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Effective: December 1, 2006 |
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24.15.10ar1 - Determining Net Health Care Expenses (Archive) |
Archived: January 1, 2010 |
Net health care expenses are applied to a client’s spenddown. This section provides steps to help determine the net health care expense. It also provides information regarding third party payments.
Steps to Determine Net Health Care Expenses.
One Payment for Multiple Expenses.
The following terminology is used throughout this section:
l Third Party. A third party includes but is not limited to:
n Health insurance or a Health Maintenance Organization (HMO) through an employer.
n Group or private health insurance or HMO.
n Medicare.
n Medicare Supplemental Insurance.
n Auto insurance.
n Workers’ compensation.
n Court-ordered insurance from a non-custodial parent, spouse, or ex-spouse.
n Personal liability insurance.
n A non-liable person or entity.
l Non-Liable Third Party. A non-liable third party includes:
n A non-responsible relative, friend or charitable organization.
n A medical doctor who decides to "write off" a bill.
l Write-Off.
The term "write off" means the client will no longer be responsible for the bill, because providers have decided to absorb the costs themselves.
Steps to Determine Net Health Care Expenses
To determine net health care expenses, follow these steps:
1. Verify the actual gross cost of the health care expense.
2. Deduct from the gross cost the following amounts:
l Verified portions of the expense paid by the client.
l The portion of the expense used to meet a previous spenddown.
3. Determine if third party liability coverage exists to cover all or part of the cost.
l Deduct verified amounts paid by a liable third party, such as health insurance or Medicare.
Note: See One Payment for Multiple Expenses when one payment is made by the third party covering multiple expenses.
l Verify amounts denied by liable third party payers.
Note: Clients must furnish the Explanation of Medical Benefits (EOMB) from the payers or workers may contact the third party directly with the appropriate signed consent for release.
l Deduct estimated anticipated liable third party payments which are based on coverage information in the insurance policy or other sources.
n Use the best information available to determine the amount the third party will pay if the third party has delayed verification or information on coverage.
Note: Do not delay processing the application or redetermining eligibility beyond the program processing standards.
n Consider Medicare to pay 80% of gross health care expenses for a client on Medicare.
4. Deduct non-liable third party payments if the payment or write-off occurs before the application is processed, the payment or write-off is deducted from the gross medical expenses.
l Do not anticipate or estimate non-liable third party payments if there is not enough information to establish an amount.
l Spenddowns are not recalculated for payments or write-offs made after the MA approval.
Example:
Harold states that his mother is willing to pay $100 on an old unpaid medical expense.
Action:
If Harold’s mother does not pay the $100 before the application is processed, do not anticipate that she will pay. Apply the current unpaid balance as an allowable expense.
5. Document third party coverage payments, denials and estimates in case notes, including but not limited to:
l Attempts to get third party verification and information.
l How the third party payment calculations were determined.
l How third party payments were used to determine net health care expenses.
One Payment for Multiple Expenses
Sometimes liable third parties will issue one payment for several different health care services and not break down the payment by date, type, and cost of each service covered. If this is the case, follow these steps:
1. Attempt to get a breakdown of the payment by service, including the date of service and the amount paid for that service. The information may be obtained by either:
l Requesting the third party to provide a breakdown.
l Examining available coverage information.
2. Deduct the third party payment from the gross cost of each service.
Note: If it is not possible to get the breakdown within the case processing standards, apply the total payment against the services it covers starting with the oldest expense. Continue applying the payment until it is used up.
Consider any remaining health care expenses to be the client’s responsibility and use them to satisfy the spenddown.
3. Document the following:
l How the information was obtained or attempted to be obtained.
l The exact calculation to show how the third-party payments were applied.