*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016. Please refer to the EPM for current health care program policy information. ***
hapter 24 - Medical Spenddowns |
Effective: September 1, 2012 |
24.10.05 - Monthly Spenddowns (Automated) |
Archived: June 1, 2016 (Previous Versions) |
A monthly spenddown is a type of medical spenddown.
The monthly spenddown amount is the difference between the total net income a client receives in a month and the applicable Federal Poverty Guideline (FPG) standard for a single month. This spenddown amount is applied to each month of the certification period when the monthly income exceeds the FPG standard in a given month.
Note: The monthly spenddown is known in health care eligibility systems as an ”automated monthly spenddown.”
Monthly Spenddown Calculation.
Monthly Spenddown Calculation - Renewal.
To use a monthly spenddown both of the following criteria must be met:
l The client cannot meet a six-month spenddown or chooses not to use a six-month spenddown.
l The client can meet the spenddown in at least one month during the application processing period, including any retroactive month, the application month, or a subsequent month that falls within the appropriate processing period.
Clients must choose a monthly spenddown if they meet the criteria for use and:
l The client's spouse or children with whom they live apply for MA and choose an automated monthly spenddown.
l The client is hospitalized and is a household member of a family enrolled in MinnesotaCare. See MinnesotaCare Expenses Used to Meet Spenddown for more information on how these expenses are processed.
l The client chooses the Client Option Spenddown.
The client option allows certain clients eligible for an monthly spenddown to pre-pay their spenddown obligation to DHS.
l The client chooses the Designated Provider Spenddown Option.
The designated provider option allows certain clients eligible with a monthly spenddown to pay their spenddown obligation to a specific provider.
Clients with a monthly spenddown may continue Minnesota Senior Health Options (MSHO) enrollment if they:
l Were on MSHO prior to July 2005 with an automated monthly spenddown.
l Acquired a monthly spenddown after being enrolled in MSHO.
MSHO enrollees with a monthly spenddown are required to pay the spenddown amount directly to DHS each month. DHS bills the client directly.
l MSHO enrollees with monthly spenddowns should stay enrolled in MSHO only if their monthly MA-covered medical expenses are routinely more than the amount of their medical spenddown.
l Do not use a designated provider for MSHO enrollees.
Exception: Change the long-term care spenddown for people who elect hospice and are in a long-term care facility to a community spenddown with the hospice provider listed as the designated provider.
l Spenddown payments can be made by:
n Mail. Send spenddown payments to:
DHS MSHO,
PO Box 64834,
St. Paul, MN 55155-0834.
n Web payment at http://payments.dhs.state.mn.us.
MSHO enrollees who elect client option spenddown are already billed directly by DHS. MSHO enrollees can continue to pay DHS through the client option spenddown.
Clients who meet the eligibility criteria for enrollment into Special Needs BasicCare (SNBC) are allowed to enroll in SNBC with a monthly spenddown.
People enrolled in SNBC may have a designated provider if they are receiving waivered services or personal care assistant (PCA) services. Add a designated provider in MMIS if the monthly cost of waiver or PCA services exceeds the medical spenddown. The enrollee will pay the spenddown amount to the designated provider(s). Clients can use up to two designated providers to meet the spenddown. The client will pay DHS directly if no designated provider is entered in MMIS.
SNBC clients with a monthly spenddown and no designated provider are required to pay the spenddown amount directly to DHS each month. DHS bills the client directly for the full spenddown amount.
l SNBC clients with monthly spenddowns should only stay enrolled in SNBC if their monthly MA-covered medical expenses are routinely more than the amount of their spenddown.
l Spenddown payments can be made by:
n Mail. Send payments to:
DHS SNBC,
PO Box 64834,
St. Paul, MN 55164-0834.
n Web payment at http://payments.dhs.state.mn.us.
SNBC enrollees who elect a client option spenddown are already billed directly by DHS. SNBC enrollees can continue to pay DHS through the client option spenddown.
Before calculating a monthly spenddown, MAXIS will determine if the client can meet a six-month spenddown and if not, change to a monthly spenddown.
If the client cannot meet the six-month spenddown, or chooses to use a monthly spenddown, follow these steps to determine if the client can meet a monthly spenddown:
Note: MAXIS may complete some of the following steps automatically when the information is entered on the appropriate screens.
1. Determine a client’s monthly net income.
2. Determine the monthly spenddown amount.
Subtract the applicable monthly Federal Poverty Guideline from the monthly net income for each month of the certification period. The results are the client’s monthly spenddown amount.
3. Determine if the client meets the spenddown amount with health care expenses.
Enter allowable H, M or P health care expenses in MAXIS. MAXIS applies the health care expenses to the spenddown amount for each month of the certification period. This determines the recipient amount (if any) for each month.
Note: There is no satisfaction date for a monthly spenddown. MMIS rejects claims submitted by providers until the recipient amount is met, at which time MA will pay all other claims.
