MO HealthNet for the Aged, Blind, and Disabled (MHABD) Manual

0810.010.15 Meeting Spend Down with Incurred Expenses

IM-96, October 26, 2015, IM-#71, August 2, 2013, IM-#56, July 2, 2012, IM-#8, January 24, 2012, IM-106, September 10, 2002

If the participant chooses to meet spend down for a month using incurred medical expenses, MO HealthNet coverage begins on the date the incurred expenses not payable by a third party equal the participants’ spend down liability. Allowable expenses to meet spend down are:

  • expenses incurred by the individual or the individual’s spouse whose income was used in the spend down determination, and
  • not subject to payment by a third party (such as Medicare or other health insurance) unless the third party is a public program of a State or political subdivision of a State such as Department of Mental Health or Department of Health and Senior Services AND the source of payment by the third party does not include Federal funds,
  • Not paid from funds in an ABLE account, and
  • the responsibility of the individual or the individual’s spouse whose income was used in the spend down determination to pay.

Participants can choose to meet spend down with incurred medical expenses in one or both of the following ways:

  • Current Incurred Expenses
  • Carryover Incurred Expenses

Current Incurred Expenses

The participant may choose to apply incurred medical expenses to meet spend down liability in the same month in which the medical expenses were incurred if all of the following requirements are met:

  • The medical expenses were incurred while the participant was eligible for MO HealthNet spend down;
  • The medical expenses were not paid and will not be paid by MO HealthNet;
  • The medical expenses were not previously applied in any month to meet spend down,  including use of out of pocket expenses; and
  • The medical expenses were not incurred in any months in which the participant received SLMB2 (QI-1).

    NOTE:  When the medical expenses are incurred in the month in which the participant requests to transfer from SLMB2 to MHABD Spend Down, the participant will be transferred to MHABD Spend Down and not considered to be in receipt of SLMB2 for the month of the request.

Carryover Incurred Expenses

Participants may choose to apply incurred medical expenses to meet spend down liability in a different month than the month the medical expenses were incurred. Spend down participants can use eligible expenses incurred in the three months prior to the current eligibility month to meet spend down. In addition, if the amount of the incurred expenses from prior month(s) exceeds the current month’s spend down amount, the excess remaining can be used towards their spend down for the following three months.

Participants may provide proof of medical expenses that they are/were personally responsible to pay, that were incurred in the month for which they are requesting MO HealthNet coverage and/or from the prior three months. These incurred medical expenses can be used to meet spend down if all of the following requirements are met:

  • The medical expenses were incurred while the participant was eligible for MO HealthNet spend down;
  • The medical expenses were not paid and will not be paid for by MO HealthNet;
  • The medical expenses were not previously applied in any month to meet spend down,  including use as out of pocket expenses;
  • The medical expenses are currently owed by the participant or were paid by the participant or spouse or a third party public program of a State or political subdivision of a State such as Department of Mental Health or Department of Health and Senior Services; and
  • The medical expenses were not incurred in any months in which the participant received SLMB2 (QI-1).

NOTE:  Timely filing is 12 months. Bills submitted within 12 months will be applied to the appropriate month(s) spend down.

Meeting Spend Down with Carryover Expenses

When all of the above requirements are met, the participant is determined to be eligible for the current month or future month(s) when personal responsibility for current medical expenses or medical expenses accumulated in the prior three months equals or exceeds the spend down liability for the month. The participant’s remaining personal responsibility may be carried over to the next month or to succeeding months’ spend down liability, not to exceed three months.

Spend Down Coverage Start Date

Carryover expenses will be credited to spend down on the first day of the month that coverage is selected.

If the participant uses a combination of carryover expenses, that are currently owed, from one or more of the past month(s), and expenses incurred in the month they want the MO HealthNet coverage, apply accumulated expenses to the first day of the month and current month’s expenses based on the date of service.

EXAMPLE: It is the month of June. Mr. G has a $300 spend down. He had incurred eligible expenses in April of $1000 for dentures. Mr. G. had no other medical expenses incurred in April or May. He chose not to use the expenses to meet April or May spend down. The expenses can be used for meeting spend down in June ($300), July ($300), and August ($300), and the balance ($100) toward his September spend down.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES
04/2012 $300 – no coverage selected for April $1000 applied 06/01/2012 – 09/2012
05/2012 $300 –no coverage selected for May  
06/2012 $300 – met with carryover and coverage starts June 1 carry over balance from April $300
07/2012 $300 – met with carryover and coverage starts July 1 carry over balance from April $300
08/2012 $300 – met with carryover and coverage starts August 1 carry over balance from April $300
09/2012 $300 –  $100 carryover applied, but spend down not met– remaining liability $200 carry over balance from April $100

Participant Designation of Months of Coverage

The participant may designate the month(s) that they want to apply the carryover. The participant must make this designation in writing. If the participant does not designate which month(s) they want their medical expenses applied, the medical expenses will be applied to the current month or to the three succeeding month(s) the incurred medical expense can be applied.

