MEMORANDUM

DISCUSSION:

There have been no changes to federal law or the Missouri Medicaid state plan regarding the use of incurred medical expenses in the MO HealthNet spend down program. The purpose of this memorandum is to make certain that staff are complying with requirements of federal and state law as they apply to the spend down program, and are consistently applying current law across the state.

Missouri’s MO HealthNet Program is a categorically needy program that covers aged, blind, and disabled individuals. Under federal and state law, MO HealthNet must allow individuals to deduct from their income "incurred" medical expenses (spend down) to reduce the individuals’ income to the categorically needy income limit. Once the income is reduced by applying these deductions, to an amount equal to the non-spend down income maximum, the individuals are income eligible. See 42 CFR 435.121(f)(1)(iii). Allowable expenses for use toward an individual's spend down are expenses incurred by the individual or spouse, whose income is used in determining eligibility, for necessary medical services that are recognized under State law and are not subject to payment by a third party, 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. To incur an expense means to be personally responsible for the expense.

The Center for Medicare and Medicaid Services (CMS) Handbook clarifies that the only medical expenses that may be allowed to meet a participant’s monthly spend down are those charges for which the participant is personally responsible. If a participant has a monthly spend down of $300, he/she must personally be responsible for $300 in medical expenses each month before his/her spend down is met. Again, this does not represent a change in FSD policy or practice; it is a clarification of how staff are required to apply existing federal regulations.

MEETING SPEND DOWN:

It is and has been the practice and expectation that eligibility specialists must obtain documentation of incurred medical expenses. See sections 0810.010.15.05 and 0810.010.15.10. This documentation should be reviewed to determine the accuracy of the invoice or billing statement. Sources of documentation may include:

• A bill from a medical provider that includes the date of service, type of service provided, and the amount that the participant or spouse is responsible to pay. If the amount of third party payment is shown on the documentation of incurred medical expenses, allow only the balance that is the patients’ responsibility toward the spend down.
• For recurring medical expenses, documentation of the prior months' charges which the patient is/was personally responsible to pay along with a bill showing services received in the current month from the same service provider and with the same type of service, may be acceptable documentation of the amount the patient is personally responsible to pay for the service that has been received in the current month.

  NOTE: The eligibility specialist will need to consider any changes in third party coverage that may have occurred between the prior months and the current month, such as a deductible being met.

• The providers’ Medicare fee schedules to establish the amount of reimbursement that would be received from Medicare and applying the deductible and co-payment amounts that are the patient’s responsibility toward meeting their spend down.

When a participant or provider contacts the eligibility specialist to provide information on incurred medical expenses, the eligibility specialist should inquire about the amount for which the participant will be responsible to pay. The eligibility specialist should review information in FAMIS, the case file, the MTPR screen, or IIVE to determine if there is a known third party payer. Examples of known, third party payers include Medicare and private insurance providers. The eligibility specialist should request documentation as needed.

TIME FRAMES:

Process new MHABD applications within normal application processing time frames. If the applicant has provided documentation of incurred medical expenses to meet spend down, the spend down liability cannot be entered on the MSPA screen on the same day the approval is entered in FAMIS. If bills to meet spend down are received prior to approval of the case, enter the MSPA screen the first working day after the approval is entered in FAMIS.

For active MHABD cases, enter the incurred medical expenses on the MSPA screen within 2 working days of receipt of documentation of medical expenses that meet spend down once the amount the third party payment and personal responsibility has been determined.

For participants meeting spend down with incurred medical expenses, the eligibility specialist should enter a comment on the Eligibility Unit Member Role (FM3Z or EUMEMROL) screen. The recording should include:

• the date the participant provides the information,
• the name and address of the provider,
• date of service,
• type of service,
• the total amount the patient is responsible to pay,
• the identity of any known or suspected liable third parties,
• the documentation used to verify this information (such as a bill from the provider was viewed and a copy filed in the case record),
• the date the MSPA screen entry is completed, and
• the amount of liability on the date the spend down was met.

Every time bills or other documentation of incurred medical expenses is received the eligibility specialist should notify the participant if any additional documentation is necessary and send the Notification of Spend down, IM-29(SPDN).

If questions arise about invoices or billing statements, please submit them on an IM-14 through normal supervisory channels to MO HealthNet Program and Policy Unit at fsd.im14@dss.mo.gov.

PAY-IN OPTION:

Missouri continues to offer the pay-in option that allows participants to meet their spend down by making a monthly payment of their spend down amount to the State. See 0810.010.20 SPEND DOWN PAY-IN OPTION.

PROVIDER INQUIRIES:

Providers’ inquiries should be referred to MO HealthNet Division Provider Relations at (573)751-2896.

NECESSARY ACTION:

• Review this memorandum with appropriate staff
• Effective immediately, apply the spend down policy as clarified in this memorandum to comply with federal regulations.
• Staff should enter spend down liability in MSPA within 2 working days of receipt of documentation of incurred medical expenses.
• Staff should request necessary documentation of spend down liability.
• Staff should send notification of determination(s) made regarding spend down liability using the IM-29(SPDN) within 10 days.

ATTACHMENTS:

• IM-29(SPDN)

KSO