Kansas Family Medical Assistance
Manual (KFMAM)
Eligibility Policy - 12/26/2024
05000
06100 Budgeting of Income - A prospective (income estimate or conversion) or income average method of budgeting shall be used to determine eligibility and the amount of assistance. All income shall be counted in the calendar month received except when received on a twice a month or monthly basis. In such instances, income shall be viewed as being received by the client on the day that the payment is ordinarily scheduled.
NOTE: For teachers or other school employees, income shall normally be budgeted on a prospective basis as received unless the teacher has opted to receive their yearly contract salary over fewer than 12 months (such as only over 9 months during the school year). In such instances, the total year's income is to be averaged over 12 months so that a monthly amount of income is considered in determining eligibility and amount of assistance.
6110 Prospective Budgeting - Prospective Budgeting is based on an estimate reflecting the income received and/or expected to be received going forward from the month of application. The basis for any estimate (including tips) must be documented. For self-employment, income shall be budgeted as outlined in 6200. For intermittent income, the income shall be budgeted as outlined in 6113. A prospectively estimated budget may be recalculated if information is received that the estimate is no longer correct (e.g., income that was estimated to be received in a month is reduced or terminated). The client must report their change of income, and the change shall be applied in accordance with provisions in 7000.
Earned income information, including pre-tax income deductions, must be analyzed to accurately prospect income. Past information must be evaluated to determine if it represents the future. Paystubs provided must be evaluated before they are determined appropriate to be used in the calculation of income.
If bonuses, tips, or commissions are on the pay stub, even when only included as part of Year to Date totals, these must be evaluated to determine whether this income is recurring. If the person is employed where tips are paid, it must be determined if tips are actual or allocated. (Certain employers must allocate tips if the percentage of tips reported by employees falls below a required minimum percentage of gross sales. To "allocate tips" means to assign an additional amount as tips to each employee whose reported tips are below the required percentage.)
Pay information provided must be evaluated to determine if there was a recent pay raise that will impact future earnings. Paystubs should also be evaluated to determine if there are any discrepancies in the year-to-date amounts. If so, the missing information must be clarified.
When using paystubs, the most recent should be used. Paychecks are deemed acceptable as proof of income when they are dated within the three months prior to the month of application through the final application processing date. Any paycheck received prior to this timeframe will be excluded from income budgeting. Budgeting methods take into consideration the variance that could occur between paystubs and the consumer’s self-attestation. Therefore, regardless of which budgeting method used, no paystub shall be excluded based on not quite matching other stubs submitted or the self-attestation of income.
When income is from a new source, the pay rate has increased (or decreased) or when the numbers or hours to be worked has increased or decreased, the income shall be budgeting using the income which is expected to continue in the future.
Weekly and biweekly income must be converted to a monthly amount.
Budgeting rules are also dependent upon frequency and regularity of income. The case record is to be documented as the method of computation. The following rules apply:
6111 Regular Earned or Unearned Income - Once the full monthly amount is determined, that same amount of income shall be budgeted providing the individual anticipates continued regular income. A new budget is required prior to redetermination only if regular income becomes irregular, there is no longer any income (not applicable to a job change if earnings remain regular), or there is a change in the monthly amount of regular income.
6112 Irregular Earned or Unearned Income - For income and expenses received or billed more frequently than on a monthly basis (i.e., weekly, biweekly, etc.), the amount to be budgeted shall be based on converting the amount to a standard amount of anticipated monthly income.
6112.01 - Income in the same weekly amount are to be multiplied by 4.3. If the income amount received is in differing weekly amounts, an average amount shall be determined and then multiplied by 4.3.
6112.02 - Income in the same amount every 2 weeks are to be multiplied by 2.15. If the income amount received is in differing amounts every 2 weeks, an average amount shall be determined and then multiplied by 2.15.
6112.03 - Income in the same amount twice per month are to be added together to obtain a monthly amount. If the income is in differing amounts twice per month, an average amount shall be determined and then multiplied by 2.
