*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016.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. ***

Chapter 24 - Medical Spenddowns

Effective:   June 1, 2014

24.10.10 - Six-Month Spenddown

Archived:  June 1, 2016 (Previous Versions)

Six-Month Spenddown

A six-month spenddown is a type of medical spenddown.

The six-month spenddown amount is the difference between the client’s net 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. Each household member may have a different spenddown amount depending on the net income and the FPG standard used to determine that member’s eligibility.

Criteria for Use.

Six-Month Spenddown Calculation.

Six-Month Spenddown Calculation - Renewal.

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Criteria for Use

There are no specific criteria for the use of a six-month spenddown.

Note:  Clients who are not required to use a monthly spenddown may choose a six-month spenddown.

Applicants must meet the spenddown amount by the end of the application month or the date the application is processed, whichever is later. After the client meets the six-month spenddown amount, eligibility exists for the remaining portion of the six-month certification period if there are no changes that negatively affect eligibility.

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Six-Month Spenddown Calculation

Record all income and medical expense information in MAXIS. MAXIS will follow these steps to determine if a client can meet a six-month spenddown:

Note:  MAXIS may complete some of the following steps automatically when the information is entered on the appropriate screens.

1. Determine the client’s anticipated monthly net income for each month of the certification period based on the appropriate Income Calculation.

2. Total the net income for all six months.

3. Determine eligibility using the appropriate six-month Federal Poverty Guideline (FPG) standard.

Note:  For clients whose income exceeds the standard for their basis of eligibility, the appropriate standard is the spenddown standard for their basis of eligibility. The appropriate spenddown standard for parents, children and pregnant women is 133%. The appropriate spenddown standard for people who are blind, disabled and age 65 or older is 75% FPG.

Example:

Surry, age 6, is receiving MA. The income used to determine Surry’s eligibility exceeds 275% FPG .

Action:

Use the spenddown standard of 133% FPG for Surry.

a. Apply the applicable FPG standard for each month of the six-month period.

Example:

Joe applies for MA in June, requesting retroactive coverage to April. His 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 beginning July.

Action:

Joe’s certification period is April through September. He has a six-month FPG standard of $4,950. Determine Joe’s six-month FPG standard by totaling each month’s FPG standard for the certification period.

Month

100% FPG

April

$800

May

$800

June

$800

July

$850

August

$850

September

+  $850

Total

$4,950

b. Subtract the applicable six-month FPG standard from the client’s six-month net income. If the result is:

n  Equal to or less than the FPG standard the client is eligible for MA without a spenddown even if they exceed the monthly FPG standard in one or more months of the six-month period. No further calculation is necessary.

Example:

Beverly’s net income is $100 below the applicable FPG standard in every month of the six-month certification period except the fifth month. In the fifth month, her net income exceeds the applicable FPG by $100. Her net income for the six-month certification period is $400 less than the applicable six-month FPG standard.  

Action:

Beverly is eligible for MA without a spenddown.

n  Greater than the FPG standard, continue to Step 4.

4. Determine the six-month spenddown amount.

Subtract the applicable six-month FPG spenddown standard from the total six-month net income. The result is the six-month spenddown amount.

Example:

Joe, age 66, applies for MA in June requesting two months of retroactive coverage. He has a six-month FPG, using a non-spenddown standard, of $5,418. Joe has a six-month income total of $6,000.

Action:

Joe’s net six-month income total is greater than the 100% FPG. Calculate Joe’s spenddown amount using the 75% FPG spenddown standard for people age 65 or older.

Joe’s six-month FPG spenddown standard equals $4,062.

Action:

Joe has a $1,938 six-month spenddown amount.

Joe's Income

$6,000

Spenddown Standard

- $4,062

Joe's Six-Month Spenddown Amount

$1,938

5. Determine if the client meets the spenddown amount with applicable health care expenses.

Apply allowable health care expenses to the six-month spenddown amount.

