Adult Medicaid Manual MA-2360 MEDICAID DEDUCTIBLE

IV. ALLOWABLE CHARGES

A. Medical Expenses Paid By A Third Party (Also see V., Below)

A medical expense paid by a third party other than the a/r or a financially responsible person may not be applied to the Medicaid deductible, EXCEPT inpatient hospital or PRTF bills (see IV.D.-G., below) and a medical expense paid by a public program of state, county, or city government (see III.C., above,).

REVISED 01/01/09 – CHANGE NOTICE 04-09

(IV.)

B. Medical Expenses Applicable To A Deductible

Charges which may be applied to the deductible include, but are not limited to, the following:

1. Medically related services recognized by state tax law;

2. Professional medical services provided by physicians, dentists, therapists, hospitals, clinics, laboratories, or other providers of medical services, including cost of care in approved level in nursing facilities during PLA deductible month;

3. Prescribed medications, over-the-counter non-prescription drugs, and medical supplies, such as aspirin, cold medicines, alcohol, bandages, absorbent pads for the incontinent, and injection syringes and needles, etc.;

4. Medical services incurred during a prior authorized period that are not covered by Medicaid or that are in excess of the allowed coverage (e.g., prescriptions in excess of 6 per month, eyeglasses replaced in less than 1 year, etc.), provided they remain unpaid (see III.D., above);

5. Medically related transportation (actual cost or .25 per mile as allowed by state tax law);

6. Medical equipment, such as eyeglasses, hearing aids, dentures, crutches, braces, etc., that are not paid by Medicaid or other insurance;

7. Health insurance co-payments and deductibles, if not covered by any other third party, and Medicare Part B premiums through the first month of Medicaid authorization; and

8. Private health insurance premiums if the a/r will not be reimbursed.

a. Health insurance premiums are incurred on the date the payment is due regardless of what months or period of coverage the premium covers.

b. Do not prorate premiums for more than one month of coverage to a monthly amount.

c. Insurance premiums cannot be "rolled over" to a subsequent c.p. UNLESS the premiums are unpaid and meet the requirements for bills incurred prior to a current c.p. (See III.D., above.)

d. If health insurance premiums have been deducted from earned income either as a standard or actual work-related expense, do not apply the cost of the premiums to a Medicaid deductible.

REISSUED 01/01/09 – CHANGE NOTICE 04/09

(IV.)

C. Order Of Charges Applied To The Deductible

1. First apply the total unpaid balance of medical expenses incurred prior to the c.p. (old bills) which have not previously been counted and remain unpaid. Deduct these types of charges on the first day of the c.p., ongoing or retroactive. (See III.D., above.)

2. Next, apply charges which are incurred during the c.p. in chronological order. This means day by day, in the order in which they are incurred.

3. Apply charges for medical services which are not covered by Medicaid before applying charges for medical services which are covered by Medicaid.

4. Apply expenses as follows when there are charges for both covered and non-covered expenses incurred on the same date:

a. Health insurance premiums, including Medicare Part B for applicants, through the month of authorization for Medicaid. (Once the individual is authorized, Medicaid continues to pay the Part B premium until the individual is terminated from Medicaid.)

b. Medical services not covered by Medicaid, such as medically related transportation, non-prescription drugs, etc.

c. Medical services covered by Medicaid. (Refer to MA-2905, Medicaid Covered Services.)

d. When the service is inpatient hospitalization or PRTF, see IV.D.-G., below.

5. A "package fee" (other than for inpatient hospital charges) is a charge for a "package" of medical services. A "package fee" is often charged for prenatal and delivery charges. Also, some dental or orthodontic services are charged as a package. Unless the provider can break out the actual fee for each office visit/service in the "package", the "package fee" can be applied to the Medicaid deductible in one of the following ways:

a. At the point that the entire "package" of services has been completed or provided, apply the total amount of charges for the "package;" OR

b. As payments are made towards the bill, apply the amount of the payment on the date the payment is made. Any unpaid balance on the package may be applied only after completion of the "package" of services.

6. Authorize on the date the amount of the medical charges equals the amount of the deductible, provided all other factors of eligibility are met. If a hospital stay is involved, see IV.D.-G., below.

