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MEDICAL SERVICES POLICY MANUAL,SECTION O O-700 Income Determination for Medically Needy Program O 741 Eligibility Based on Incurred Medical Expenses (Spend Down)

Net monthly income, determined according to MS O-730, will be totaled to arrive at quarterly income. The amount of net quarterly income available to the individual/family is measured against the appropriate Medically Needy Income Level (MNIL) (MS O-710) to determine “excess income.” When eligibility cannot be determined for a full quarter (Re. MS O-165), the determination will be made for the balance of the retroactive period (i.e., one or two months). Net income for the shortened period as determined in MS 0-730 will be measured against the appropriate MNIL (MS O-710) to determine excess income. O-741 Eligibility Based on Incurred Medical Expenses (Spend Down) MS Manual 01/01/14 The eligibility determination based on incurred medical expenses is a two-step process: 1. Incurred medical expenses (i.e., those which were incurred at the time of application) which cannot be covered by Medicaid are deducted from excess income, first. When these expenses obligate all excess income, the individual is eligible beginning the first day of the Spend Down quarter being considered. When these expenses do not obligate all excess income, proceed to item #2. A list of these non-covered expenses is specified in MS O-742. 2. When excess income remains following deduction of incurred non-covered expenses, a chronological listing (by date of service) of coverable medical expenses must be prepared to determine Spend Down eligibility. Daily totals of these expenses will be deducted from remaining excess income. When remaining excess income is exceeded by a daily total, the Spend Down date (i.e., beginning date of eligibility) is established. The last excess income that was exceeded by the daily total on the Spend Down date is the applicant’s “unmet liability”. When excess income remains after deducting all coverable medical expenses, the application will be denied.  NOTE: When the applicant has incurred medical expenses which have been paid or will be paid within a reasonable period of time by a third party resource (i.e., insurance, etc.) refer to MS O-750.