NOTE: To prospectively estimate semi-monthly income from a new job, (when paychecks are not available to average) pay periods with varying hours must be taken into account. The easiest and most accurate way to make this determination is to calculate a weekly estimate, times 2.15 times 2. Multiplying the weekly amount time 2.15 will take into account pay periods that have fluctuating hours. For example, a person working 40 hours a week will have more than 80 hours in a pay period when paid semi-monthly. Taking 40 X the hourly rate X 2.15 X 2 will get a closer anticipation of projected income than taking 40 X the hourly rate X 2 X 2.
6113 Irregular and Intermittent Income - Irregular and Intermittent Income received on a monthly basis in differing amounts shall be averaged. The monthly amount shall be established by dividing the income by the proper number of months for the period that the income is intended (e.g., 3 months for quarterly, etc.). A fair estimate for the time period used for averaging shall be established with the client. The case record shall clearly indicate that the income is being treated as intermittent income.
6113.01 - Once a standard monthly amount is established, it may continue to be budgeted through the redetermination period. However, a new budget is required:
(1) - for medical assistance when income terminates and there continues to be a spenddown in place;
(2) - for CHIP when income decreases and results in elimination or reduction of a premium requirement.
For redetermination of eligibility in medical assistance spenddown cases based on a change or termination in income, use the income amounts established for the case through the month the change is reported. In addition, if income continues, establish a new converted monthly amount to be used beginning the month after the change is reported through the end of the base period.
6120 Current Month Budgeting Methods - When budgeting income for the current eligibility month, there are four methods that may be used. These are: Using the Payer Source, Reasonable Compatibility, Full month budgeting method, and Partial Month budgeting method.
6121 Using a Confirmed/Payer Source - When using income which has been verified through an interface through Tier 1, the amount of income is used despite what the client reports. See 1330.01 for more information about Tier 1 sources.
6122 Reasonable Compatibility - This budgeting method is used as verification of earnings and the lack of earnings. It is used to determine if wages reported by the consumer are generally consistent with information received through a recognized data exchange or other source. If information from the source is reasonably compatible with the customer’s statement, additional information cannot be requested. Income amounts from both the customer and the source are converted to a monthly amount for the reasonable compatibility test; and the amounts are compared.
The reasonable compatibility test only applies to Tier 2 verification and is used for earnings and when no earned income has been reported. When verifying earnings, the applicant must have provided enough information to determine the reported monthly income in order to do the reasonable compatibility test. In situations where the consumer has reported an hourly wage but failed to report the number of hours worked per week, the self-attestation can be determined using an assumed 40 hours per week. When an hourly wage is provided along with a range of hours, the average of the range of hours is used.
Applicable data sources are The Work Number and the wage records on KDOL (BASI). The reasonable compatibility test is performed in KEES. When the Work Number (TALX) is used, the income from the most recent 30 days will be compared to the reported income.
Note: In most cases the income will be calculated prospectively as an average; however, in instances where the employer does not provide a complete income record – specifically, the employer indicates the frequency as ‘hourly’ – actual income received during the 30-day period starting with the anchor date will be used and should be similar to the average. For a consumer paid bi-weekly who received three paychecks within the 30-day period and is negatively impacted when actual income is used, a new prospective amount must be determined for accurate processing.
When KDOL (BASI) is used, the income from the most recent quarter of the two prior quarters is used to determine an average monthly amount and then compared to the reported income to determine if it can be accepted as verification.
There are two reasonable compatibility tests that are conducted; an individual test and a household-level test. Initially each individual has their income tested to determine if their income is reasonably compatible.
6122.01 Individual Reasonable Compatibility Test - KEES evaluates reasonable compatibility in the order specified below. Reported information is considered reasonably compatible when one of the following is applicable:
a) No earnings were reported and both data sources do not return any earned income, or
b) The amount of earnings reported by the consumer is greater than the amount received from at least one data source for the applicable time frame, or
c) The difference between the self-attested amount and one data source is no greater than 20% of the self-attested amount.
6122.02 Household Reasonable Compatibility Test – Both Below - After the completion of the individual test, each individual will have a reasonable compatibility test conducted against their entire IBU.
