Adult Medicaid Manual MA-2360 MEDICAID DEDUCTIBLE
III. HOW TO MEET A DEDUCTIBLE
A. Date Deductible Is Met
1. The deductible is met on the day that the total of medical expenses applied to the deductible equals the amount of the deductible for the certification period. Refer to MA-2240, Transfer of Assets, to determine when the CAP indicator is entered for CAP applicants/ beneficiaries subject to a deductible and a sanction period.
2. The inpatient hospital admission of an MAABD a/b (who does not have Medicare Part A coverage) is assumed to meet the deductible, regardless of length of stay or the ultimate amount of the charges. (IV.D.-G., below)
3. The inpatient admission to Psychiatric Residential Treatment Facility (PRTF) for an individual under age 21 is assumed to meet the deductible, regardless of length of stay, the ultimate amount of charges or Medicare coverage. PRTF admissions are not covered by Medicare.
REVISED 11/01/11 - CHANGE NOTICE 17-11
REVISED 03/01/08 – CHANGE NOTICE 09-08
2. Do not apply to the deductible a medical expense paid by a public program funded wholly or in part by federal funds.
D. Applying Medical Expenses Incurred Prior to the C.P.
1. Apply a medical expense to a deductible in a current c.p. if it is the unpaid balance of an expense incurred by a budget unit member. Apply it on the first day of the c.p. An old bill is a medical expense:
a. With a date of service or payment date which is within the 24 months immediately prior to the month of application for a prospective or retroactive c.p., or the 24 months prior to the first month of any subsequent c.p.
EXAMPLE: An application for Medicaid was made on December 10, 2007, for ongoing coverage and for retroactive coverage for September, October, and November 2007. The unpaid balance of a medical bill that was incurred, or on which any payment was made, on or after December 1, 2005, may be applied to the deductible in either the ongoing or retroactive period.
b. Which is a current liability, (that is, has not been written off by the provider), including medical bills paid by a loan, as provided in III.D.3. below,
c. Which has not been applied to a previously met deductible.
(1) If payments are being made on an outstanding medical bill, apply to the deductible the unpaid balance on the first day of the c.p., not the payments.
(2) When an a/b has been authorized because he was hospitalized (see IV.D. below), Medicaid may not pay because the deductible balance equaled or exceeded the Medicaid payment. In this case, the unpaid hospital bill may not be applied to the deductible in subsequent c.p. It was applied to a previously met deductible.
e. Which has not been denied for payment by a third party due to failure to meet the requirements of the insurance plan. (See V.B.3., below)
REISSUED 03/01/08 – CHANGE NOTICE 09-08
2. Carry over to a subsequent c.p. the following expenses if they meet the requirements in III.D.1., above:
a. The unused portion of an allowable medical expense in excess of the current deductible,
b. Any expense applied to a deductible which was not met,
c. Any expense not previously applied to a deductible, and/or
d. Any expense which was previously reported, but never verified and applied to a deductible.
3. Apply the unpaid balance of a loan used to pay a medical expense incurred prior to the current c.p. on the first day of the c.p. if:
a. The medical bill meets the requirements in III.D.1., above, except that instead of remaining unpaid, it has been paid by a loan, bank card, or other legally binding financial arrangement which is a liability to the a/b.
b. To verify the unpaid loan balance:
(1) Financial Institutions
(a) Review a copy of the last loan statement from the bank, credit union, or other lending institution, bank statement, or other similar document, prior to the month of the current c.p.
(b) Subtract the amount of any finance charges shown on the statement to determine the current unpaid loan balance.
(2) Personal Loans
For a personal loan from other than a financial institution (friend, relative, etc.) obtained to pay a medical expense, request a verbal or written statement from the lender regarding the original amount, purpose, repayment terms, and the amount of the unpaid balance.
c. Compare the cost of the medical service(s) paid by the loan to unpaid loan balance on the first day of the c.p.
(1) If the unpaid balance is less than the cost of the medical service, apply the unpaid balance to the deductible.
(2) If the unpaid balance is equal to or greater than the cost of medical service(s), apply the full cost of the medical service to the deductible.
