Adult Medicaid Manual MA-2900 RECIPIENT FRAUD AND ABUSE POLICY AND PROCEDURES

VIII. CALCULATING OVERPAYMENTS

This section provides rules for establishing overpayments and is applicable to all Adult coverage groups. To properly determine an overpayment, the investigator must have full knowledge of all Medicaid programs and access to present and past eligibility policy.

A. General Rules

1. Based on the verified unreported information, determine the period(s) of ineligibility for each assistance unit (a.u.) member. The period of ineligibility may encompass a whole or partial c.p.

2. Redetermine eligibility as if the information had been reported timely by the recipient.

3. Allow time for changes:

a. Allow 10 calendar days for the client to have notified the county dss of the change. For income cases, changes must be reported within 10 calendar days of the receipt of the changed income.

b. Allow another 10 work days for Timely Notice (DSS-8110) to the client of the change in eligibility.

Example: In an ongoing MAA-Q case, client starts working on 07/02/07.  He gets paid monthly and he receives his first paycheck on 08/01/07. The client has until 08/11/07 to report the income. The client reports by the 13th (the 11th is a Saturday). The worker acts on the reported information and sends a notice to the client on 08/14/07. The first month a change could be effected is 09/07.

4. If any a.u. member is determined to be ineligible under the original coverage group, determine if the a.u. member could have been eligible under any other coverage group had the information been reported correctly and timely.

Example: A recipient who is ineligible as Categorically Needy (CN) may be eligible as Medically Needy (MN) with a deductible.

Example: A recipient who is ineligible for MAA-Q may be eligible for MQB-Q or MQB-B. This would decrease the amount of the overpayment.

REVISED 11/01/11 - CHANGE NO. 17-11

(VIII.A.)

5. Use the appropriate resource and income levels for the period of ineligibility. Refer to the MAABD & MQB Income History and the MAABD Reserve History for current and archived Income and Resource Limits.

a. For cases with unreported/changed resources verify available resources as of the first moment of each month.

b. For cases with unreported/changed income, compute eligibility separately for each certification period, using the verified base period income. Project the income over the remainder of the c.p. as if the income had been reported correctly and/or timely by the client.

c. If multiple changes occur, re-budget each change in the order in which it occurred. Refer to MA-2250, V. for an explanation of what constitutes a change in income.

6. Once the period of ineligibility is established, request a Medicaid/NCHC Recipient Profile from the Division of Medical Assistance via the DMA-7063 to establish the overpayment amount.

a. Complete the required information for each member of the assistance unit who is ineligible. For instructions on how to order Medicaid/NCHC Recipient Profiles, refer to section XVI. below.

b. It is not necessary to request a profile for long-term care cases with an understated liability

7. Buy-In for Part A and/or Part B Medicare Premiums

a. Do not include the amount of the Medicare premiums in the overpayment for recipients ineligible due to excess income or transfer of assets.

b. For all recipients who are ineligible due to excess resources or other categorical requirements, include the amount of the Medicare premiums paid during the overpayment period in the total amount of the claims paid to determine the overpayment.

B. Computation of Overpayments due to Excess Income

1. Determine the period(s) in which the recipient was ineligible for CN coverage due to income that exceeded the income limit.

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(VIII.B.1.)

a. The period of ineligibility may encompass a whole or partial c.p., several contiguous c.p.’s, or in the case of multiple changes in income, there may be non-contiguous periods of ineligibility.

b. In determining the point of beginning ineligibility, allow adequate time for changes to have been reported and for appropriate action to have been taken by the county dss.

2. Change Discovered During the Current Certification Period

a. Verify and project changed or unreported income based on policy requirements.

b. If the recipient has an unmet deductible, send a timely notice to increase the deductible. There is no overpayment since the recipient was not authorized for Medicaid.

c. If the recipient is authorized because there is no current deductible or the current deductible has been met, and there is time in the current certification period (c.p.) to take action to revise the deductible, send timely notice to increase the deductible.

(1) If the recipient incurs enough medical expenses to meet the additional deductible prior to the end of the c.p. (including old bills), there is no overpayment.

(2) If the recipient does not incur enough medical expenses to meet the additional deductible, apply all allowable expenses to the additional deductible to determine the amount of the unmet deductible.

(3) Request a Medicaid/NCHC Recipient Profile for the period authorized. Refer to XVI. below for instructions on how to read Medicaid/NCHC Recipient Profiles and determine the amount of claims paid on behalf of the client during the period of ineligibility.

(4) Compare the amount of the unmet deductible to the amount of expenses paid by Medicaid. The overpayment is the lesser of the two amounts.

.