The Household RC Test determines if both the amount reported by the consumer and the amount received from one data source are below Medicaid income limits for the applicant. This is known as ‘Both Below’; BOTH self-attestation and income from the data source are BELOW Medicaid. For this RC test, all income in an individual’s IBU is used to determine if it is below the applicable income limit for that person. When the applicant is determined to be Reasonably Compatibility due to Both Below – no income verification is required to complete their determination. They are eligible to receive Medicaid without asking the consumer to provide additional verification of income.
6123 Full Month Budgeting Method - Full-Month budgeting method is used when the income has been determined to NOT be reasonably compatible and a full month of income verification is available. A prospective amount shall be determined and used in place of reported income. The client attestation is not used. A full month of income verification exists when the agency has verification of 30 days of consecutive earnings received by the wage earner within the period beginning 30 days prior to the application date and ending on the date the application is processed for new applications. When processing a review or case change, the pay verification provided must be from the three months prior to the month the Reasonable Compatibility test is initially run.
This “full month” of income is what is used to determine the prospective amount. 30 days’ worth of income is represented by 4 weekly checks, 2 biweekly checks, 2 semi-monthly checks or 1 monthly check. If an additional weekly or bi-weekly check is received within the 30-day period, it shall be included in the prospective determination if available but is not required to meet the definition of full-month budgeting. Additional checks submitted outside of the 30-day window are not used.
6124 Partial Month Budgeting Method - Partial Month budgeting method is used when sufficient information has not been provided to complete Full-Month budgeting. If less than 30 days of income is provided or in situations where you do not know if it represents a full month, determine a prospective amount based on what is on file. This amount is then compared to the reported income. Use whichever is greater between the amount reported by the applicant and the prospective monthly amount.
For Partial Month budgeting, income verification is acceptable as long as it is dated within three months prior to the month of application. Similarly, when processing a review or case change, the pay verification provided must be from the three months prior to the month the Reasonable Compatibility test is initially run.
6125 Pre-tax and Federal Income Deductions - Pre-tax and federal deductions are amounts that are excluded from the gross income amount used for a MAGI determination. They include pre-tax amounts reported to the IRS by an employer via wage information or by a consumer through filing taxes. For MAGI-based determinations, they may be reported by the consumer at application or review or identified through paystubs or tax forms received. When a consumer reports overall household deductions of $300.00 or less per month, the attested amount may be used in the determination with no further verification needed. For reported amounts in excess of $300.00 per month, verification will be required in most cases. See 1330.05.
6130 Prior Medical Budgeting Method - The budgeting method used for prior medical months is based on whether or not there has been a change reported by the applicant that occurs in the prior period. The applicant is asked a series of questions on the application to determine if changes in household members or income has occurred in the prior medical period.
Despite the client report, there may be instances where the agency is able to determine that no actual change has occurred. These situations shall be treated as though the applicant has not reported a change. In order to be considered a change for purposes of this policy, the change must fundamentally alter the expected income to be received. The reported change must be in the rate of pay (i.e. received a raise or a pay cut) or the regularly scheduled hours of work (i.e. weekly hours were increased or decreased). Missing a few days of work due to sickness or working some occasional extra hours of overtime does not trigger this policy change. If determined that no actual change has occurred, use the ‘No Change’ income budgeting rules. The amount verified and budgeted for the current month is used in each of the prior months. No further verification is required. If the agency or the individual is unable to verify current income, eligibility for the current and prior months shall be denied for failure to provide information.
NOTE: The applicant must answer ‘yes’ or ‘no’ to the prior medical questions. These answers cannot be assumed. If responses are not provided, the prior medical determination cannot be completed.
6131 No Reported Changes - If the applicant reports there has been no change in income for the prior period, the prior months are budgeted using the amount that is verified and budgeted for the current month.