REVISED 04/01/02 – CHANGE NOTICE 15/02

(IV.C.)

7. If an additional medical bill is presented after a case has been authorized, determine whether it will result in an earlier authorization.

a. Ongoing Case

(1) If the bill is presented during the c.p., and the deductible is met on an earlier date, authorize the earlier day(s) according to instructions in the EIS USERS MANUAL.

(2) If the bill is presented after the c.p., apply in the subsequent period(s), if still unpaid. (See III.D., above.)

(3) Send an adequate notice to notify the individual of the action taken.

b. Terminated Case

(1) If the bill is presented within 12 months of the termination date, and the deductible is met on an earlier date, authorize the earlier day(s) according to instructions in the EIS USERS MANUAL.

(2) If an override of the time limit for filing claims is needed, refer to MA-2395, Corrective Actions and Responsibility for Errors, for procedures.

(3) Send an adequate notice to notify the individual of the action taken.

8. If medical bills sufficient to meet the deductible are presented on an ongoing case that was certified but not authorized,

a. Determine the date the deductible was met; and

b. Authorize according to instructions in the EIS USERS MANUAL.

9. If a change in situation results in a new deductible, apply in the first month of the new deductible period any unpaid bills not previously counted and which meet the requirements in III.D., above.

D. Applying Inpatient Hospital or PRTF Charges to a Deductible - General

1. Admission to a hospital for observation is an outpatient service; do not treat as an inpatient charge.

NOTE: Apply outpatient hospital or PRTF bills to a deductible following policy for medical bills other than inpatient bills.

2. When a charge for inpatient hospitalization or PRTF was incurred prior to c.p., it is an old bill. Follow policy in III.D. Do not apply the policy in this item (IV.D.-G.).

(IV.D.)

3. When an a/r with a deductible or a person who is financially responsible for him is hospitalized during the c.p. for which eligibility is being determined, determine how the bill is applied to the deductible based on the following factors:

• To whose deductible is the bill being applied?
• Who is the hospitalized person? Is he the person with the deductible to which the bill is being applied or is he financially responsible for the person with the deductible?
• If he is a financially responsible person, is he also an a/r?

a. These factors determine whether to use the procedures in IV.E., F., or G. to apply the bill to the deductible.

b. Follow instructions in 4.-6. below to determine which procedures to use.

4. Follow procedures in IV.E. for applying a hospital bill to a deductible when:

a. The deductible is for a Medicaid individual, Medicaid child, or a spouse in a Medicaid couple, and

b. The hospitalized person is the same Medicaid individual, the same Medicaid child, or a member of the same Medicaid couple.

5. Follow procedures in IV.F. for applying a hospital bill to a deductible when:

a. The deductible is for a Medicaid individual with an ineligible spouse or for a Medicaid child, and

b. The hospitalized person is the financially responsible ineligible spouse or a parent of the Medicaid child, and

c. The hospitalized person is also an a/r with a deductible.

6. Follow procedures in IV.G. for applying a hospital bill to a deductible when:

a. The deductible is for a Medicaid individual with an ineligible spouse or for a Medicaid child, and

b. The hospitalized person is the financially responsible ineligible spouse or the parent of the Medicaid child, and

c. The hospitalized person is not an a/r.

REISSUED 04/01/11-CHANGE NO.07-11

(IV.)

E. Applying Inpatient Hospital Charges of an A/R to His Deductible (See IV.D.4., above to determine if IV.E. applies.)

1. Inpatient hospital charges of an a/r meet his deductible, regardless of length of stay, amount of charges, or other third party liability, unless the a/r is admitted to the hospital and has Medicare Part A coverage.

a. Inpatient PRTF charges of an a/r under the age of 21 meet his deductible regardless of length of stay, ultimate amount of charges, Medicare coverage or other third party liability. PRTF admissions are not covered by Medicare.

b. If the a/r does have Medicare Part A coverage and is admitted to a hospital, apply only the amount of the Part A deductible to the Medicaid deductible.