Note:  Delay the final processing until the client has received the medical services if you know the client will incur bills to satisfy the spenddown after the date you are processing the application.

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Health care expenses must be applied to a six-month spenddown in a specific order on the dates provided:

a. H Bills:

Health insurance and Medicare premiums are applied on the first day of the month in which they are due.

Exceptions: When determining a certification period with retroactive eligibility, total the H bills that have been paid in the certification period. Apply the total of the H bills 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. Do not use anticipated bills when processing a six-month spenddown.

Example:

Sherita applies for MA on July 15 and requests retroactive coverage to May. She has other health care coverage and has paid her premiums for May, June and July. She indicates that she will also be paying the premiums for August, September and October. Sherita intends to keep the other coverage even though a review shows it is not cost effective.

Action:

Total the health insurance premiums for May, June and July and apply that total medical expense as of May 1. Do not anticipate the health insurance premiums for August, September and October.

n  Co-payments are applied to the recipient amount of a six-month 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 and possibly the satisfaction date of the six-month 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 adjustment to providers. The reimbursements will not always go to 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.

n  Six-month Spenddowns.

m If the spenddown recalculation results in a lower recipient amount on the original satisfaction date. DHS will reprocess claims automatically. The provider should not rebill.

m If the spenddown recalculation results in an earlier satisfaction date, DHS will reprocess claims automatically from the original satisfaction date forward. The client should notify providers to bill claims from the new satisfaction date through the day before the original satisfaction date.

n  MA Family Deductible is also applied to the recipient amount of the six-month 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 six-month 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 the 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.

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.

Do not allow premiums paid by MA due to cost effective status or paid by a Medicare Savings Program (MSP) as a health care expense.

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:

m first applying the bill the client will be paying first,

m 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.

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 (and certification period in which the amount was used) of an M Bill used to meet the spenddown 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.

Exception:  Total the P bills that have been incurred in the certification period (retroactive months and processing months). Apply the amount to the first day of the certification period.

d. R Bills:

R bills are applied on the date incurred.

6. Determine the satisfaction date and recipient amount for each household member.

l  If the total of the spenddown is met using H, M, and P 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 the total of the H, M, and P bills is less than the client's six-month spenddown 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:  MMIS will deny claims submitted by providers prior to the satisfaction date and until the recipient amount has been met, at which time MA will pay all other MA-covered 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.

7. MAXIS sends the notice of approval that includes the spenddown amount. Add worker comments to the notice regarding bills the client remains responsible for prior to the satisfaction date and the recipient amount.

8. Update MMIS with the original spenddown amount, satisfaction date and recipient amount.

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Six-Month Spenddown Calculation - Renewal

To calculate a six-month 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. 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 described for each type of bill:

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.

Example:

Sherita provides her six-month renewal for November on October 12. She verifies she paid her August, September and October health insurance premiums on the first of each month.

Action:

Total the August, September and October health insurance premiums and apply the total as a medical expense for November 1. Do not anticipate the health insurance premiums for the next certification period.  

Exception:  Allow the November premium if the six-month renewal is being processed after November 1 and Sherita verified she paid the November health insurance premium.

l  M Bills:

Apply the portions of M bills that remain unpaid and that were not used to meet a previous spenddown on the first day of the next certification period.

Note:  Bills incurred during the certification period before renewal that 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; the renewal is determining eligibility for the next certification period 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 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. Pursue MinnesotaCare eligibility.

4. MAXIS sends the client the appropriate notification of the spenddown.

l  For clients 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, MAXIS includes the spenddown amount on the notice. Add worker comments to the notice regarding the recipient amount, if different from the spenddown amount, and the bills the client remains responsible for prior to the satisfaction date.

5. Update the existing RSPD screen in MMIS with the new spenddown amount, satisfaction date and recipient amount.

l  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.

l  Claims that have already been processed and denied will not reprocess automatically if the satisfaction date is changed to an earlier date. The provider should resubmit denied claims. These claims would have dates of service between the old satisfaction date to the new satisfaction date.

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