6132 Reported Changes: Income - If the applicant reports a change in income for the prior months, the change shall be evaluated to determine if the income change will fundamentally alter the income that is being received. The reported change must be in the rate of pay or the regularly scheduled hours of work. Missing a few days of work to sickness or working some occasionally extra hours of overtime does not trigger this policy. If it is determined that no actual change has occurred, use policies in 6131. When a change of income has occurred, one of the following budgeting methods will be used.
6132.01 Use of KDOL Wages - If the Reasonable Compatibility test returns a result of ‘Both Below’ with KDOL wages being used, this monthly amount shall be used to determine prior medical eligibility, and no further verification is required. This is regardless of how many sources of employment have been reported. However, if only a Work Number (TALX) amount has been returned, or if KDOL is not below the Medicaid or M-CHIP income limits, actual income must be used to verify prior medical income.
6132.02 Actual Income - In situations where 6132.01 is not applicable, actual verified income shall be budgeted for each month of the prior period. Although the agency must attempt to verify using Tiers 1-3, it is most likely verification through Tier 4 will be necessary.
If the information provided by the applicant is incomplete, but eligibility staff are able to determine the actual income received in each prior month, verification shall be considered complete. For example, using year-to-date information on pay stubs to determine the missing checks.
If verification for the prior period is not provided, but income for the current period is verified the prior period shall be denied for failure to provide information and the current period approved.
6133 Reported Changes: Household - If the applicant reports a household change in the prior months, the change is evaluated to determine the type of change that has occurred and the potential impact on eligibility. If there were different individuals residing in the home during prior months, then those individuals must be considered when determining budgeting units and income used in the calculations. If the change involves an individual moving in or out of the household who has income, then staff shall refer to 6132.
Note: Verification of household changes is not required, unless necessary to determine custody of a child.
6134 Discrepant or Inconsistent Information - If no change in income or household has been reported, but the agency has information indicating a change has occurred, guidelines in 6132 and 6133 shall be used.
Note: It is not necessary to search for additional information/verification when the applicant reports there has been no change. However, when contradictory information exists at the time of the applicant report, the agency must take action on the known information to reconcile the discrepancy.
06200 Self-employment Income Budgeting - See 5330 for guidelines to determine if an individual is self-employed. Self-employment income will be based on the countable net income as reported on the Federal tax return. The individual will be required to provide a copy of the most recent personal tax return including all schedules and attachments. In instances where the individual states they have not filed their tax return and it is after the IRS filing deadline, the previous year’s return may be used if an extension has been filed with the IRS. Verification of the extension is not required. If the individual does not file taxes or has not yet filed taxes because this is a new self-employment business, or the current return is not representative, completion of the KC5150 self-employment worksheet by the individual is required.
6210 Tax Return Filed - When a tax return has been filed, the countable amount of self-employment tax that the individual paid must be deducted from the gross self-employment income. The Schedule 1, also known as Form 1040) or Schedule SE is used to determine the amount of self-employment tax paid located on the deductible part of self-employment tax line. This amount should be deducted from the amount of income taken directly from each schedule where applicable. The following outlines which line on each schedule is used for each type of business:
• Business income – Net profit amount from Schedule C or C-EZ
• Rental real estate, partnerships, S-corporations – Total rental real estate amount from Schedule E
• Farm income – Net farm profit from Schedule F
• Capital Gains – Capital Gains amount from the 1040 divided by 12
• Other Gains – Other Gains amount from the 1040 (Schedule 1) divided by 12
When the tax return reports more than one business, the self-employment tax must only be deducted from one of the self-employment businesses, preferably the business that has a net profit larger than the amount of the self-employment tax.
When a loss is reported on one or more of the schedules, it is to be treated as zero income for the eligibility determination and cannot be deducted from another source of income, even if the other source is another form of self-employment.
Provided the return reflects a full year of self-employment earnings, a twelve month average shall be established.
6211 Tax Return Not Filed or Does Not Contain Full Years Earnings - If a tax return has not been filed (e.g., employment just started or client has not filed a return), the KC5150- Self-employment worksheet is required. The applicant is required to complete the worksheet documenting all income and expenses for the 12 months prior to the month of application. Ledgers and other business records are not accepted as verification of self-employment income.