(1) The Part A deductible is due on the date of admission under DRG only when a new Medicare benefit period has begun. (See V.C.1., below.) Determine from contact with the a/r or the hospital whether there has been a previous hospitalization in the last 60 days and whether the Part A deductible is applicable to the current hospitalization. Apply the total Medicare Part A deductible toward the Medicaid deductible on the admission date only if the a/r is responsible for paying it.

(2) Apply the Part A deductible amount to the Medicaid deductible on the date of admission, prior to applying other Medicaid covered charges incurred on the same date.

(3) If the Part A deductible meets the Medicaid deductible, authorize the a/r effective the date of admission. The deductible balance is the amount of the Medicare Part A deductible, or the amount of the Medicaid deductible remaining on the date of admission, whichever is less.

(4) If the Part A deductible does not meet the Medicaid deductible, or if the a/r does not owe the Part A deductible because he had a prior hospitalization, continue applying other charges to the deductible, following procedures in IV.C.4., above, until the deductible is met.

(5) If the Medicaid deductible is met during the hospitalization but after the date of admission, authorize effective the date the deductible is met.

(a) If the Medicare Part A deductible is applied to the Medicaid deductible, the deductible balance is always the amount of the Medicare Part A deductible. (See VII.A.2., below.) This is the amount owed by the a/r to the hospital.

REVISED 04/01/11-CHANGE NO.07-11

(IV.E.1.b.5)

(b) If the Part A deductible was not applied, the deductible balance is always 0. The a/r does not owe for any of the hospital charges.

NOTE: Under DRG, the entire hospital bill will be paid by Medicare and Medicaid, less the deductible balance, if the a/r is authorized on any day during the hospitalization.

(6) If the deductible is met during the hospitalization, complete a DMA-5020.

(a) Medicaid authorization is the date the deductible is met (the same date entered in EIS), and

(b) The amount of "Patient payment due the hospital" entered in item 5.a. is the amount calculated in IV.E.1.b.(3)-(5), above.

EXAMPLE 1: Mr. Dunn has a deductible and has Medicare Part A. He enters the hospital on 7/5 and remains until 7/12. The amount of his deductible remaining on the date of admission is $3,450. The Part A deductible of $1,132 is applied on 7/5 leaving $2,318 remaining. Mr. Dunn's out of pocket expenses during his hospital stay total $1,050. After his hospital stay he still has $1,268 of his deductible left to meet.

EXAMPLE 2: Ms. Horowitz has a deductible and has Medicare Part A. She enters the hospital on 8/2 and remains until 8/27. The amount of her deductible remaining on the date of admission is $459. The Part A deductible of $1,132 is applied on 8/2 and she meets her deductible. Ms. Horowitz is authorized effective 8/2 with a deductible balance of $459.

EXAMPLE 3: Ms. Wright has a deductible and has Medicare Part A. She enters the hospital on 6/25 and remains until 6/30. The amount of her deductible remaining on the date of admission is $1,155. The Part A deductible of $1,132 is applied on 6/25 leaving $23 remaining. Ms. Wright's share, after Part B, of the doctor’s charges meets her deductible on 6/26. Ms. Wright is authorized effective 6/26 with a deductible balance of $1,132.

2. If the a/r does not have Medicare Part A:

a. Authorize the a/r (or Medicaid couple) effective the date of admission to the hospital or PRTF.

b. To determine the deductible balance:

(1) Determine the amount of the deductible remaining on the date of admission.

04/01/02

(IV.E.2.b.)

(2) Subtract the charges for any medical services not covered by Medicaid incurred on the day the deductible is met; e.g. health insurance premiums, non-prescription drugs, etc.

Refer to MA-5100, Services Covered by Medicaid.

EXAMPLE: Mr. Jones is certified February through July. deductible is $1836. He is hospitalized on April 12. He does not have Medicare Part A. Prior to April 12 he incurred $747 in medical bills to apply to his deductible. He is authorized effective April 12 and his deductible balance is $1089.

c. Enter this amount in EIS as the deductible balance.

d. Complete a DMA-5020.

(1) Medicaid authorization is the date of admission (the same date as entered in EIS), and

(2) The amount of "Patient payment due the hospital" entered in item 5.a. is the amount calculated in IV.E.2.b., above.