3. If the change is discovered after the c.p. or it is too late in the current c.p. to take action to revise the deductible, determine the overpayment as follows:

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(VIII.B.3.)

a. Verify and project changed or unreported income based on policy requirements.

b. If the original deductible was never met and there was no authorization, there is no overpayment.

c. If the original deductible was met or the recipient had no deductible, send a DSS-8110 giving the recipient 10 work days notice of the additional or new deductible amount.

(1) Allow the recipient the opportunity to provide any additional medical expenses to meet the deductible.

(2) If the recipient meets the additional deductible, there is no overpayment.

(3) If there is an unmet deductible, request a Medicaid/NCHC Recipient Profile for the period of ineligibility.

(4)

Compare the amount of the unmet deductible to the amount of expenses paid by Medicaid during the period of ineligibility. The overpayment is the lesser of the two amounts.

4. Income Example:

05/02/07 – A single woman applied for MAD-N. She reported that her only source of income was $638 from Social Security. Her application was approved with a certification period from 05/01/07 to 04/30/08. The client reported she had a $5,000 unpaid bill from 01/07. Client did not qualify for retro.

05/14/07 – The client began working.

06/18/07 – The client received her first monthly check for $1245 which she did not report. Had client reported her earnings timely by 10 calendar days (6/28/07), and another 10 workdays for a timely notice, the change would have affected her Medicaid beginning 08/07.

01/01/08 – Client’s Social Security increased from $638 to $650.

REISSUED 07/01/08 - CHANGE NO. 16-08

(VIII.B.4)

03/03/08 – The client came to county dss for a redetermination of eligibility. She reported her Social Security increase. During the review, the caseworker discovered through OLV that the client had wages beginning the second quarter of 2007. The client admitted she had been working but had forgotten to report it. The caseworker sent the employer a letter to verify earnings.

03/10/08 – The employer verified the client’s monthly earnings of $1245 beginning in June 2007. Since the income exceeded the CN income limit, Medicaid was evaluated with a deductible. The client was sent a 10 day notice to advise her of the new deductible. The deadline to respond was 03/24/08.

03/20/08 – The client provided the unpaid $5000 unpaid bill from 01/07. Client said she did not expect to have bills to meet the deductible for ongoing eligibility.

04/01/08 – The client was sent a timely notice to terminate benefits effective 04/30/08.

Calculate an overpayment following the rules below:

Rule: Divide a 12-month c.p. into two 6-month c.p.s when there is excess income for CN eligibility.

In this example, the c.p.s were divided as follows: 05/01/07-10/01/07 and 11/01/07 – 04/30/08.

Rule: Verify unreported base period income for each certification period.

Rule: Re-budget using verified income during the overpayment period. Re-budget each certification period separately.

In the first c.p. count the client’s income from 06/07 to 10/07. In the second c.p., budget 11/07 and 12/07 separately from 01/08 - 04/08 because the client’s income changed in 01/08 due to the COLA increase.

Rule: Determine the deductible for each certification period.

REISSUED 07/01/08 - CHANGE NO. 16-08

(VIII.B.4.)

Calculate the deductible as follows:

May 2007 thru October 2007 Deductible months: June 2007 – October 2007	November 2007 thru April 2008 Deductible months: November 2007- December 2007
$638.00 Original RSDI	$638.00 Original RSDI
- 20.00 Deduction	- 20.00 Deduction
= $618.00	= $618.00
$1245.00 Wages	$1245.00 Wages
- 65.00 Earned Income Deduction	- 65.00 Earned Income Deduction
= $1180.00 / 2	= $1180.00 / 2
= 590.00 Net Earned	= 590.00 Net Earned
+ 618.00 RSDI	+ 618.00 RSDI
= $1208.00	= 1208.00
- 242.00 Maintenance	- 242.00 Maintenance
= $966.00 Excess Income	966.00 Excess Income
X 5 Months 06/07-10/07	X 2 Months 11/07-12/07
= $4830.00 Deductible	= $1932.00 Deductible
	January 2008 thru April 2008
The client provided the $5,000 bill	$ 650.00 RSDI-COLA Increase
from 01/07.	-20.00 Deduction
	= 630.00
$5,000	$1245.00 Wages
-$4,830	- 65.00 Earned Income Deduction
$170 Remainder unpaid medical	= $1180.00 / 2
	590.00 Net Earned
	+ 630.00 RSDI
	$1220.00
	- 242.00 Maintenance
	=978.00 Excess Income
	X 4 Months 01/08 to 04/08
	$3912.00
	+$1932.00 Months 11/07-12/07
	$5844.00 Deductible 11/07-04/08
	- 170.00 Remainder unpd medical
	$5674.00 Unmet deductible

The unmet deductible for 11/07 to 04/08 is $5,674.

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(VIII.B.4.)

Rule: Send a DSS- 8110 to notify the client of the new or revised deductible, allowing the client time to provide unpaid bills to meet the deductible.

