0810.010.15 Meeting Spend Down with Incurred Expenses

If the participant chooses to meet spend down for a month using incurred medical expenses, MO HealthNet coverage begins on the date the incurred expenses not payable by a third party equal the participants' spend down liability. Allowable expenses to meet spend down are:

• expenses incurred by the individual or the individual's spouse whose income was used in the spend down determination, and
• not subject to payment by a third party (such as Medicare or other health insurance) unless the third party is a public program of a State or political subdivision of a State such as Department of Mental Health or Department of Health and Senior Services AND the source of payment by the third party does not include Federal funds,
• Not paid from funds in an ABLE account, and
• the responsibility of the individual or the individual's spouse whose income was used in the spend down determination to pay.

Participants can choose to meet spend down with incurred medical expenses in one or both of the following ways:

• Current Incurred Expenses
• Carryover Incurred Expenses

Current Incurred Expenses

The participant may choose to apply incurred medical expenses to meet spend down liability in the same month in which the medical expenses were incurred if all of the following requirements are met:

• The medical expenses were incurred while the participant was eligible for MO HealthNet spend down;
• The medical expenses were not paid and will not be paid by MO HealthNet;
• The medical expenses were not previously applied in any month to meet spend down,  including use of out of pocket expenses; and
• The medical expenses were not incurred in any months in which the participant received SLMB2 (QI-1).

  NOTE:  When the medical expenses are incurred in the month in which the participant requests to transfer from SLMB2 to MHABD Spend Down, the participant will be transferred to MHABD Spend Down and not considered to be in receipt of SLMB2 for the month of the request.

Carryover Incurred Expenses

Participants may choose to apply incurred medical expenses to meet spend down liability in a different month than the month the medical expenses were incurred. Spend down participants can use eligible expenses incurred in the three months prior to the current eligibility month to meet spend down. In addition, if the amount of the incurred expenses from prior month(s) exceeds the current month's spend down amount, the excess remaining can be used towards their spend down for the following three months.

Participants may provide proof of medical expenses that they are/were personally responsible to pay, that were incurred in the month for which they are requesting MO HealthNet coverage and/or from the prior three months. These incurred medical expenses can be used to meet spend down if all of the following requirements are met:

• The medical expenses were incurred while the participant was eligible for MO HealthNet spend down;
• The medical expenses were not paid and will not be paid for by MO HealthNet;
• The medical expenses were not previously applied in any month to meet spend down,  including use as out of pocket expenses;
• The medical expenses are currently owed by the participant or were paid by the participant or spouse or a third party public program of a State or political subdivision of a State such as Department of Mental Health or Department of Health and Senior Services; and
• The medical expenses were not incurred in any months in which the participant received SLMB2 (QI-1).

NOTE:  Timely filing is 12 months. Bills submitted within 12 months will be applied to the appropriate month(s) spend down.

Meeting Spend Down with Carryover Expenses

When all of the above requirements are met, the participant is determined to be eligible for the current month or future month(s) when personal responsibility for current medical expenses or medical expenses accumulated in the prior three months equals or exceeds the spend down liability for the month. The participant's remaining personal responsibility may be carried over to the next month or to succeeding months' spend down liability, not to exceed three months.

Spend Down Coverage Start Date

Carryover expenses will be credited to spend down on the first day of the month that coverage is selected.

If the participant uses a combination of carryover expenses, that are currently owed, from one or more of the past month(s), and expenses incurred in the month they want the MO HealthNet coverage, apply accumulated expenses to the first day of the month and current month's expenses based on the date of service.

EXAMPLE: It is the month of June. Mr. G has a $300 spend down. He had incurred eligible expenses in April of $1000 for dentures. Mr. G. had no other medical expenses incurred in April or May. He chose not to use the expenses to meet April or May spend down. The expenses can be used for meeting spend down in June ($300), July ($300), and August ($300), and the balance ($100) toward his September spend down.

Participant Designation of Months of Coverage

The participant may designate the month(s) that they want to apply the carryover. The participant must make this designation in writing. If the participant does not designate which month(s) they want their medical expenses applied, the medical expenses will be applied to the current month or to the three succeeding month(s) the incurred medical expense can be applied.