DHS sends an Explanation of Medical Benefits (EOMB) to notify clients which medical bills were used to meet the spenddown amount and which bills they are responsible to pay. The EOMB lists specific health care expenses submitted by providers and indicates which expenses the client must pay.
MAXIS applies health care expenses to a monthly spenddown in the following order according to the dates of service:
a. H Bills:
Health insurance and Medicare premiums are applied on the first day of the month in which they are due.
Exceptions:
n Do not enter health insurance premiums as a monthly spenddown expense if they are not paid monthly because health insurance premiums cannot be anticipated. Adjust the recipient amount of the spenddown at the time the client verifies the premium has been paid.
n Do not allow premiums paid by a third party or MA, due to cost effective status or payment by a Medicare Savings Program (MSP), as a health care expense.
n Co-payments are applied to the recipient amount of a monthly spenddown in the month the co-payment was incurred. Clients can submit verification of incurred co-payments either monthly or at renewal. Recalculate the recipient amount of the monthly spenddown using the verified co-payment whenever it is verified, monthly or at renewal.
Note: After spenddown recalculation, enter the new amount in MMIS. DHS will send the adjustments to providers. the reimbursements will not always go to the providers who collected the co-payments. It will go to the first provider who had a spenddown-reduced claim for that month's services. The client should receive a refund or credit from the provider who received the reimbursement. Allow two to four weeks for providers to receive the adjustments.
The spenddown recalculation will decrease the client's recipient amount. DHS will reprocess claims automatically. Providers should not rebill for monthly spenddown adjustments.
n MA Family Deductible is also applied to the recipient amount of the monthly spenddown on the first day of the month the deductible was incurred. The provider bills the client for the deductible after the provider receives payment from DHS and learns the family deductible was applied to the claim. The client can submit verification of the MA family deductible either monthly or at renewal. Recalculate the recipient amount of the monthly spenddown using the verified MA family deductible whenever it is verified, monthly or at renewal. Enter the deductible in MAXIS on STAT/BILS using code 47 "Copayment/Deductible."
The family deductible is case-based and only applied to associated recipients who are on the same case. Do not apply one family member's deductible towards another family member's spenddown if they are required to be on separate cases.
Example:
Ed and Julie are each eligible for MA with a spenddown. Their son, Tony, is eligible for MA with no spenddown. Ed and Julie are associated recipients on each other's case because both have a medical spenddown and the same spenddown type. Tony is not an associated recipient because he does not have a spenddown. Ed's Explanation of Benefits (EOB) shows that his family deductible was applied to a medical expense that he incurred last month. Ed sends in the EOB as verification of the family deductible.
Action:
Enter the date and amount of Ed's family deductible on STAT/BILS. Use expense type H (Health Ins, Other Premium) and code 47 (Copayment/Deductible) for Ed's family deductible. MAXIS applies the family deductible to reduce Ed's and Julie's recipient amount. Enter the reduced recipient amount on both Ed's and Julie's RSPD screen in MMIS for the month the family deductible was incurred.
Example:
Marty and his wife Jan are both open on MA with a spenddown. They have separate cases because Marty is open on EW as a household size of one.
Action:
Marty's deductible may be used to reduce his recipient amount and Jan's deductible may be used to reduce her recipient amount. However, do not apply either client's deductible towards their spouse's spenddown. Do not code either as associated recipients on each other's cases on the RSPD screen in MMIS. Update RSPD after the family deductible is applied in MAXIS to reflect the new recipient amount.
b. M Bills:
The unpaid balances of M bills are applied on the first of the month in one of the following two ways:
n Chronologically starting with the earliest date of service, until the full amount is used if no priority is indicated on the MAXIS screen.
n According to priority if a priority indicator is entered.
Enter the bills in order of priority to give the client the advantage of a greater M Bill balance that he or she will still owe at the next recertification by:
o first applying the bill the client indicates he or she will be paying first,
o then applying any remaining bills in the order the client indicates he or she expects to pay them.
The client can use any remaining balance to meet the spenddown for the next recertification period.
Before adding this information to MAXIS, verify that the unused amounts of M bills used to meet previous spenddowns remain unpaid when using the bill to meet a current spenddown.
Document the amount of an M Bill used to meet the monthly spenddown and the month in which it is used on a copy of the bill itself and in case notes.
c. P Bills:
P bills are applied on the first day of the month in which they were incurred.
Note: The remedial care expense deduction may be an allowable health care expense if the client is residing in a residential living arrangement where a county has a Group Residential Housing (GRH) agreement.
d. R Bills:
R bills are applied on the date incurred.
Note: An R bill becomes a P bill if the household member who incurred the expense is ineligible for MA . See R Bills for an example of how an R Bill becomes a P Bill.
4. MAXIS sends the notice of approval that includes the spenddown amount. Add worker comments to the notice regarding bills the client remains responsible for and the recipient amount.