Since the client provided the $5000 bill from 01/07, she was able to meet the deductible of $4,830 for the first cert period ($5000-$4830= $170). The remainder $170 was applied to the second cert period decreasing the deductible amount to $5,674.

Rule: Determine the amount of claims paid by Medicaid during the periods of ineligibility.

A Medicaid/NCHC Recipient Profile was requested for 11/07-04/08. The Recipient Profile indicated that Medicaid paid $1,500 in medical expenses during ineligible period.

Rule: Compare the amount paid by Medicaid to the amount of the unmet deductible. The amount of the actual overpayment is the lesser of the two amounts.

The total overpayment in this case is $1,500 because it is less than the deductible amount of $5,674.00.

5. If ineligibility is the result of a client error in determining the amount of expenditures for medical care applied to the deductible, the amount of the overpayment is the lesser of:

a. The amount of Medicaid payments made on behalf of the recipient, or

b. The difference in the actual amount of incurred expenses and the amount of the deductible.

Example: The deductible for May-October was $865. Based on the medical charges provided, the recipient was authorized effective June 2. It is later discovered that a $115 charge that had been applied to the deductible was incorrectly applied. (The recipient forged her name on the bill but it was in fact for services rendered to an individual not in the b.u.) The profile shows that $1055 was paid for medical charges during the c.p. Subtract the actual amount of incurred expenses that could be applied to the deductible ($750) from the deductible amount ($865), and compare this amount ($115) to the claims paid ($1055). The lesser amount ($115) is the overpayment amount.

NOTE: This is applicable only if the error was on the part of the client. If the county dss makes an error in applying expenses to the deductible, it is an agency error and cannot be recouped from the client. Therefore no claim should be entered in EPICS.

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(VIII.)

C. Overpayment Methodology for Excess Resources

1. Determine the period(s) in which the recipient was ineligible due to resources that exceeded the reserve limit.

a. The period of ineligibility may encompass a whole or partial c.p., several contiguous c.p.'s, or in the case of reserve fluctuating above and below allowable limits, there may be non-contiguous periods of ineligibility.

b. In determining the point of beginning ineligibility, allow adequate time for changes to have been reported and for appropriate action to have been taken by the county dss.

c. If the recipient states that resources are for burial purposes, apply the burial exclusion policy. This policy can be applied retroactively, allowing the recipient to use cash funds to purchase burial assets and exclude up to the $1500.00 burial exclusion limit. See MA-2230 for detailed information regarding retroactive burial exclusions.

2. Determine excess reserve for each separate period of ineligibility.

a. Verify all resources available to the recipient during each period of ineligibility.

b. Determine the dollar amount by which reserve most exceeded allowable limits during each period in question.

(1) Verify the reserve amount for each month using the first moment of the first day of each month.

(2) Compare the reserve for every month during the period of ineligibility. Use the largest amount in the overpayment calculation.

c. Notify the recipient on the DSS-8110 of the amount of excess reserve in each period of ineligibility and request verification, if any, of reduction of reserve.

3. Determine the amount paid by Medicaid during each separate period of ineligibility.

a. Request a Medicaid/NCHC Recipient Profile via the DMA-7063 to DMA Quality Assurance.

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(VIII.C.3.)

b. If there is more than one period of ineligibility, request a Medicaid/NCHC Recipient Profile for each separate period of ineligibility under the heading entitled "Dates of Service." Refer to XVI. for complete instructions on how to request Medicaid/NCHC Recipient Profiles.

4. Determine the amount of the overpayment.

a. Determine the overpayment for each period of ineligibility separately.

b. The amount of the overpayment for each period of ineligibility is either the amount paid by Medicaid during that period, or the highest dollar amount by which reserve exceeded allowable limits, whichever is less.

c. If there is more than one period of ineligibility, add together the overpayments from each period to get the total amount of the overpayment.

d. If the amount of the overpayment is based on the amount of paid claims, include the amount of Medicare premiums paid during the overpayment period(s). Determine this amount by verifying when the Buy-In became effective. Then multiply the premiums paid by the state, times the number of months the client was ineligible. Refer to the History of Medicare Deductibles, Co-Payments and Premiums, on the DMA website, for current and archived Medicare premiums.

e. If the amount of excess reserve is less than the claims paid as reported on the profile, it is not necessary to include the Medicare premiums as the overpayment is based on the lesser amount of excess reserve.

Example: Recipient was found eligible and authorized June-November with no reserve. It is discovered at a subsequent review that the recipient had a certificate of deposit with a balance of $8,700, resulting in excess reserve of $6,700. Recipient provides verification that reserve was reduced to allowable limits on October 30. The period of ineligibility is June 1-October 30. During this period Medicaid paid $936 in claims plus $183 in Medicare premiums for a total of $1,119. The overpayment is $1,119 as this is less than the amount of excess reserve.