An average is determined by totaling all gross earnings in the months being counted, subtracting the total expenses, and dividing by the respective number of months. The calendar months being used and the corresponding earnings must be clearly documented in the case record.
6212 Need for New Estimate/Average Based on Changes in Income - In cases where the consumer indicates their tax return is not representative of the existing self-employment income, both the most recent personal tax return and the self-employment worksheet are required so staff may evaluate this. The reason for the discrepancy must also be clearly documented by the applicant and is only allowed when there is a definitive change in the amount of business.
6220 Wages from a business - When a business owner pays themselves a wage from the business, this is to be treated as a separate form of income and budgeted separately from the self-employment. Verification of the wages shall follow the Tiered verification policy. However, when the income cannot be verified using Reasonable Compatibility, alternative methods of verification are allowed. When income cannot be verified using Reasonable Compatibility, the individual’s most recent personal tax returns’ Form 1040 may be used if the individual indicates that the wages are only representative of those that have been paid from the business and not a combination of other jobs held. The total amount of wages to be used in the determination can be located on the 1040 Form under wages, salaries, tips etc. When no other verification is available, self-attestation of the wages is accepted.
6230 Capital Gains - For individuals who report self-employment income and provide a tax return as verification, any amount from Capital Gains or Other Gains is countable. Capital Gains can be located on the schedule 1040 or the Schedule D of the tax return. The amount of gains reported under net short and/or long-term capital gain or (loss) shall be used. These amounts will need to be prorated over the year. This will mean dividing the total by 12 to determine the monthly countable amount.
6310 Eligibility Period - The eligibility period is the time period on which need is computed. See Section 7330 for policy and procedures for eligibility reviews.
6311 Eligibility Periods for Medical Programs - An eligibility or base period is the length of time used in determining financial eligibility for an individual or family. The length of the base period varies from one to six months depending on the medical program and any changes of circumstance as referenced in 6311.01. Eligibility shall be determined from the date of application. See 1403.
For all medical programs other than CHIP, the month of application establishes the first month of the current eligibility base period provided all eligibility factors, with the exception of a spenddown, have been met. On request of the client, a 3-month prior eligibility base period shall be established. (See 6311.02.) For cases determined eligible without a spenddown, the effective date of eligibility will correspond with the beginning of the eligibility base and will begin with the first day of the first month of the medical base period. For spenddown cases, eligibility cannot be certified until the spenddown has been met. However, the effective date of eligibility may precede the date on which the spenddown is actually met.
Since suspension, closure, and denial are alternative administrative procedures that result in the withholding of benefits to the client when there is unmet spenddown, a base period can be established and maintained regardless of which procedure is chosen. Denied applications establish an eligibility base period and an application month when the reason for denial is excess income resulting in spenddown. (See 6311.02(3). Closures within an eligibility base period because of increased spenddown do not change the base period. A reapplication received outside of a previously established base shall be treated as a new application without regard to any previous base except for a determination of prior medical eligibility. (See 6311.02.) Once an eligibility base is established, it can be shortened or changed in accordance with 6311.01. Ineligible months are counted as part of the eligibility base period only when ineligibility occurs within an established base period.
For CHIP, the month of application does not establish the first month of the current eligibility base period. The base period begins with the first month the eligible individual is enrolled in a managed care health plan per 2470. With the exception of CHIP newborns as outlined in 2500, there is no eligibility for CHIP for any months prior to that first enrollment month. Thus, the effective date of eligibility and the eligibility base period will always correspond to the first day of the first enrollment month.
6311.01 Current Eligibility Periods - The eligibility base will be 1 month base for all MAGI programs with the exception of Medically Needy. The eligibility base will be 6 months for Medically Needy cases. The 6 month base will be shortened, however, in the following circumstances:
(1) - When a recipient becomes eligible for CTM or SSI.
(2) - When a recipient begins receiving long term care in a Medicaid-approved institution.
(3) - When a recipient begins HCBS.
