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Effective: December 1, 2006 |
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24ar1 - Medical Spenddowns (Archive) |
Archived: January 1, 2010 |
This chapter provides information for clients who live in the community and are eligible for MA with a medical spenddown.
MinnesotaCare and GAMC do not allow spenddowns.
For information related to long-term care (LTC) spenddowns, see MA Payment of Long-Term Care (LTC) Services.
Spenddown Steps: Determining MA Eligibility with a Spenddown.
Explanation of Medical Benefits (EOMB).
A spenddown is a cost-sharing approach which allows Medical Assistance (MA) eligibility for people whose net countable income is greater then the applicable federal poverty guideline (FPG) standard.
Applicants and enrollees can become income eligible for MA by ”spending down” their excess income to the FPG standard. The excess income is reduced by deducting certain medical expenses.
l The spenddown amount is the difference between the client’s net countable income and the appropriate FPG standard.
Client’s net countable income - FPG standard = spenddown amount.
l On the date that incurred medical bills equal the enrollee or applicant's excess net countable income, the individual has met the spenddown and is income eligible; this date is known as the Satisfaction Date.
l The amount of reimbursable medical expenses a client is obligated to pay on the satisfaction date is known as the Recipient Amount.
Example:
Michael’s monthly income is currently $100 greater than the FPG standard. To become income eligible for MA, Michael will need to have at least $100 in medical expenses to meet the spenddown.
Michael’s medical bills include:
|
Day of Month |
Health Care Expense |
Amount |
|
Second |
Physical Therapy Visit |
$50 |
|
Third |
Pharmacy |
$45 |
|
Fifth |
Physical Therapy Visit |
$50 |
|
Sixth |
Clinic Visit |
$200 |
Action:
Michael’s medical bills total $345; he has enough medical bills to become income eligible for MA by meeting the spenddown of $100.
n The date that Michael incurred enough medical bills to meet the spenddown is on the fifth of the month, which is known as the satisfaction date.
n On the satisfaction date Michael has a recipient amount of $5. This is the amount of medical expenses he is responsible to pay. He is responsible for the following bills:
m The $50 therapy visit on the second of the month.
m The $45 pharmacy bill on the third of the month.
m $5 of the $50 physical therapy visit on the fifth of the month.
n MA will pay the following:
m $45 of the $50 physical therapy visit on the fifth of the month.
m The $200 clinic visit on the sixth of the month.
The following programs or people cannot have a spenddown:
l Medicare Savings Programs (QMB, SLMB, QWD, QI):
n People with income in excess of the FPG standards for these programs are not eligible.
n Income must be within the applicable standards for QMB, SLMB, QWD, or QI benefits.
Note: People may be eligible for a Medicare Savings Program even if they are ineligible for MA due to excess income and the inability to meet a spenddown.
l Transitional/Transition Year MA (TMA and TYMA):
n There is no income limit for the four months of TMA eligibility, or for the first six months of TYMA eligibility.
n The income limit for the second six months of TYMA is 185% FPG.
Note: People whose income exceeds the limit for the second six months are no longer eligible for TYMA. Redetermine eligibility under another basis.
l MA for Employed Persons with Disabilities (MA-EPD).
People eligible for MA-EPD pay premiums based on their income.
l MA for Breast and Cervical Cancer (MA-BC).
There is no income limit for clients eligible for this program.
l Pregnant Women with income less than 275% FPG.
n If income exceeds 275% FPG pregnant women may be eligible by spending down to 100% FPG.
m Allow the work expense deduction when calculating income for 275% FPG.
m Allow the earned income disregard, dependent care deduction and the child support deduction when calculating income for 100% FPG.
n For more information on pregnant women see MA/GAMC Bases of Eligibility.
l Auto Newborns.
n There is no income limit for auto newborns.
n For more information regarding auto newborn eligibility see MinnesotaCare Auto Newborns and MA Auto Newborns.
People may be eligible for MA with a spenddown if they meet all of the following criteria:
l They have met all other MA eligibility criteria.
l Their net countable income exceeds the applicable MA income standard.
l Their incurred and ongoing medical expenses are equal to or greater than their spenddown.
Follow these steps to determine if a client is eligible for MA with a medical spenddown.
1. When processing a certification period with spenddown eligibility, consider the factors that may change from month to month:
n Client’s age.
n Eligibility type.
n Income.
n Income standard.
n Cost-of-living adjustment.
n Household size.
2. Determine net countable income. See Income Calculation - Community.
3. Compare net countable income to applicable FPG standard. If the net countable income is:
n Less than or equal to the applicable FPG, and the client meets all other eligibility criteria, the client is eligible for MA without a spenddown.
n Greater than the applicable FPG, calculate the monthly or six-month spenddown amount using the applicable spenddown standard.
Example:
Beth applies for MA for her 16-year-old son Thomas. Countable income exceeds 150% FPG (the appropriate standard for a child under age 18 on MA Method A) for a household of two.
Action:
Because income exceeds the 150% FPG, Thomas is not eligible for MA without a spenddown. Determine the spenddown amount using the 100% FPG standard.
4. Evaluate health care expenses based on spenddown type.
a. Identify whose health care expenses can be used to meet the spenddown.
b. Determine the type of health care expense.
c. Verify health care expenses.
d. Determine the net health care expense.
e. Determine if health care expenses meet the spenddown amount.
If net medical expenses are:
m Greater than or equal to the spenddown amount, determine the satisfaction date, and the recipient amount. Then continue to step five.
m Less than the spenddown amount, the client is unable to meet a spenddown and is ineligible for MA. Continue to step six.
See Spenddown Adjustments when a client reports health care expenses after the date of spenddown approval.
5. Determine the appropriate spenddown type using a certification period to the client’s benefit.
6. Provide client notification of the spenddown determination.
Spenddown cases have notice requirements in addition to those in Chapter 26 Notices.
These spenddown notice requirements are the same for applications and renewals.
l MAXIS will send a completed income computation worksheet with the opening or denial notice.
l Notify clients of their recipient amount.
l Add worker comments to the notice to inform the client how the spenddown was met and which bills the client is responsible to pay. MAXIS does not notify clients which bills were used to meet the spenddown.
Additional notice information can be found in:
l Automated Monthly Spenddowns.
l Manual Monthly Medical Spenddowns.
Explanation of Medical Benefits (EOMB)
An Explanation of Medical Benefits (EOMB) statement is sent to clients each month. Listed on the EOMB is:
l The name of the provider billing a service.
l The date of the service.
l How much of the cost of the service was paid by MA.
l The amount of the service the client is responsible for because it was not paid by MA.
The EOMB is used by clients who have a spenddown to determine to whom they should pay their recipient amount.
The following budget worksheets are useful for calculating MA budgets and spenddowns manually. It is useful for showing clients how MA budgets and spenddowns are determined.
Note: When calculating income use actual dollars and cents. Do not round or truncate.
l Method A:
Family Income Computation Worksheet for MA (DHS-0029B) is for families and children's cases.
l Method B:
Elderly, Disabled and Blind Income Computation Worksheet (DHS-0029C) is for people who are elderly, blind, or disabled.
l The Spenddown Worksheet (DHS-1829) is a useful tool for understanding and explaining the calculations. This form is not a mandatory form. Use this form as a guide for checking results for:
n Applying medical bills to the spenddown.
n Determining the satisfaction date.
n Determining the client's recipient amount.