Example: Recipient was authorized March-August with countable reserve of $275. A savings account is later discovered causing excess reserve of $725. During this period Medicaid paid $8,922 in claims. The overpayment is $725, as this is less than the amount of claims paid. Note: It is not necessary to include the Medicare premiums in the amount of the claims paid in this example, as the excess reserve is the lesser amount.

REISSUED 11/01/11 - CHANGE NO. 17-11

(VIII.C.4.e)

Example: MAA-N recipient was found eligible and authorized April-September and October-March. At the next review it is discovered that the recipient failed to report a savings account that caused excess reserve in the amount of $450 from initial authorization. Recipient provides verification that reserve was reduced on September 2. However, by January 1 reserve again exceeded allowable limits by $300.

The first period of ineligibility is April -September with excess reserve of $450. A recipient profile shows a total of $526 paid in claims. The overpayment for this period is $450, which is less than the amount paid in claims.

The earliest the case could have been terminated for the second period of ineligibility was January 31 due to timely notice requirements. Therefore the second period of ineligibility is February - March with $300 excess reserve. A payment history profile shows a total of $45 paid in claims plus $82 in Medicare premiums. The overpayment for this period is $127, which is less than the amount of the excess reserve.

The total amount of the overpayment for both periods of ineligibility is $450 + $127 = $577.

Note: Reserve must be established based on the first moment of the first day of each month.

f. If there are separate periods of ineligibility which are separated by gaps in authorization (not by periods of eligibility), there is only one overpayment based on either the maximum amount of excess resources for the periods or the amount paid by Medicaid for all the periods, whichever is less.

Example: A recipient authorized May-October is terminated at the end of the c.p. due to failure to complete the review. The recipient re-applies and is authorized January-June. At the review at the end of the latter c.p., it is discovered that the recipient had an unreported bank account that caused excess resources during both c.p.'s. The maximum excess resources for May-October were $660 and for January-June were $720. The total amount of claims paid for both periods was $1,095. The overpayment amount is $720 (the lesser of $1,095 and $720).

D. Overpayment Methodology for Transfer of Assets

Depending on when the transfer took place, different procedures apply to overpayments due to Transfer of Assets occurring before or after November 1, 2007. Refer to MA-2240 Transfer of Assets for policy clarification.

REISSUED 07/01/08 - CHANGE NO. 16-08

(VIII.D.)

1. Transfer of asset sanctions applies to institutionalized recipients for payment of cost of care (long-term care) in:

a. Nursing facility (NF) or intermediate care facility for the mentally retarded (ICF-MR), or

b. Swing bed or inappropriate level of care bed in a hospital, or

c. CAP waiver programs, PACE, in addition,

d. After February 1, 2003 and prior to November 1, 2007

In-Home-health Services and supplies for private living arrangement

e. After November 1, 2007

In home health services and supplies for private living arrangement after being sanctioned for institutional services, and a portion of the sanction period remains after the individual stops receiving institutional services. Refer to MA-2240 for procedures and regulations applicable to transfer of assets at the time of the transfer.

2. Three separate calculations are required to determine the amount of the overpayment when the LTC recipient, his financially responsible spouse or his representative does not report transfer of assets:

a. Calculate the overpayment for any period of authorization prior to the transfer in which the recipient was over the allowable resource limit.

b. Based on the date of the transfer calculate the overpayment for the period of the sanction for assistance with cost of care in the institution.

c. Determine eligibility based on PLA budgeting to calculate the overpayment based on the unmet deductible for other medical costs during the sanction period.

3. Determine the amount of any overpayment for unreported assets that exceeded allowable limits prior to the transfer following procedures in VIII.C. above.

4. Determine if the LTC recipient should have been sanctioned for transfer of assets. Refer to MA-2240 V. If no sanction is applicable, the overpayment is computed based on the excess resources prior to the date of the allowable transfer.

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(VIII.D.4.)

a. If the recipient transferred property, determine starting points:

(1) Applications prior to November 1, 2007 – Individuals who first applied for Medicaid in any category on or after February 1, 2003, but prior to November 1, 2007, the starting point is the date of the first application for Medicaid.

(2) Applications on or after November 1, 2007 – Individuals who first applied for Medicaid in any category prior to February 1, 2003 or on or after November 1, 2007, the starting point is the earliest date the recipient is institutionalized or request CAP, PACE, and applies for Medicaid.

b. The lookback date is the earliest time on or after which all transfers of assets are reviewed for a recipient requesting or receiving institutionalized services. See dates below:

Lookback Dates

	Starting point prior to 11/01/10	Starting point 11/01/10 or later but prior to 11/01/12	Starting point 11/01/12 or later
Lookback Date	36 months prior to starting point for most transfers. 60 months for transfers to annuities or trust	11/01/07 for most transfers; 5 years prior to starting point for transfers to trusts and annuities	5 years prior to starting point for transfers of all types

5. Determine the sanction period.

a. Transfers occurring prior to November 1, 2007 – The length of the sanction begins with the month of transfer. Refer to MA-2240 XII.B. for detailed instructions.