(4) - When a recipient is transferred from a Family Medical Medically Needy program to a Disability related Medically Needy program or vice versa. .
(5) - When the only person in an assistance plan dies and eligibility has not been determined due to a spenddown.
If the applicant dies or if an application is made on behalf of a deceased person, eligibility will begin no earlier than the third month prior to the month of application.
(6) - When the only recipient on the Medically Needy case becomes eligible for Medicaid poverty level coverage, or coverage through foster care.
(7) - When two or more Medically Needy recipient family groups combine into one. In such instances, the previous bases shall be shortened and a new base period started with the combined family group.
6311.02 Prior Medical Eligibility (Not Applicable to CHIP) - An applicant for medical assistance may request a determination of medical eligibility for a 3-month period prior to the month of application. The month of application establishes this prior medical period. A request for prior medical must be made in the month of application or the two following months. When a request for coverage is not processed within the applicable case disposition timeline as defined in 1407, the period to request prior medical is extended to 12 days following the date of the determination. Requests made after this time shall be denied. See 2340.02and 2460.02 regarding prior coverage determinations for children being added to an existing PLN program.
Prior eligibility can be established even though there is no eligibility for the current base period. However, there is no eligibility in any prior month for an individual who does not qualify for Medicaid.
NOTE: Prior CHIP coverage is only available for certain CHIP eligible newborns. (See 2500)
A 3-month eligibility base shall be used unless one of the following conditions exist:
(1) - Part or all of the prior base period falls into a previously established medical base period.
(2) - Part or all of the base period falls within any month in which the client was a Medicaid recipient.
(3) - The individual is not categorically eligible for any medical program in one or more months of the base period (i.e., is not a child, a pregnant woman, or a caretaker).
(4) - The individual was not part of the current family group in one or more months of the base period.
If, in the above instances, the assistance request includes other individuals in the family group, only the individual would be excluded for the applicable months. If the assistance request is only for the individual, the prior base period shall be shortened to exclude those months.
A one month base period shall be used in accordance with 6311.01 for each month of the prior period. Eligibility can be determined for any one or all of the 3 prior months.
Financial factors of eligibility apply to the entire base period. Eligibility factors other than the income shall affect eligibility for each of the months separately. Eligibility shall be effective only for the months in which the client meets both the financial and nonfinancial factors of eligibility.
06400 Medical Program Standards -
6410 Medical Program Standards - For the Medicaid poverty level and CHIP programs, standards have been established based on a percentage of the federal poverty level. If countable income does not exceed these standards, there is eligibility. For the Medically Needy (spenddown) program, standards have been established which are the amounts of monthly income protected from medical expenses to allow applicants/recipients to meet their maintenance needs. If countable income does not exceed these standards, there is eligibility. If countable income exceeds the standards, a person can "spenddown" the excess and become eligible.
6410.01 Standards in the Medicaid Poverty Level Programs - To be eligible, the total countable income must not exceed the monthly poverty level standards based on the appropriate number of individuals. See KDHE Eligibility Policy Appendix F-8 for the Medicaid and CHIP standards.
6410.02 Standards in the Medically Needy Program - The protected income budgeted is the independent living standard for the number of persons in the budgeting unit. See KDHE Eligibility Policy Appendix F-8 for Medically Needy income standards.
06500 Determination of Financial Eligibility -
6510 Need - 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.
6511 Financial Eligibility in the Medicaid Poverty Level and CHIP Program - Financial eligibility exists if countable income does not exceed the allowable poverty level standards. A person cannot spenddown to obtain eligibility under any of these programs.
6512 Financial Eligibility in the Medically Needy Program (spenddown) - Financial eligibility exists if allowable incurred medical expenses, as specified in this section, equal or exceed the spenddown for the base period. See 6410.02 for establishing the spenddown amount.
