Do not allow bills for services received and paid-in-full in a retroactive or application month past the application month, even if there is some balance not used to meet a spenddown.
· Unpaid bills for a service Medicaid would not cover can be used in months after the application month if it has not all been used to meet spenddown. The available portion must be unpaid and still owed to the provider.
Example 1: Member applies for Family Medically Needy for August. She has paid prescription bills from May, June and July. Apply these bills before applying other bills to meet the August spenddown.
Example 2: Member applies for Disability Medically Needy for June. He has unpaid doctor bills from April and May. He also had a hospital charge in April so he wants coverage in April.
· The unpaid bills incurred in April can be used to meet the spenddown. No balance can be carried forward to May or June. The member cannot combine any cash payment with incurred bills. The April spenddown must be fully met with medical bills.
· The unpaid bill incurred in May can be used in May, if he wants Medicaid.
· If he does not want Medicaid for May, the unpaid bill can be used in June. The expense is a medical deduction if the member does not receive Medicaid for May. If the full amount owed was not used for the June spenddown, it can be used in later months if it remains unpaid and owed to the provider.
4. Ongoing Months.
· The bill may be an incurred bill or a medical deduction.
· Allow an incurred bill only in the month the service is received. The amount used to meet the spenddown is the member's obligation. Even if the member has not paid that amount to the provider, it has already been used to meet a spenddown and cannot be used again.
· Deductions may be used in the month the service is received, or in later months to the extent the bill remains unpaid, is still owed to the provider and has not been used to meet a spenddown.
Example: An adult on Family Medically Needy receives dental services in July and wants to meet the July spenddown. The dental services are a medical deduction because Medicaid does not cover dental for adults on Family Medicaid. Use the bill in July. If the bill is greater than the July spenddown, any remaining unpaid amount can be used in a later month.
· If a member makes payments on medical deductions that can be used in multiple months that exceed the amount used to meet spenddown, reduce the member's obligation by the payment amounts made.
§ When you know a member is making payments on bills, coordinate with the member to use those bills for the spenddown first.
§ If a member pays off a medical bill that you have not used for the spenddown, it can no longer be used to meet a spenddown after the month it is paid in full.
5. ACOs and Incurred Medical Bills
· When a member is first applying, enrollment in an ACO shouldn't happen until the month after the agency makes an eligibility decision (and sometimes later).
· In some cases, a member may be reapplying and was enrolled previously in an ACO. In this case, if the member wants to meet a spenddown with current month bills, call an HPR (Health Program Representative) at the Dept. of Health to find out what month the ACO enrollment will begin. Only allow incurred medical bills in months before the ACO enrollment becomes effective.
· After the member becomes enrolled in an Accountable Care Organization (ACO), the member cannot use incurred bills to meet spenddown.
6. Bills for Mental Health Services
· Paid incurred medical bills for mental health services received in the retroactive period or the application month can be used to meet the spenddown through the application month if the capitated mental health provider or their contracted providers did not provide the services.
· If a member has paid bills from a private medical provider, contact an HPR to verify that the provider is not under contract with the member’s capitated mental health plan.
7. Span Month Bills
· A Span Month bill is an expense for a medical service that begins in one month and ends in a following month. These are usually in-patient hospital charges when the admission date is in one month and the discharge date is in a following month. They may include emergency room charges. For example, a member is hospitalized on June 29th and discharged on July 2.
· When the member has to meet a spenddown for both months to receive Medicaid, the span month bill is prorated over the number of days of service. This allows part of the bill to be applied to the spenddown owed in each month.
· This does not apply to individuals eligible for Part A Medicare. See Section 461-5 when a member has Medicare and expenses from an inpatient stay.
8. Bills Requiring DHHS Approval
· If DHHS has to approve a service as meeting medically necessary criteria, do not allow the expense until DHHS approves it. If approved, deduct the expense in the next benefit month if the bill is unpaid. If the bill is paid and the member paid a cash spenddown for that month, send a Form 79R to DHHS for a refund. A refund cannot exceed the actual cash payment the member made.
· If DHHS does not approve the expense it cannot be used to meet a spenddown. Inform the member it cannot be used.
· Medicaid may deny payment on an expense that Medicaid normally covers because it exceeds Medicaid limits. In this case, ask the Program Specialist to request a decision from DHHS about whether it is considered medically necessary and allowed to meet a spenddown. If approved, allow the bill as described above.
9. Right to a Fair Hearing
· If the member disagrees with the decision not to allow some medical bills as deductions, the member may appeal the decision through the Fair Hearing process.
· Send a hearing request through the regular fair hearing request process.