Part VI. Deduction of Incurred Medical Expenses in Determining Countable Income (Spenddown)
Article 4
Income
12VAC30-110-1020. Definitions.
"AFDC" means Aid to Families with Dependent Children.
"Applicable disregards" means the amounts that would be deducted in determining eligibility under AFDC for families and under SSI for aged, blind and disabled recipients.
"Available income" means the earned and unearned income used in determining the financial eligibility of a medically needy individual.
"Budget period" means a prospective period of time during which an individual's income is calculated to determine eligibility.
"Budget unit" means a subunit of the family unit which is used in calculating countable income and resources when deeming of income and resources between family members would violate the Social Security Act.
"Countable income" means, for the medically needy, the amount of an applicant's income measured against the medically needy income level (MNIL). Countable income is determined by deducting the following amounts from reported gross income:
1. For individuals under age 21 and caretaker relative, amounts that would be deducted in determining eligibility under the state's AFDC plan, except for those prohibited under Title XIX of the Social Security Act.
2. For aged, blind, or disabled individuals, amounts that would be deducted determining eligibility under SSI and (i) any SSI benefits, (ii) any auxiliary grant, and (iii) other deductions from income applied under the Medicaid plan. This figure is measured against the income level for Medicaid eligibility.
"Expenses covered in the plan" means expenses for services included in the State Plan for Medical Assistance including those that exceed agency limitations of amount, duration or scope of services.
"Expenses not covered in the plan" means expenses for necessary medical and remedial services recognized under State law but not covered under the State Plan for Medical Assistance.
"Excess countable income" means the amount of income to be applied toward incurred medical expenses and is determined by subtracting the MNIL from the countable income.
"Family unit" consists of all individuals listed on the application form as living in the household and among whom legal responsibility under state law exists.
"Financially responsible relative" means a spouse or parent whose income is actually used in determining eligibility.
"Incurred expenses" means medical or remedial services:
1. Which are recognized under state law;
2. Which are rendered to an individual, family, or financially responsible relative;
3. For which the individual is liable in the current accounting period or was liable in the three-month retroactive period; and
4. Which are not subject to payment by any liable third party.
An expense for medical or remedial service is an incurred expense from the beginning of the accounting period in which the liability arises until the end of the accounting period in which the liability is satisfied.
"Institutionalized individual" means an individual residing in a long-term care institution or covered under a home and community-based waiver for 30 consecutive days.
"Liable third party" means any individual, entity or program that is or may be liable to pay all or part of the cost of medical or remedial treatment for injury, disease, or disability of an applicant or recipient of Medicaid.
"Medically needy income level" or "MNIL" means the income standard established to determine the eligibility of medically needy individuals and families.
"Old bills" means medical or remedial care expenses incurred prior to the initial application month and application's retroactive period, and which were not deducted from (counted in) any previous spenddown that was met.
"Projected expenses" means expenses for services that have not yet been incurred but are reasonably expected to be.
"Service dates" means dates of incurred medical expenses.
"Spenddown" means the process through which countable income is compared to the MNIL for the budget period and incurred medical and remedial care expenses are deducted from income in excess of the MNIL.
"Spenddown liability" means amounts by which countable income exceeds MNIL for the budget period.
"SSI" means Supplemental Security Income.
"State or territorial public program" means a program that is operated (i.e. administratively controlled) by a state or territory (including a political subdivision thereof).
"State or territorially-financed program" means a state or territorial public program whose funding, except for deductibles and coinsurance amounts required from program beneficiaries, is either:
1. Appropriated by the state or territory directly to the administering agency, or
2. Transferred from another state or territorial public agency to the administering agency.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 1, eff. April 30, 1995.
12VAC30-110-1030. Income eligibility.
A. Individuals and families who otherwise meet the medically needy eligibility requirements, but who have income in excess of the medically needy limit, shall be ineligible for medical assistance unless the excess income is insufficient to meet the total cost of needed medical care and the cost of incurred medical or remedial care recognized under state law has been deducted from excess income.
B. Spenddown applies only to the medically needy. Individuals must meet the medically needy nonfinancial, property transfer and resource requirements in order to be placed on a spenddown.
C. An individual or family shall be determined to be income eligible when countable income is equal to or lower than the medically needy income level for the budget period or when countable income after deduction of specified medical and remedial care expenses is equal to or below the MNIL. Countable income shall be compared to the MNIL for the budget period and incurred medical and remedial care expenses shall be deducted from income in excess of the MNIL.
D. An applicant having income in excess of the MNIL shall be advised that medical expenses incurred prior to the month of application count toward meeting the spenddown if the following conditions are met:
1. The applicant is legally liable to pay the expense.
2. A claim for the expense was submitted to the liable third parties and the applicant provides evidence of the third parties' denial of payment or amount of payment made by the third parties for the expense. Only that portion of the expense which is the applicant's legal responsibility (not the liability of any third party) shall be deducted from countable income.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 2, eff. April 30, 1995.
