8270 Financial Eligibility

Financial eligibility shall be determined by first computing a monthly client obligation. The client obligation is a monthly amount the individual is responsible for paying toward his or her cost of care each month. The client obligation is the amount of income in excess of the appropriate income standard.

Eligibility staff shall make contact with those who are anticipated to have a monthly client obligation by telephone or through use of the ES-3159, HCBS Client Obligation Informational Agreement form. It is not necessary to contact individuals who are not anticipated to have a monthly client obligation. There is no negative impact to the consumer if the ES-3159 is not returned and contact by telephone is unsuccessful.

The following persons shall not have a client obligation for services, regardless of monthly income: SSI recipients (including those eligible under 1619(b) provisions); persons eligible under the CTM group and persons eligible under the protected groups of 2680 (e.g., Pickle).

Countable income is considered in determining the client obligation (see 8250). Where applicable, the obligation should take into account the amount of any income allocation in accordance with the provisions of 8243 (3) or 8244.2. The client obligation is further reduced by allowable medical expenses.

8270.1 Allowable Medical Expenses

To be allowed against the client obligation, 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 expenses have not been previously applied to another patient liability, client obligation or spenddown 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.

Allowable expenses can be applied to a future month's client obligation when it is not possible to account for the expenses in the month, they are incurred because of the use of a one-month base period.

Expense Limitations:
1. An expense must be the responsibility of the customer to be allowable. The portion of any expense assumed by a third party, whether legally liable or not, negates the individual's responsibility to pay and therefore, are not allowable except for expenses assumed by a third party as per 7532.3. 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 co-payment or deductible) or not assumed by another third party is allowable. Medical bills transferred to a collection agency for repayment are considered the responsibility of the individual.
2. 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 periods 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 period 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 on the initial medical expense as well as payments made are required.
  3. For expenses from an assisted living or residential treatment facility, only the medical portion of the monthly charge is allowable. If the facility is able to sufficiently verify the medical-only portion of the bill, that amount is allowable. If the facility is not able to sufficiently separate out the medical-only portion of the bill from the non-medical, the HCBS cost of care as determined in the current plan of care may be used as the allowable cost for each full month.
  4. 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 an HCBS client obligation, even if still due and owing by the recipient.
3. 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 to reduce a client obligation.
Allowable Expenses - Services must be verified to be allowed. The following are considered allowable services or items:
1. 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.
2. Medicare premiums not covered by buy-in are also allowable. See PM1999-10-03, Application of Medicare Premiums to Spenddown for guidelines on applying premiums prior to accretion to buy-in. 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. 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.
3. If medically necessary, all expenses for medical services incurred by the individual beginning with the first month of eligibility, are allowable. Items or services expected to be paid by the Medicaid program, regardless of whether eligibility has been determined or not, are not allowable. See P-1, Medical Necessity, for a list of medically necessary services and items.

8270.2 Application of Client Obligation

If the individual passes the 300% special income test as described in 7430(4) and 8260(3), Medicaid coverage shall be approved if otherwise eligible and the client obligation applied. If the individual fails the 300% test, eligibility shall be determined under the Medically Needy (MN) program and the following provisions apply:

If the client obligation does not exceed the cost of care for the HCBS services (8200.3), the individual is eligible for HCBS coverage. The HCBS standard (7430(4)), HCBS budgeting methodology (8230) and base period (8231) apply. The Spousal Impoverishment provisions of 8244 apply.

If the client obligation exceeds the cost of care for the HCBS services (8200.3), the individual is not eligible for HCBS coverage. The independent living standard (7430(2)), budgeting methodology (4300) and base period (7330) apply. The Spousal Impoverishment provisions of 8244 do not apply.

See 7430(4), 8120 (4) and 8260.

8270.3 Retroactive Client Obligation Changes

A change to an established HCBS client obligation must be made prior to the first day of the base period, except as noted below, as timely and adequate notice requirements permit (see 1430 and subsections). Generally, the client obligation is finalized beginning the first day of the month the obligation is effective, and no additional changes are to be made to the amount. However, the following situations must be acted upon, and a liability change may result. Proper notification is issued to both the recipient and the facility:

A change in living arrangement requires a budgeting change, resulting in a reduced client obligation for the current calendar month or a past month. These situations generally involve an individual moving from an LTC/NF arrangement to Medically Needy, HCBS or Working Healthy. The resulting change is acted upon beginning the month the new arrangement begins or a following month, depending on the situation. Although a patient liability may be adjusted due to these situations, client obligations would rarely, if ever, be adjusted because of a living arrangement change.
An agency error has resulted in an overstated obligation for the current calendar month or a past month. These include situations where an error was made by the agency which resulted in an overstated obligation for one or more of these months. Also included are situations in which the intended obligation did not transmit to the MMIS appropriately, but adequate and timely (if applicable) notice requirements were met at the time of the change. Understated obligations may be changed only if the customer and facility were timely notified of the liability change and the new obligation did not transmit to the MMIS appropriately. Supervisory approval is needed to authorize the retroactive liability change in these situations.

In either situation, the liability must be recomputed for the appropriate months. Appropriate changes may be applied in one of two methods. In the majority of HCBS situations the total amount of the overstated obligations is to be reduced from any future months obligations. If there is no ongoing client obligation to credit or if it is so small that it cannot be reasonably expected that the credit will be fully allowed within 12 months, changes shall be made to the existing client obligation for the months involved. These changes will be communicated to the MMIS and require the case manager/waiver manager to modify the existing plan of care and adjust the assignment of the obligation for each month involved.

