• Medicaid coverage on spend down cases will begin and end without the case closing.
• Elimination of the quarterly spend down reporting form (IM-2 SPDN), spend down cases will be reviewed annually in the same manner as non-spend down cases.
• New screens to activate Medicaid coverage on spend down cases.
• Information in the system to prevent Medicaid from paying for Medical services used to meet spend down.
• Monthly spend down periods instead of quarterly.
• Automation of letters and invoices.
• Pay-in option.
• The way we budget and enter prior quarter.

PROCEDURES FOR OPENING spend down MEDICAID COVERAGE

Effective October 1, 2002, Medicaid coverage on spend down cases will begin and end without the case closing at the end of the spend down period.  As long as the claimant remains eligible on all factors, except having met the spend down, the case will remain active.  spend down cases will not have an end date entered in field 32 of IMU5.  Instead, spend down cases will be identified in the system by the reason ’s ' in field 13G2 of IMU5.  A spend down case is to remain active until a change in the claimant’s situation causes ineligibility on a factor other than meeting spend down.  Any proposed closing, increase in spend down, or change from non-spend down to spend down requires normal adverse action procedures to be followed.  A quarterly eligibility form will no longer be required to re-establish Medicaid spend down coverage.

The following screens have been developed to enter and view Medicaid coverage dates for spend down claimants:

• MSPA is the screen on which the caseworker will enter new spend down coverage dates.
• MSPU is the screen to correct spend down coverage dates for periods previously entered.
• MSPI is an inquiry screen, which will show all spend down coverage periods after September 30, 2002.

As of 10/01/02 eligible spend down claimants will only have Medicaid coverage for dates that appear on the MSPI screen.  For claimants meeting spend down with incurred expenses, the worker will enter coverage dates on the MSPA screen.  The screen will require the worker to enter the begin date of coverage and client liability for the begin date.  The begin date is the date spend down was met.  Client liability is the amount of the spend down that was met on that day.  The dates of coverage must be in a month for which spend down eligibility has been entered in IMU5 and can not be a future month.  The client liability must be greater than zero. The system will enter a coverage date of the last day of the month for which coverage is being authorized.

Note: Specific field by field instructions on the MSPA, MSPU and MSPI screens will be issued in a separate memorandum.

ONE MONTH spend down PERIOD

The spend down period will be shortened from quarterly to monthly.  This allows the claimant to have a smaller spend down amount, but will make it essential that the caseworker enters the coverage quickly when the claimant provides the bills.  Coverage must be entered no later than two working days after the worker receives verification of the expense.  County offices are to establish procedures to expedite the process from the mailroom to the worker.

spend down AMOUNT NOT PAID BY MEDICAID

Effective October 2002, the Medicaid system will prevent payment of medical services used to meet an individual’s spend down amount.  Prior to October 1, 2002 eligibility (and coverage) began on the first date that a person’s cumulative medical expenses equaled or exceeded the spend down amount.  There was not enough information in the computer system to prevent Medicaid from paying for covered services used to meet spend down on that day if the provider submitted a claim.  Beginning October 1,2002 coverage will still begin on the date the spend down is met.  However, Medicaid will not pay the portion of a bill used to meet the spend down, as the amount of spend down met on the first day of coverage will be in the system.

To authorize coverage, the worker will enter the date spend down was met on the MSPA screen.  The worker will also enter the amount of spend down met on that day as claimant’s liability.  This will establish coverage for the claimant from the date entered through the last day of the month. 

EXAMPLE:  Claimant’s spend down for October is $100.  They incur medical expenses of $75 on 10/1/02 and $50 on 10/2/02.  The worker enters 10/2/02 as the begin date of coverage on MSPA, with a client liability of $25.

The DMS system will track the bills they receive for the first day of coverage, until the bills equal the claimant’s remaining spend down liability.  For the first day of coverage, DMS will deny or split (partially pay) the claims until the claimant’s liability for that first day is reduced to zero.  Claims for all other days of spend down coverage will process in the same manner as those of non-spend down claimants.  DMS will notify both the provider and the claimant of any claim amount not paid due to the bill having been used to meet spend down.

Note:  Claimant does not have to pay a bill before Medicaid coverage can begin.  The change is that Medicaid will no longer pay for medical expenses that are used to meet the spend down.

EXAMPLE:  Prior to October 1, 2002, claimant’s spend down quarter was July 2002 through September 2002.  Their spend down amount was $450.00.  They provided the caseworker a $50.00 unpaid bill from their doctor and bills for $450.00 for prescriptions they had charged at their pharmacy.  Both bills were for July 3, 2002.  The worker on July 5th entered the IMU5 transaction to approve Medicaid coverage for 7/3/02 through 9/30/02.  Both providers submit claims to Medicaid, which Medicaid pays.  The claimant paid nothing out of pocket as Medicaid paid all of the bills on the day the spend down was met, including the spend down amount.

