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Public programs

Revised date


Medical expenses that are paid with public program funds (other than Medicaid) may be used to reduce a client's spenddown. They must be verified by the agency providing the services. HCA has negotiated individual agreements with the agencies identified below to recognize their programs as Public Programs for Medicaid purposes. This allows Medically Needy (MN) client's to use expenses paid on their behalf by the participating agency toward meeting their spenddown liability.

Public Programs

The approved public programs in Washington are:

  1. Lifelong AIDS Alliance (Evergreen Insurance Program)
  2. Department of Health AIDS/HIV Early Intervention Program;
  3. Kidney Centers in various communities to administer the Kidney Disease Program (KDP);
  4. Beacon Health Options in Clark, Skamania, and Klickitat Counties; in Pierce County; and in Grant, Chelan, Douglas, and Okanogan Counties;
  5. Kitsap Mental Health Services;
  6. Indian Health Service.

To qualify as a public program, the participating agencies must ensure that no federal funds are used to pay for these individual's expenses.

Public Programs do not anticipate costs for medical expenses. They must submit verification to DSHS as medical expenses are incurred by the client and paid by the program. This verification may look different for each program depending upon the expenses that are being verified.

Expenses incurred by Public Programs prior to a Medicaid application

Public Programs may pay spenddown expenses incurred by individuals during the three month retroactive base period. Most public programs work with their clients to help them apply for Medicaid and to help cover the medical expenses while the Medicaid application is pending.

This enables client's to use expenses that are paid by the Public Program during the retroactive base period as qualifying expenses towards meeting spenddown liability in either the retroactive or current base period.

Indian Health Service

HCA has negotiated an agreement with the tribes to recognize tribal clinics as Public Programs. Tribal clinics may use Indian Health Service (IHS) funds to pay for medical expenses on behalf of their spenddown clients. The clinic must verify IHS is responsible for the cost of the medical expense before the expense can be applied toward spenddown.

Public Programs - What do I need to do?

Accept verification of the expense amount submitted by the Public Program unless questionable. Allow the usual and customary charge from the provider toward the individual spenddown, even if the provider has reimbursement agreements with the public program that permit them to pay less for the service.

The Department of Health uses a form to verify prescription expenses paid on behalf of Early Intervention Program enrollees. Staff may use the expense listed, minus any third party liability payments identified by the pharmacy, to reduce an individual's spenddown liability.

ACES no longer tracks Public Program expenses using the "PP" expense type. Staff need to enter the appropriate code based on the type of expense that has been paid by the Public Program and the date the expense was incurred.

Example: The HIV/AIDS Early Intervention program verifies it paid $150 in prescription expenses on April 3 and $30 transportation expenses to a medical appointment on April 7. Code the prescription expense as ‘RX’ (prescription expense) and code the transportation expense as ‘MU’ (not covered by Medicaid). ACES computes the effective date of eligibility based upon the combination of date of service and expense type entered.

Some Public Programs use their funding to purchase private health insurance on behalf of individuals. When a Public Program verifies payment of a health insurance premium on behalf of a spenddown individual, redetermine eligibility under the MN program using the expense as an income deduction and not a spenddown expense. Health Insurance premiums are coded on the MEDX screen in ACES and not entered as a spenddown expense in ACES online. Do not allow payments for Part C Medicare premiums on the MEDX screen.

In some cases this results in clients becoming eligible for MN with no spenddown liability, and these cases are approved for 12 months. In other circumstances, the spenddown liability is simply reduced by the health insurance premium amount. Ensure a new letter is generated to let the client know what has changed.