5. Update MMIS with the original spenddown and recipient amounts.
Example:
Jerome, who is receiving RSDI due to a disability, applies for MA. Jerome verified the following medical expenses:
l An unpaid doctor bill from four months ago for $50.
l A monthly health insurance premium of $50.
l A monthly prescription cost of $200 each month.
l A prescription cost of $175 every other month.
Action:
Following the steps provided:
1. Determine Jerome's net income.
2. Determine Jerome's monthly spenddown amount. His spenddown is $300.
3. Jerome may use a monthly spenddown because he does not have enough allowable health care expenses to meet a six-month spenddown, but he does have enough in recurring health care expenses to meet his monthly spenddown for at least one month of the certification period.
Jerome will have a recipient amount of $200 for the first month of the certification period and $250 for the remainder of the certification period.
a. The health insurance premium (H bill) of $50 is applied to the spenddown amount first on the first day of each month of the certification period. Jerome will be responsible to pay this premium monthly.
b. The unpaid doctor bill (M bill) of $50 is applied to the spenddown next, but only for the first month of the certification period because the full unpaid amount will be used.
c. The monthly prescriptions costs (R bill) are the last to be applied to the spenddown. In the months that Jerome fills the $175 prescription (every other month) his medical expense will equal or exceed the recipient amount.
4. Add a worker comment to Jerome's approval notice telling him he will be responsible to pay his health insurance premium each month and that he will continue to be responsible for the unpaid doctor bill (which cannot be used to meet another spenddown) and for the recipient amount.
Each month Jerome will receive an EOMB informing him of the amount he will be responsible for and to which provider MMIS will pay his health care expenses via potluck processing.
5. Update MMIS with the original spenddown amount of $300 for each month. The recipient amount for the first month of the certification period is $200 and for the remaining months is $250.
Monthly Spenddown Calculation - Renewal
To calculate a monthly spenddown at renewal follow these steps:
Note: MAXIS may complete some of the following steps automatically when the information is entered on the appropriate screens.
1. Determine a client’s anticipated monthly net income.
2. Determine the monthly spenddown amount.
3. Determine if the client meets the spenddown amount with health care expenses. Anticipated bills for the next certification period may be used to meet the monthly spenddown amount for the next certification period.
a. Health care expenses from the fifth month of the previous certification period may be used as a guide to determine eligibility for the next certification period. Obtain verification of these health care expenses by reviewing MMIS to determine if the client’s spenddown was met.
n Do not require further verification if the fifth month of the previous certification period shows that the recipient amount was equal to the used amount.
n If you cannot clearly determine that the client met the spenddown amount in the fifth month, contact the client and request verification of already incurred health care expenses that may not have been submitted to MMIS yet or are not payable by MA. Ask the client if he or she is anticipating incurring health care expenses during the next certification period if there are no incurred bills to apply toward the spenddown.
Examples of health care expense verification include but are not limited to:
m A printout from the client’s pharmacy.
m Copies of the latest EOMB.
b. Estimate the client's health care expenses for the new certification period. MAXIS applies the anticipated health care expenses on the first day of the first month of the new certification period.
l Approve the renewal if it appears that the client will continue to have enough expenses to meet the monthly spenddown for some months of the certification period.
Example:
John completed his renewal on May 15 for the new certification period starting June 1. MMIS shows that John's health care expenses equal his recipient amount. He had prescription and clinic expenses in April sufficient to meet an ongoing monthly spenddown.
Action:
Use the prescription and clinic expenses as June 1 expenses for the renewal and approve ongoing eligibility.
Example:
Andrew completed a renewal on May 15 for June 1. The new monthly spenddown amount will be $100 per month beginning in June. Andrew incurred $80 of pharmacy costs on April 10 which is the fifth month of the current certification period. Verify that Andrew's ongoing medical need will include a $20 ongoing clinic expense each month.
Action:
Andrew will meet the new spenddown. The prescription cost of $80 and $20 in clinic costs are used as June 1 expenses for the renewal.
l If the client does not have anticipated medical bills to meet the monthly spenddown in the next certification period consider:
m Other spenddown types. If the client is not eligible with any spenddown type, close MA at the end of the current certification period.
m MinnesotaCare eligibility.
Advise the client to reapply if there is a change in medical expenses, income, or other circumstances.
4. MAXIS sends the notice of approval that includes the spenddown amount. Add worker comments to the notice regarding bills the client remains responsible for and the recipient amount.
DHS sends the Important Information about MA for Enrollees who have a Spenddown (DHS-5792C) with the approval notice.
See Notice Requirements for more information about when worker comments must be added to the client notice.
5. Update MMIS with the original spenddown and recipient amounts, or close eligibility.
Claims are automatically reprocessed in the next claims cycle after the change is made. If a change is made to the existing RSPD, the reprocessed claims will appear on the corresponding RSLG. For more information about RSLG, see MMIS User Manual. Providers do not need to re-bill claims that were already paid.