Spend-down
HP Provider Relations
October 2010
Agenda
– Objectives
– Spend-down Rule
– Spend-down Eligibility
– Eligibility Verification System
– Enhanced Spend-down
Information
– Billing a Member
– Claims Processing
– Examples of Application of
Spend-down
– Quiz
– Helpful Tools
– Questions & Answers
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Spend-down
October 2010
Objectives
– To provide a thorough explanation of spend-down rules and
eligibility
– To explain when it is appropriate to bill Medicaid members for
spend-down
– To outline claims processing procedures related to spend-down
– To provide illustrative examples of how spend-down
calculations are made
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Spend-down
October 2010
Spend-down Rule
405 IAC 1-1-3.1 – Providing
services to members enrolled
under the Medicaid spend-down
provision
– Subsection (d) states:
4
•
A provider may not refuse service to a
Medicaid member pending verification
that the monthly spend-down obligation
has been satisfied
•
A provider may not refuse service to a
Medicaid member solely on the basis of
the member’s spend-down status
Spend-down
October 2010
Define
Spend-down eligibility
Spend-down Eligibility
– 405 IAC 2-3-10 – Spend-down eligibility
• Certain types of income are counted in
determining Medicaid eligibility
• Income greater than a certain threshold is
considered "excess income” and is referred to as
"spend-down obligation"
– Spend-down, therefore, is very similar to
a "deductible"
• The Medicaid member is liable for their initial
Medicaid expenses each month, up to their spenddown amount
• Spend-down amounts are deducted from the first
claim(s) processed each month
 Pharmacy providers that bill claims on a point
of sale (POS) system receive immediate claim
adjudication and may collect the amount of
spend-down credit at the time of service
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Spend-down
October 2010
Spend-down Eligibility
– Spend-down members are in the
Traditional Medicaid, fee-for
service program
– Spend-down members should not
be in Care Select or the riskbased managed care (RBMC)
program
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Spend-down
October 2010
Error Codes 0387 and 0388
– Providers may have encountered claim denials due to explanation of
benefit (EOB) codes 0387 or 0388 – This service is not payable. The
recipient has not satisfied spend-down for the month.
– Providers should notify their field consultant when claims deny for
these error codes.
Note: Claims adjudicate to a paid status when spend-down is
credited on a claim. Spend-down-related claims should not
adjudicate to a denied status.
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Spend-down
October 2010
Eligibility Verification System
Enhanced spend-down information
– Enhanced spend-down information became available on the Eligibility
Verification System (EVS) beginning January 1, 2010
– Enhanced spend-down information is available on the following EVS
tools:
• Web interChange
• Omni
• Automated Voice Response (AVR)
• Health Insurance Portability and Accountability Act (HIPAA) 270/271 electronic
transactions
– Review Bulletin BT200950 for detailed information
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Spend-down
October 2010
Eligibility Verification System
Enhanced spend-down information
– Spend-Down – Yes
– Remaining Obligation For This Month – $241.00
– This amount is based on claims processed at the time of this eligibility
verification
• It is subject to change at any time following this eligibility verification as claims continue
to process in the system
• A provider may bill a member for the spend-down amount deducted from the
adjudicated claim; however, with the exception of point of sale (POS) pharmacy claims,
the member is not required to pay the provider until the member receives the monthly
Medicaid Spend-down Summary Notice listing the amount applied to spend-down
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Spend-down
October 2010
Eligibility Verification System
Enhanced spend-down information
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Spend-down
October 2010
Learn
Billing a member
Billing a Member
– A provider may bill a member for
the dollar amount identified beside
Adjustment Reason Code (ARC)
178 on the Remittance Advice
(RA) statement
– This amount will also show up in
the "Patient Responsibility"
column
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Spend-down
October 2010
Billing a Member
– The member is not obligated to pay the
provider until the member receives the
Medicaid Spend-down Summary Notice
listing the amount applied to spend-down
• Notices are sent on the second business day
following the end of the month
• The notices give a detailed itemization of how the
spend-down was applied for that month, including
provider name, amounts, and dates of service
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Spend-down
October 2010
Billing a Member
– Providers should always review the second-to-last page of the
Remittance Advice to see if ARC 178 applies to any claims on the RA
• This page lists all adjustment reason codes present on the RA
– ARC 178 indicates there is a spend-down amount billable to at least
one member on that week's RA
– Examples:
• 132 PREARRANGED DEMONSTRATION PROJECT ADJUSTMENT
• 178 PATIENT HAS NOT MET THE REQUIRED SPEND-DOWN REQUIREMENTS
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• 18
DUPLICATE CLAIM/SERVICE
• 24
CHARGES ARE COVERED UNDER A MANAGED CARE PLAN
• 94
PROCESSED IN EXCESS OF CHARGES
• B5
COVERAGE/PROGRAM GUIDELINES WERE NOT MET OR WERE