12VAC30-110-1040. Spenddown calculation.
A. When countable income exceeds the Medically Needy Income Level (MNIL) for the budget period, certain medical and remedial care expenses incurred by an individual, family or financially responsible relative that are not subject to payment by a third party unless the third party is a public program of a state or territory or political subdivision of a state or territory shall be deducted from countable income.
B. Medical and remedial care expenses paid by a public program (other than a Medicaid program) of a state or territory shall be deducted from countable income. Once countable income is reduced (by applying these deductions) to an amount equal to the MNIL, the individual or family shall be income eligible.
C. Reasonable measures to determine the legal liability of third parties to pay for incurred expenses shall be taken. However, eligibility determination shall not be forestalled simply because third party liability cannot be ascertained or payment by the third party has not been received.
D. The time standards for reaching decisions on Medicaid eligibility must be met when determining eligibility through spenddown: 90 days for applicants who apply on the basis of disability and 45 days for all other applicants. These limits shall apply for receipt of third party payment or verification of third party intent to pay in order to determine deductible expenses under spenddown. Efforts to determine the liability of a third party shall continue through the last day of this period. If information regarding third party liability is not received by this date, eligibility must be established based upon the information available.
E. If the amount subject to payment by a third party cannot be determined based on information available, the bill in question to which the third party liability applies cannot be used in determining the spenddown. However, if information becomes available at a later date, the spenddown shall be recalculated and the effective date of eligibility revised.
Statutory Authority
§§ 32.1-324 and 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 3, eff. April 30, 1995; amended, Virginia Register Volume 25, Issue 14, eff. April 15, 2009.
12VAC30-110-1050. Required deductions based on kinds of services.
In determining incurred medical expenses to be deducted from income, the medical or remedial care expenses listed below that are not subject to payment by a third party shall be deducted from countable income. Such deductions are allowable even if the expenses are paid by a public program (other than the Medicaid program) of a state or territory if the program is financed by the state or territory.
1. Expenses for Medicare and other health insurance premiums, and deductible or coinsurance charges, including enrollment fees, copayments, or deductibles imposed by the State Plan for Medical Assistance.
2. Expenses incurred by the individual or family or financially responsible relative for necessary medical and remedial services that are recognized under state law but are not included in the State Plan for Medical Assistance.
3. Expenses incurred by the individual or family or by financially responsible relative for necessary medical and remedial services included in the State Plan for Medical Assistance including those that exceed agency limitations on amount, duration and scope of services.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 4, eff. April 30, 1995.
12VAC30-110-1060. Required deductions based on the age of bills.
In determining incurred medical expenses to be deducted from income, the agency must include the following:
1. For the retroactive budget period for medical assistance (the three months prior to the month of application), on expenses incurred during such period, whether paid or unpaid and "old bills" (unpaid expenses which remain a liability to the individual incurred prior to the period), to the extent that the expenses have not been deducted previously in establishing eligibility;
2. For the first prospective budget period, expenses incurred during such budget period and any of the three preceding months, whether paid or unpaid, to the extent that the expenses have not been deducted previously in establishing eligibility;
3. Current payments (that is, payments made in the current budget period) on expenses incurred before the current budget period and not previously deducted from income in any budget period in establishing eligibility for such period; and
4. If the individual's eligibility for medical assistance was established in each such budget period preceding the current budget period, expenses incurred before the current budget period but not previously deducted from income in establishing eligibility, to the extent that such expenses are unpaid and are:
a. Described in 12VAC30-110-1050; and
b. Carried over from the preceding budget period or periods because the individual had a spenddown liability in each such preceding period that was met without deducting all such incurred, unpaid expenses.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 5, eff. April 30, 1995.
12VAC30-110-1070. Projection of expenses.
Medical and remedial care expenses that are not for institutional care services (excluding acute care facility services) shall not be projected. For example, insurance premiums are not an institutional service, therefore, such expenses shall not be projected. Nor shall expenses that are included in a prepaid package of service be deducted prior to the date the services are rendered (e.g., charge for prenatal care and delivery services and orthodontia).
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 6, eff. April 30, 1995.
12VAC30-110-1080. Projection of institutional care expenses.
Institutional care expenses, except for expenses for services rendered in an acute care facility, shall be projected. The amount of the projected expenses shall be based on the Medicaid per diem rate or a combination of actual incurred institutional expenses and projected expenses at the Medicaid per diem rate. Projection of institutional care expenses does not preclude deduction of actually incurred expenses and in some instances requires the use of a combination of actually incurred expenses and projected expenses. Those circumstances are:
1. When the projected institutional care expense is less than the individual's spenddown liability for the budget period; and
2. When there is current liability for bills from a period prior to the current retroactive and prospective budget periods. A bill written off as a bad debt is not a current liability.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 7, eff. April 30, 1995.