0810.010.15.01  Documentation of Incurred Medical Expenses

Upon receipt of a request for coverage of medical services received by a MO HealthNet spend down participant, the eligibility specialist should request a copy of a receipt or bill to the customer to verify countable medical expenses, the amount of the expense that is the participant's responsibility to pay, and the date spend down is met.  The receipt or bill must include:

• date of service(s),
• type of service(s) provided,
• charge for service(s) provided,
• amount of third party liability, and
• amount that the participant or spouse is responsible to pay.

A bill is a statement of a liability by one party to another party following a transaction.  For the purposes of determining eligibility for MO HealthNet spend down coverage, the transaction is the medical services provided and received.

A receipt is a printed acknowledgment from the provider that payment has been received from the participant for medical services provided.  An incurred medical expense does not have to have been paid to be allowed to meet spend down.  However, the expense must be the responsibility of the participant to pay.  See Manual Section 0810.010.15.05 Countable Medical Expenses for Spend down.

The MO HealthNet (MHN) Spend Down Provider Form must be completed when a receipt or a bill to the patient is not available.  The MHN Spend Down Provider form must be completed by the provider of the services, an authorized employee of the provider, or an authorized employee of an agency contracted to provide billing services for the provider.  The individual completing the form is attesting to the accuracy of the information and must be able to verify the amount billed to the participant to substantiate a claim or in the event of an audit.   The MO HealthNet Spend Down Provider form is available on the internet at http://dss.mo.gov/fsd/massist.htm.

NOTE:  Attachments providing the information requested on the form may be submitted in place of completing each column.  (See MO HealthNet Spend Down Provider Form Instructions)

A receipt, bill, or a completed MHN Spend Down Provider Form is acceptable documentation of the amount of the participant's responsibility for incurred medical expenses.  Within 2 days of receiving documentation of medical expenses, the eligibility specialist must send an IM-29(SPDN) to notify participants:

• when their spend down liability is met;
• when documentation of incurred medical expenses does not meet their spend down liability, and;
• when incurred medical expenses were not allowed to meet their spend down and why.

  EXCEPTION:  The Department of Mental Health (DMH) customers do not receive a bill or services received through state funded programs.  See Manual Section 0810.010.15.15.10 Identifying DMH Medical Services Allowable For Spend Down.  Verification of medical expenses incurred by a participant receiving CPR, CSTAR, Targeted Case Management, or DD waiver services paid by DMH using state only funds can be provided on an invoice to DMH which must include:

  • Name and DCN of the MO HealthNet participant;
  • Name of service provider;
  • Provider type (First two digits of the provider number);
  • Date the service was provided;
  • Service provided, identified in one of the four categories – CPR, CSTAR, Targeted Case Management, or DD waiver.  It does not have to include the specific service name or procedure code.
  • Charge to DMH for service on the date it was provided.

The eligibility specialist should review information in FAMIS, the case file, the INQUIRY INDIVIDUAL TPL RESOURCE (MTPR) screen (MTPR space 8 digit DCN), and SVES-WIRE THIRD PARTY QUERY (IIVE) to confirm the accuracy of the documentation and  request additional documentation when clarification is  needed. 

The eligibility specialist will allow only the balance that is the participant's responsibility to pay to meet their spend down for a month. If the amount of the third party payment is not shown, the eligibility specialist will determine the amount of third party payment, if any, before allowing any portion of the expense to meet spend down. The amount of the incurred medical expense will be reduced by the amount that the third party is expected to pay.

Health Maintenance Organizations (HMO's), and other types of managed health care plans, usually assess a set copayment (copay) amount for services. In these types of plans the individual is only responsible for the copay amount. When an individual's insurance coverage is provided through a plan with set copay amounts, count only the copay amount toward the spend down; do not allow the "actual" cost of the service.

EXAMPLE:  An individual visits an HMO physician and the cost of the visit charged to the HMO is $80. The individual's copay for physician's visits is $10. Only the $10 is counted toward meeting the spend down.