In October 2002 the same claimant’s spend down will be $150.00, as the state will have switched from quarterly to monthly periods.

On October 4th, claimant goes to the same doctor and is billed for $50.00; they also charge prescriptions of $150.00 on October 4th.  On October 5th the bills are provided to the caseworker, who enters coverage dates and client liability into the MSPA screen.  The next day the Division of Medical Services system will show a coverage period of 10/04 to 10/31 with client liability of $150.00.

Claims for 10/04 will be compared to the client liability amount when they are received.  If the doctor sends his bill in first, it will be denied.  The Medicaid system will subtract the doctor bill from the total client liability ($150.00 - $50.00) and reduce the client liability for 10/04 to $100.00.  When the $150.00 pharmacy bills are received, they will be compared to the remaining claimant liability of $100.00.  The Medicaid system will calculate the remaining client liability of $100.00 was met with the pharmacy bill, and will pay the pharmacy the Medicaid rate for that prescription, minus $100.00.

Active spend down cases will be mailed a monthly invoice (sample attached) on the second working day of each month by DMS.  This will be the invoice for the next month’s spend down amount (for example, the 10/02/02 invoice is for the November 2002 spend down).  The invoice gives the claimant the option of paying in the spend down amount to DMS or submitting bills to the caseworker.  The invoice will instruct the claimant to call the Premium Collections Unit at 1-877-888-2811 for questions about a payment.

PAY-IN OPTION 

The claimant may choose to meet their spend down by the existing method of submitting expenses or the new pay-in option.  The pay-in option allows claimants to meet their spend down by making a monthly payment of their spend down amount to the State.  If the claimant pays in, DMS will create a coverage period on the MSPI screen that begins on the first day of the month for which the claimant is paying.  If the claimant pays for the next month prior to the end of the current month, there will be no end date on the coverage period.  If a payment has been missed, the MSPI screen will show the coverage dates with a begin and end date (the last day of the month they paid for).  If they choose pay-in, they may pay by sending a check (or money order) each month to DMS or having the spend down amount automatically withdrawn from their bank account each month.

Claimants who pay-in will have continuous coverage as long as payment is received prior to the first day of the month for which the claimant is paying.  As long as the case remains open, a claimant may pay-in retroactively for any month up to twelve months after the invoice for that month was sent.  If the payment is received after a month has ended, the DMS will create a coverage period on MSPI beginning the first day of the month and ending the last day of the month.

Claimants have the option of changing the method in which they meet their spend down each month.  They make the choice by sending the payment to DMS or bills to the caseworker.  For those months that the claimant does not pay-in or submit bills, they are not covered.

Pay-in option for new approvals

Once a claimant has eligibility established on all factors other than meeting spend down, the caseworker will send an initial approval letter that explains how to access coverage for the current and prior months.  The first month the claimant has the option to pay-in will be the month of approval.  The approval letter will instruct the claimant to submit bills to the worker for the months prior to the month of approval.  DMS will send all new claimants an invoice for pay-in the month of approval that gives them the option of paying-in or sending bills to the caseworker.

Pay-in by automatic withdrawal

Claimants will be given the option of filing a form (copy attached) with DMS to have their spend down amount withdrawn from an existing bank account.  Withdrawals will be made on the 10th of each month.  The claimant will receive a monthly notification of withdrawal from DMS.  If a problem with the withdrawal occurs, DMS will send a letter informing the claimant that their Automatic Withdrawal was returned.  Reasons for the return and instructions on how to resume or correct the problem are included in the letter.

Caseworkers are to send an automatic withdrawal form and instructions with the initial spend down approval letter.

Pay-in by other agencies 

Some other agencies, such as Department of Mental Health, may choose to pay the spend down amount for some of their clients.  Agencies interested in this process will work with DMS to identify clients the agency intends to pay for.  The MSPI screen will show these persons as having continuous coverage due to pay-in by the agency.  It will also show what agency paid the spend down for the claimant.

CONVERSION PROCEDURES

Coverage for July, August and September 2002 spend down applications will still be based on a quarter.  An end date of September 30, 2002, October 31, 2002 or November 30th, 2002 would be entered by the caseworker in field 32 of IMU5 based on the application date.  On September 16th, invoices for the October spend down amount will be mailed to all active spend down claimants with a September 30, 2002 end date.  The invoice will give the claimant the option of sending incurred expenses to the caseworker or paying the spend down amount.

On September 21, 2002, IM-DP will remove the end date from all spend down cases with a 09/30/02 end date.  The system will no longer allow a 09/30/02 end date to be entered by the caseworker after 09/20. On October 1, 2002 the IMU5 system will no longer allow an end date to be entered on any spend down approval.

