Go to the reason code chart to link directly to a specific reason code or scroll through the list below.

For ACES Procedures go to ACES Letters in the ACES User Manual.

401-460

Medical expenses specific to long-term care

WAC 182-513-1350 (6) (b) gives the criteria for allowable medical expenses used to reduce excess resources. DDCS waivers, HCS CN waivers, hospice, and participation rules point to this WAC for allowable out-of-pocket medical expenses.

• Premiums, deductibles, and coinsurance/copayment charges for health insurance and Medicare premiums
• Necessary medical care recognized under state law, but not covered under the state's Medicaid plan;
• Necessary medical care covered under the state's Medicaid plan incurred prior to Medicaid eligibility.
• Expenses for nursing facility care are reduced at the state rate for the facility that the client owes the expense to
• As long as the incurred medical expenses:
  • Were not incurred more than three months before the month of the Medicaid application.
  • Are not subject to third-party payment or reimbursement.
  • Have not been used to satisfy a previous spend down liability.
  • Have not previously been used to reduce excess resources.
  • Have not been used to reduce client responsibility toward cost of care.
  • Were not incurred during a transfer of asset penalty described in WAC 182-513-1363.
  • Are amounts for which the client remains liable.
• Expenses not allowed to reduce excess resources or participation in personal care are:
  • Unpaid expense(s) prior to HCBS Waiver eligibility to an adult family home (AFH) or boarding home is not a medical expense.
  • Personal care cost in excess of approved hours determined by the CARE assessment described in 106 WAC is not a medical expense

Covered items under Medicare, Medicaid, or a Medicare/Medicaid managed care plan is not an allowable deduction from participation

Medical services covered by Medicare, Medicaid, or covered under a Apple Health managed care plan is not an allowable deduction from long-term care participation because it is considered "covered".

If the client's medical practitioner indicates an item or service is medically necessary (MN), and the item or service is denied, the client must file an appeal with Medicare, Medicaid, or the Apple Health managed care plan. The reduction of participation is the last resort after all other resources are pursued. Most medically necessary items should be covered by either Medicare, Medicaid fee-for-service or Apple Health managed care under the scope of care. This includes: transportation cost, over the counter items, cough and cold products, vitamins, topical and medical equipment and supplies, incontinent supplies, foot care, hearing aids, that are covered by Medicare, Medicaid, or Apple Health managed care.

See: Long-term care and Apple Health managed care See: Long-term care insurance and third party resources.

What if a client chooses a non-Medicare/Medicaid contracted provider?

If a client chooses to go to a non-Medicaid contracted provider or outside the Apple Health managed care network, the charge is the client's responsibility as the service is covered under their Medicare, Medicaid, or Apple Health managed care plan. Health Care Authority (HCA) has an agreement to pay for health care services that is signed by the provider and client. HCA 13-879 The exception is when a client has "creditable" insurance coverage through their retirement, pension, employer sponsored plan or COBRA continuation plan. These client's may have copayments. These copayments are an allowable deduction only if Medicaid does not pay the copayments due the provider not having a Medicaid contract. Individuals with creditable insurance coverage are not limited to Medicaid contracted providers. An exception to rule (ETR) may be requested through the HCS Regional Designee for HCS cases or Marcie Birdsall for DDCS cases if a client goes out of network due to special circumstances.

What is covered under Medicaid?

See the following pages for information on covered services.

• Scope of care chart
• Pharmacy information
  • Drug lists
  • Over the counter lists including cough/cold, vitamins
• Apple Health basic covered services (rule of thumb, if it is covered under Medicaid it should be covered under Apple Health managed care)
• Medical equipment and supplies
• Noncovered services are an allowable deduction from participation

What if the item is covered, but there is no contracted provider in the area?

There are situations where a needed contracted Medicaid provider is not available within a reasonable distance. The most common situation is when a client is unable to find a Medicaid contracted dentist within a reasonable distance.

An exception to rule (ETR) may be requested. The reasoning must be documented. A medical expense is not allowed at the private rate if the care/expense is available under the Medicaid rate.

ETR requests for a medical deduction listed as a covered item under Medicare, Medicaid, or Apple Health must go through the HCS regional financial program manager for HCS offices. For DDCS cases, an ETR request to reduce participation for a covered item must go through HCS HQ Marcie Birdsall.

Incontinence supplies

A common expense turned in as a participation deduction is incontinence supplies.

Incontinence supplies are covered under Medicare/Medicaid. If the client is in need of more supplies than normally allowed, a medically necessary justification may be requested by Medicare or the Health Care Authority (HCA) in order to authorize more supplies.

Do not allow incontinence supplies as a participation deduction.

Medication organizers/bubble packing

Bubble-packing prescription drugs is not an allowable expense from participation.

Facilities such as adult family homes, assisted living, and nursing facilities have specific regulations that ensure the proper labeling and organizing of a client's medication.

If a facility chooses to send the medications to a vendor to be bubble-packed, it is not an allowable deduction from participation.

What does Medicare cover?

Individuals on Medicare and Medicaid are called Full Benefit Dual Eligible (FBDE). Individuals on institutional Medicaid and HCB waivers do not have copayments toward Medicare services.

Individuals on institutional and HCBS waiver services on Medicare D for prescription drugs may have a premium cost that is an allowable medical deduction if the client has chosen a non-benchmark Medicare D PDP.