Medicare and other health insurance have deductibles and coinsurance amounts that the participant is personally responsible to pay.

EXAMPLE:  An individual visits a Medicare physician and the cost of the visit charged to Medicare is $120. The individual has met their annual deductible prior to this visit. The individual's coinsurance for physician's visits is 20%. The individual is personally responsible for $24. Only the $24 is counted toward meeting the spend down.

EXCEPTION: The QMB program provides MO HealthNet payment of the Medicare premium, and coinsurance and deductibles for all Medicare covered services. Because QMB participants have coverage that pays their Medicare deductibles and co-insurance, they are not personally responsible for those charges. The costs of Medicare covered services cannot be used to meet spend down for individuals receiving QMB benefits.  See 0865.035.25 QMB BENEFITS GUIDE

0810.010.15.02  Determining Patient Responsibility After Third Party Liability

When documentation of incurred medical expenses is received by the Family Support Division (FSD), the eligibility specialist (ES) must review the documentation to determine when spend down liability is met.

Calculating Medical Expenses after Third Party Liability

When the ES receives documentation of incurred medical expenses which shows third party payment of each individual expense, follow these steps:

1. Verify the gross cost of the medical expense prior to any payments by the participant or third party.
2. Determine if third party liability (TPL) coverage exists to cover all or part of the medical expense, as follows:
   • Verify and deduct any amount paid or expected to be paid by a liable third party, such as health insurance or Medicare.
   • Verify amounts denied by liable third party payers. If the participant remains responsible to pay the denied amounts, allow to meet their spend down. If the provider does not hold the participant responsible do not allow the denied amount to meet spend down.
   • Verify and deduct anticipated third party payments based on coverage information in the insurance policy or other sources.
3. If it is known to FSD that a provider does not bill the participant for the remaining balance after third party liability, contact the provider for verification of the participant's responsibility. Do not allow the balance to be applied to the participant's spend down liability if they are not responsible to pay the remaining balance. Record contact information including, date, person, title, and summary on the Eligibility Unit Member Role (EUMEMROL\FM3Z) screen.

   EXAMPLE: Mr. Jones provides a detail bill from the local hospital that lists the date of service, type of services provided, and what the third party is anticipated to pay, but lists no amount due from the participant. Do not allow the remaining balance to be applied to Mr. Jones' spend down until it is verified that he is legally obligated to pay the balance. If the hospital states that the participant is not billed for the balance, Mr. Jones does not meet his spend down liability with the hospital stay.  The information is recorded on Eligibility Unit Member Role (EUMEMROL\FM3Z) screen.

One Payment for Multiple Expenses

Documentation of medical expenses does not always show a breakdown of what the third party liability pays for each service. Some providers are paid based on methods such as episode-based payments, bundled payments,  case rate, packaged pricing, flat fees, or capitation. If the documentation received by FSD does not break down the payment by date, types, and cost of each service covered, follow these steps:

1. Attempt to obtain information on the payment by service, including the date of service and the amount paid for that service. The information may be obtained by either:
   • Requesting the third party to provide a detailed explanation of the payment.
   • Examining available coverage information.
2. Deduct the third party payment or the amount expected to be paid by the third party, from the gross cost of each service. Use the remaining balance to meet the participant's spend down liability.

   NOTE:  If it is not possible to obtain the amount of the payment by date of service within the case processing standards, apply the total payment against the services it covers starting with the oldest expense. Continue applying the payment until it is used up.

3. Document the following in the electronic case record on the Eligibility Unit Member Role (EUMEMROL\FM3Z) screen:
   • How the information was obtained or attempted to be obtained.
   • The exact calculation to show how the third party payments were applied.

EXAMPLE:  Mr. Star has a monthly spend down of $100. He has Medicare Part B and has already met his deductible for the year. Mr. Star provides documentation of medical expenses from a physician visit on June 1 totaling $240. The documentation does not show a breakdown of third party payment by services, but shows one payment for his medical expenses incurred at the visit, June 1. After third party payment, Mr. Star is responsible for $48. Mr. Star does not meet his spend down for June with this incurred medical expense. Mr. Star also provides documentation of a medical expense from another physician visit on June 7 totaling $300. This documentation does not show a breakdown of third party payment by services, but shows one payment for the medical expenses incurred at the visit, June 7. After third party payment, he is responsible for $60. Mr. Star meets his spend down on June 7.