(1) Total the uncompensated value of transfers in the lookback period

(2) Divide the total uncompensated value by $5,000.

(3) Round this number to the lowest whole number

(4) The result is the number of months of sanction

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(VIII.D.5.)

b. Transfer occurring on or after November 1, 2007 - Refer to MA-2240 XII C. and to the DMA-5181, Calculating Penalty Period, to assist in calculating the sanction period.

6. If a sanction is applicable, determine the amount Medicaid paid for cost of care during the sanction period. Request a Recipient Profile via the DMA-7063. Refer to XVI. for instructions on how to request a Medicaid/NCHC Recipient Profile.

a. The DMA Recipient Investigations Coordinators will review the Recipient Profile to determine which claims are considered non-covered during the transfer of assets sanction.

b. The Coordinator will prepare a letter for the investigator, detailing the amount of the non-covered claims to be included in the overpayment. If there are questions regarding claims, please contact DMA at 919 647-8000.

7. Determine the total amount of the overpayment for the sanctioned period.

a. Compare the amount of the uncompensated value of the transferred assets to the total amount Medicaid paid for cost of care during the sanction period.

b. The overpayment is the lesser of these two.

8. Compute eligibility for other medical services for each c.p. in the sanction period based on PLA budgeting. If a deductible results:

a. Determine the amount Medicaid paid for medical services other than cost of care during the sanction period by requesting a Medicaid/NCHC Recipient Profile.

b. Compare the amount of the unmet deductible for each c.p. to the amount of claims paid for other medical services in each c.p. The overpayment is the lesser of the two.

c. If there is more than one c.p. add the totals for each together.

Note: If the sanction period has not been exhausted, apply the remaining months of sanction to the ongoing case and rebudget based on PLA budgeting.

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(VIII.D.)

9. Add the amount of the three calculations, excess reserve, sanction period and unmet deductible. Compare this total to the amount of the uncompensated transfer and/or excess reserve, whichever is greater. The overpayment amount is the lesser of the two. The total overpayment can never exceed the total amount of the uncompensated transfer or the excess reserve, whichever is greater.

10. Transfer of Assets Examples

a. Transfer prior to November 1, 2007

07/11/07 – A single individual transfers a Certificate of Deposit worth $24,000.

08/01/07 – The individual enters a nursing facility.

08/13/07 – The individual applies for MAA for help with cost of care. He reported no resources and income of $875 from SSA. The case was authorized effective 8/01/07-1/31/08

12/05/07 - The county dss verifies that the individual had transferred the Certificate of Deposit worth $24,000. The case is referred to Program Integrity.

Step 1- Determine if there was excess reserve prior to the transfer.

There was no excess reserve to consider because the transfer was made on 07/11/07, prior to the application date of 08/13/07.

Note: If transferred assets are returned to the recipient, do not apply a sanction. Count the value of the returned assets for the entire period including the time the resources were not in the client’s name.

Step 2- Determine the sanction period.

The starting point in this case is 08/13/07, the date of the first application for Medicaid. Look back date is 08/13/04, 36 months prior to the starting point.

1.) Total uncompensated transfers $24,000__

2.) Divide by private NF rate $_5,000__

3.) Equals number of sanction months __ 4.80__

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(VIII.D.10.a)

The 4.80 is rounded down to 4. The four-month sanction begins from the month of transfer July 2007 to October 2007.

Step 3 – Determine the amount of the overpayment for the sanctioned period.

The agency verified through DMA that the total paid for “cost of care” from 8/1/07 – 10/31/07 was $20,000.00. The $20,000 is less than the $24,000 transfer amount. The amount of $20,000 will be used to compute the overpayment. Other paid expenses such as Rx, are not included at this, at this point.

Step 4 - Budget PLA with a deductible for the ineligible months

The client is ineligible for full Medicaid because her $875 SSA benefits exceeds income limit. Therefore, we calculate a deductible.

Ineligible months in c.p: 8/01/07-10/31/07

$ 875

-242 PLA Maintenance
= $ 633 Excess Monthly Income
x 4 Months
= $ 2,532 Deductible for 08/07-10/07

Client’s total deductible for the four months he is ineligible for cost of care is $2,532. The cost of care is not an allowable expense toward the PLA deductible during the sanction period.

