*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016.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. ***
Effective: June 1, 2011 |
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24.15 - Health Care Expenses |
Archived: June 1, 2016 (Previous Versions) |
To be eligible for Medical Assistance (MA), clients may reduce excess net income by deducting health care expenses that are not subject to payment by a third party. This section provides information regarding the type of health care expenses that are allowed when determining eligibility, how clients are notified when to send in health care expenses, and the client's responsibilities for reporting and verifying those health care expenses.
Note: The health care expenses used to determine eligibility might not be the actual expenses applied to the client’s spenddown.
See LTC Spenddowns and Waiver Obligations for information about long-term care spenddowns.
Reporting Health Care Expenses.
Whose Health Care Expenses Can be Used to Meet a Medical Spenddown?
Allowable Health Care Expenses to Meet a Medical Spenddown.
Types of Health Care Expenses.
Health Care Expenses Not Allowed.
Reporting Health Care Expenses
Clients must report and verify all health care expenses used to meet a medical spenddown, except for the remedial care expense.
Note: See Spenddown Adjustments when a client reports health care expenses after the date of spenddown approval.
Contact the client to determine if any household members have paid or unpaid health care expenses if the client has a spenddown.
Send a Medical Expenses form (DHS-1844), along with a Verification Request Form - B (DHS-2919B), to MA clients who have a spenddown and need to report their health care expenses when processing an application or renewal.
Note: It is not mandatory for the client to use the DHS-1844 to report health care expenses, but it is a convenient form for them to use to organize the required health care expenses. The form is not verification of the health care expenses; the client still needs to submit verification of the expenses reported on the form. DHS does not include this form in any mailings.
Clients with a spenddown can report health care expenses incurred after MA is approved that are not covered by MA, such as copays, monthly or with the six-month or annual renewals. See Spenddown Adjustments for instructions on adjusting the recipient amount when clients report health care expenses between renewals.
When determining eligibility for MA, apply health care expenses incurred by the following people to a client’s medical spenddown:
l Client.
l Client’s spouse if the spouse’s income is used to determine the client’s eligibility.
Example:
William receives MA services through the CADI waiver. He lives with his wife, but he is a household size of one and his wife's income is not used to determine his eligibility.
Action:
Only apply William’s medical expenses to his spenddown.
l Client’s legal dependents if they are included in the client’s household size or would have been included when the bills were incurred.
Example:
Sherronda applies for MA for herself and her 16-year-old daughter Toya. She has a two-year-old unpaid medical bill for her 19-year-old daughter Shantay, who lived with her when the bill was incurred but has since moved out. Sherronda remains responsible for the bill.
Action:
Apply the old bill to Sherronda's spenddown because Shantay would have been included in her household size when the bill was incurred.
l Client’s siblings, half-siblings, and step-siblings who are included in the client's household size.
l Parents or stepparents who live with the client if their income is actually used to determine the client’s eligibility or they are included in the client's household size.
Note: The family members described above do not have to be applying or eligible for MA for the client to use their health care expenses to meet a spenddown.
Example:
Nicole, age 20, applies for MA and has a spenddown. She lives with her parents who are not applying. Nicole is not emancipated and her parents' income is deemed to her.
Action:
Allow Nicole’s health care expenses and those of her parents to meet Nicole’s spenddown amount.
See Associated Recipients for information on how to apply medical claims to more than one household member’s spenddown.
Allowable Health Care Expenses to Meet a Medical Spenddown
Allowable health care expenses that can be used to meet a medical spenddown are health care expenses incurred by the client or other allowable family members that are not subject to payment by a third party and can be:
l paid or unpaid bills incurred in the current certification period.
l unpaid bills incurred prior to the current certification period.
The portion of a bill used to meet a previous spenddown cannot be used again in future spenddown calculations, unless the entire certification period was denied.
Health care expenses incurred before the spenddown satisfaction date are not eligible for MA payment; the client will remain responsible for those bills.
Use the verified amount of the net health care expense.
Health care expenses include but are not limited to:
l Health insurance premiums.
l Doctors visits.
l Dentist visits.
l Chiropractors.
l Co-payments.
l Prescription drugs.
l Tests and X-rays.
l Hospital and nursing care.
l Home nursing care, such as personal care attendants, private duty nursing and home health aides.
l Eyeglasses.
l Hearing aids.
l Dentures.
l Medical supplies, such as wheelchairs.
l Therapy, such as speech therapy or occupational therapy.
l Transportation for medical care, such as car, taxi, bus or ambulance.