Deductible and Copayment Amounts Due

When the participant is responsible for a set deductible or copayment (copay) amount for the services provided, apply the deductible or copay to the services provided in date order.

EXAMPLE:  Mr. Green has a spend down of $700 per month. He has Medicare Part A and Part B. On May 5, the local hospital provides a bill to FSD showing Mr. Green was hospitalized from April 19-May 2. The bill provided shows a breakdown including dates of service, types of services, and patient responsibility of $1,156. The $1,156 is Mr. Green's Medicare Part A inpatient deductible and is applied to the first date of hospitalization. He met his spend down liability on April 19. Mr. Green did not incur any expenses from this hospitalization to apply to his May spend down liability.

EXAMPLE: Ms. Smith has a spend down of $500 per month. She has private health insurance with a hospitalization copay of $300. On June 15, the local hospital provides a bill to FSD showing Ms. Smith was hospitalized from June 5-June 7. The bill provided shows a breakdown including the dates of service, types of services, and patient responsibility of $300 (her hospital copay). The copay is applied to the first date of hospitalization. Ms. Smith did not incur expenses up to her June spend down amount, so she did not meet her spend down liability with this hospitalization.

For more information about Medicare as a third party liability visit http://www.medicare.gov/cost/.

Calculating Medical Expenses When the Portion Subject to Third Party Payment Can Not be Identified

Because medical providers are mandated to provide any additional information required to establish that an individual has incurred a medical expense, it is only in rare circumstances, such as a catastrophic loss of provider billing records, that the portion subject to third party payment can not be identified. When it is known that the individual has third party liability and the portion subject to payment by the third party cannot be identified, estimate the amount of the individual's responsibility based upon provisions of their third party coverage.

1. Verify the gross cost of the medical expense prior to any payments by the participant.
2. Calculate and deduct any amount anticipated to be paid by a liable third party, such as health insurance or Medicare, based on coverage information in the insurance policy, handbook, summary of benefits, or other sources.

   NOTE:  For individuals with Medicare Part A and/or B coverage who do not have Qualified Medicare Beneficiary (QMB) coverage, estimate the amount of the individual's incurred medical cost as 100% of the Medicare reimbursement rate up to the individual's Medicare deductible when the deductible has not been met.  Once the deductible is met, estimate that the individual is responsible for 20% of the Medicare allowable reimbursement rate.

3. Determine if there will be amounts anticipated to be denied by liable third party payers, based on coverage exclusions in the insurance policy or other documented sources.

0810.010.15.05  Countable Medical Expenses for Spend down

Evaluate the medical expenses to determine if they can be counted in spend down.  If the case is a couple case and the income of both spouses is used in the spend down determination (refer to Section 0805.015.05), allow the expenses of both spouses, even if only one is eligible for MO HealthNet. Allow only the portion of the expense that the individual or their spouse is responsible to pay.

The date a medical expense is incurred is the date the individual receives the service, not the date of the bill or the date a bill is paid. For some types of services, such as rental of durable medical equipment and personal care services, the provider may bill the individual on a monthly basis.  When this occurs the eligibility specialist must determine and allow the daily rate for the service as follows:

For rental equipment, after determining any third party liability, allow the monthly expense as billed. Do not prorate the expense of durable medical equipment.

EXAMPLE: Mr. X does not have Medicare or other health insurance. Mr. X has a spend down of $100.00. The pharmacy bills him for the use of an oxygen machine on the first of the month for $150.00.  The expense of $150.00 exceeds the spend down liability of $100.00.  Mr. X meets his spend down on the 1st day of the month.

For personal care and similar in-home services, verify the daily charge and the days of the month the participant receives the service.  Allow the daily charge that is the participant’s responsibility, for each day the service was received.