Drugs that are allowed under ANY PDP formulary under Medicare D, but not allowed in the specific PDP the client has chosen is not an allowable deduction from participation. Guidance from CMS has indicated if the drug is in any formulary it is a covered item.

Individuals on "credible coverage" for prescriptions are not enrolled in Medicare D. Prescription copayments due to credible coverage insurance is an allowable medical deduction from participation.

• Medicare has a web tool to check for covered items under the Medicare program.
• CMS notice to providers regarding QMB and Medicaid eligible clients. Providers are not allowed to charge QMB clients copayments.

If you have an institutional or HCB Waiver client being charged a Medicare D copayment, refer them back to the provider and indicate if the provider doesn't refund the copayment, the client will need to call the 1-800-MEDICARE helpline.

LTC and Medicare C and D charges

• Medicare Savings Program (MSP) describes Medicare programs, buy-in, Medicare buy-in unit contact information, what is Medicare, and the different Medicare programs. This includes information on Medicare A, B, C, and D and referral numbers for help on Medicare related issues.
• Medicaid Covered Drugs for Part D Dual Eligible
• CMS guidance on expenses related to Medicare D for spenddown
• Medicare and long-term services and supports (LTSS) has detailed information on Medicare and long-term care including participation issues.
• Medicare and spenddown

Medicare premiums and LTC overview

Once a LTC client is eligible for Medicaid, the Medicare premiums are paid.

Allow a Medicare premium deduction that is considered out-of-pocket to the client. Don't allow a Medicare premium that will be covered under a Medicare Savings Program (MSP) or a state buy-in program.

S05/SLMB eligibility is effective up to 3 months prior to the date of application if eligible.

S03/QMB eligibility is effective the first of the following month the client is determined eligible. Allow the Medicare A/B premium as a participation reduction in the month(s) prior to the S03 opening.

Medicare D/Low income subsidy is for all active MSP or Medicaid clients. It is effective immediately. Client's can choose a nonbenchmark plan which may have additional premium costs that is allowed as a participation deduction. Institutional and HCB Waiver clients have no Medicare D copayments.

For individuals not eligible for a Medicare Savings Program (MSP), it takes approximately two months before the department begins paying state buy-in. Allow the Medicare A/B premium as a participation reduction. This should only occur when there is a retro or historical opening prior to MSP eligibility.

For questions related to insurance or Medicare premium payments, contact HCA Coordination of Benefits online via secure form, or call 1-800-562-3022, ext. 1-6129.

If using the contact us form, use the Client button. Indicate your contact information and question. Indicate you are a financial worker and your office. Include the ACES client ID.

HCA no longer pays Medicare C premiums with the exception of a small existing caseload subject to funding (these cases were grandfathered for Medicare C payment).

Spenddown

For more information on medical spenddown such as base periods, medical transportation, public programs and ACES screens, see the Apple Health for medically needy and spenddown overview page.

The spenddown clarifying information gives guidance as to allowable medical expenses, including

• Expenses paid with a credit card.
• Expenses sent to a collection agency.

What are the differences between expenses allowed to reduce participation and those used in medically necessary (MN) spenddown?

The medical expense chart used for MN spenddown is the same basic guideline used to reduce participation for LTC programs.

There are situations that are unique to long term care programs.

• Expenses incurred during a LTC transfer penalty are not allowed to reduce participation.
• For LTC, a medical expense prior to eligibility must be unpaid. For spenddown, expenses incurred and paid 3 months prior to the application can be used.
• Private personal care cost in excess of approved hours determined by the CARE assessment described in 106 WAC is not a medical expense.
• Unpaid expenses prior to HCBS Waiver eligibility to an adult family home (AFH) or boarding home is not a medical expense. This applies to both participation and MN spenddown. These facilities are not medical facilities. Another term for AFH and boarding homes is alternate living facility (ALF).
• Expenses of the community spouse or family members. This includes health insurance premiums. If the health insurance premium is for the couple, we allow one half of the expense for the LTC recipient if we are unable to determine the amount of the LTC recipient's share.
• Health insurance premiums paid by a 3rd party including HCA COB unit are not used to reduce participation. Health insurance premiums paid on a client's behalf by COB are considered an income deduction for the MN Spenddown program.
• Medical expense deduction from participation that is a covered item under the state plan is not allowed as a deduction if the client was on Medicaid during the date of service.
• Medical expense deduction for copayments or deductibles from participation that is a covered item under Medicare is not allowed as a deduction if the client was on Medicaid and QMB during the date of service.
• Medical expense deduction from participation that is a covered item under the Apple Health managed care plan is not allowed as a deduction if a client chooses the service outside of the network.
• Liquid supplements (such as Ensure, Resource) are covered by Apple Health when medically necessary. Liquid supplements (enteral nutritional products) not approved by HCA are not considered a medical expense used to reduce participation even if the client has a medical prescription.
• Effective 11/22/2012 reasonable limits on allowable medical expense deductions described in WAC 182-513-1350 was final.
  • Expenses for nursing facility care are reduced at the state rate for nursing facility care that is owed by the client prior to Medicaid eligibility. It is based on the state rate for the particular facility the bill was incurred.
  • Medical expenses incurred more than three months before the month of application is not an allocable medical deduction to reduce participation.

Expenses of a medically necessary service animal

A description of service animals is described in WAC 388-473-0040 food for service animals as an ongoing additional requirements. Although this section describes when to authorize food for services animals of an SSI or TANF recipient, it can also be used as a guideline when determining if expenses related to a service animal can be used as a medical expense.