6512.01 Allowable Expenses - Allowable expenses incurred outside of the current eligibility base are only allowable if the individual is still legally obligated to pay the expense and such expenses have not been previously applied to spenddown in any other base period in which the person became eligible. The amount of these expenses applied to spenddown within a particular base period shall be the amount due and owing as of the first day of that base period. This provision includes instances in which the individual has taken out a loan to pay the expense or charged the expense on a credit card. The unpaid portion of the loan or credit card balance attributable to the original medical expense shall be regarded as a due and owing expense which can be applied to spenddown.
The amount still due and owing shall be determined by subtracting all payments made on the loan or credit card balance prior to application of the expense in a base period from the original expense amount. The remainder shall be regarded as due and owing. Verification of the initial medical expense as well as payment made will be necessary.
All expenses which are incurred by persons in the budgeting unit are allowable within the limitations described above. Such expenses do not actually have to be paid to be allowed against the spenddown. The client will choose which of his allowable expenses he wishes to apply on the spenddown. Failure by designated providers to collect from the client does not shift responsibility to the medical program. A medical payment can be made only for the excess expenses.
Payment for or assumption of medical expenses by a third party, whether legally liable or not, negates the client's responsibility to pay; therefore, such medical expenses cannot be considered against the spenddown. This includes the portion of any medical expense paid by Medicare or another health insurance. The portion not covered by insurance, such as the co-payment or deductible, is allowable. See 6512.02 for exceptions of when expenses are allowable when paid by a third-party.
The following expenses are allowable against a spenddown when the client provides eligibility staff with evidence that he has incurred such expenses within the limitations established above.
(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.
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 repayment.
NOTE: Additional costs consumers pay for Medicare Replacement polices will not be reimbursed through the Buy-in process but are an allowable medical insurance premium.
Premiums for hospital indemnity policies which pay a flat per day amount are not deductible as they are viewed as income replacement policies rather than medical insurance. However, certain indemnity-type policies pay based on specific services received and charges incurred. In these instances, the premiums would be allowable. Each policy will need to be reviewed to determine whether the premium is allowable or not.
(2) - If medically necessary, all expenses for medical services incurred by the individual or a member of the budgeting unit are allowable. See KDHE Eligibility Policy Appendix, Eligibility Processing, P-1, Medical Necessity for Allowable Medical Expenses.
Medicaid co-payments are deductible. In addition, charges in a Medicaid approved institution can be allowed up to the private rate for individuals subject to the gross income limit and whose income exceeds that limit. Otherwise, the facility can only charge at the monthly state rate if the individual's income is below the limit. Charges in a non-Medicaid approved institution are not allowable including charges incurred during a transfer penalty. (See MKEESM 8111.)
6512.02 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 (MKEESM 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 (MKEESM 2911) the pre-discount cost of the item is allowed 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, Ryan White funds or the Kansas Farmworker Health program is NOT allowable.
6513 Meeting a Spenddown - 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, nonfinancial, 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.
6513.01 Eligibility staff 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.
a. Health insurance premiums;
b. Expenses for non-participating members of the budgeting unit;
c. Due and owing expenses;
d. 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.
6513.02 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.
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 6513.03 below.
6513.03 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 form ES- 3170, Beneficiary/Patient Spenddown Billing 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 toward the spenddown.
6513.04 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 6513.01 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 6513.01, items a - d. A copy of this notice will be sent to the assigned eligibility worker.
6513.05 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:
a. For unmet spenddowns that remain unmet, the new spenddown amount will be effective upon receipt.
b. 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.
c. 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.
d. 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.
6514 Establishing Financial Eligibility in the TransMed Programs - There are no financial eligibility criteria for establishing TransMed coverage. The family must meet the criteria in 2230 and subsections.
6515 Establishing Financial Eligibility in the Extended Medical Program - There are no financial eligibility criteria for establishing the four-month Extended Medical period. The family must meet the criteria in 2240 and subsections.
6520 Continuing Financial Eligibility (MAGI Programs) - When circumstances change, adjustments will be made as necessary depending on the category of medical coverage. For the Medicaid Poverty Level and CHIP programs for caretakers, children and pregnant women, changes in income will not impact eligibility based on continuous eligibility provisions under 2311. 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 MKEESM 2650 for CE policies for children on non-MAGI programs.