According to the Medicaid Profile, the amount Medicaid paid for medical services other than the cost of care from 08/07 – 10/07 was $200.

Client was advised of the deductible and given the opportunity to provide old or new bills. The client did not provide bills. Since the $200 Medicaid paid is less than the deductible amount of $2,532, the $200 will be used to compute the overpayment.

Step 5 – Add the amount of the three calculations to determine the overpayment

$ 0.00 Excess Reserve
$20,000.00 Cost of Care expenses
$ 200.00 Cost of Services for other than cost of care
$20,200.00 Total Overpayment

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(VIII.D.10.a)

The overpayment amount of $20,200 is entered into EPICS with Service Code 11. The individual is eligible for Medicaid for LTC 11/01/07 – 01/31/07.

b. Transfer on or after November 1, 2007.

07/11/08 – A single individual transfers a Certificate of Deposit worth $24,000

08/01/08 – The individual enters a nursing facility.

08/13/08 – An individual applies for MAA for help with cost of care. He reported no resources and income of $875.00 from SSA. The case was authorized effective 8/01/08-1/31/09

12/05/08 - The county dss verifies that the individual had transferred the Certificate of Deposit worth $24,000. The case is referred to Program Integrity.

Step 1- Determine if there was excess reserve prior to the transfer.

There was no excess reserve to consider because the transfer was made on 07/11/08, prior to the application date of 08/13/08.

Step 2- Determine the sanction period

The starting point in this case is 08/01/08, the earliest date the individual was institutionalized and applied for Medicaid. The Lookback date is 08/01/05, 36 months prior to the starting point.

1.) Total uncompensated transfers $24,000__

2.) Divide by private NF rate $_5,000__

3.) Equals number of months ___4.84__

4.) Determine whole month sanction period by

Counting forward from date otherwise eligible

08/01/08 through 11/30/08

5.) Enter fractional month (from 3 above) and multiply by 31.

.84 X 31 = 26.04__

6.) Add 26 days to the sanction in 4 above. Drop partial day.

08/01/08 through 12/26/08

The total sanction period is from 08/01/08 through 12/26/08.

Step 3 – Determine the amount of the overpayment for the sanctioned period

REVISED 03/01/11 - CHANGE NO. 05-11

(VIII.D.10.b.)

The agency verified through DMA that the total paid for “cost of care” from 8/1/08 – 12/26/08 was $25,000.00. The cost of care amount of $25,000 is more than the $24,000 the recipient transferred. The $24,000 will be used to compute the overpayment. Other paid expenses such as Rx, are not included at this, at this point.

Step 4 - Budget PLA with a deductible

The client is ineligible for full Medicaid because her $875 SSA benefits exceeds income limit. Therefore, we calculate a deductible.

PLA Certification period: 8/01/08-12/31/08

$ 875

-242 PLA Maintenance
= $ 633 Excess Monthly Income
x 5 Months
= $ 3,165 Deductible for 08/07-12/07

Client’s total deductible for the five months he is ineligible for cost of care is $3,165. The cost of care is not an allowable expense toward the PLA deductible during the sanction period.

According to the Medicaid Profile, the amount Medicaid paid for medical services other than the cost of care from 08/08 – 12/07 was $200.

Client was advised of the deductible and given the opportunity to provide medical bills. The client did not provide any bills to reduce his deductible. The $2,200 Medicaid paid is less than the deductible amount of $3,165. The $2,200 will be used to compute the overpayment.

Step 5 – Add the amount of the three calculations to determine the overpayment

$ 0.00 Excess Reserve
$24,000.00 Cost of Care expenses
$ 2,200.00 Cost of Services for other than cost of care
$26,200.00 Total Overpayment

The overpayment amount of $26,200 is entered into EPICS with Service Code 11. The recipient is eligible for Medicaid for LTC from 12/27/08 – 01/31/09.

REISSUED 03/01/11 - CHANGE NO. 05-11

(VIII.)

E. SA Money Payment Cases

1. If a SA recipient is found to be ineligible for money payment, assess the recipient's eligibility for Medicaid under any other coverage group during the period of SA ineligibility.

2. If the recipient would have continued to be eligible for Medicaid only there is no overpayment.

3. If the recipient would have been eligible for Medicaid with a deductible, refer to the instructions in B. above to determine if there is a Medicaid overpayment.

4. Refer to SA manual for SA overpayments. The cash portion of SA overpayments does not go into EPICS

F. Long Term Care Cases

When there is a change in patient monthly liability (pml) due to unreported income, calculate the overpayment as follows:

1. Verify the amount of the unreported income.

2. Determine when the pml would have changed had the income been reported timely, allowing time for notification of the change.

3. If applicable, correct the ongoing pml, allowing for timely notice of the change.

4. If the correct liability is less than the nursing facility’s Medicaid reimbursement rate, the amount of the overpayment is the total of the difference between the original pml and the correct pml for each month.