In order for expenses related to a service animal to be used as a medical expense:

Consult CARE and the client's social service specialist/case manager as to whether the service animal is medically necessary. If the social service specialist is unable to determine if the service animal is medically necessary get a statement by the client's physician/practitioner as to why the expense is medically necessary.

The service animal must be performing a task that is necessary for the health and safety of the individual.

For LTC recipients with service animals that are on SSI, consider food for service animals as an ongoing additional requirement. If authorized, do not allow the food as a medical expense to reduce participation.

Medical expenses and room and board

Noncovered necessary medical expenses is an allowable deduction to determine the client's participation. For HCBS waiver clients residing in alternate living facilities, it is not an allowable deduction from room and board without an exception to rule (ETR).

Submit an ETR request to the HCS regional designee for a medical expenses that would have been used to reduce participation if there had been available participation.

Room and board for ABD cash recipients is not reduced by medical expenses. Do not refer ABD cash cases for an ETR.

Reducing room and board is the last resort as it is state funded. If the expense can be deducted through participation, but takes a few months because of low participation, use that method rather than an ETR to reduce room and board.

Medicare supplements, called Medigap are not an allowable ETR from room and board if the client is eligible for a Medicare Savings Program (MSP), this is because MSP covers the same thing as a Medigap plan. For more information, see "What about Medicare Insurance Supplements, also called Medigap plans?" on the Medicare and long-term services and supports (LTSS) webpage (scroll down to find this section).

See also: HCS waivers, room and board, ETRs and bed holds.

DDCS waiver has a process to reduce room and board for necessary medical expenses and guardianship fees. DDCS has authorized the case manager as the designee to approve these costs from room and board. DDCS case-managers notify the financial worker via the DSHS 15-345.

Any deduction from room and board must be coded as an ETR in ACES 3G in the decision tree under the Institutional Care/Expenses.

TPL, COB, Premium Assistance program

• Medical assistance-third party liability
• Long-term care and third-party resources, LTC insurance

When to allow medical expenses

Changes including medical expenses must be reported within the timeframes outlined in WAC 182-504-0110. Changes that must be reported will be used for all medical including institutional medical programs. See WAC 182-504-0105.

If a medical expense is not reported within required time frames, we are not able to use the expense as a post eligibility deduction for institutional Medicaid. For HCBS Waiver, we may allow a medical expense if unpaid as long it meets the criteria in WAC 182-513-1350 (6) and (7).

If a medical expense increases and is not reported within time frames, we can't go back historically and change the amount. If a medical expense ends, (such as a health insurance premium), and it is not reported timely, it is an overpayment.

In order to allow a medically necessary noncovered item, we will need verification:

• Of the cost
• Item is prescribed by an allowable practitioner and is considered a medically necessary item
• Item is not covered by Medicare, Medicaid, or Apple Health managed care. Most medically necessary items should be covered for individuals receiving long-term care. Any item indicated on the pharmacy covered list, including over the counter items such as cough/cold medications or vitamins cannot be allowed as a participation deduction.
• For medical equipment and supplies (MES) or environmental modifications, check with the social worker/case manager as to whether it should be covered under the HCBS waiver? Most MES is covered under the Medicaid scope of care or HCBS waiver. HCBS MB H13-030 dated June 24, 2013 has more information regarding MES vendors.

If the reported expense appears to be covered, send a letter explaining why the expense is not allowed using the text templates that include the rule.

Send the medical expense fact sheet to all new openings and clients that turn in expenses that are not allowed as a participation reduction.

Noncovered allowable medical expenses. Differences in how we apply the medical deduction in institutional medical and HCBS Waiver

Once it is determined the medically necessary expense is allowed as a deduction, there is differences in institutional and HCBS Waiver cases on when we allow the medical deduction.

Post eligibility participation (WAC 182-513-1380, WAC 182-515-1509, WAC 182-515-1514)

There are three methods of allowing expenses in post eligibility described in WAC 182-504-0120 (11) for institutional programs and WAC 182-504-0120 (12) for HCB Waivers. Federal guidance allows Method 1 or Method 2 for institutional cases (those residing in medical institutions). Federal option allows Method 3 for HCBS Waivers.

• Method 1: Allow the expense in the month it was incurred; or
• Method 2: Estimate medical expense incurred in the preceding period, not to exceed 6 months if the expenses are expected to continue.
  • At the end of the prospective period, or if there is a significant change of 25%, the expense is reconciled for the next time period.
  • A reconciliation is required, at least every 6 months when using Method 2. Use barcode ticklers to track the expenses and reconciliation period.
  • Use the Method 2 training instructions and calculator and document that Method 2 is being used to estimate medical expenses.
• Method 3: When there is a change in income, or allowable expenses, that changes the amount of the cost of your care for a home and community-based waiver or service, we calculate the new participation amount effective the first of the month following the date the change was reported, except that the new participation amount will be effective the month the change occurs if the change is the loss of an income source that you report within thirty days of the change.

For additional information on Method 1, Method 2, and Method 3 go to the financial SharePoint site. See financial training under the policy and program changes.

What if a provider appears to be charging a client extra?

If a Medicaid or Medicare/Medicaid client is turning in medical expense charges that appear to be covered, or the client is being charged the difference between the Medicaid or Medicare rate, you may need to refer the situation for an investigation.

