30.06 Allowable medical expenses

In general Medical expenses that are the current liability of the individual and for which no third party is legally liable may be deducted from total excess income or resources for the accounting period. No medical expense may be used more than once to meet a spenddown requirement. A medical expense may be used to spend down either income or resources. If only a portion of a medical expense is used to meet the spenddown requirement for a given accounting period, that portion of the medical expense that was not used and remains a current liability may be applied toward a spenddown requirement in a future accounting period. Upon receiving coverage, the individual remains directly responsible to providers for expenses incurred before the spenddown was met. Health insurance expenses Health insurance is insurance that covers medical care and services, such as Medicare part B, and similar group or individual policies. A deduction is allowed for health insurance premiums paid by the individual if it can be reasonably assumed that health insurance coverage will continue during the accounting period. Deductions may also be allowed for other health insurance expenses, including enrollment fees and deductibles or coinsurance imposed by Medicare or other health insurance not subject to payment by a third party (such as another insurance policy). Health insurance coverage, the amount of the premium for the coverage, and any other deductible expense amounts must be verified. Premiums, or other expenses, for the following types of insurance are not deductible: (i) Income protection or similar insurance plans designed to replace or supplement income lost due to sickness or accident; or (ii) Automobile or other liability insurance, although these may include medical benefits for the insured or their family. Expenses not covered by Medicaid. A deduction is allowed for necessary medical and remedial expenses recognized by state law but not covered by Medicaid in the absence of an exception for Medicaid coverage under DVHA Rule 7104. In determining whether a medical expense meets these criteria, AHS may require medical or other related information to verify that the service or item for which the expense was incurred was medically necessary and was a medical or remedial expense. The patient’s physician shall verify medical necessity with a written statement or prescription specifying the need, quantity, and time period covered. Examples of medical expenses not covered by Medicaid include, but are not limited to, expenses for the services and items listed in (1) through (6) below. Any medical bills, including those incurred during a period of Medicaid eligibility, that are the current liability of the individual and have not been used to meet a previous spenddown requirement may be deducted from excess income. Generally, the individual is required to present a bill or receipt to verify that medical expenses have been incurred or paid. Over-the-counter drugs (i) In general. Either standard deductions or actual costs, if greater, may be used to deduct noncovered over-the-counter drugs and supplies. (ii) Documentation Documentation verifying medical necessity is not required when AHS determines that an over- the-counter drug or supply is a common remedy for the medical condition of the individual or of the member of the individual’s financial responsibility group and the usage is within the maximum amount for common over-the-counter drugs and supplies. Documentation verifying medical necessity may be required whenever one or both of the following two situations apply: (I) When the drug or supply is not a common remedy for the medical condition, or (II) When the reported usage exceeds the maximum amount. (iii) Amount deductible Instead of actual expenses, a reasonable estimate of ongoing expenses for over-the-counter drugs and supplies may be applied prospectively to the accounting period. If an individual uses an ongoing expense to meet their spenddown requirement, they are not eligible to receive Medicaid coverage during that accounting period for the same expense. Transportation. Noncovered commercial and private transportation costs may be deducted. (i) For commercial transportation, the actual cost of the transportation, verified by receipt, may be deducted. (ii) For private transportation, either a standard deduction or the actual cost, if greater, may be used. (iii) The cost of transportation may be deducted without verification of medical necessity provided that: The transportation was essential to secure the medical service; and The individual was responsible for the cost and was charged an agreed-upon fee or purchased fuel to use a family-owned vehicle or other non-commercial vehicle. (iv) Mileage reimbursement rates are the rates established by the U.S. General Services Administration. The rates fluctuate periodically. It is important to refer to the federal website in order to determine the current rate. The website is www.gsa.gov/mileage. Personal care services (i) In general. A deduction for noncovered personal care services provided in an individual’s own home or in a level IV residential care home is allowed when they are medically necessary in relation