Effective: November 1, 2009
23.20 - LTC Spenddowns and Waiver Obligations
The LTC income calculation results in the amount of a person’s long-term care (LTC) spenddown or waiver obligation. People whose cost of long-term care facility (LTCF) or Elderly Waiver (EW) services is less than the calculated LTC spenddown or waiver obligation use a combination LTC/Medical spenddown.
Interaction with Medicare Part A Payments.
How to Treat LTC Spenddown Refunds.
Combination LTC/Medical Spenddown.
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The LTC spenddown is the amount a person is obligated to contribute toward the cost of LTC services when the person:
l resides in a LTCF; or
l is an Elderly Waiver (EW) enrollee with a community spouse and income in excess of the Special Income Standard (SIS). EW enrollees without a community spouse and who have income above the SIS use a community income calculation.
Note: EW enrollees with income below the SIS have a waiver obligation if their income is above the SIS-EW maintenance needs allowance. People whose cost of LTC or EW services is less than the calculated LTC spenddown use a combination LTC/Medical spenddown. People who reside in a LTCF use the designated provider option to designate the LTCF as the provider to whom they are obligated to pay their LTC spenddown. See the MMIS User Manual for information on how to code a LTC spenddown for EW clients with a community spouse whose income is above the SIS.
EW enrollees with a LTC spenddown who are enrolled in a managed care plan cannot use the designated provider option.
A LTC spenddown is based on actual income and deductions in a given month and must be adjusted when it is determined that a different amount of income or deduction should have been applied. The LTC spenddown may be adjusted retroactively without providing 10-day notice. Verify changes in income and deductions at the time they are reported.
Failure to pay the LTC spenddown does not result in ineligibility for MA. Assist clients who fail to pay the LTC provider in finding an authorized representative or refer the client to Social Services. Disqualify an authorized representative who fails to pay the LTC provider and assist the client in finding another authorized representative.
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Interaction with Medicare Part A Payments
Medicare Part A covers care provided in a skilled nursing facility (SNF) when a person is admitted to the SNF immediately following three or more consecutive days of hospitalization. Medicare Part A covers post-hospital services in a qualified SNF for up to 100 days in any benefit period for each day beginning with day 20 of SNF care, except for a coinsurance payment.
An MA enrollee’s obligation to contribute to the cost of LTCF care is the LTC spenddown or the enrollee’s Medicare coinsurance obligation, whichever is less.
The SNF may begin collecting the LTC spenddown as soon as MA eligibility for payment of LTC services is approved. Sometimes the Medicare coinsurance amount has not yet been determined when MA is approved. As a result, the SNF may have received a higher LTC spenddown than the MA enrollee should have paid. The SNF may refund the excess spenddown to the MA enrollee or, with the agreement of the MA enrollee, retain the excess spenddown for payment of a past due obligation.
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How to Treat LTC Spenddown Refunds
Treat the amount of any LTC spenddown refunded to an MA enrollee as follows:
1. Do not count the refund as income or as an asset in the month received.
2. Count any amount refunded to the MA enrollee as an asset beginning with the month following the month the refund is received.
3. Review the enrollee’s assets to determine if the amount of the refund when added to the enrollee’s other available assets results in the enrollee exceeding the asset limit. Do not count as an asset any amount of the refund retained by the SNF as payment for an outstanding balance.
4. Notify the enrollee of the need to reduce excess assets if receipt of the refund results in the enrollee’s countable assets exceeding the MA asset limit.
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A waiver obligation is the amount a person is obligated to contribute toward the cost of LTC services when the person has income at or below the SIS.
EW enrollees with a waiver obligation who are enrolled in a managed care plan cannot use the designated provider option.
SIS-EW enrollees may access EW services that cost less than the waiver obligation. These enrollees remain eligible for SIS-EW and may keep income they do not need to contribute to the cost of their care.
Recalculate the LTC income calculation beginning the month following the month in which an SIS-EW enrollee’s income increases to an amount above the SIS.
A waiver obligation is based on actual income and deductions in a given month and must be adjusted when it is determined that a different amount of income or deduction should have been applied. The waiver obligation may be adjusted retroactively without providing ten-day notice.
Note: MMIS is currently unable to reprocess claims when a waiver obligation increases retroactively. Request a voluntary repayment from the enrollee using the Notice of Overpayment (DHS-4939) when a retroactive adjustment is made that increases the waiver obligation.
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Combination LTC/Medical Spenddown
A combination LTC/medical spenddown is used when a LTCF resident or EW enrollee’s LTC spenddown is more than the cost of LTCF or EW services the enrollee is receiving. The enrollee must be able to meet a monthly medical spenddown for that portion of the LTC spenddown that cannot be met with LTCF or EW expenses.
Subtract the cost of the current month’s LTCF or EW services from the LTC spenddown. The remaining amount is the enrollee’s medical spenddown. The enrollee must be able to meet the monthly medical spenddown with non-LTC health care expenses.
Enrollees with a combination LTC/medical spenddown are subject to monthly renewals. Changes in the amount of a combination LTC/medical spenddown require a 10-day notice Notification sent to the client at least ten calendar days before the effective date of an agency action. Most adverse actions, such as denial, reduction, or termination of health care benefits, require ten-day notice..
Molly resides in a LTCF. The LTC income calculation results in a $3,050 LTC spenddown. Molly’s monthly LTCF costs are $2,000.
Molly has a combination LTC/medical spenddown because her LTC spenddown exceeds the cost of her LTCF costs. Molly must be able to meet a monthly medical spenddown of $1,050 in order to be eligible for MA.
Some enrollees receive periodic payments that cause income to exceed the cost of LTCF or EW services in some but not all months. When this happens, take the following actions.
1. Change the enrollee from a LTC spenddown to a combination LTC/medical spenddown for months you can reasonably anticipate this situation.
2. Do not close eligibility if the enrollee cannot meet the monthly medical spenddown in this month.
3. Review assets in the month following the month in which the combination LTC/medical spenddown was in effect to determine if the enrollee retained income that caused excess assets. Notify the enrollee of the requirement to reduce assets for continued eligibility if appropriate.
Keanu is an EW enrollee. He receives a semi-annual land rent payment in January and June of each year. The cost of Keanu’s monthly EW services is $1,800. Keanu’s LTC spenddown is $1,150 in months he does not receive the land rent payment and $2,500 in January and June when he receives the land rent payment.
Set up a combination LTC/medical spenddown for Keanu in January and June of each year. Do not close Keanu’s MA eligibility when he cannot meet the monthly medical spenddown. Review Keanu’s assets in February and July to determine if Keanu has gone over the asset limit and require him to reduce his assets when appropriate.
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