spend down Not Paid by Medicaid

House Bill 1111 is the appropriation bill and includes a provision regarding spend down. It does NOT eliminate spend down or MA.  Specifically, HB 1111 authorizes the state to only reimburse providers for medical expenses that exceed a recipient’s spend down amount. Consequently, Medicaid will not pay for any portion of a person’s spend down amount. 

We currently grant eligibility for the whole day when individuals meet their spend down amount; thus, Medicaid may be paying for some bills that are used to meet spend down.  With this change, Medicaid will only pay those bills that exceed the amount of medical expenses used to meet spend down on the day eligibility begins.

We are developing procedures and system support for these changes.  The computer system will not pay provider claims for any amount of bills used to meet spend down on the first date of eligibility.  In some cases, one bill may be partially the client’s responsibility and partially Medicaid’s responsibility.

Changes to Help Offset the Payment Restrictions

We are planing several changes to lessen the impact of the spend down revision.  Some of these changes require additional actions by staff, and others simplify redeterminations. 

1.  Monthly spend down: We will go from a quarterly to a monthly spend down basis.  Thus, staff will determine the spend down amount for one month and, once met, coverage only goes through the end of that month.

2.  Not Require a Reapplication: Currently, a spend down case closes at the end of the quarter.  The client reapplies by submitting a simplified application form.  The worker then registers that application.  When the client submits the incurred bills, the worker approves the case and sends the client an approval letter.

In the revised method, the client’s case remains open and a "lock-in" screen will be used to show eligibility for coverage.  Once the client submits bills, the caseworker will enter into the "lock-in" screen, the first date of eligibility and the amount of medical expenses used to meet spend down for that date.  The system will put in an end date of the last day of that month and send an approval letter.  The letter tells clients that they are approved and advises them to submit their bills again in the following month.  

3. Pay-In: Clients will be allowed to pay-in their spend down amount to a central collection unit instead of incurring and submitting their medical bills.  This will allow clients on-going medical coverage as long as they pay timely.  

Incurred vs. Paid Medical Expenses

We will continue to count incurred medical expenses to determine eligibility.   Individuals do NOT have to pay for their medical expenses before being considered in meeting spend down.  It is the spend down amount that the state will not pay for after this change begins.  

Effective Date and Notifications

The system programming and procedures should be in place beginning October 1, 2002.   The pay-in provision may not be ready at that time.  Do not implement any of the above changes until notified.  Procedure and policy instructions will be forthcoming at a later date.  We also plan to notify spend down claimants about these changes, possibly in July.
 

• Discuss this memorandum with all appropriate staff.
• Follow current MA instructions.