7500 Determination of Financial Eligibility

Need is a factor of eligibility in all categories of assistance and shall be determined through the application of standards by use of the budgetary method.

Need requirements and countable income shall be documented.

7510

Reserved

7520

Reserved

7530 Financial Eligibility

7531 Financial Eligibility in the QMB, LMB, QWD, and Working Healthy Program

Financial eligibility exists if countable income does not exceed the allowable poverty level standards and resources do not exceed program limits, where applicable. A person cannot spenddown to obtain eligibility under any of these programs.

7532 Financial Eligibility in the Medically Needy Programs (Spenddown)

Financial eligibility exists if allowable incurred medical expenses, as specified in this section, equal or exceed the spenddown for the base period and resources do not exceed program limits. Expenses used to satisfy the spenddown amount remain the responsibility of the individual and are not subject to Medicaid reimbursement. See 7430(2) for establishing the spenddown amount.

7532.1 Limitations on Allowable Medical Expenses

To be allowed toward the spenddown, expenses must be incurred in the current eligibility base or, if incurred outside of the current eligibility base and the individual was legally obligated to pay the expense on the first day of the base and such expense has not been previously applied to spenddown in any other base period in which the spenddown was ultimately satisfied. This includes instances when the individual has taken out a loan to pay the expense or charged the balance on a credit card. Medical bills transferred to a collection agency for repayment are considered the responsibility of the individual.

All expenses which are incurred by persons in the assistance plan as well as those incurred by legally responsible family group members are allowable within the limitations described in this section. This includes expenses for persons who are not otherwise eligible for Medicaid (such as a non-disabled, non-aged spouse).

The amount of the expense allowable is determined according to the following:

The portion of the expense assumed by a third party, whether legally liable or not, negates the individual's responsibility to pay; therefore, such medical expenses cannot be considered against the spenddown. This includes the portion of any allowable medical expense paid by Medicare or other health insurance. The portion not covered by insurance (such as the copayment or deductible) or not assumed by another third party is allowable. Prescription drug expenses which are not covered under the Medicare Part D plan are allowable if an exception to coverage has been rejected by the plan. See 7532.2 for exceptions when expenses are allowable when paid by a third party.
Current expenses must be incurred and do not actually have to be paid to be allowed against the spenddown.
For due and owing expenses the following rules apply:
1. For unpaid expenses, the total amount due and owing on the first day of the base period is allowable, except for the portion used in a previous base or obligated by a third party. Bills used against a prior spenddown may be allowed in a subsequent base period only if the prior spenddown was not met. Only the portion still due and owing on the first day of the current base is allowable.
2. For expenses paid with a loan or credit card, only the unpaid portion of the loan or credit card balance attributable to the original medical expense is allowable. This is determined by subtracting all payments made on the loan or card balance from the original expense amount less any third party payments. Verification of the initial medical expense as well as payments made are required.
3. A long term care share of cost (nursing home patient liability, HCBS client obligation, or PACE participant obligation) determined by the agency for a covered month is never allowable as a medical expense against a Medically Needy (MN) spenddown, even if still due and owing by the recipient or spouse.
Otherwise allowable medical expenses that have already been applied as a pre-tax payroll income deduction per 7241(1)(a) may not also be applied as a medical expense against a spenddown.

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.

7532.3 Expenses Paid by a Third Party

Medically necessary expenses paid for by a public program funded by the State (or political subdivision of the State, such as a county), other than Medicaid, can be applied to spenddown. Only the portion of the expenses funded by the public program is allowable unless the client will continue to be obligated for the remaining portion of the bill. Such an expense is allowable in the base period in which it was incurred. Examples include expenses paid by Vocational Rehabilitation, the Family Support Program, Kansas Health Insurance Program for the uninsurable, certain programs administered by the Department of Health and Environment, such as those through Children with Special Health Care Needs, the Infant/Toddler Program and Other Title V programs and non- Title II AIDS Drug Assistance Program/Ryan White (see 2694) payments. Also included are services paid by Donated Dental Services, Adult Emergency Support Services/APS Emergency Funds, the Community Support Medication Program, and expenses subsidized on services received through a Community Mental Health Center or Community Developmental Disability Organization. For prescription drugs purchased with a Medicare Approved Drug Discount Card (see 2911) the pre-discount cost of the item is allowable toward spenddown. The entire cost of the item is allowable even if the $600 credit was used to purchase the drug. Services provided for or paid through Hill-Burton funds, Federal Ryan White funds or the Kansas Farmworker Health program are NOT allowable.

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.
1. Health insurance premiums.
2. Expenses for non-participating members of the assistance plan.
3. Due and owing expenses.
4. 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:
1. For unmet spenddowns that remain unmet, the new spenddown amount will be effective upon receipt.
2. 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.
3. 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.
4. 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.

7533

Reserved

7534 Continuing Financial Medical Eligibility

When circumstances change, adjustments will be made as necessary depending on the category of medical coverage. For persons eligible based on receipt of SSI, changes of circumstances may affect the basis of eligibility . For the Medicaid Poverty Level and CHIP programs for children and pregnant women, changes in income will not impact eligibility based on continuous eligibility provisions. Changes in the amount of earned income do not impact eligibility for TransMed. All other changes must be evaluated to determine if eligibility criteria continue to be met; see 8111.1 (3) for information relating to minors.

For non-SSI cases, if a person goes from independent living (including a non-Medicaid approved institution or specialized living arrangement) to long term care in a Medicaid approved institution or to an HCBS arrangement or vice versa, the eligibility base will be adjusted beginning with the month of the living arrangement change. When an individual goes from independent living to long term care in a Medicaid approved institution, financial eligibility shall be recomputed for the actual time in independent living. A one month eligibility base period shall be established for all institutional months, including the month of entry and the month of discharge. When an eligible individual goes from independent living to an HCBS arrangement, financial eligibility shall be computed in accordance with 8272.

When an eligible individual goes from long term care in a Medicaid approved institution or from an HCBS arrangement to independent living, a new 1 or 6-months eligibility base period shall be established beginning with the month following the month the care arrangement ends for institutionalized spouses for whom the provisions of 8144.2 have been applied or the month the care arrangement ends for all others. In the latter situations for Medically Needy, the amount of the previously established client obligation or the cost of care incurred by the individual in the month of discharge or service termination, whichever is less, shall be applied towards the spenddown for the new base. A new Medically Needy base period would not, however, be required for an individual subject to the provisions of 8172.2(2) and who goes from the adult care home to independent living. The 6-months base previously established in such cases would continue in these instances.