Retroactive obligation changes are not appropriate to account for incorrect liabilities due to a client error, including the failure to report a change. In these situations, changes which result in an overstated obligation for the months involved are not reacted upon. For example, a client with a supplemental health insurance plan fails to report the increase in the monthly premium from $75 to $100, which took place in January, until May 15. The change results in an overstated obligation for the months of January - May, and are, therefore, not reacted upon. The change is made for June and subsequent months.

In addition, retroactive patient liability changes are not appropriate to account for non-covered expenses which, because assistance has been terminated, have not yet been allowed. This would include closures for death and loss of Kansas residency.

For understated liabilities which are the result of the client's failure to report a required change or other client error, overstated eligibility may result. Again, retroactive patient liability changes are not appropriate to account for overstated eligibility.

8270.4 Voluntary Contribution

A client obligation shall be increased by the amount of a voluntary contribution as described in 8243 (4). The increased client obligation due to application of the voluntary contribution cannot exceed the HCBS cost of care.

8271

Reserved

8272 Continuing Financial Eligibility

HCBS eligibility continues until the individual no longer meets appropriate eligibility criteria or until circumstances have changed as indicated in this section. When HCBS services end, KEES must be updated effective the day that action is taken by worker to process the change. When HCBS termination is based on a functional reason the last day of service is the date action is taken by worker to process the change. All terminations, approvals, and denials regarding functional eligibility must be reviewed and approved by KDADS. If the person has moved out of state or has died, the last day of service is the day of the move or the client's passing. If eligibility has been terminated for another reason, the last day of service is the last day of the mont in which the action became effective. (See also 2650 pertaining to CE policies for children under the age of 19 receiving non-MAGI coverage.) Other adjustments will be made as follows:

8272.1 Medically Needy to HCBS

When an individual goes from independent living (including a non-Medicaid approved institution or specialized living arrangement) to an HCBS arrangement, the provisions of 8231 apply.

8272.2 HCBS to Medically Needy

When an eligible individual goes from an HCBS arrangement to independent living, a new 6-months base shall be established beginning with the month following the month the care arrangement ends.

8272.3 Long Term Care to HCBS

When an eligible individual goes from long term care in a Medicaid approved institution to an HCBS arrangement, the higher HCBS income standard shall be applied beginning with the month the HCBS arrangement begins, and liability recomputed for that month. The resulting patient liability will be assigned entirely to the facility, even in instances where the total cost of care is less than the resulting liability. In these situations, KEES should not be updated with the HCBS information until the living arrangement changes (after the person physically leaves the facility). The new level of care and living arrangement codes care effective the date of discharge. HCBS Plans of Care may be backdated to ensure proper reimbursement to providers in these situations. Coordination between HCBS care coordinators and eligibility staff is necessary.

8272.4 HCBS to Long Term Care

When an eligible individual goes from an HCBS arrangement to long term care in a Medicaid approved institution, budgeting methodologies are dependent upon the anticipated duration of the stay.

If the stay is expected to exceed the month of entrance and the two following months, the obligation established for the month of entrance shall remain in effect and will be applied to HCBS services provided in the month. The current client obligation is left in place for the period where HCBS payment is appropriate. LTC budgeting methodologies begin the month following the month of entrance, unless the stay meets the temporary criteria as noted in 8173.4 (2).
1. If the HCBS recipient enters a State Hospital, the effective date of the new Level of Care and Living Arrangement codes is the day following the day of entrance into the State Hospital. Current coding in place authorizing HCBS as well as the previously established client obligation should be left in place for the date of entrance.
2. If the HCBS recipient enters a Nursing Facility or Swing Bed Hospitals, KEES should be adjusted with an effective date of the day of NF entrance. The current Level of Care code should be left in place. This combination of coding will allow both the NF and the HCBS provider to receive reimbursement for services provided on the day of entrance. The new Level of Care/Living Arrangement codes authorizing only NF payment are effective the day following the day of entrance into the NF.
  Overstated eligibility is not considered in situations where the total client obligation is not paid out for HCBS care because the cost of services was less than the obligation.
If the stay is not expected to exceed the month of entrance and the following month, HCBS budgeting methodologies continue for the temporary period. Any HCBS obligation would be applied to the HCBS services provided in either month or no obligation applied to the cost of the institutional care. However, because billing procedures differ for different institutional arrangements, instructions for handling these situations also differ.
1. If the HCBS recipient enters a State Hospital, no changes to KEES are necessary, and the coding established for HCBS payment is left in place for the duration of the temporary period. If a child receiving services through the SED waiver is approved for the special 14 day funding, HCBS coding remains in place for the full 14 days. Changes in level of care and living arrangement would be made effective for the 15th day.
2. If the HCBS recipient enters a Nursing Facility or Swing Bed Hospital, the Living Arrangement code is changed and left in place throughout the duration of the temporary period. No other changes are necessary. If the individual is hospitalized in general hospital prior to entrance into the NF/Swing Bed, no change should be made until the NF stay begins. However, the total anticipated length of stay should not exceed the month of entrance and the two following months for these provisions to be applicable.

In either case, if the case is initially processed as being in temporary care and the stay ends up exceeding those timelines, long term care policies shall then be applied beginning in the third month following the month of entrance.

For all changes in financial factors, the change will be incorporated into the appropriate eligibility base. Necessary case action will be taken at the earliest possible time based on advance notice requirements.