Example:
Laurie is applying for MA in May and is requesting one month of retroactive coverage. She has a six-month spenddown amount of $500. Laurie has verified the following health care expenses:
Day of Month |
Expense |
Amount |
Status |
January 3 |
doctor's visit |
$200 |
Unpaid |
January 12 |
doctor's visit |
$150 |
Paid |
April 3 |
doctor's visit |
$150 |
Unpaid |
April 3 |
lab tests |
$90 |
Paid |
April 3 |
pharmacy (ongoing monthly cost) |
$120 |
Unpaid |
April 15 |
doctor's visit |
$150 |
Unpaid |
Action:
Laurie’s health care expenses exceed her spenddown amount. She is eligible for MA.
Only the January 12 expense will not be used to meet the spenddown because it was incurred prior to the certification period and it has already been paid.
Health care expenses were applied to her spenddown in the following way:
Day of Month |
Expense |
Amount |
Status |
Spenddown Amount ($500) |
January 3 |
doctor's visit |
$200 |
Unpaid |
- $200 |
April 3 |
lab tests |
$90 |
Paid |
- $90 |
April 3 |
doctor's visit |
$150 |
Unpaid |
- $150 |
April 3 |
pharmacy |
$120 |
Unpaid |
- $60 |
Laurie’s satisfaction date, the date she exceeds the six-month spenddown amount, is April 3.
Laurie’s recipient amount, the amount of health care expenses she is responsible for on the satisfaction date, is $300.
n Laurie needs to inform her health care providers that she is eligible for MA as of April 3 so they can submit claims to DHS.
n Laurie remains responsible for the January 3 bill, and $300 of expenses submitted for the April 3 medical expenses.
n The providers must submit the April 3 bills, including the one that is already paid, to DHS claims. The first claims submitted will be rejected until the amount of $300 is reached. MA will pay bills received after the recipient amount has been met. The provider of the lab tests must reimburse Laurie if MA pays the bill for this claim.
n Health care expenses used to meet Laurie’s spenddown cannot be used to meet a future spenddown.
Health care expenses are grouped into four different types. For detailed information on each type of health care expense, see the individual section of the same name.
Determine the net health care expense to deduct from the client’s spenddown amount in the order listed:
l H Bills:
H bills are health insurance expenses incurred during the current income certification period. This includes third party liability and Medicare premiums, deductibles, and co-insurance.
l M Bills:
M bills are unpaid health care expenses incurred prior to the certification period. These are old bills the client is still obligated to pay.
l P Bills:
P bills are non-reimbursable health care expenses that are not covered by MA or MinnesotaCare, including remedial care expense incurred during the current income certification period.
l R Bills:
R bills are reimbursable MA-covered services received during the current income certification period. MA-covered services include services that MA will cover if the client is eligible on the date of service.
Health Care Expenses Not Allowed
Do not apply the following expenses to the client’s spenddown:
l Health care expenses for MA-covered services or for MinnesotaCare-covered services with dates of service during the time the client was on MA or MinnesotaCare.
Exception: Unpaid bills for services received outside the managed care health plan network prior to the current certification period and for which client is financially responsible are allowable expenses.
See the following sections for further information on this type of health care expense:
n M Bills.
n Benefit Sets.
l MA or MinnesotaCare payments receiving Federal Financial Participation (FFP).
l Discounted health care expenses or any portion of an incurred expense that the provider writes off or absorbs and no longer expects the client to pay.
l Health care and Medicare premiums being reimbursed through the cost effective process or covered by a Medicare Savings Program (QMB, SLMB, QI, QWD).
l Health care expenses previously used to meet a spenddown.
Exception: Health care expenses used to meet a previous spenddown when eligibility was denied for the entire certification period may be used to meet a future spenddown.
l Food, even if it is a cost related to a special diet.
l Rent, mortgage payments, taxes, and homeowners or renters insurance.
l Utilities, even if required for medical equipment recommended by a physician.
l Items that do not directly benefit the client, such as special equipment requested by the client's personal care attendant or other caretaker.
n Expenses paid by a third party.
n Room and, when applicable, board charges in a residential living arrangement, including fuel, food, utilities, household supplies and other costs necessary to provide room and board.