3. Insurance

a. When the a/r has Medicare A, his hospital claim will be billed to Medicare first then crossed-over to Medicaid which will deduct the Medicaid deductible balance entered in EIS from payment.

b. If the a/r has private insurance, be sure that it is on file in EIS so that it will pay before Medicaid. His hospital claim must be billed to insurance before Medicaid pays. Medicaid will pay the remaining amount after deducting the deductible balance entered in EIS.

4. If the recipient met his deductible with hospitalization but a change in situation causes an increased deductible, he must meet the additional deductible to be authorized for any remaining portion of the c.p.

F. Applying Inpatient Charges of an A/R Parent or Ineligible Spouse to the Deductible of His Child or Spouse (See IV.D.5., above to determine if IV.F. applies.)

When an a/r is also a financially responsible parent or spouse for his child/spouse with a separate deductible, and the a/r has an inpatient hospitalization during the current c.p., do not assume the a/r's hospital bill will meet the deductible for his child/spouse. How the bill is applied to the child/spouse depends upon whether the hospitalized a/r has Medicare Part A and whether the hospitalization meets his own deductible.

1. Follow instructions in IV.E., above to apply inpatient hospital or PRTF charges to the a/r's own deductible (or MA-3315, Medicaid Deductible IV.E. if he is an MAF a/r).

(IV.F.2.)

2. If the hospitalized a/r does not have Medicare Part A, the hospitalization meets his Medicaid deductible on the date of admission. Treat his deductible balance on the date of admission as a medical bill to apply to the deductible for his child/spouse.

EXAMPLE 1: Father receiving MAD has a deductible. His 10 yr. old child is an MAD child with a deductible. The father is the financially responsible parent of the child. Father has monthly unearned income of $880. Child has monthly unearned income of $600. (Father does not have Medicare Part A coverage.)

The father is hospitalized. Assuming he had no other medical expenses, he would be authorized for MAD on the date of hospital admission. His deductible balance is $3,708. Apply this amount to the child's deductible.

3. If the hospitalized a/r has Medicare Part A (and the admission is not to a PRTF), only the Part A deductible may be applied to his Medicaid deductible. Apply the a/r's hospitalization charges to the deductible of his child/spouse as follows:

a. If the Part A deductible meets the hospitalized a/r's deductible on the date of admission, treat his deductible balance as a medical charge to apply to the deductible for his child/spouse.

b. If the Part A deductible does not meet the hospitalized a/r's Medicaid deductible on the date of admission, apply his Part A deductible amount to the deductible for his child/spouse on the date of admission. Continue applying charges incurred by the hospitalized a/r to his deductible and to the deductible of his child/spouse.

c. If the hospitalized a/r's deductible is met during the hospitalization on any day after the date of admission, and his Part A deductible was applied to his Medicaid deductible, his deductible balance is always the amount of the Medicare Part A deductible. This amount has already been applied to the child/spouse's deductible on the date incurred, therefore do not apply the deductible balance to the child/spouse's deductible.

REVISED 01/01/12-CHANGE NO.22-11

(IV.F.3.)

EXAMPLE 2: Same situation as Example 1, except father has Medicare Part A. He enters the hospital on 1/4 and it is a new Medicare benefit period. Prior to 1/4 he has incurred $500 in medical charges which have been applied to his deductible and to his child's deductible.

Father is hospitalized 1/4 - 1/10. The Part A deductible of $1,156 is applied to his Medicaid deductible on 1/4, the date of admission, leaving $2,076 still to be met. The $1,156 is also applied to the child's deductible. Other charges are incurred on 1/5 and 1/6 totaling $2,024. 1/7 the father incurs a $500 charge which meets his deductible.

Father is authorized on 1/7 with a deductible balance of $1,153. Child's remaining deductible on 1/7 is $516.

G. Applying Inpatient Charges of a Financially Responsible Person Who Is Not an A/R (See IV.D.6. above, to determine if this applies.)

1. Apply inpatient bills of a financially responsible person who is not an a/r on a daily basis as they are incurred to the a/r's deductible.

2. If the inpatient bills were incurred prior to the c.p., follow instructions in III.D., above.