Adult Medicaid Manual MA-2360 MEDICAID DEDUCTIBLE
V. THIRD PARTY RESPONSIBILITY
When applying hospital bills of the a/b to the deductible, refer to IV.D., above.
A. Bills For Which There Is Third Party Responsibility
1. Do not count a medical expense that anyone, other than the a/b or a person who is financially responsible for the a/b, has paid or agreed to pay, UNLESS the third party is a public program of state, county, or local government. See III.C., above.
2. Do not count unpaid medical bills from a prior c.p. of an a/b or any financially responsible person who also is a Medicaid a/b and whose case you know to be either pending or on appeal, if the bills may eventually be paid by Medicaid. If the pending or appealed case is ultimately denied, the bills may be applied in a subsequent c.p.(s).
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B. Third Party Insurance Coverage (Other Than Medicare)
The following are instructions for applying medical charges to a deductible when there is insurance coverage, other than Medicare. (See C., below, for Medicare information.)
NOTE: Indian Health Services (IHS) is the payer of last resort to Medicaid and is not considered third party insurance.
1. Determine from the insurance explanation of benefits (EOB) or contact with the insurance company or medical provider whether insurance has paid, and if denied the reason for the denial. If the EOB does not explain why the claim was denied, contact the insurance company.
2. When insurance has paid on a bill, verify the amount of the insurance payment.
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(3) Subtract the average daily insurance payment from the average daily charges to determine how much to apply to the Medicaid deductible.
(4) Apply this amount on a daily basis.
e. Physicians' Charges
Count the difference between the insurance payment and total charges as stated on the insurance EOB. If the physician's bill is for several days' services and billed as a lump sum, determine the a/b's responsibility to pay as in V.B.2.a.
3. When insurance, including Medicaid, has denied the claim because of noncompliance with the requirements of the plan by the a/b or a person who is financially responsible for the a/b, do not apply the charge to the deductible.
a. Common examples of noncompliance denials are:
Failure to obtain pre-approval
Exceeds time limit for filing
Service not provided in proper location
Service not payable separately but is lumped with payment for other services
Failure to give provider Medicaid card
b. Noncompliance DOES NOT include denials that are outside the control of the a/b, such as non-covered services or denials due to failure of providers to meet their responsibility.
4. When insurance has not processed the claim:
(1) For bills incurred during a current (retroactive or ongoing) c.p., verify with the medical provider or insurance company whether insurance is likely to process the claim within the 45/90 day application processing period.
(a) If likely to process the claim within the application processing period, hold the application pending for insurance payment.
1) When insurance pays, verify the amount of the outstanding balance owed by the a/b after deducting the insurance payment. Proceed as in V.B.2.
2) If the insurance denies due to noncompliance, do not apply the charge to the deductible. (See V.B.3.)
3) If insurance has not processed by the 45/90th day, apply the full charge to the deductible.
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(b) If not likely to complete processing the claim within the 45/90 day period, apply the total expense to the deductible.
(c) Do not hold an application pending beyond 45/90 days if insurance will not complete processing the claim within the application processing period.
(2) For bills incurred prior to a current c.p., verify whether insurance has denied payment or has not been filed.
(a) If denied due to failure to meet the requirements of the plan, do not apply the charge to the deductible. (See V.B.3.)
(b) If denied for some other reason, count the unpaid balance owed by the a/b.
(c) If not filed, a/b must file a claim, unless it is verified with the insurance company that the time limit for filing claims has expired.
(d) Count unpaid balance owed by a/b only after insurance response has been verified.
(e) If the insurance claim is still pending, do not apply the charges to the deductible until the claim has completed processing.
b. Ongoing Cases
(1) For bills incurred during a current c.p., verify with the medical provider or insurance company whether insurance has paid.
(a) If not, apply the total expense to the deductible.
(b) If the insurance denied due to failure to meet the requirements of the plan, do not apply the expense to the deductible.
