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Effective: November 1, 2009 |
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15.10.05.05ar2 - Determining Cost Effectiveness (Archive) |
Archived: September 1, 2010 |
Follow these instructions to review and approve or deny payment of certain insurance premiums. Also see Cost Effective Insurance Review - Worker Steps (DHS-2841E).
Premiums that May be Reimbursable.
Exclusion from Enrollment in a Managed Care Organization (MCO).
Deny payment of insurance premiums for the following types of insurance policies:
l Minnesota Comprehensive Health Association (MCHA) policies.
n Minnesota statute prohibits MA and GAMC from paying MCHA premiums.
n MA and GAMC enrollees may carry MCHA coverage at their own expense but are not required to do so as a condition of eligibility.
l Limited Medical Benefit Plans offered by small group employers. These policies or plans cap annual benefits at low amounts (such as $1,000 or $4,000) and are typically not licensed as health insurance in Minnesota.
l High deductible health insurance policies with an associated Health Savings Account (HSA), unless the policyholder agrees that HSA funds will be used to reduce the deductible. This applies to similar medical expense accounts when they are funded by the employer.
Note: Obtain a signature from the client using the Cost Effective Insurance Information Employer or Insurance Company Form (DHS-2841).
l Medicare Supplement (also known as Medigap) policies for clients who are eligible for MA and Medicare.
Note: MA and Medicare eligible clients may request suspension of a Medicare supplement policy for up to 24 months if they plan to re-enroll in the policy after they no longer qualify for MA.
m The suspension allows the person to re-enroll in the policy without reapplying if MA ends during the suspension.
m The policyholder must request the suspension from the insurer within 90 days of the effective date of MA enrollment.
l Medicare Part C (Medicare Advantage) products, with or without prescription drug coverage, for people age 65 or older.
l Medicare Part B premiums for MA-EPD enrollees with income greater than 200% FPG. Do not count spousal income in this calculation.
Example:
Steve receives MA-EPD and Medicare Part B. His income is over 200% FPG. Steve is not eligible for QMB or SLMB because household income exceeds the limits for those programs.
Action:
Do not refer Steve’s Medicare Part B premium for a cost effective review because his income is over 200% FPG.
l For people age 65 and over who are MA and Medicare eligible, group health insurance products, such as those offered by employers, unions or retiree plans that either:
n Do not include prescription drug coverage.
n Include prescription drug coverage that is not considered creditable drug coverage.
l Long-term care and hospital indemnity policies that provide cash payments for each day in a hospital or nursing facility and the client is not currently collecting benefits.
Note: Benefits paid by these policies are third party liability and must be used first to cover the cost of medical care.
Premiums That May be Reimbursable
Premiums may be reimbursable for other health care coverage offered through an employer or group, individual plan or retiree plan. This includes premiums for dental or vision coverage or long-term care (LTC) premiums a client is required to pay during an elimination period.
l Use the Cost Effective Insurance Referral - Employer or Insurance Company (DHS-2841) to obtain necessary information about the other health care coverage.
Note: Do not approve payment of premiums if the policy is identified as a Limited Benefit Policy on the Employer Form.
l Complete the Cost Effective Insurance Calculation (DHS-2841A) for people eligible for MA or GAMC covered by the policy or plan. Use pro-rated premium and deductible amounts if not everyone covered by the policy is also eligible for MA or GAMC.
Note: Complete the calculation with a combined total of medical, dental and vision premiums and deductible amounts. However, if that results in the premiums not being cost effective, consider them in order of priority by first subtracting the vision premium and deductible and then the dental premium and deductible.
n Add the pro-rated Premium (Column B) + Pro-rated Deductible Amounts (Column C). Compare this amount to the Capitation by Age amounts (Column A - total for MA eligibles listed).
m If B + C is less than A, approve for Cost Effective premium reimbursement.
m If B + C is greater than A, continue to Medical Expense Review.
Review the health care expenses paid by the policy to determine if the coverage is cost effective if the policy is not determined cost effective using the Cost Effective Insurance Calculation (DHS-2841A). Follow these steps:
1. Send the Cost Effective Insurance Referral - Applicant/Enrollee (DHS-2841B) to the client.
2. Review copies of Explanation of Benefits (EOBs) for a 12-month period.
n Approve for cost effective premium reimbursement if benefits paid by the policy are more than two times the cost of the pro-rated premium for the same period.
n If the benefits paid by the policy are not more than two times the cost of the pro-rated premium for the same period, fax the following information to the DHS Benefit Recovery Section (BRS) at (651) 431-7431.
m Cost Effective Insurance Information Employer or Insurance Company (DHS-2841).
m Cost Effective Insurance Calculation (DHS-2841A).
m Cost Effective Insurance Referral Applicant/Enrollee (DHS-2841B).
m Health insurance policy summary of benefits and any other relevant information.
m Copies of Explanation of Benefits (EOBs).
m LTC insurance policy information that is currently paying benefits or in the elimination period.
Example:
Galinda is age 23 and has health care coverage through her employer. She pays a monthly premium of $175 a month and her annual deductible is $1,000. Galinda provided EOMBs received from health care plan. The EOMBs indicate her health care coverage has paid medical expenses of at least $4,300 during the past 12 months.
Action:
Galinda’s health care coverage is cost effective because her annual covered medical expenses are greater than two times the cost of her annual premium.
1. Galinda’s annual covered medical expenses total $4,300.
2. Galinda pays an annual premium total of $2,100 ($175 X 12).
3. Galinda’s annual covered medical expenses are at least twice that of her annual premium. Her annual covered medical expenses must be at least $4,200.
Exclusion from Enrollment in a Managed Care Organization (MCO)
Exclude clients in the following categories from participation in managed care enrollment. These clients will receive health care through traditional fee-for-service (FFS).
l MA and GAMC eligible clients with private health care coverage that has been determined cost effective.
l MA and GAMC eligible clients with private health care coverage through a Health Maintenance Organization (HMO) licensed under Minnesota Statutes §62D. These people may enroll on a voluntary basis if they select the same MCO as their private HMO.
For additional cost effective coverage information see the following sections:
l Cost Effective Health Care Coverage - MA and GAMC.
l Medicare Cost Effective Requirements.