5. As a rule it is not necessary to request a recipient profile for patient liability.

Example: A recipient with income-producing property is authorized for January-June with a pml of $350 per month. It is discovered and verified on May 5 that the recipient's countable income increased by $50 per month beginning March 1 because of an increase in the rent she is paid. The pml is revised effective June 1, leaving an understated liability for April and May. Had the change been reported within 10 days by the recipient's representative and the county dss given timely notice, the pml would have been increased effective April 1. The total overpayment is $100, $50 for each of the 2 months.

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(VIII.F.)

6. If the unreported income causes the recipient's total countable monthly income to exceed the nursing facility’s Medicaid reimbursement rate, private rate, or all other predictable medical expenses (MA-2270, V.B.), then the recipient was ineligible for assistance with the cost of care. Budget the recipient PLA with a deductible. Refer to MA-2270, XIII.

a. Request a Medicaid/NCHC Recipient Profile for the period of ineligibility for payment of cost of care. Follow the instructions in XVI., Medicaid Profiles, to determine the total amount paid by Medicaid for “Room and Board and Ancillary charges”.

b. Compute a monthly deductible, subtracting from the recipient's income any allowable deductions.

c. Beginning with the first month of ineligibility for help with cost of care, multiply the monthly deductible by the number of ineligible months to arrive at the total deductible. If the income varied, use the maintenance allowance adjustment to compute the total deductible.

d. If there was no deductible the recipient would have been authorized for Medicaid except for cost of care. The overpayment is the amount paid for cost of care.

c. If there is a deductible, compute the overpayment as follows:

(1) Apply any medical expenses not covered by Medicaid to the deductible.

(2) Compare the remaining unmet deductible to the amount of claims paid for other medical services. The overpayment is the lesser of the two amounts.

(3) Add this amount to the amount paid for cost of care. This is the total overpayment.

7. In some cases Medicaid pays less than the assigned PML because Medicare covered the hospitalization, except for the Part A deductible, and the SNF charges for a limited period of time. See MA-2270, XIV., and Table B, for more details about Medicare coverage in hospitals and SNF.

a. It is not unusual for a person to go from the hospital to the LTC facility and for Medicare to continue to pay. When the LTC client has Medicare, and you discover an understated liability, ask the client or Nursing Facility about any hospitalizations or Medicare covered days during the overpayment period.

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(VIII.F.7.)

b. If Medicare payment is involved request a recipient profile to determine what was paid by Medicaid. Compare this total amount to the total understated liability. The lesser of the two amounts is the Medicaid overpayment.

G. Evaluating Ineligible M-AABD Recipients for MQB-B

1. Unreported Income

When a recipient is determined to have been ineligible for full MAABD or MQB-Q coverage due to unreported income, evaluate the recipient's eligibility for MAABD-M and MQB-B during the period of ineligibility.

a. Using actual verified income, re-compute the recipient's eligibility for full coverage. Refer to B. above for calculating overpayments based on revised deductibles.

b. Compare the verified income to the income limits for MQB-B to determine if the recipient continues to be eligible for limited coverage.

c. If ineligible for MQB-B, evaluate for all other MQB classifications, and for MWD.

d. Notify the recipient on the DSS-8110 of their MAABD-M deductible status.

e. Also advise the recipient on the same DSS-8110 of their status for other MQB classifications.

2. Unreported Resources

When a MAABD-N recipient is determined to have been ineligible for full coverage due to unreported resources, evaluate the recipient's eligibility for MQB-Q and MQB-B during the period of ineligibility.

a. Compare the actual verified resources to the MQB-B reserve limits to determine if the recipient continued to be eligible for limited coverage.

b. Notify the recipient on the DSS-8110 of any change in current eligibility, including their eligibility for MQB-Q.

3. Request a recipient profile for the overpayment period.

a. If the recipient is eligible for MQB-Q, you will count only the total paid for non-Medicare covered services in the overpayment amount. See XVI. Medicaid Profiles for further instructions.

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(VIII.G.3.)

b. Medicare covered services are what we call crossover claims (claim types O, X, and W). Do not count benefits paid on these claim types. The remaining claim types are non-Medicare covered claims and any benefits paid on these would count toward the overpayment. See XVI., Medicaid/NCHC Recipient Profile, for further instructions.

c. If the recipient is eligible for MQB-B, MQB-Q, MQB-E, or MWD only, all payments made for medical services are considered an overpayment.

d. If the client would have had a deductible, compare the amount Medicaid paid to the amount of the deductible. The overpayment is the lesser of the two.

f. If the recipient would have been eligible for MQB-Q during the overpayment period, the amount paid for MQB-Q covered-services are excluded from the overpayment.