NOTE:  The participant cannot later choose another month to use the medical expenses to meet spend down. The eligibility specialist must record the participant’s decision on the Eligibility Unit Member Role (EUMEMROL\FM3Z) screen. The recording must include what month(s) the participant chooses to apply medical expenses to meet spend down.

EXAMPLE: Mr. Lee is an active spend down participant since May 2010. Mr. Lee’s monthly spend down liability is $100. He incurred a medically prescribed dental expense on 6/12/12 and he currently owes $300. (This expense was incurred after he met his June spend down with bills, but is not paid by MO HealthNet).

Mr. Lee has not used his dental bill to meet his spend down liability in a prior month. Mr. Lee has chosen to have his dental expense applied to his spend down liability for July, August, and September. Mr. Lee meets his spend down and his coverage begins on the first of the month for July, August, and September (not to exceed 3 months) using this expense.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES
07/2012 $100 $100 (dental bill)
08/2012 $100 $100 (dental  bill)
09/2012 $100 $100 (dental bill)

EXAMPLE:  The current month is September. Mrs. Lautner is an active spend down participant since 02/2009. Mrs. Lautner’s monthly spend down liability is $180. Mrs. Lautner has private insurance. Mrs. Lautner incurred the following bills:

6/02/12 primary care physician – co-pay $30

6/02/12 pharmacy prescriptions – co-pays total $20

7/13/12 specialist visit charges – co-pay $45

7/13/12 pharmacy prescriptions – co-pays total $25

8/02/12 lab tests – personal responsibility of $60 after insurance pays

She has requested the expenses be applied to her spend down liability for September. Effective September 1, 2012 her total accumulated expenses for prior bills incurred outside the current month are used to meet her September 2012 spend down liability of $180.  Mrs. Lautner meets her spend down on September 1.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES
06/2012 $180 $50 (spend down not met)
07/2012 $180 $120 ($50+$70)(spend down not met)
08/2012 $180 $180 ($50+$70+$60) (spend down met but not applied)
09/2012 $180 $180 (spend down applied)

EXAMPLE: It is July 2012. Ms. Steinman is an active spend down participant.  Ms. Steinman’s monthly spend down liability is $320.  She met her June spend down on June 15. On June 29 she had to purchase a hearing aid that cost her $1,285. She has Medicare and MO HealthNet coverage; however this is not a covered service.  She has an incurred bill in the amount of $1,285.  Ms. Steinman presented her bill on July 5 and has chosen to apply her hearing aid bill to her July spend down , and the three succeeding months , August, and September, and October. (not to exceed three months) spend down liability.  Ms. Steinman meets her spend down on the first of the month for July, August,  September, and October.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES

07/2012

$320

$1,285 – $320 = $965 carried over

08/2012

$320

$965 – $320 = $645 carried over

09/2012

$320

$645 – $320 = $325  carried over

10/2012

$320

$325-320 = $5 (can not carry over past 3 succeeding months from current month)

NOTE:  The month(s) the bill is presented can change the outcome of this scenario.  If Ms. Steinman would have presented her bill in June, the incurred expense would only be applied to July, August, and September (up to 3 succeeding months from the current month). If Ms. Steinman waited until August to present her bill, the remaining balance due could be applied to August, September, October, and November.

EXAMPLE:  Mr. Landry’s spend down liability is $300. He has private insurance with a hospital deductible of $600. He is hospitalized from August 14th – August 17th. Mr. Landry had no additional medical expenses in August. The total bill is $14,000. After third party payment, Mr. Landry owes his deductible amount of $600. He submits documentation of the incurred medical expense of $600 to the local FSD office and instructs the ES that he wishes to apply the bill to August. Mr. Landry also states he would like the remaining $300 to be applied to October; he has already scheduled a medical procedure for October.  The ES applies the $300 to his August bill and completes an IM-29 (SPND) to let Mr. Landry know he has met his spend down for August; however the remaining $300 cannot be used to meet October spend down. The ES explains that the remaining $300 will be billed to Medicaid as it is a Medicaid covered charge and therefore not an allowable expense in future months.

MONTH SPEND DOWN LIABILITY COUNTABLE MEDICAL EXPENSES

08/2012

$300

$600-$300=$300 to be paid by Medicaid