Spend Down Program

PURPOSE: This rule establishes terminology as well as provides definition of terms for the spend down program and defines valid verification of incurred medical expenses. (1) Spend down is a program created for persons with disabilities and persons aged sixtyfive (65) and older who have income that exceeds the Medicaid qualification limits. Such individuals may qualify for Medicaid benefits when they spend down their income that exceeds the Medicaid eligibility limit. Medicaid coverage begins when the individual’s incurred medical expenses equal the monthly spend down requirement. (2) Definitions. (A) “Incurred medical expenses” means expenses incurred by the individual or financially responsible relatives for necessary medical and remedial services that are recognized under state law and are not subject to payment by a third party, unless the third party is a public program of a state or political subdivision of a state. Incurred medical expenses include Medicare and other health insurance deductibles and co-insurance charges, and co-payments or deductibles imposed under 42 C.F.R. Section 447.51 or Section 447.53. The term incurred medical expenses includes expenses incurred by an individual’s spouse whose income is included in the Medicaid eligibility determination. (B) “Individual” means aged persons (over sixty-five (65) years), blind persons, or people with disabilities with income above limits established under section 208.151, RSMo, for MO HealthNet for the Aged, Blind, and Disabled, permanent and total disability benefits, or aid to the blind benefits. (C) “Third party” means a Medicare, private health insurance, or other health care payer. (3) How spend down amount is calculated. The monthly spend down amount is calculated as the difference between the individual’s monthly net income and the Medicaid eligibility limits. The net income is calculated according to the provisions of 13 CSR 402.200. (4) Spend down may be met in one (1) of the following ways: (A) Incurred Costs Method. Spend down participants using this method must provide documentation of medical expenses they have incurred. 1. Incurred medical expenses that can be applied to spend down must be either— A. Incurred within the month MO HealthNet coverage is requested and bills are submitted to the Family Support Division; or B. Incurred within the three (3) months prior to the month for which MO HealthNet coverage is requested and bills are submitted to the Family Support Division for those eligible for MO HealthNet Aged, Blind, and Disabled spend down program; C. Incurred medical expenses can be applied to future months limited to a maximum of three (3) months from the current month in which MO HealthNet coverage is requested when— (I) The bills were incurred while the participant was eligible for MO HealthNet spend down; (II) The bills were not paid and will not be paid by MO HealthNet; (III) The bills are currently owed or paid by the participant; (IV) The bills were not previously applied in any month to meet spend down, including use of out-of-pocket expenses; and (V) The bills were incurred no earlier than three (3) months prior to the current month; D. Allowable medical expenses include those specified in section 208.152, RSMo; and E. Proof of incurred costs does not require proof of payment of the incurred costs. 2. In order for an individual to claim that an incurred medical expense should be credited to the individual’s spend down obligation, the individual shall provide documentation of the incurred medical expense within one (1) year of the date of the medical service. 3. No credit for incurred medical expenses shall be given without documentation that the individual has incurred, and is legally obligated to pay the expense, and has not previously used the expense for spend down. Documentation of an incurred medical expense shall be submitted in either one (1) of the following methods: A. An invoice, billing statement, or receipt from the provider that contains the following information: (I) Name of patient; (II) Date of service; (III) Type of service provided and/or description of the service; (IV) Identification of the portion of the total charges that are billed to a third party and the portion of the total charges that are the patient’s responsibility to pay; and (V) To document incurred costs of mileage of medically necessary, nonemergency transportation, the individual shall certify the miles traveled and the purpose. Travel expenses required to obtain a medical item or service shall be determined at the State Employee Reimbursement rates established by the state of Missouri Office of Administration pursuant to 1 CSR 10-11.010 and 1 CSR 10-11.030 as of the date of travel; or B. A Family Support Division Provider form signed and completed by the provider containing the information set out in subparagraph (4)(A)3.A. of this regulation. 4. The provider shall, upon request, provide any additional information required by the Family Support Division to establish that the individual has incurred the medical expense. 5. When it is known that the individual has coverage by a third party and the portion subject to payment by the third party cannot be identified, the Family Support Division shall— A. For individuals with private health insurance or coverage by another healthcare payer, estimate the amount of the individual’s incurred cost based upon the provisions of coverage; and B. For individuals with Medicare Part A and/or B coverage and who do not have Qualified Medicare Beneficiary coverage, estimate the amount of the individual’s incurred medical cost to be— (I) One hundred percent (100%) of the Medicare reimbursement rate up to the individual’s Medicare deductible, if the deductible has not been met; and thereafter (II) Twenty percent (20%) of the Medicare allowable reimbursement once the deductible has been met. 6. Individuals receiving Qualified Medicare Beneficiary coverage cannot use incurred medical expenses covered by Medicare towards meeting spend down. 7. If a provider provides a direct medical service based on an “ability-to-pay” or “sliding” fee scale, only the amount the individual is legally obligated to pay the provider is an incurred medical expense; (B) Pay-in Method. An individual may pay their spend down amount to the state. The monthly spend down requirement may be paid by the individual, their spouse, a financially responsible relative, or a public program of a state or political subdivision of a state; and (C) Combination Method. An individual may use a combination of the incurred costs method and the pay-in methods to satisfy the monthly spend down amount to the state. (5) Any individual who disagrees with the FSD’s decision shall have the right to request administrative review pursuant to 208.080, RSMo, and 13 CSR 40-2.160. AUTHORITY: sections 207.022 and 660.017, RSMo 2016.* Original rule filed March 1, 2012, effective Oct. 30, 2012. Amended: Filed Sept. 27, 2018, effective May 30, 2019. *Original authority: 207.022, RSMo 2014 and 660.017, RSMo 1993, amended 1995.