On September 30, 2002, DMS-DP will create coverage periods on the MSPI screen for all spend down recipients with an end date of 10/31/02 or 11/30/02. If the end date is 10/31/02, the coverage will be 10/01/02 through 10/31/02 with zero client liability.  If the end date is 11/30/02, two coverage periods  (10/01/02 through 10/31/02 and 11/01/02 through 11/30/02) with zero liability will be created.

Any pending July 2002 applications approved after 09/30/02 will receive July through September coverage based on the Title XIX begin date the worker enters in IMU5.  The claimant would have coverage from that date through 09/30/02.  Coverage for dates after 09/30/02 will have to be entered by the worker on the MSPA screen (unless the claimant pays in).

EXAMPLE:  Claimant applied 07/30/02. On October 2,2002 claimant provides July through September bills and worker determines he met spend down on 08/23/02.  Worker authorizes coverage for 08/23/ through 09/30 by entering 08/23/02 as the TXIX begin date in field 13E of the IMU5.  On October 3, claimant also provided bills for services on October 2,2002 which met the October spend down.  On 10/03 the caseworker would use the MSPA screen to enter coverage for 10/02/02 through 10/31/02.

EXAMPLE:  Claimant applied 08/02/02 and supplied medical bills on 10/14/02 that met spend down amount for the quarter August through October.  spend down was met 10/03/02.  The caseworker will enter the 10/03/02 as the begin date in field 13E of the IMU5 and approve the case.  The system will create coverage on the MSPI screen from 10/03/02 through 10/31/02 with zero liability.  If the claimant had met the spend down in either of the two proceeding months, the begin date entered on the IMU5 by the worker would authorize coverage on IXIX through 09/30/02 and the system would authorize the coverage for 10/01/02 through 10/31/02 on the MSPI screen with zero liability.

EXAMPLE:  Claimant applied 09/20/02 and met spend down 10/31/02.  The caseworker will enter 10/31/02 as the TXIX begin date in the IMU5 system.  The system will create two coverage periods with zero client liability on MSPI; one for 10/31/02 through 10/31/02 and one for 11/01/02 through 11/30/02.

For applications taken in November with prior quarter, the spend down for August through October will be based on the quarter.  The worker will enter the date spend down was met in the prior quarter as the begin date in IMU5.  The claimant will have coverage from that date through September 30, 2002.  The system will authorize October coverage by creating a coverage period on MSPI of 10/01/02 through 10/31/02, with a zero client liability.  If the August through October spend down is not met until sometime in October, the worker will enter a begin date of the date spend down was met in field 13E of the IMU5.  The system will create a coverage period from the date spend down was met through 10/31, with zero claimant liability.

NEW APPLICATIONS 

Effective October 1, 2002, all new MA applications will be approved using the IMU5 screen as soon as eligibility is established on all factors, other than meeting spend down.  The caseworker will enter the first day of the first month the claimant was eligible for MA in field 13E.  Upon receipt of verification that spend down has been met with incurred expenses for a month, the worker will enter coverage on the MSPA screen.  Coverage must be entered no later than two working days after the worker receives verification of that spend down has been met. The MSPA Screen cannot be entered on the same day the approval is entered in IMU5.  If bills to meet spend down are received prior to approval of the case, enter the MSPA screen the day after the approval is entered in IMU5. 

The caseworker will send an approval letter notifying the claimant they have been approved for spend down, but Medicaid coverage will not begin until the spend down is met.  The letter will inform the claimant of the spend down amount and the months for which they can receive coverage by meeting spend down.  If the worker has already received bills to meet spend down for some of the months, the letter includes the dates of coverage for those months.

Note: A revised approval letter will be issued in a separate Memorandum.

PRIOR QUARTER ON DECEMBER 2002 AND LATER APPLICATIONS

Prior quarter will continue to be available to the spend down claimant.  Each of the three prior quarter month’s medical expenses will be compared to that month’s spend down separately.  Using this process, it may be that the claimant will be eligible for one, two, or all three months, sometimes not consecutively.  As soon as the worker receives bills to meet spend down for a prior quarter month, the MSPA screen needs to be entered for that month.  The caseworker is not to wait for the claimant to meet the present (or other prior quarter) month’s spend down.

For applications taken in December with prior quarter, the spend down for September through November would be based on monthly periods.  If the claimant met the spend down for September, the worker will enter the date in September that it was met as the TXIX begin date of eligibility in IMU5.  The claimant will have coverage from that date through 09/30/02.  If the claimant did not meet spend down for September, the worker will enter 10/01 as the eligibility begin date in field 13E of the IMU5.  For coverage after September 30th, coverage will have to entered by the worker on MSPA (or the system if pay-in) for each month the claimant met spend down.

• Review this memorandum with appropriate staff.

 
• Follow the procedures outlined in this memorandum to determine eligibility and Medicaid coverage for MA spend down cases beginning October 1, 2002.