Allowable expenses for use toward an individual's spend down are expenses incurred by the individual or spouse, whose income is used in determining eligibility, for necessary medical services that are recognized under State law and are not subject to payment by a third party, unless the third party is a public program of a State or political subdivision of a State such as Department of Mental Health or Department of Health and Senior Services. To incur an expense means to be personally responsible for the expense. The types of medical expenses that can be counted to meet spend down include:

• All types of medical expenses covered by Title XIX.
• All prescribed drugs and dental care.
• Health care services rendered in the home including the cost of physical, occupational and speech therapy; services of home health aides; medical supplies such as surgical dressings, splints, casts, syringes, oxygen, aces, catheters, colostomy bags, and other similar medical supplies; and rental durable medical equipment such as oxygen tents, iron lungs, hospital beds, and wheelchairs.
• Personal care services not currently being provided for, through other federally-funded programs, i.e. Title XIX.
• Medically related homemaker/chore services.
• Medically related adult day health care or adult day treatment.

  NOTE: If a participant has incurred personal care services; medically related homemaker/chore services; or adult day health care services; the expenses associated with these medically related services may be allowed.  If applicable, contact the Department of Health and Senior Services staff to verify the assessed medical need for homemaker/chore services and/or adult day health care; and/or request that the participant provide a medical statement from the attending physician, which outlines the need for medically-related homemaker/chore services and/or adult day health care.

  Personal care services; medically related homemaker/chore services; or adult day health care services will not include:

  • Services provided by family members, regardless of whether or not they live with the participant.  Family members are defined as blood relatives in the first and second degree.  This includes spouse, child, parent, grandchild, grandparent, brother and sister.
  • Services currently being provided and paid for through other federally funded programs, i.e. all expenses currently being paid through Title XX funds; or other third party coverage; and/or
  • Non-medically related Homemaker/Chore or Adult Day Care programs
• Independent Living Waiver Services authorized by the Division of Vocational Rehabilitation through a contract with a Center for Independent Living (CIL).  The waiver provides services to disabled individuals age 18 through 64.  Waiver services include:
  • Case Management
  • Personal Care Services
  • Environmental Accessibility Adaptions
  • Specialized medical equipment and supplies

  The waiver allows for self-directed services. The participant contracts, selects, and trains the person they chose to deliver their services and care. Participants may hire family members (other than the participant's spouse) to provide waiver services.  Verify the individual's enrollment and cost of waiver services through the appropriate CIL.

• Private duty nursing services in the home.
• Prosthetic devices
• Hearing aids
• Eye glasses
• Services of:  optometrist; optician; chiropractor; chiropodist or podiatrist; Christian Science Practitioner
• Residential and day habilitation services prescribed by a physician and authorized by the Department of Mental Health (DMH).
  • Verify DMH authorization and prescription by a physician by viewing an Individual Plan of Care (IPC) or Individual Habilitation Plan (IHP) which contains the physician's signature and DMH authorization.
  • Obtain a copy of the IPC or IHP and verification of the daily rate and total cost of residential or day habilitation services from the DMH regional center casemanager serving the region where the claimant resides.

  NOTE:  Only residential or day habilitation services are allowable.  Other habilitation services are not allowed toward spend down.

• Emergency ambulance services
• Medically necessary transportation to scheduled, physician-prescribed nonelective treatments.  Transportation to obtain medical treatment or services is allowed at the current rate of mileage reimbursement for state employees.  Allow transportation costs for trips to and from a pharmacy or other location to fill prescriptions. Verify the mileage claimed is for a medically related trip using the date on the bill or receipt for the medical expense. Hand written statements are not acceptable.

  NOTE: Transportation expenses are not allowed for individuals with active MO HealthNet/non-emergency transportation coverage. NEMT is considered a third party liability, unless it is verified that the participant was unable to obtain NEMT services.

  NOTE:  The date(s) of an individual's medically related trips is considered the date of service; not the date paid. The date(s) of service and medical necessity must be verified and clearly recorded on the Eligibility Unit Member Role (EUMEMROL/FM3Z) screen in FAMIS.