EXCEEDED
Spend-down
October 2010
Billing a Member
– Providers must bill their usual and
customary charge to the Indiana
Health Coverage Programs (IHCP)
– Members cannot be billed for more
than their spend-down amount
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Spend-down
October 2010
Billing a Member
– Providers may discharge a member
from their care if a member does not
adhere to established payment
arrangements of outstanding
copayments or spend-down
– Providers cannot be more restrictive
with spend-down members than with
other patients
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Spend-down
October 2010
Explain
Claims processing
Claims Processing
– The first claim processed by the IHCP
applies to spend-down, regardless of
the date of service within the month
– The system uses the billed amount to
credit spend-down
– Third Party Liability (TPL) amounts are
deducted from billed amount prior to
crediting spend-down
– State-mandated copayments for
pharmacy and transportation claims
credit spend-down first
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Spend-down
October 2010
Claims Processing
The Division of Family Resources may
credit spend-down for the following:
– Medical expenses incurred by a
recipient’s spouse or other person whose
income is considered in determining
eligibility
– Medical services provided by nonMedicaid providers
– Services rendered prior to eligibility
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Spend-down
October 2010
Claims Processing
Hierarchy of spend-down credits:
– Non-claim items entered by the
caseworker
• Including spousal medical expenses and
expenses for children under age 18
– State-mandated transportation and
pharmacy copayments
– Denied details, when permitted
– Paid details
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Spend-down
October 2010
Claims Processing
Denied services
– Services that are not covered by the
Medicaid program do not credit
spend-down
– Exceptions:
• A service that is denied because the
member exceeds a benefit limitation, which
cannot be overridden with prior authorization
(PA), may credit spend-down
• Denied services may be split between
spend-down months
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Spend-down
October 2010
Claims Processing
Benefit Limit Exhausted – Example 1
Date Billed: September 25, 2010
– $100.00 Spend-down Remaining for September
– $200.00 Spend-down Remaining for October
Billed Amount
$200.00
Claim Status
Denied
Audit
6122 –
Chiropractic
Therapeutic
Physical
Medicine
Treatments
Limited to 50
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Spend-down
October 2010
Credit to
Spend-down
$100.00 –
September
$100.00 –
October
Claims Processing
Benefit Limit Exhausted – Example 2
Date Billed: September 25, 2010
– $700.00 Spend-down Remaining for October
Billed
Amount
$800.00
Claim
Status
Denied
Audit
6238 –
Dental
Services
Limited to
$600.00
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Spend-down
October 2010
Credit to
Paid to
Spend-down
Provider
$700.00
$0.00
September
$100.00 rolls
forward to
October
Claims Processing
Voids and replacements
– When a claim is paid and credits the member’s spend-down, a
provider-initiated void or replacement can cause an increase or
decrease in spend-down amount owed to a provider for the claim
– In the event a refund is due to the member as a result of a voided
claim, the member is notified in the Medicaid Spend-down Summary
Notice
• The member must have paid the provider to be eligible for a refund
– Voids and replacements adjust the spend-down credit immediately
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Spend-down
October 2010
Claims Processing
Month-end balancing
– If the caseworker makes changes to
the spend-down amount during the
current month or previous month, the
total spend-down amount only
decreases, never increases
– Each month, HP performs a monthend balancing process that ensures
all credits applied by the county are
used first
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Spend-down
October 2010
Claims Processing
Month-end balancing
– This process ensures that any Indiana
Client Eligibility System (ICES) nonclaim and claim items and Statemandated copayments are applied
correctly
– Claims affected by the month-end
balancing have an internal control
number (ICN) with region code 64
– The amount used to credit spenddown on a claim only decreases by
this process
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Spend-down
October 2010
Claims Processing
Example 1 – Spend-down Activity for September - $500
Order of
Claims that
Credit the
Spenddown
Date of
Service
Provider
Type
Amount
Incurred
Method of
Claim
Submission
Claim
Processing
Date
Claim
Status
1
9/2/10
Pharmacy
$50.00
(Includes
Copay)
Point of Sale
(POS)
9/2/10
Paid $0.00
$450.00
2
9/5/10
Physician
$100.00
Web
interChange
9/5/10
Paid $0.00
$350.00
3
9/8/10
Pharmacy
$50.00
(Includes
Copay)
Point Of Sale
(POS)
9/8/10
Paid $0.00
$300.00
4
9/7/10
NonClaim
$50.00
ICES (County
Office)
5
9/8/10
Outpatient
Hospital
$300.00
837I
(Electronic)
$250.00
9/15/10
$250.00
Credit
spenddown
Paid $0.00
6
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Spend-down
Balance for
September
Spend-down
9/2/10
Dental
October 2010
$100.00
Paper
9/20/10
Paid IHCP
Allowed
$0.00
(Allowed
amount is
less)
Claims Processing
Example 2 – Spend-down Activity for October - $300
Order of
Claims that
Credit the
Spenddown
Date of
Service
Provider Type
Amount
Incurred
Method of
Claim
Submission
Claim
Processing
Date
Claim
Status
Spenddown
Balance for
October
1
10/2/10
Pharmacy
$20.00
(Includes
Copay)
Point of Sale
(10:00 a.m.)