12VAC30-110-1090. [Reserved]. (Reserved)
12VAC30-110-1100. Individuals and families with income below the MNIL.
Cases which have only regular income that is below the MNIL do not have to spenddown to become income eligible. Such cases shall be maintained in the same manner as categorically needy cases; however, effective the month that income exceeds the MNIL or the first month following the timely notification period, the case must be treated as all other spenddown cases. When a monthly budget period is used, increases in income shall be counted beginning the month the change occurs, unless a Medicaid card has already been issued for that month and a change in circumstances occurs too late in the month to provide "timely" notice under 42 CFR 435.919 prior to suspending Medicaid benefits.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 9, eff. April 30, 1995.
12VAC30-110-1110. [Reserved]. (Reserved)
12VAC30-110-1120. Reconciliation.
At the end of the first prospective budget period and any subsequent prospective budget period, or if earlier when any significant change occurs, the agency must reconcile any projected amounts with the actual amounts incurred, or with changes in circumstances to determine if the adjusted deduction of incurred expenses reduces countable income to the income standard.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 11, eff. April 30, 1995.
12VAC30-110-1130. Eligibility.
Except as provided in 12VAC30-110-1120, an individual is eligible on the first day of the month in which spenddown liability is met. However, expenses used to meet spenddown liability are not reimbursable under Medicaid. The amount paid by Medicaid will be reduced to the extent necessary to prevent the transfer of an individual's spenddown liability to the Medicaid program.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 12, eff. April 30, 1995.
12VAC30-110-1140. Spenddown entitlement.
A. When excess income has been spent or incurred, the applicant must request reinstatement of his application, submitting the "Record of Medical Expenses - Medicaid" together with bills or receipts for medical services either paid or incurred, and evidence of third party payment or denial of payment if applicable. No new application form is completed at that time. If there has been no change which renders him ineligible, he becomes eligible for the remainder of the six-month period.
B. The request for reinstatement must be processed in the same manner as an application, with notice to the client of the disposition of his request.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 13, eff. April 30, 1995.
12VAC30-110-1150. Qualified Medicaid Beneficiaries.
A. When an enrolled medically indigent Medicare beneficiary meets the medically needy spenddown, he continues to be eligible for Medicaid as a Qualified Medicare Beneficiary (QMB) but is also eligible for Medicaid as medically needy beginning the date the spenddown was met, and ending the last day of the six-month spenddown period.
B. No new application for QMB shall be required to continue entitlement as a QMB at the end of the budget period; however, the individual must file a new application in order for eligibility for full Medicaid benefits in subsequent budget periods.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 14, eff. April 30, 1995.
12VAC30-110-1160. Retroactive spenddown; countable income; entitlement date.
A. Eligibility for retroactive Medicaid entitlement must be determined in all cases in which an individual reports receiving a Medicaid-covered service during the three-month period prior to the month of application, whether the individual is applying for Aid to Families with Dependent Children, auxiliary grant or Medicaid. Eligibility for retroactive coverage shall be determined at the same time as the ongoing eligibility is determined, using the same application.
B. The amount of countable income available to the applicant's family or budget unit is determined for the three-month period prior to application if none of the three months was included in a prior Medicaid coverage or spenddown period, and all other eligibility factors were met. Countable income for the period shall be applied to the appropriate income limit for the period (¼ the annual income limit).
If any of the months in the retroactive period were included in a previous coverage or spenddown period, those months cannot be included in the retroactive period. Only the income received in the retroactive months not included in previous periods are counted in determining retroactive eligibility. Countable income is applied to the appropriate income limit for the number of months actually included in the retroactive period.
C. When the retroactive spenddown is met by medical expenses incurred before the retroactive period, eligibility will begin the first day of the retroactive period.
When the retroactive spenddown is met be expenses incurred during the retroactive period, eligibility will begin the date the spenddown was met.
Eligibility will exist for the remainder of the retroactive period.
When the spenddown is not met, retroactive eligibility does not exist.
If an applicant states that a covered service was received in any one of the three retroactive months, eligibility is to be determined for all three retroactive months, regardless of the service date.
D. The Medicaid application shall be processed to determine both retroactive and prospective Medicaid eligibility beginning with the month of application. Notice of both determinations must be provided in written form to the applicant.
Statutory Authority
§ 32.1-325 of the Code of Virginia.
Historical Notes
Derived from VR460-10-8.2600 § 15, eff. April 30, 1995.
12VAC30-110-1170. [Reserved]. (Reserved)