Meeting Spend Down with Incurred Expenses

MANUAL REFERENCE:

Meeting Spend Down With Incurred Expenses:  3.8.4 Allowable Medical Expenses for Spend Down

REQUIREMENT:

If the participant chooses to meet spend down for a month using incurred medical expenses, MO HealthNet coverage begins on the date the incurred expenses not payable by a third party equal the spend down amount. Medical coverage continues through the last day of the month.

For QMB recipients, expenses covered by QMB cannot be used to meet spenddown.

INCURRED EXPENSES:

To incur an expense means to be personally responsible for the expense. Allowable expenses to meet spend down are expenses incurred by the individual or the individual’s spouse whose income was used in the spend down determination, and are not subject to payment by a third party (such as Medicare or other health insurance) unless the third party is a public program of a State or political subdivision of a State such as Department of Mental Health or Department of Health and Senior Services.

VERIFICATION:

Eligibility specialists must obtain documentation of incurred medical expenses from participant and third party when involved. Documentation should be reviewed to determine the accuracy of the invoice or billing statement. Medical expenses do not have to be paid to be used to meet spend down.

HC = Documentary verification

PROCEDURE:

  1. Arrange countable medical expenses chronologically by date of service. The date the individual receives service is the date the medical expense is incurred, not the date of the bill or the date the bill is paid.
  2. Create a running total of these expenses.
  3. Spend down is met on the date that the claimant’s total medical expenses meet or exceed his/her spend down amount. The claimant’s MHABD coverage for a specific month begins the date that spend down is met and continues through the last day of the month.
  4. When spend down has been met by incurring medical expenses, enter the MO HealthNet start date and claimant’s liability amount on the MSPA screen.
    • Start date is the date the spend down was met.
    • Claimant’s liability is the portion of the spend down amount remaining on the date that the claimant meets his/her spend down. This amount is entered on the MSPA screen to prevent payment to medical providers for the amount of the liability.

Example 1: Ms. Jackson has a $100.00 spend down each month. You receive a copy of her pharmacy bill showing that she picked up prescriptions on September 1st. None of these expenses were covered by TPL. She paid $105.00 for three prescriptions. Ms. Jackson met her spend down on September 1st (her expense of $105.00 exceeds her spend down amount of $100.00). Her liability on September 1st was her entire spend down amount of $100.00. The date Ms. Jackson met spend down (September 1st) along with her liability on that date ($100.00) is entered into the MSPA screen. When MO HealthNet Division receives this invoice, they know to pay only $5.00 of the total bill as $100.00 is Ms. Jackson’s amount to pay.

Example 2: Mr. Palmer has a $167.00 monthly spend down. You receive the following receipts:

  • Pharmacy bill dated 4/2 in the amount of $45.00
  • Doctor visit bill dated 4/4 in the amount of $65.00
  • MRI test bill dated 4/5 in the amount of $120.00, paid by TPL
  • Lab work bill dated 4/6 in the amount of $100.00

Mr. Palmer met his spend down on 4/6, when his total expenses incurred up to that date exceeded his spend down amount. Mr. Palmer’s liability is the remainder of spend down on that date. In other words, Mr. Palmer’s liability is $57.00.

Total spenddown amount of $167.00 – $45.00 incurred on 4/2 = $122.00 – $65.00 incurred on 4/4 = $57.00. The MRI test cannot be counted towards the spend down amount, as a TPL paid this bill. So, $57.00 is left of the total $167.00 on the date he met his monthly spenddown. That is Mr. Palmer’s liability.