• Nursing facility, assistance living, group homes or adult family homes contact: Residential Care Services (RCS) complaint email box Complaint Resolution Unit (DSHS/RCS).
• All other Medicaid providers contact the Health Care Authority. Include your name, phone number, client and provider information and what the issue is.
• Refer complaints regarding Medicare claims to 1-800-Medicare
• If provider fraud is suspected, follow the procedures in HCS MB H13-011 issued 3/5/2013: procedures for report suspected fraud.

Practitioners

Allowable practitioners

• ARNP advanced registered nurse practitioners
• CRN certified registered nurses
• DC chiropractors
• DDS dentists, denturist, orthodontist, periodontitis
• Dental hygienists
• DO osteopath
• DPM podiatrists
• Electrotherapist
• Hydro therapist
• Inhalation/respiratory therapists
• MD physicians
• Midwives
• OD optometrist
• Opticians
• PA physicians assistants
• Pharmacists
• Physical Therapists
• Psychologists/psychiatrists
• Speech therapists
• X-ray technicians

Allowable practitioners with a documented referral from an M.D., D.O., D.D.S., OR A.R.N.P.

• Acupuncturist
• Dietitians
• Licensed massage therapist
• Naturopaths

Nonallowable practitioners

• Herbalists
• Holistic healers
• Homeopaths
• Hypnotists
• Masseurs or manipulators
• Medical cannabis distributor
• Practitioners not licensed under Washington State law
• Psychic or faith healers
• Sanipractors
• Veterinarians (unless the expense is for a medically necessary service animal)

Nonallowable expenses, services, and supplies

• Services obtained out of the US
• Interest and fees incurred on an unpaid medical bill
• Durable medical equipment or modification approved under the HCBS Waiver program for individuals receiving Waiver services is not an allowable participation deduction
• Insurance premiums for policies that pay a cash benefit to the insured and the benefit is not intended to reimburse a provider.

  These premiums are not health insurance but pay directly to the insurance holder under certain conditions. (usually a daily rate when the client is unable to work, in the hospital or has a certain type of medical condition).

  • Contact the carrier to find out if it is a health insurance or one of these policies that pay a cash benefit to the client and not a provider because of a health condition.
  • This does not include LTC insurance. LTC insurance premiums are an allowable deduction.
  • LTC insurance policies waive the premiums when the client starts receiving benefits from the LTC insurance. Once the client is accessing LTC insurance, remove the premium as a deduction.
• In home cooking/cleaning services/yard work/property maintenance
• Telephone charges including long-distance charges
• Commercial diet clinics, gyms and pools that are not monitored by a licensed physical therapist
• Toiletries such as toothpaste, shampoo, personal grooming products
• Private alternate living facility (ALF) charges are not considered a medical expense.
  • See WAC 182-513-1205 for possible eligibility of Medicaid using rules for individuals living in state contracted ALFs.
• Drugs not approved by the Federal Drug Administration (FDA)
• Out of state billings for medical services not recognized under Washington State law.
• Items covered under Medicare, Medicaid, or an Apple Health managed care plan is not an allowable deduction from long-term care participation. If a client chooses to go to a non-Medicaid/Medicare contracted provider or outside the healthy options managed care network, the cost is their responsibility.
• Food/special diets is not a medical expense
• Nutritional supplements unless prescribed as medically necessary. Examples are enteral liquid and powdered supplements.
• For active Medicaid clients, liquid supplements that are medically necessary are covered by Health Care Authority (HCA). Liquid supplements (enteral supplements) not approved by HCA are not considered a medically necessary expense to be used to reduce participation.
• Food items are covered under the basic food program, consider eligibility for basic food for individuals not in a facility claiming food items as a medical expense.
  AFH, Assisted living facilities, NF and RHCs are required to provide meals taking into account an individuals special dietary needs. Meals are included in the daily rate.
• Over the counter drugs and medications not prescribed or considered not medically necessary. Many over the counter drugs, medications and vitamins are covered by Medicaid.
• Health camps, trips or retreats
• Medical cannabis. Cannabis is not an approved prescription drug under the Federal Food, Drug and Cosmetic Act and has not been approved by the FDA for treatment.
• Unpaid participation incurred while active on a Medicaid program
• Dietetics
• Spouse's unpaid medical expenses are not allowed to reduce participation.

Where to indicate medical expenses

LTC medical expenses are indicated on the LTCX screen. The MEDX screen is used for recipients on other programs such as food assistance. Non-Medicare health insurance premiums are indicated on the MEDX screen for noninstitutional spenddown cases. Make sure the medical expense is indicated on the LTCX and MEDX screen when a LTC recipient is on food assistance.

ACES and medical expenses

Institutional Care in ACES 3G decision tree used in institutional Medicaid programs to indicate medical expenses.

Expenses in ACES 3G decision tree used to indicate health insurance premiums for spenddown. Used to indicate all medical expenses for food assistance including COPES HCBS Waivers participation.

ACES on line summary and detail used to indicate medical expenses for spenddown.

ACES-LTC

ACES-Medical expenses as a deduction

Medicare programs

• Apple Health Medicare Savings Programs
• Medicare Savings Program (MSP) Certification periods
• Apple Health Medicare Connect
• Medicare information from the Washington State Office of the Insurance Commissioner
• Medicare Savings Programs reference guide 

Railroad retirement

Railroad Retirement Medicare entitlement is NOT in SOLQ. The client can present a Red, White and Blue Medicare entitlement card or RRB approval or award letter that shows their or their dependent's Medicare coverage. RRB award letters do not provide entitlement dates for Part A and Part B. The RRB Red, White and Blue cards do provide Medicare entitlement dates.

