Kansas Family Medical Assistance
Manual (KFMAM)
Eligibility Policy - 12/26/2024
06000 >>> 06500
06400
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.