0810.010.15 Meeting Spend Down with Incurred Expenses

IM-96, October 26, 2015, IM-#71, August 2, 2013, IM-#56, July 2, 2012, IM-#8, January 24, 2012, IM-106, September 10, 2002

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:

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

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:

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:

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.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES

04/2012

$300 – no coverage selected for April

$1000 applied 06/01/2012 – 09/2012

05/2012

$300 –no coverage selected for May

 

06/2012

$300 – met with carryover and coverage starts June 1

carry over balance from April $300

07/2012

$300 – met with carryover and coverage starts July 1

carry over balance from April $300

08/2012

$300 – met with carryover and coverage starts August 1

carry over balance from April $300

09/2012

$300 –  $100 carryover applied, but spend down not met– remaining liability $200

carry over balance from April $100

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.

NOTE:  The participant cannot later choose another month to use the medical expenses to meet spend down. The eligibility specialist must record the participant's decision on the Eligibility Unit Member Role (EUMEMROL\FM3Z) screen. The recording must include what month(s) the participant chooses to apply medical expenses to meet spend down.

EXAMPLE: Mr. Lee is an active spend down participant since May 2010. Mr. Lee's monthly spend down liability is $100. He incurred a medically prescribed dental expense on 6/12/12 and he currently owes $300. (This expense was incurred after he met his June spend down with bills, but is not paid by MO HealthNet).

Mr. Lee has not used his dental bill to meet his spend down liability in a prior month. Mr. Lee has chosen to have his dental expense applied to his spend down liability for July, August, and September. Mr. Lee meets his spend down and his coverage begins on the first of the month for July, August, and September (not to exceed 3 months) using this expense.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES

07/2012

$100

$100 (dental bill)

08/2012

$100

$100 (dental  bill)

09/2012

$100

$100 (dental bill)

EXAMPLE:  The current month is September. Mrs. Lautner is an active spend down participant since 02/2009. Mrs. Lautner's monthly spend down liability is $180. Mrs. Lautner has private insurance. Mrs. Lautner incurred the following bills:

6/02/12 primary care physician - co-pay $30

6/02/12 pharmacy prescriptions - co-pays total $20

7/13/12 specialist visit charges - co-pay $45

7/13/12 pharmacy prescriptions - co-pays total $25

8/02/12 lab tests - personal responsibility of $60 after insurance pays

She has requested the expenses be applied to her spend down liability for September. Effective September 1, 2012 her total accumulated expenses for prior bills incurred outside the current month are used to meet her September 2012 spend down liability of $180.  Mrs. Lautner meets her spend down on September 1.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES

06/2012

$180

$50 (spend down not met)

07/2012

$180

$120 ($50+$70)(spend down not met)

08/2012

$180

$180 ($50+$70+$60) (spend down met but not applied)

09/2012

$180

$180 (spend down applied)

EXAMPLE: It is July 2012. Ms. Steinman is an active spend down participant.  Ms. Steinman's monthly spend down liability is $320.  She met her June spend down on June 15. On June 29 she had to purchase a hearing aid that cost her $1,285. She has Medicare and MO HealthNet coverage; however this is not a covered service.  She has an incurred bill in the amount of $1,285.  Ms. Steinman presented her bill on July 5 and has chosen to apply her hearing aid bill to her July spend down , and the three succeeding months , August, and September, and October. (not to exceed three months) spend down liability.  Ms. Steinman meets her spend down on the first of the month for July, August,  September, and October.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES

07/2012

$320

$1,285 - $320 = $965 carried over

08/2012

$320

$965 - $320 = $645 carried over

09/2012

$320

$645 - $320 = $325  carried over

10/2012

$320

$325-320 = $5 (can not carry over past 3 succeeding months from current month)

NOTE:  The month(s) the bill is presented can change the outcome of this scenario.  If Ms. Steinman would have presented her bill in June, the incurred expense would only be applied to July, August, and September (up to 3 succeeding months from the current month). If Ms. Steinman waited until August to present her bill, the remaining balance due could be applied to August, September, October, and November.

EXAMPLE:  Mr. Landry's spend down liability is $300. He has private insurance with a hospital deductible of $600. He is hospitalized from August 14th - August 17th. Mr. Landry had no additional medical expenses in August. The total bill is $14,000. After third party payment, Mr. Landry owes his deductible amount of $600. He submits documentation of the incurred medical expense of $600 to the local FSD office and instructs the ES that he wishes to apply the bill to August. Mr. Landry also states he would like the remaining $300 to be applied to October; he has already scheduled a medical procedure for October.  The ES applies the $300 to his August bill and completes an IM-29 (SPND) to let Mr. Landry know he has met his spend down for August; however the remaining $300 cannot be used to meet October spend down. The ES explains that the remaining $300 will be billed to Medicaid as it is a Medicaid covered charge and therefore not an allowable expense in future months.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES

08/2012

$300

$600-$300=$300 to be paid by Medicaid

0810.010.15.01  Documentation of Incurred Medical Expenses

IM-#82, September 20, 2012, IM-#56, July 2, 2012

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:

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:

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

IM-#88, November 2, 2012, IM-#58, July 7, 2012

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:
  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:
  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:

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

IM-#88, November 2, 2012, IM-#8, January 24, 2012, IM-53, September 8, 2011, IM-35, June 14, 2011, IM-127, August 31, 2000

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: