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Effective: December 1, 2006 |
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24.10.10ar1 - Six-Month Spenddown (Archive) |
Archived: January 1, 2010 |
A six-month spenddown is one type of medical spenddown.
The six-month spenddown amount is the difference between the client’s net countable income for a six month period and the applicable Federal Poverty Guidelines (FPG) for a six-month period. This spenddown amount is for the entire certification period.
Six-Month Spenddown Calculation.
Six-Month Spenddown Calculation - Renewal.
There are no specific criteria for the use of a six-month spenddown.
Note: Clients who are not required to use an automated monthly or manual monthly spenddown may choose a six-month spenddown.
The six-month spenddown may be most beneficial for clients who have one or two months of large medical bills followed by several months of either high or low medical bills or income.
Once the client has met the six-month spenddown amount, eligibility exists for the remaining portion of the six-month certification period. Applicants must meet the spenddown amount by the end of the application month or the date the application is processed, whichever is later.
Six-Month Spenddown Calculation
Follow these steps to determine if a client can use a six-month spenddown:
1. Determine a client’s monthly net total countable income for each month of the certification period based on the appropriate Income Calculation.
2. Total the net total countable income for all six months.
3. Determine eligibility using the appropriate non-spenddown six-month Federal Poverty Guideline.
a. Determine the six-month FPG standard. At the time of determination, account for any known changes in FPG standard for each of the six months.
Example:
Joe applies for MA in June, requesting retroactive coverage to April. His FPG standard is 100% FPG for a household of one. DHS announces FPG standards increase effective July 1. Joe’s monthly FPG standard increases from $800 to $850 as of July.
Action:
Joe’s certification period is April through September. He has a six-month FPG standard of $4950. Joe’s six-month FPG standard is determined by totaling each month’s FPG standard for the certification period.
|
Month |
100% FPG |
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April |
$800 |
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May |
$800 |
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June |
$800 |
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July |
$850 |
|
August |
$850 |
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September |
+ $850 |
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Total |
$4950 |
b. Subtract the applicable six-month FPG standard from the client’s six-month net countable income. If the result is:
n Equal to or less than the FPG standard the client is eligible for MA without a spenddown, regardless if they have a monthly spenddown amount. No further calculation is necessary.
n Greater than the FPG standard, continue to Step 4.
4. Determine the six-month spenddown amount using the applicable spenddown standard. At the time of determination, account for any known changes in FPG standard for each of the six months.
5. Determine the six-month spenddown amount.
Subtract the applicable six-month FPG spenddown standard from the total six-month net countable income. The result is the six-month spenddown amount.
Example:
Joe applies for MA in June requesting two months of retroactive coverage. He has a six-month FPG, using a non-spenddown standard, of $4950. Joe has a six-month income total of $6000.
Action:
Joe’s net countable six-month income total greater than the 100% FPG. Joe’s spenddown amount must be calculated using the spenddown standard.
Joe’s six-month FPG spenddown standard equals $3900.
Action:
Joe has a $2100 six-month spenddown amount.
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Joe's Income |
$6000 |
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Spenddown Standard |
- $3900 |
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Joe's Six-Month Spenddown Amount |
$2100 |
6. Determine if the client meets the spenddown amount with applicable health care expenses.
Apply current health care expenses to the six-month spenddown amount.
Note: If you know the client will incur bills to satisfy the spenddown after the date you are processing the application, delay the final processing until the client has received the medical services.
Health care expenses must be applied to a six-month spenddown on the dates provided:
a. H Bills:
Apply health insurance and Medicare premiums on the first day of the month in which they are due.
Exception: When determining a certification period with retroactive eligibility, total the H bills that have been paid in the certification period. Apply the amount to the first day of the certification period.
Do not deduct anticipated H bills for months after the month of application or processing period, whichever is later. Anticipated bills are not used when processing a six-month spenddown.
Example:
Sherita applies for MA on July 15. She does not have enough bills to meet her spenddown in July, but plans to fill a monthly prescription on August 1.
Action:
Because this is within the processing period, it is possible to approve the application with an August effective date once Sherita verifies that she has incurred the August 1 charge.
Note: Determine which of the following is to the greater benefit of the client when applying H bills:
m Reimbursing the premiums as cost effective health care coverage.
m Applying the premiums to the spenddown.
b. M Bills:
The unpaid balance of M bills is applied on the first of the month. It may be applied in two ways:
n Chronologically starting with the earliest date of service, until the full amount is used.
n If a client will be paying one of the M bills first, the application of the bills to the spenddown can be prioritized to give the client the advantage of a greater M Bill balance owed at the next recertification.
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 the portion of an M Bill used to meet the spenddown on a copy of the bill itself and in case notes.
c. P Bills:
Apply P bills on the first day of the month they were incurred.
Exception: When determining a certification period with retroactive eligibility, total the P bills that have been incurred in the certification period. Apply the amount to the first day of the certification period.
d. R Bills:
Apply R bills on the date incurred.
7. Determine the satisfaction date and recipient amount.
l If the total of the spenddown is met using H, M, and/or P bills only that equal or exceed the client's six-month spenddown amount:
n The spenddown satisfaction date is the first day of the six-month certification period.
n The recipient amount for the first of the month is $0.
l If the total of the H, M, and/or P bills is less than the client's six-month amount, continue by applying net R bills in order of the date of service.
n If the total of the H, M, P, and R bills is less than the six-month spenddown amount the client is not eligible with a six-month spenddown.
Determine if the client is eligible with another type of medical spenddown.
n If the total of the H, P, M, and R bills equals or exceeds the client's six-month spenddown amount:
m The satisfaction date is the date on which the cumulative total of all bills used to meet the spenddown equals the spenddown amount.
m The recipient amount is the truncated (drop the cents) difference between the spenddown amount and the total amount of medical expenses applied through the day before the satisfaction date.
Note: The system will reject claims submitted by providers prior to the satisfaction date and until the recipient amount has been met, at which time all other claims will be paid by MA.
Clients will be notified of which medical bills were used to meet the spenddown amount and for which they are responsible. This notification, the Explanation of Medical Benefits (EOMB) is sent to clients. The EOMB lists specific health care expenses submitted by providers and indicates expenses for which the client is responsible.
8. Update the MMIS system with the spenddown amount, satisfaction date and the recipient amount.
9. Send the client the appropriate notification of the spenddown, including the spenddown amount, bills the client remains responsible for prior to the satisfaction date and the recipient amount.
Six-Month Spenddown Calculation - Renewal
To calculate a six-month spenddown at renewal follow these steps:
1. Complete Step 1 through Step 5 in Six-Month Spenddown Calculation.
2. Determine if the client meets the spenddown amount with applicable health care expenses.
Health care expenses must be applied to a six-month spenddown on the dates provided:
l H Bills:
Apply H bills due on the first day of the next certification period, even if they were paid during current certification period.
l M Bills:
Apply the portions of M bills that remain unpaid and that were not used to meet a previous spenddown of the first day of the next certification period.
Note: Bills incurred during the certification period before renewal, which remain unpaid, and were not eligible for MA payment are considered M bills.
l P Bills and R Bills:
These bill types will not be available when processing a renewal because these types of bills are incurred during the certification period, and eligibility for that certification period is being determined prior to its start.
3. Determine the satisfaction date and recipient amount.
l If the spenddown amount is met using H and M bills that equal or exceed the client's six-month spenddown amount:
n The spenddown satisfaction date is the first day of the six-month certification period.
n The recipient amount for the first of the month is $0.
l If clients cannot meet the new spenddown using H and M bills, and do are not eligible with a different spenddown type, terminate the case at the end of the six-month income review period.
Advise clients to reapply if they incur new health care expenses or have a change in income.
4. Update the MMIS system for clients who meet the new spenddown amount with the spenddown amount, satisfaction date and the recipient amount.
5. Send the client the appropriate notification of the spenddown.
l For client who did not meet the spenddown, the MAXIS closure notice advises clients who did not meet the spenddown amount of the availability of MinnesotaCare.
l For clients who do meet the new spenddown amount, include the spenddown amount, and the bills the client remains responsible for prior to the satisfaction date.