CMS guidance on Part D prescription drug expenses and spenddown

This is an overview of guidance given by CMS regarding Medicare D and spenddown expenses. The same guidance can be applied to reducing LTC participation by a Medicare D related expense.

When are prescription drugs for Medicare beneficiaries an allowable expense under spenddown?

For the purposes of Medicaid spenddown, incurred Part D pharmacy costs are treated in the same manner as any other costs incurred for medical care. All usual rules for determination of an applicant’s liability, insurance coverage and spenddown eligibility is applicable. Costs paid in whole or in part by a State Pharmaceutical Assistance Program (SPAP), or other public program of the state or a political subdivision of the state, which involves no federal funds may be counted as an incurred medical expense to establish eligibility for a Medicaid spenddown.