Kansas Family Medical Assistance
Manual (KFMAM)
Eligibility Policy - 11/22/2024
6511
6512 Financial Eligibility in the Medically Needy Program (spenddown) - Financial eligibility exists if allowable incurred medical expenses, as specified in this section, equal or exceed the spenddown for the base period. See 6410.02 for establishing the spenddown amount.
6512.01 Allowable Expenses - Allowable expenses incurred outside of the current eligibility base are only allowable if the individual is still legally obligated to pay the expense and such expenses have not been previously applied to spenddown in any other base period in which the person became eligible. The amount of these expenses applied to spenddown within a particular base period shall be the amount due and owing as of the first day of that base period. This provision includes instances in which the individual has taken out a loan to pay the expense or charged the expense on a credit card. The unpaid portion of the loan or credit card balance attributable to the original medical expense shall be regarded as a due and owing expense which can be applied to spenddown.
The amount still due and owing shall be determined by subtracting all payments made on the loan or credit card balance prior to application of the expense in a base period from the original expense amount. The remainder shall be regarded as due and owing. Verification of the initial medical expense as well as payment made will be necessary.
All expenses which are incurred by persons in the budgeting unit are allowable within the limitations described above. Such expenses do not actually have to be paid to be allowed against the spenddown. The client will choose which of his allowable expenses he wishes to apply on the spenddown. Failure by designated providers to collect from the client does not shift responsibility to the medical program. A medical payment can be made only for the excess expenses.
Payment for or assumption of medical expenses by a third party, whether legally liable or not, negates the client's responsibility to pay; therefore, such medical expenses cannot be considered against the spenddown. This includes the portion of any medical expense paid by Medicare or another health insurance. The portion not covered by insurance, such as the co-payment or deductible, is allowable. See 6512.02 for exceptions of when expenses are allowable when paid by a third-party.
The following expenses are allowable against a spenddown when the client provides eligibility staff with evidence that he has incurred such expenses within the limitations established above.
(1) - The pro rata portion of medical insurance premiums for the number of months covered in the eligibility base period regardless of the actual date of payment, past or future, are allowable.
Medicare premiums not covered by Buy-in are also allowable. Premiums which are subject to Buy-in are not allowable even if the client pays them (or they are withheld) prior to completion of the Buy-in process as such amounts are subject to repayment.
NOTE: Additional costs consumers pay for Medicare Replacement polices will not be reimbursed through the Buy-in process but are an allowable medical insurance premium.
Premiums for hospital indemnity policies which pay a flat per day amount are not deductible as they are viewed as income replacement policies rather than medical insurance. However, certain indemnity-type policies pay based on specific services received and charges incurred. In these instances, the premiums would be allowable. Each policy will need to be reviewed to determine whether the premium is allowable or not.
(2) - If medically necessary, all expenses for medical services incurred by the individual or a member of the budgeting unit are allowable. See KDHE Eligibility Policy Appendix, Eligibility Processing, P-1, Medical Necessity for Allowable Medical Expenses.
Medicaid co-payments are deductible. In addition, charges in a Medicaid approved institution can be allowed up to the private rate for individuals subject to the gross income limit and whose income exceeds that limit. Otherwise, the facility can only charge at the monthly state rate if the individual's income is below the limit. Charges in a non-Medicaid approved institution are not allowable including charges incurred during a transfer penalty. (See MKEESM 8111.)
6512.02 Expenses Paid by a Third Party - Medically necessary expenses paid for by a public program funded by the State (or political subdivision of the State, such as a county), other than Medicaid, can be applied to spenddown. Only the portion of the expenses funded by the public program is allowable unless the client will continue to be obligated for the remaining portion of the bill. Such an expense is allowable in the base period in which it was incurred. Examples include expenses paid by Vocational Rehabilitation, the Family Support Program, Kansas Health Insurance Program for the uninsurable, certain programs administered by the Department of Health and Environment, such as those through Children with Special Health Care Needs, the
Infant/Toddler Program and Other Title V programs and non-Title II AIDS Drug Assistance Program/Ryan White (MKEESM 2694) payments. Also included are services paid by Donated Dental Services, Adult Emergency Support Services/APS Emergency Funds, the Community Support Medication Program, and expenses subsidized on services received through a Community Mental Health Center or Community Developmental Disability Organization. For prescription drugs purchased with a Medicare Approved Drug Discount Card (MKEESM 2911) the pre-discount cost of the item is allowed toward spenddown. The entire cost of the item is allowable even if the $600 credit was used to purchase the drug. Services provided for or paid through Hill-Burton funds, Ryan White funds or the Kansas Farmworker Health program is NOT allowable.