10/2/10
Paid
$0.00
$280.00
2
10/2/10
Physician
$50.00
Web
interChange
(2:00 p.m.)
10/2/10
Paid
$0.00
$230.00
3
10/8/10
Dental
$100.00
Web
interChange
10/8/10
Paid
$0.00
$130.00
4
10/25/10
Physician
Void of
Claim #2 for
$50.00
Web
interChange
10/25/10
Void
Entire
Claim
$180.00
5
10/28/10
Dentist
$100.00
Paper
10/15/10
Paid
$0.00
$80.00
6
10/29/10
Transport
$150.00
Paper
10/20/10
$80.00
Credit
Spenddown
$0.00
(Allowed
amount is
less)
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Spend-down
October 2010
Claims Processing
Example 3 – Spend-down Activity for June - $400
Order of
Claims that
Credit the
Spenddown
Date of
Service
Provider Type
Amount
Incurred
Method of
Claim
Submission
Claim
Processing
Date
Claim
Status
Spenddown
Balance for
June
1
6/2/10
Pharmacy
$50.00
(Includes
Copay)
Point of Sale
(POS)
6/2/10
Paid $0.00
$350.00
2
6/5/10
Physician
$100.00
Web
interChange
6/5/10
TPL paid
$25.00
Paid $0.00
$275.00
3
6/8/10
Pharmacy
$50.00
(Includes
Copay)
Point Of Sale
(POS)
6/8/10
Paid $0.00
$225.00
4
6/8/10
Outpatient
Hospital
$200.00
837I
(Electronic)
6/15/10
Paid $0.00
$25.00
5
6/2/10
Transport
$100.00
Paper
6/20/10
$25.00
Credit
$2.00
copay rolls
forward)
$0.00
(Allowed
amount
is less)
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Spend-down
October 2010
Spend-down Quiz (True or False)
– A provider may refuse to provide service to a member if they verify
eligibility and determine the member has a spend-down?
– A provider may refuse to provide service to a member who has not
yet met his or her spend-down obligation for the month?
– A provider may refuse to provide a service to a member who has a
legitimate past-due balance for a spend-down, but refuses to pay it?
– A provider may bill the member for spend-down as soon as they
receive a Remittance Advice that includes ARC 178?
– A member must pay his or her spend-down obligation at time of
service?
– Care Select members may have a spend-down?
– Spend-down is credited based on the provider’s usual and customary
charge?
– Members have no way of knowing how their spend-down was
applied each month, unless they keep track of it on their own?
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Spend-down
October 2010
Spend-down Quiz (True or False)
– A provider may refuse to provide service to a member if they verify
eligibility and determine the member has a spend-down? FALSE
– A provider may refuse to provide service to a member who has not yet
met his or her spend-down obligation for the month? FALSE
– A provider may refuse to provide a service to a member who has a
legitimate past-due balance for a spend-down, but refuses to pay it?
TRUE
– A provider may bill the member for spend-down as soon as they receive a
Remittance Advice that includes ARC 178? TRUE
– A member must pay his or her spend-down obligation at time of service?
FALSE
– Care Select members may have a spend-down? FALSE
– Spend-down is credited based on the provider’s usual and customary
charge? TRUE
– Members have no way of knowing how their spend-down was applied
each month, unless they keep track of it on their own? FALSE
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Spend-down
October 2010
Find Help
Resources Available
Helpful Tools
Avenues of resolution
– IHCP Web site at www.indianamedicaid.com
– IHCP Provider Manual (Web, CD-ROM, or
paper)
– Customer Assistance
• Local
• All
(317) 655-3240
others 1-800-577-1278
– Written Correspondence
• HP
Provider Written Correspondence
P. O. Box 7263
Indianapolis, IN 46207-7263
– Provider field consultant
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Spend-down
October 2010
Q&A