The number for Railroad Retirement Medicare Benefits is: 1-877-772-5772. Railroad retirement field office locator.

Medicare buy-in unit

For Medicare Buy-in issues contact: 1-800-562-3022 Ext.1-6129. Business hours: Monday through Friday, 7:30 a.m. to 4:30 p.m. This phone number is strictly for Medicare premium payment questions only.

A worker can contact the Medicare Buy in unit on a case related question by using a barcode tickler to 102@MBU.

Medicare information specific to long-term care

Medicare payment for nursing facility cost of care:

• Medicare pays the full cost of care for NF services for up to 20 days per benefit period and partial costs for the remainder of 100 days when the person meets Medicare requirements. The partial costs are called Medicare A coinsurance days.
• If the FBDE client enters the NF under Medicare coverage, the agency determines eligibility and participation the same as for any other institutional person on Medicaid.
• Do not code Medicare days in ACES (ME) as this will affect the NF award letter.
• The FBDE client does not pay participation toward Medicare days. Once that Medicare coverage ends, the client pays participation toward Medicaid days up to the cost of care. Client participation towards the cost of care is a post-eligibility requirement tied to institutional Medicaid programs, not the Medicare benefit.
• Monitor resource eligibility when an FBDE client is on full Medicare days. An FBDE client on Medicare for the full 100 days may acquire excess resources. Medicare Coverage of Skilled Nursing Facility Care explains the NF Medicare benefit.

Reimbursement rates for full benefit dual eligibles (FBDE)

Purpose: This clarification is based on the Dear Nursing Home Administrator letter NH #2010-001 sent 3/26/2010.

For Medicaid clients enrolled in Medicare A, Medicare will pay in full for up to the first twenty days of nursing facility care at the full Medicare rate. For the first day and up to eighty days thereafter (i.e. the hundred and first day), the amount paid by Medicare will be reduced by the client's coinsurance responsibilities. The agency will pay up to the Medicaid rate for the coinsurance days. This is described in WAC 182-502-0110 (3) and 1902 of the Social Security Act

Reimbursement rates for Qualified Medicare Beneficiaries (QMB)

Those eligible for QMB are eligible for payment of Medicare cost sharing expenses.

A QMB only client may apply for a CN or MN program if Medicaid is needed beyond the Medicare days in the nursing facility.

The agency will pay for Medicare coinsurance charges for QMB residents, up to the Medicaid nursing facility reimbursement rate. It is not necessary for a QMB-only resident to apply for Medicaid services for payment of coinsurance expense during Medicare coinsurance days. QMB-only clients are not required to pay participation. An award letter is not required to bill the agency for Medicare copayment expenses. Providers should refer to the nursing home billing guide for instructions on how to bill for QMB-only claims.

Reimbursement rates for FBDE clients enrolled in Medicare Part C (Advantage) plans

For Medicaid clients enrolled in Medicare Part C plans, payment for Medicare days including coinsurance days may vary depending on the Medicare C plan. The agency will pay up to the Medicaid rate for coinsurance days.

Medicaid client participation during Medicare days including coinsurance days

Facilities may not collect participation from Medicaid clients during Medicare days, including Medicare coinsurance days. Client participation indicated on the nursing facility Medicaid award letter is only applicable for Medicaid days.

Client participation is not an eligibility factor for Medicare coverage. This includes cases where the Medicaid rate is higher than the Medicare coinsurance rate and DSHS is billed for the coinsurance up to the Medicaid rate. Clients or their representatives are responsible for reporting if their resources exceed Medicaid standards. 

Note: The agency cannot use Medicaid funds to pay the recipient's coinsurance responsibility beyond the amount Medicaid would pay for the service and cannot allow nursing facilities to write off the unpaid amounts as bad debts on their Medicaid cost reports.

Nursing Home Providers may contact the nursing home claims processing unit at the Health Care Authority (HCA) with questions regarding the billing during Medicare days.

Noncontracted Medicaid nursing facilities

Some nursing facilities are contracted with Medicare, but not with Medicaid. Nursing facilities can file a Medicare coinsurance claim with HCA for QMB eligibles.

If the Medicare days end, the nursing facility cost would be considered private pay. If the person remains in a noncontracted Medicaid for 30 days or more, the only full Medicaid that can be considered is an S99. The private pay cost in a medical institution is an allowable spenddown expense.

If a client is on HCBS Waiver and that is what is driving the S03/QMB eligibility, and enters a non-Medicaid contracted Medicare facility, a redetermination will be needed if the client is in the NF 30 days or more under the S99 program. This redetermination will likely cause the S03/QMB to close after the 10-day notice period.

Medicare premiums as a participation deduction

Only out-of-pocket Medicare premiums are an allowable participation reduction. If the Medicare premium is covered under a Medicare savings program (MSP) or state buy-in, it is not an allowable participation reduction. Consult the Allowable medical expenses in the Apple Health eligibility manual for complete information on medical expenses used as a participation reduction.

All FBDE clients are automatically enrolled in the low-income subsidey (LIS) Extra help subsidy for Medicare D prescription drug coverage unless the client has creditable coverage for prescriptions under another plan. If an LTC client elects to have a nonbenchmark Medicare D plan, the out-of-pocket cost (difference in the premium minus the LIS subsidy) is an allowable medical expense deduction from participation. 