to an individual’s medical condition. (ii) Deductible personal care services. Deductible personal care services include the personal care services described in DVHA Rule 7406.2 and assistance with managing money. They also include general supervision of physical and mental well-being where a physician states such care is required due to a specific diagnosis, such as Alzheimer’s disease or dementia or like debilitating diseases or injuries. Room and board is not a personal care service. (iii) Qualified personal-care service providers Except as stated in (B) below, services may be deducted when performed by a home-health agency or other provider identified by the individual’s physician as qualified to provide the service. When the service provider is living in the home, deductions may not be based on payments for personal care services provided to an individual: (I) Under age 21 by the individual’s parent, stepparent, or legal guardian, unless the individual is 18, 19, or 20 years old and payment for personal care services is made from and does not exceed the individual’s own income or assets; (II) By the individual’s spouse; (III) By the individual’s sibling, child, or grandchild when the person providing the services is under age 18; or (IV) By a parent of the individual’s minor child. (iv) Documentation To document the need for personal care services, the provider must submit: (I) A plan of care; (II) A list of the personal care services required; (III) A statement that the services are necessary in relation to a particular medical condition; and (IV) A statement that the level of care provided by the particular level IV residential care home is appropriate or, if the individual is not living in a level IV residential care home and the services are not provided by a home health agency, that the provider is qualified to provide the service. Upon the initial submission of a plan of care, it is assumed that the individual will continue to need the personal care services for the entire accounting period, unless the plan of care has specified a date by which the individual’s need for services is expected to change. A plan of care can be submitted to AHS using a form provided by AHS or using a statement, signed by the physician, that contains information sufficient, as determined by AHS, to document the individual’s need for personal care services. A new plan must be submitted: (I) Once every six months, when the provider has not specified an ongoing need for personal care services in the current plan; or (II) Once every two years, when the physician has specified an ongoing need for personal care services in the current plan. A new plan must also be submitted: (I) Whenever the service provider changes, unless the service is performed by a home health agency; and (II) Whenever the need for services in relation to the individual’s condition is expected to change, according to the current plan of care. (v) Amount deductible Either standard deductions or actual costs, if greater, may be used for deducting personal-care services. Expenses that have not been incurred yet may be deducted if they are predictable and meet the requirements in § 30.05(h). Expenses also may be deducted if they have actually been incurred by the individual and are not subject to payment by Medicaid or any other third party. The standard monthly deduction for personal care services shall be deducted for each full or partial calendar month in the accounting period during which the plan of care documents the need for services. The actual documented costs of personal care services may be deducted if they exceed the monthly standard deduction. Deductions may be made for anticipated need through the end of the accounting period. All changes to these standards that result in lower standard deductions will be made via the Administrative Procedures Act. Assistive Community-Care Services (ACCS) (i) Deductible assistive community-care services. A deduction for noncovered assistive community care services (ACCS) provided to an individual residing in a licensed level III residential care home is allowed. The individual may also deduct medically-necessary personal-care services included under the list at DVHA Rule 7406.2 but not part of the list at DVHA Rule 7411.4. (ii) Qualified Service Providers Qualified service providers include all level III residential care homes licensed by AHS. When an individual that is a resident of a level III residential care home becomes eligible for Medicaid by projecting the cost of ACCS across part of the accounting period, the residential care home may agree to function as a Medicaid provider for ACCS with respect to that resident for the remainder of their accounting period. In these cases, the provider may bill for ACCS services no sooner than the ACCS coverage date given to the resident and the provider in a notice from AHS. When a privately-paying resident of a level III residential care home becomes eligible for Medicaid after having met a spenddown requirement by projecting the cost of ACCS across the entire accounting period, the residential care home shall not function as a Medicaid provider for ACCS with respect to that resident during the period when the resident is meeting the