REISSUED 11/01/11 - CHANGE NOTICE 17-11
(3) If the unpaid balance is $0 in this or subsequent c.p.'s, there is nothing to apply to the deductible in that c.p.
d. If the amount of the loan applied to the deductible as determined in III.D.3.c. above, is equal to or greater than the amount of the deductible, any excess remaining after additional payments during c.p. can be carried forward to subsequent c.p.'s as provided in III.D.2., above. If payments on the loan during the c.p. reduce the unpaid balance to $0, there is nothing to carry forward.
e. If the deductible increases because of an increase in income during the c.p., reverify the unpaid loan balance as of the first day of the month of the increased deductible and follow steps in III.D.3.c., above.
f. If payments are being made on the unpaid medical bill, count the unpaid balance on the first day of the c.p., not the payments.
4. If there was health insurance, including Medicare and Medicaid, in effect during the prior period, count the unpaid medical bills only after the status of the insurance claim has been verified. Verify that insurance has either paid or denied the claim. Do not count the unpaid bill toward the deductible if the claim was denied for failure to meet the requirements of the plan. An insurance claim must be filed unless it is verified with the insurance company, Medicare or Medicaid that the time limit for filing has expired. (See V.B., below.)
5. Count the unpaid balance of medical bills incurred prior to a current c.p. in the way that most benefits the a/b and meets the requirements for timely processing of applications.
E. Examples Of Whose Bills To Apply To A Deductible:
1. Beneficiary in pla is certified for M-AD. His spouse who lives with him is not a Medicaid a/b and has no income. Even though there is no income to deem, she is financially responsible and her medical bills may be applied to his deductible.
2. Beneficiary in pla is certified for M-AA. His spouse living in the home with him works. Medical expenses of both spouses are counted toward the beneficiaries Medicaid deductible.
3. Beneficiary in pla is certified for M-AA. His spouse who receives SSI, is not financially responsible for him. Therefore, only his expenses count toward his deductible.
4. Able-bodied parents apply for M-AD for a disabled dependent child. The parents are financially responsible for the child. Medical expenses of the parents and the disabled child are applied toward the Medicaid deductible of the beneficiary.
REVISED 11/01/11 - CHANGE NOTICE 17-11
5. A disabled child eligible for M-AD lives with a parent who receives SSI. The parent is not financially responsible. Therefore, only the child's medical expenses are applied toward the Medicaid deductible.
6. Beneficiary with a deductible took out a home equity loan for $5,000 at the bank to consolidate all of his bills, including an orthodontist's charge of $2,250 that was incurred prior to the current c.p. He has the provider's bill for the services rendered and a statement showing that the bill was paid. He also has a copy of the promissory note for $5,000 to his bank dated a few days prior to his paying the medical bill and his current statement showing one payment for $100, finance charges of $49, and an unpaid balance of $4,949 ($5,000 - 100 + 49 = $4,949). The total amount of the medical bill can be applied to the a/b's deductible on the first day of the c.p. and carried forward to future c.p.'s as allowed, because the unpaid balance of $4,900, not counting finance charges, exceeds the amount of the medical bill.
7. The a/b always pays his bills, including medical bills, with his MasterCard, wherever it is accepted for payment. He has a copy of the physician's statement showing the date of service and payment rendered by MasterCard for a medical service in the amount of $137 prior to the current c.p. He also presents his MasterCard statement showing an unpaid balance of $392. The finance charges on that statement are $5.88. Subtract the finance charges from the unpaid balance (392 - 5.88 = 386.12). The full amount of the medical expense ($137) can be applied to his Medicaid deductible on the first day of the c.p., because the difference is greater than the amount of his medical charges.
8. The a/b presents his Visa card statement showing an unpaid balance in the amount of $75.96, including a finance charge of $11.25 for that month. He had previously paid a medical bill of $150 for a medical service incurred prior to the current c.p. with his Visa card. Only the amount of the unpaid balance, minus the finance charges on that statement (75.96 - 11.25 = 64.71), can be applied to the Medicaid deductible on the first day of the c.p., because the unpaid balance, minus the finance charges, is less than the medical expense and is the amount he still owes.
F. Notify The Food Stamp Section When A/B Meets A Medicaid Deductible
By copy of DMA-5036, Record of Medical Expenses, and DSS-8194, notify the Food Stamp worker of the change in the Medicaid status of the a/b.