Any expense deducted from room and board (residential clients in ALFs) is coded as an Exception to the Rule (ETR). Signed ETRs are needed to deduct any expense from room and board. Do not request an ETR if there is available participation.

Medicare D-Prescription Drug Plan (PDP)

Beginning January 1, 2006, Medicare assumed responsibility for the prescription drug coverage for over 6 million low-income Medicare beneficiaries who are also enrolled in Medicaid. These beneficiaries are referred to as full-benefit dual eligible (FBDE). 

• All FBDE clients transitioned from Medicaid drug coverage to Medicare drug coverage as of January 1, 2006.
• FBDE clients receive their prescriptions through a Prescription Drug Plan (PDP) unless they receive prescriptions through a creditable coverage plan. If they do not enroll in a plan, they are automatically assigned a PDP. 
• FBDE clients can change plans any time by contacting 1-800-Medicare. The new plan will be effective on the first of the next month.
• Fee for service Medicaid will cover medically necessary over-the-counter medications specifically listed as a covered item on the HCA website.
• FBDE clients have copays under Medicare Part D that will vary.
• FBDE clients who are on a benchmark Medicare D plan have their premiums paid by the low-income subsidy (LIS) program through Medicare.
• FBDE clients are entitled to premium-free Part D enrollment, however they may elect enrollment in an enhanced plan. Those who enroll in an enhanced plan are responsible for the portion of the premium attributable to the enhancement and that portion is an allowable deduction in the post-eligibility calculation.
• FBDE clients who are residing in institutions (nursing homes and ICF-MRs) are exempt from Med D copays once they are residing in a facility for a full calendar month. An FBDE client will have no Med D copays once they are deemed in a medical institution through the end of the calendar year. This group is called LIS 3.
• FBDE clients who are eligible for a Home and Community Based Waiver are exempt from Med D copayments starting 1/1/2012.
• The LIS status resets every January 1.

Example: An FBDE client is on Community First Choice (CFC) February 1st, on February 28th the client enters the NF. On May 3rd the client returns home on CFC. For this client, the Medicare D co-payments end on April 30th and will continue to have no copayments through December 31st (the end of the calendar year).

Note: Medicare D copayments ended for home and community based (HCBS) waivers effective 1/1/2012 due to federal legislation. A pharmacy is required to accept an HCBS Waiver award letter from ACES or a Planned Action Notice (PAN) from the social service authorization for new HCBS Waiver openings until the interface between ProviderOne and Medicare identifies the HCBS Waiver person as LIS 3 in the system.

Medicare D LIS payment levels and what they mean

Health Care Authority (HCA) sends information to Centers for Medicare and Medicaid Services (CMS) regarding an FBDE client's status. CMS sends this information to the PDP.

Payment level 1: QMB, SLMB only

Payment level 2: An FBDE client who is not institutionalized

Payment level 3: Institutional group. Effective 1/1/2012 this will include HCBS waiver eligibles authorized by Home and Community Living Administration (HCLA).

If the PDP indicates to the pharmacy that a person is still not showing up as a payment level 3, the client must present an award letter or PAN showing institutional medical eligibility as "best available evidence" for the Medicare D copayments to be waived.

If the person in an institution or on a HCB Waiver still shows up as a payment level 2 even after the PDP has received an institutional award letter, the pharmacy or PDP should contact 1-800-Medicare.

Field staff or the client can call 1-800-Medicare (1-800-633-4227) to report any issues around Medicare D or complaints about the PDP or a pharmacy not accepting an award letter or planned action notice. If a complaint is made to Medicare, a copy of the complaint will be forwarded to CMS. It also tracks the complaints to make the PDPs accountable for customer service.

• HCA Medicare Part D resources
• Drugs covered by Medicaid

The Medicare D benchmark plan is the maximum monthly premium that will be paid by CMS for clients qualifying for "Extra Help". If a person receiving the low-income subsidy (LIS) enrolls in a Medicare Part D plan which has a premium higher than the amount listed as a benchmark, the beneficiary is responsible for paying the difference in the premium.

All Medicaid clients are automatically enrolled in the LIS/Extra help subsidy. If an LTC client elects to have a non-benchmark plan, the out-of-pocket cost (difference in the premium) is an allowable medical expense deduction from participation.

Medicare D Prescription Drug Plan for newly Medicaid eligible

Until an FBDE client is auto enrolled in a Medicare D prescription drug plan, newly eligible Medicaid clients get their prescription drugs through the Limited Income Net Program (LI-NET) powered by Humana.

Note: Medicare D premiums are paid by Medicare's low-income subsidy (LIS) program not HCA. HCA sends information on all Medicaid recipients eligible to receive Medicare benefits to Medicare to enroll these clients in the low-income subsidy program. Benchmark plan premiums are covered 100% by the Medicare LIS program. Individuals need to call 1-800-Medicare if they wish to switch to a benchmark plan. Clients need to call their PDP plan to resolve issues with prescription drug coverage.

HCA does not enroll clients in Medicare D plans, this is done by Medicare.

Creditable coverage and Medicare D

Not all Medicare eligible clients have Medicare D. Clients that have "creditable coverage" are not required to enroll into a Medicare D plan once they become Medicaid eligible.

What is creditable coverage?

