7532.2 Allowable Expenses

See Policy Memo 1999-10-03 Application of Medicare Premiums to Spenddown .

To be allowed against spenddown, items or services must be medically necessary. See P-1, Medical Necessity , for a list of medically necessary services and items. Medically necessary items or services received by the individual or legally responsible family group member in the home are allowable. Verification of the expense is required. Expenses are not allowable until the service has been delivered or the item has been received, except as noted below.

The pro rata portion of medical insurance premiums for the number of months covered in the eligibility base period regardless of the actual date of payment, past or future, are allowable. This includes all types of health insurance plans, including limited coverage plans providing for single disease or specialized coverages, such as long term care, cancer, prescription drug or hospitalization plans. However, premiums for some hospital indemnity plans which pay a flat rate (such as a per day or per occurrence payment) are not allowable unless payment is dependent upon the insured receiving certain services or treatments. Each policy must be reviewed to determine if the premium is allowable. Medicare premiums not covered by buy-in are also allowable. Premiums which are subject to buy-in are not allowable even if the client pays them (or they are withheld) prior to completion of the buy-in process as such amounts are subject to reimbursement to the Medicare beneficiary. Additional costs paid for Medicare Advantage policies are not reimbursed through buy-in but are an allowable medical insurance premium. Additional premiums paid by the beneficiary for Part D coverage are allowable if not subject to reimbursement by the Subsidy. This includes surcharges for late enrollment and charges to upgrade the plan above the basic level.

Nursing facility charges reasonably expected to be provided within the base period, up to the private rate for individuals whose patient liability exceeds the monthly state rate as described in 8172.2(2) . Charges in a non-Medicaid approved facility, including those incurred during a transfer penalty, are not allowable (see 8111 ).

The cost sharing expense assigned to a nursing home (patient liability), HCBS (client obligation), or PACE (participant obligation) recipient is never allowable as a due and owing medical expense for any medical assistance program, including against a Medically Needy (spenddown). The assigned cost sharing expense has already been used to determine eligibility and therefore can never be applied as a due and owing expense even if never actually paid by the recipient.