7532.4 Meeting a Spenddown and Application of Medical Expenses

When allowable incurred medical expenses equal or exceed the spenddown amount, eligibility exists. The spenddown for the entire eligibility base must be met before there is eligibility. Once met, eligibility exists for all months of the base period in which categorical, non-financial, general, and other financial eligibility criteria are met.

Expenses are applied in the order they are received. However, different methods are actually used to account for the expenses, depending upon the type, source, and date of service. Because of this, the process to meet a spenddown is the responsibility of both the eligibility worker and the fiscal agent.

Agency Responsibility - The eligibility worker is responsible for determining the appropriate eligibility base period and the total spenddown amount. In addition, eligibility staff shall reduce the total spenddown amount by the following allowable expenses, which have been reported and verified. These are documented in KEES. Health insurance premiums. Expenses for non-participating members of the assistance plan. Due and owing expenses. Allowable nursing facility/institutional expenses (excluding general hospital). No other medical expenses are to be entered in KEES for persons attempting to meet a spenddown. If these expenses satisfy the spenddown in full, the individual will be eligible for reimbursement of medical expenses immediately.

MMIS Responsibility - The above information is then sent to the MMIS, where a medical assistance benefit plan of medically needy will be assigned. The presence of a medically needy benefit plan will identify the individual as a person with a spenddown. A medical card is issued for each participating member of the assistance plan. Medicaid providers who deliver medically necessary services and items shall bill the Kansas Medical Assistance Program (KMAP) using the information on the card. All medical expenses may be direct billed to MMIS, not just those covered by the KMAP. If the spenddown has not yet been satisfied, expenses which have been incurred in the base period are applied to reduce the amount of remaining spenddown, subject to TPL limitations. The amount actually billed will be allowed toward spenddown, as providers are restricted to billing at their usual and customary rate. The remaining portion of expenses coming through a Medicare crossover claim that are not subject to reimbursement through the QMB program are also applied toward the spenddown. All claims received by the fiscal agent will have a Potential Provider Payment (PPP) status determined. The status indicates if the service is a Medicaid covered service which, if the client were not on spenddown, could potentially be paid by the Medicaid program. The fiscal agent will send weekly notifications to those cases which experience activity on the spenddown in the past week. The notice will itemize all allowable expenses directly billed to the MMIS or through the Beneficiary Billed claims explained in item (3) below.

Beneficiary Billed Claims - In the event an individual receives an allowable service, and the provider cannot direct bill for the service (e.g., item from a non-Medicaid provider or an expense from a Medicaid provider prior to case approval) a special process has been established to allow such expenses to be used toward the spenddown. Persons must obtain from the provider of the medical service a completed, ES-3170, Beneficiary/Patient Spenddown Billed Form . The form will capture the necessary information to input a special claim, called a Beneficiary Billed Claim, into the MMIS. This process will also be used to provide for some non-Medicaid covered items and services which cannot be direct billed to Medicaid. The completed form shall be submitted to the eligibility worker for review. If the expense is allowable, the eligibility worker is responsible for input into the MMIS. Items and services billed through the ES-3170 may only be applied toward spenddown and are not considered for payment even if the expense Isn't ultimately used towards the spenddown.

Spenddown Met - When the total spenddown has been satisfied, the spenddown is considered met for the base period. Bills used to meet the spenddown remain the responsibility of the individual. A combination of accounting methods may be used to actually meet the spenddown. However, the bills used to meet the spenddown are not altered unless the new expenses are listed in (1) above, items a - d or if the last bill used to meet the spenddown was a non-Medicaid covered expense. In this case, if other Medicaid-covered bills have already been applied, the non-Medicaid covered expenses shall be used in full, thus making the Medicaid-covered expenses potentially eligible for reimbursement. When the spenddown is met, the fiscal agent will produce an itemize list of expenses used to meet the spenddown. The list will not include those expenses listed in (1) above, items a - d. A copy of this notice will be sent to the assigned eligibility worker.

Changes in Spenddown Amount and Status - When changes occur that ultimately impact the total spenddown amount (e.g., changes in income or changes in the assistance plan), the new spenddown amount will be sent to the fiscal agent. Timely and adequate notice is required when reacting to a change to increase the spenddown amount or change the spenddown status from met to unmet. The following rules apply: For unmet spenddowns that remain unmet, the new spenddown amount will be effective upon receipt. For unmet spenddowns which have been reduced and when applied expenses exceed the new spenddown, the spenddown will now be considered met and only those expenses which aren't subject to potential Medicaid payment and enough expenses which are subject to Medicaid payment to satisfy the spenddown. For spenddowns which have been met that are reduced, the expenses used to meet the spenddown will be reviewed and those which are subject to Medicaid reimbursement will be eliminated in reverse date order. For spenddowns which have previously been met are increased, the case will be put back into spenddown status and the new spenddown amount will be applied the month following the month the new amount is received or the second month following, depending upon negative action deadline.