Creditable Coverage Definition and Determination defined by CMS:

As defined in the regulation at 42 CFR §423.56(a), drug coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard Medicare prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Medicare prescription drug benefit. See 70 CFR 4225

In a client has health insurance that includes comparable prescription drug coverage, they do not have to enroll into a Medicare D plan.

These plans are required to send a document to the client indicating they provide comparable prescription drug coverage.

Refer clients to the Washington State Office of Insurance Commissioner (SHIBA) if clients have questions about switching insurance.

Do clients have out-of-pocket prescription drug co payments associated with creditable coverage plans?

Yes. Creditable coverage plans may have co payment charges that are considered out-of-pocket costs to the client. These out-of-pocket costs must be verified for the agency to reduce participation. Once the agency has verification of what the health insurance has paid toward the prescription drugs, the out-of-pocket co payment is an allowable deduction from participation.

What happens if the system automatically enrolls an client with creditable coverage into a Medicare D prescription drug plan once they become eligible for Medicaid?

The client or their representative will need to contact 1-800-Medicare and their creditable coverage insurance carrier to indicate they want to retain their creditable coverage health plan. There are times when Medicaid clients are enrolled into a Medicare D PDP incorrectly when the client has creditable coverage.

Clarification from Centers for Medicare and Medicaid Services (CMS) issued 12/2005 regarding Medicare D prescription drug costs and post eligibility.

Beginning January 1, 2006 clients enrolled in Medicare will be able to receive prescription drugs through Medicare Part D. For the most part, coverage of prescription drugs will no longer be available under Medicaid. Many states have raised questions about how to treat pharmacy charges and Part D costs for institutionalized clients.

Part D premiums

Full benefit dual eligibles (FBDEs) are entitled to premium-free Part D enrollment, however they may elect enrollment in an enhanced plan. Those who enroll in an enhanced plan are responsible for that portion of the premium attributable to the enhancement. When an institutionalized FBDE is enrolled in an enhanced plan the portion of the premium that remains the client’s responsibility is an allowable deduction in the post-eligibility calculation.

Copays, deductibles and coverage gap

Full benefit dual eligibles (FBDEs) who are institutionalized and enrolled in a Part D plan or a Medicare Advantage-Prescription Drug plan (PDP or MA-PD) will not be responsible for the payment of deductibles or copays, nor will they be subject to a coverage gap in their Part D benefits (these rules do not apply to clients eligible under a 1915 (c) waiver). Listed below are the various circumstances that may apply to institutionalized FBDEs:

• The plan will require no copays or deductibles and will apply no coverage gap.
• If the state identifies the client as an institutionalized FBDE for past months on their monthly Medicare Modernization Act (MMA) file, the plan will reimburse the client for any copays incurred during those months.
• If the state identifies the client as an institutionalized FBDE for past months on their monthly MMA file, the plan will reimburse the client for copays or deductibles and costs incurred during a coverage gap for those months.
• The plan will be responsible for drug charges effective the date of enrollment. The plan will not charge deductibles or copays, or apply a coverage gap to those enrolled as institutionalized FBDEs.

In the first three circumstances above, when post-eligibility is calculated, there should be no deductions for copays, deductibles or coverage gaps. This is because, if incurred, the client is not ultimately responsible for these charges. In the last circumstance above, the client will remain responsible for Part D covered drugs purchased prior to the effective date of the Part D enrollment. In this circumstance the cost of these drugs is an allowable deduction in the post-eligibility calculation.

Nonformulary Part D drugs

PDPs and MA-PDs are required to develop transition plans for institutionalized clients. Plans may allow for limited coverage of drugs that are not part of the plan’s formulary. Each PDP/MA-PD’s transition plan may vary. Plans must issue a periodic (at least monthly) statement to the beneficiary explaining all benefits paid and denied. Part D drugs that are not covered by the plan may not be covered by Medicaid, and absent other drug coverage, these would remain the responsibility of the client. These charges may be allowable deductions in the post-eligibility calculation. To determine whether prescription charges should be allowed in post-eligibility, apply the following rules:

1. When a plan denies coverage of a prescription the beneficiary has the right to request an exception for coverage of the drug. The beneficiary is notified in writing of the decision on any exception requested. If the drug charge appears on the statement as a denial, and no exception was requested, do not allow the charge.
2. If the drug charge appears on the statement as a denial, and an exception was requested and denied, allow the charge. At the state’s option, the deduction for these costs may be subject to reasonable limits.

This procedure will help ensure that legitimate costs for drugs not covered by the plan are correctly allowed in post-eligibility. By relying on the plan statements and exception notices, eligibility workers will not need to be concerned with knowing the plan’s formulary or nonformulary drugs covered under a transition plan or under the exception process. Applicants should be advised to maintain these documents for consideration in post-eligibility.

Non-Part D covered drugs

Certain drugs are not covered under Part D. State Medicaid programs have the option of covering these excluded drugs. If the institutionalized FBDE client presents documentation that a purchased drug is excluded under Part D, and the State Medicaid program has not opted to cover the drug, absent other drug coverage, the drug may be an allowable deduction in the post-eligibility calculation. States may place reasonable limits on this deduction.

Projection and reconciliation

For states that opt to project medical expenses for post-eligibility, note that the projected figures must be reconciled at the end of the prospective period. Use the guidelines above to determine the beneficiary’s actual costs to determine the appropriate adjustment to the projected deductions.

Note: HCS Management Bulletin H06-015-Procedure dated March 7, 2006 includes several handout and Q and A regarding Medicare D.