(c) If the insurance denied for some reason other than noncompliance, apply the total expense owed by the a/b to the deductible.
(2) For bills incurred prior to a current c.p. and when there was insurance coverage, verify whether insurance paid or denied payment, and if denied the reason for the denial, and the amount of the unpaid balance owed by the a/b.
(a) If the insurance has not paid due to failure to meet the requirements of the plan, do not apply the expense to the deductible.
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(b) If the insurance has not paid for some reason other than noncompliance, apply the total expense owed by the a/b to the deductible.
(3) Apply the expense only after the insurance response has been verified.
5. Inform the a/b that all insurance reimbursement rights are assigned to Medicaid if insurance later pays medical expenses that have been paid by Medicaid. Submit a DMA-2041. See MA-2400, Third Party Recovery, and EIS USERS MANUAL.
c. Medicare Coverage
The following is a summary of current Medicare benefits and instructions for applying medical charges to a deductible when there is Medicare coverage. (See B., above, for other third party insurance information.)
1. Inpatient Hospitalization - For inpatient hospital bills of a/b's, see IV.D.-G., above. Only the portion of hospital charges the a/b or a financially responsible person is responsible for paying is applicable to a Medicaid deductible.
The individual is responsible for the Part A deductible of $1,260 per benefit period.
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(3) In some instances, Medicare may exempt the specialty unit (psychiatric or rehabilitation) of a general hospital from the hospital DRG and reimburse the hospital based on the costs of services provided.
(a) If the patient is admitted to a psychiatric or rehabilitation unit of a general hospital, verify with the hospital whether Medicare will pay based on DRG or on costs of services provided.
(b) If paid based on DRG, follow V.C.1.c.(1) & (2), above.
(c) If paid based on cost of service provided, apply the amount of hospital charges as they are incurred until they total Medicare deductible.
2. Nursing Facility (NF)
Medicare pays the first 20 days of skilled care in a Medicare certified medical institution. Eligible individuals incur a co-insurance amount of $157.50 per day, for the 21st through the 100th day of skilled care. There is no Medicare coverage for skilled care after the 100th day. The facility usually determines whether care is Medicare-covered and for how long.
3. Medical Insurance - Medicare Part B
a. The a/b is responsible for the Medicare Part B premium of $104.90 per month until he goes on Medicare Buy-In.
b. The a/b is responsible for the Medicare Part B deductible of $147 for the calendar year.
c. Medicare Part B pays for outpatient physician services and other outpatient services. It may also pay for some other medical services not covered by Part A when the patient is hospitalized, such as laboratory charges, x-rays, etc.
4. Applying A Medicare Patient's Non-Inpatient Hospital Charges To A Current Medicaid Deductible
a. Apply to the Medicaid deductible only those charges for which the a/b or person financially responsible for the a/b is responsible.
b. The Medicare patient is responsible for the following:
(1) Charges for the first 3 pints of blood.
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(2) For bills for the current c.p.:
(a) If the Medicare EOB is available, compute the a/b's liability as follows:
1) If the provider accepts assignment, count the difference between the Medicare approved amount and the Medicare payment amount as the a/b's liability.
2) If the provider does not accept assignment, count the difference between the actual charges and the Medicare payment as the a/b's liability.
(b) If the Medicare EOB is not available, count 20% of the actual charges, unless the a/b has a "Q" classification showing eligibility for Medicare-Aid (M-QB). (Assume the $100 Medicare deductible has been met.)
(3) For bills incurred prior to a current c.p., the IMC must verify whether Medicare has been filed and has paid or denied payment and the amount of the unpaid balance owed by the a/b. The a/b must file a claim unless it is verified that the time limit for filing claims has expired. Do not project 20% for these bills.
(4) If the a/b provides the EOB within 90 days of the previous authorization date and actual charges exceed the estimated amount, determine if the deductible was met earlier. If so, authorize according to instructions in the EIS USERS MANUAL. The a/b must provide the EOB within 90 days of the previous authorization date.