spenddown requirement. (iii) Documentation Documentation verifying medical necessity is not required for ACCS. If an individual claims a deduction for medically-necessary personal-care services included under the list at DVHA Rule 7406.2 but not part of the list at DVHA Rule 7411.4 the individual’s physician must submit: (I) A plan of care (form 288B); (II) A list of the personal care services required; (III) A statement that the services are necessary in relation to a particular medical condition; and (IV) A statement that the level of care provided by the particular level III residential care home is appropriate and that the provider is qualified to provide the service. Upon the initial submission of a plan of care, it is assumed that the individual will continue to need the personal care services for the entire accounting period, unless the plan of care has specified a date by which the individual’s need for services is expected to change. An individual with an approved personal care services deduction must submit new plans at the same frequencies specified under paragraph (c)(3)(iv) of this subsection. (iv) Amount deductible The deduction for ACCS may be used for the entire accounting period or part of it. Whether the standard daily or monthly deduction is used depends on the size of the spenddown requirement. The actual documented costs of ACCS may be deducted if they exceed the monthly standard deduction. Deductions may be made for anticipated need through the end of the accounting period. All changes in these standards that result in lower standard deductions will be made via the Administrative Procedures Act. If the individual’s excess income and resources after deduction of all expenses for which Medicaid coverage is not available equal or exceed the deduction for ACCS for the entire accounting period, for the purposes of meeting a spenddown requirement, ACCS are projected and deducted as if they were not Medicaid-covered services for the entire accounting period. Medicaid eligibility for services other than ACCS becomes effective on the day the spenddown requirement is met. Expenses for which Medicaid coverage is not available are: (I) Medical expenses excluded from coverage; (II) Covered medical expenses incurred prior to the accounting period, not used to meet a previous spenddown requirement, and remaining unpaid; and (III) Covered medical expenses incurred and paid during the current accounting period. If the individual’s excess income and resources after deduction of all expenses for which Medicaid coverage is not available are less than the deduction for ACCS for the entire accounting period, ACCS expenses are not projected. Instead, they are deducted as covered expenses on a daily basis. In this case, Medicaid eligibility for all covered services other than ACCS becomes effective the first day of the accounting period. Medicaid coverage for ACCS begins later. It starts the day cumulative daily ACCS deductions exceed the individual’s remaining excess income and resources. The individual is not responsible for payment of a portion of the ACCS expense on the first day of ACCS eligibility. In addition, the amount of the deduction for any services included under the list at DVHA rule 7406.2 but not part of the list at DVHA rule 7411.4 documented as medically necessary by the plan of care is determined based on the number of hours times minimum wage, or actual costs, if greater. Dental services. Dental services in excess of the allowable annual maximum may be deducted. Private-duty nursing services. Private-duty nursing services for an individual age 21 and older may be deducted. Expenses for covered medical services A covered medical service is any medical or remedial service that Medicaid would pay for if the individual were enrolled in Medicaid (see DVHA Rules 7201–7606). Deductions for covered medical services are not limited to the Medicaid reimbursement for the service. The actual cost paid or incurred is allowed. A standard deduction may be taken for ACCS (see DVHA Rule 7411.4).34 Third-party coverage No deduction is allowed if the medical expense is subject to payment by a third party such as health insurance, worker’s compensation, liability award, or other benefit program unless the third party is a 34 For the current standard deduction, see Vermont’s Eligibility Standards for Healthcare Programs on the Department of Vermont Health Access website. state or local program other than Medicaid. When a third party is liable for all or some medical expenses, only the portion owed by the individual may be deducted. AHS is required to take reasonable measures to determine the legal liability of third parties to pay for incurred expenses. Estimates of payment by the third party may be used if actual third party liability cannot be ascertained within the period for determining Medicaid eligibility. An eligibility determination may not be delayed simply because actual third party liability cannot be ascertained or payment by the third party has not been received. If an individual is pursuing a liability award, but liability has not yet been established, a deduction is allowed. Eligibility must be based on AHS’s estimate of the amount the individual owes for the bill.