What about Medicare insurance supplements, also called Medigap plans?

Medigap plans are private insurance supplements that provide additional coverage for certain Medicare copayments.

Medigap insurance premiums are an allowable post eligibility deduction from participation.

Medigap insurance is not allowed as an ETR from room and board. The reason for this is because clients in medical institutions or on a HCB Waiver are eligible to receive a Medicare Savings Program (MSP) which provides the same copayment coverage as a Medigap plan. Do not allow Medigap insurance as a deduction from state-funded room and board.

Clients can choose to cancel Medigap plans when going on institutional and HCB Waiver services and QMB. If the client goes off Medicaid, they have 30 days per the Office of Insurance Commissioner to notify their Medigap plan that they want to be reinstated. Refer clients to their local SHIBA counselor if they have questions about cancelling and reinstating their Medigap plans.

Medicare C - Medicare Advantage Plans

Medicare Advantage Plans are another way to get original Medicare (Parts A and B).

Medicare pays a private insurance company you select to manage your care.

You pay:

• Part A premiums (if any)
• Part B premiums
• The Medicare Advantage Plan's premium (if any)
• Any deductibles, copays, or coinsurance

For clients on institutional Medicaid, the only out-of-pocket expense would be the Medicare Advantage Plan premium if any.

Since institutional Medicaid clients receive both Medicaid and QMB Medicare Savings Program, the deductible and copayments are covered (up to the state rate). Providers with a Medicaid contract are to accept payment at the state rate.

What do these plans cover?

All medically necessary care covered by original Medicare.

They could include prescription drug coverage (Medicare Part D)

They could include additional coverage for vision, hearing, dental, foot care.

For additional information on Medicare Advantage Plans including approved Medicare Advantage Plans in the State of Washington by county.

Medicare Savings Program (MSP) and long-term care: Effective date

Note: The date eligibility is established for QMB/S03 is determined by the Public Benefits Specialist (PBS), or LIS leads data having all the information needed in order to make a decision on the application. HCA has clarified that QMB needs to be open the first of the following month the action could have been taken by the PBS.

QMB/S03 starts the first of the month following the date eligibility is established. If institutional eligibility is needed to open S03 because income is over the FPL, then the S03 opens the first of the month following the date all verification was received to establish eligibility. The date eligibility is established is the date that is indicated on the VERF screen. HCA has given clarification that if verifications are received, but LTC does not start until the following month, that the PBS would indicate the date the verifications are received on the VERF screen. If verifications were received in a prior month to the LTC start date, this would cause the S03 to open in the same month as the LTC. Even though the LTC eligibility is driving S03 eligibility, this is correct.

S05/SLMB starts in the month the client is income eligible for the program. This includes a retro month.

S06/QI 1 starts in the month the client is income eligible for the program. This includes a retro month.

What is a retro month? A retro month is 3 months prior to the date the application was received.

What is a plug in? A plug in is needed when P1 does not pick up the eligibility from ACES. HCA indicates it is always needed for MSP or state buy in coverage in a retro month. To request a plug-in contact the Medicare buy-in unit using a barcode tickler to: 102@MBU

State buy-in. This is state funded and picks up the Medicare B premium in the 3rd month of Medicaid eligibility. State buy in is used when the client is not eligible for a federally matched MSP program but is eligible for a Medicaid program. State buy-in is frequently used for the Apple Health for Workers with Disabilities (HWD) program and spenddown as most of these clients have income that exceeds the MSP income standards.

If we are opening an institutional program back several months and an client was not eligible for the S03/QMB until the first of the month following the month we had all the necessary information to open S03, the state will still buy in the Medicare premium in the 3rd month of eligibility.

Active Medicaid client subsequently becomes eligible for Medicare. In this scenario, HCA has confirmed that the PBS would screen in the S03 in the month prior to the Medicare eligibility to start the MSP in the month the client becomes Medicare eligible.

Note: For more information, see allowable medical expenses.

ACES-Medicare savings programs

LTCX screen coding and Medicare

• OA-Medicare Part A premiums
• OB-Medicare Part B premiums
• OC-Medicare Part C premiums
• OD-Medicare Part D premiums
• OP-Medicare Part D copayments

Additional helpful links for Medicare issues

• Statewide Health Insurance Benefits Advisors (SHIBA)
• Medicare prescription drug program (Part D)
• Medicare website
• Apply online for Medicare

182-500-0010 Medical assistance definitions -- A.
182-500-0015 Medical assistance definitions -- B.
182-500-0020 Medical assistance definitions -- C.
182-500-0025 Medical assistance definitions -- D.
182-500-0030 Medical assistance definitions -- E.
182-500-0035 Medical assistance definitions -- F.
182-500-0040 Medical assistance definitions -- G.
182-500-0045 Medical assistance definitions -- H.
182-500-0050 Medical assistance definitions -- I.
182-500-0065 Medical assistance definitions -- L.
182-500-0070 Medical assistance definitions -- M.
182-500-0075 Medical assistance definitions -- N.
182-500-0080 Medical assistance definitions -- O.
182-500-0085 Medical assistance definitions -- P.
182-500-0090 Medical assistance definitions -- Q.
182-500-0095 Medical assistance definitions -- R.
182-500-0100 Medical assistance definitions -- S.
182-500-0105 Medical assistance definitions -- T.
182-500-0110 Medical assistance definitions -- U.
182-500-0120 Medical assistance definitions -- W.