Example: Recipient was authorized for MAA Q. After applying the Burial Exclusion, countable resources verified at application were $800, which was less than the allowable limit of $2,000. During the review process it is verified that the recipient had an unreported $3,000 certificate of deposit. This caused $1,800 excess reserve ($3,800 - $2,000) for MAA for the entire c.p.

However, $3,800 is less than the $4,000 reserve limit for MQB-Q. Therefore the recipient remains eligible for MQB-Q for the entire c.p. The Medicaid/NCHC Recipient Profile indicates that Medicaid paid a total of $750 for MQB-Q covered services and $183 for non-MQB-Q covered services. The amount of the overpayment is $183, the lesser of the amount paid for non-MQB-Q covered services and the excess reserve.

H. MQB-Q Ineligible Cases

1. If a recipient is found to be ineligible for MQB-Q due to unreported resources, evaluate for MAABD-M. Follow the instructions in C. above to calculate the amount of the overpayment. These recipients are not eligible for MAABD-N as the reserve limit is lower for that coverage group. These recipients may be eligible for MAABD-M with a deductible if reserve is reduced during the period of ineligibility.

2. If a recipient is found to be ineligible for MQB-Q due to unreported income, evaluate the recipient's eligibility for MAABD-M with a deductible. Follow the instructions in B. above. If the recipient is unable to meet the deductible, the amount of the overpayment is the lesser of the amount Medicaid paid or the amount of the deductible.

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(VIII.H.)

3. For ineligible MQB-Q recipients, determine the amount Medicaid paid by requesting a Medicaid/NCHC Recipient Profile.

4. If a recipient is found ineligible for MQB-B, MQB-Q, MQB-E or M-QB-and did not receive MAABD or MQB-Q, do not request a Medicaid/NCHC Recipient Profile. The only service paid by Medicaid is the Medicare Part B premium or a portion of the Medicare Part B premium and this does not appear on a profile. Determine the amount of premiums paid and use this amount to establish the overpayment. Refer to the History of Medicare Deductibles, Co-Payments and Premiums, on the DMA website.

I. Potential SSI Medicaid Overpayments

When the county dss is aware of a SSI recipient who was terminated from SSI due to unreported income or resources, these are the steps that should be followed to determine if a Medicaid overpayment exist:

1. The caseworker completes the SSI ex-parte review and determines from the SDX that SSI was terminated for excess resources or income.

2. The caseworker must verify income and resources to determine eligibility for ongoing Medicaid. If it is determined that the client is not eligible for full Medicaid under any program or has a large deductible, the caseworker should establish whether the resources or income were newly acquired.

3. If resources or income are newly acquired, there is no referral for potential fraud. Examples:

a. The caseworker verifies RSDI began the previous month.

b. A client recently inherited $50,000.

4. If the client failed to report income or resources to SSI in a timely manner, there is a potential Medicaid overpayment. The case should be referred to the fraud unit for a possible overpayment recoupment.

Example: The client interview or the verification of resources establishes that that client has $50,000 in CD at Wachovia and they were acquired several months ago.

5. If the county dss is aware that a SSI recipient has resources and that the resources make the recipient ineligible, the county dss should report this information to the Social Security Administration. Once SSA terminates SSI, the county dss should follow the guidelines I. 1-4 above.

6. These are other examples of when a case should be referred to the fraud unit for a possible overpayment recoupment:

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(VIII.I.6.)

Example: A SSI client loans someone else his card and the other person receives benefits to which he was not entitled.

Example: The SSI client’s Medicaid card may have been stolen and used by the thief.

Each of these situations would need to be investigated and a decision made as to whom the debtor would be for any benefits received fraudulently.

J. Medicaid Transportation Overpayments

Medical transportation overpayments occur when a recipient and/or provider of transportation requests transportation reimbursement for visits they never made to the Medical provider as claimed. To determine the overpayment for a Medicaid transportation claim, the investigator will need to take the following steps:

1. View county dss records of the dates for which the recipient claimed a need for reimbursement for transportation and reimbursement was given, either to the recipient, or the provider of transportation services.

2. Request a Medicaid/NCHC Recipient Profile for the dates of service in question. Compare the providers who billed Medicaid to the transportation reimbursement logs.

3. It may be necessary to contact the medical provider if there is no Medicaid claim on file as providers have at least 12 months from the date of service to file claims.

4. The overpayment will be the amount reimbursed the recipient and/or provider of transportation services for any dates medical services were not rendered to the recipient.

5. Enter the claim in EPICS as a Medicaid claim using the Medicaid case ID number and program code the recipient was receiving under at the time of the overpayment. The Medicaid service Code will be 71.

6. Depending on the circumstances, the debtor may be the recipient, the provider of transportation, or both.

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