Chapter 15
Medicaid
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Medicaid
• Title 19 of Social Security Act established
federally mandated, state-administered
medical assistance program for
individuals with incomes below federal
poverty level (1965)
• Medicaid is federal name for program
• Individual states adopt other names (e.g.,
MediCal, MassHealth, TennCare)
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2
Medicaid (continued)
• Provides medical and health-related
services to those with low incomes and
limited resources
• Jointly funded by federal/state governments
• Each state:
–
–
–
–
Establishes its own eligibility standards
Determines type, amount, duration, and scope of services
Sets rates of payment for services
Administers its own program
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3
Medicaid Eligibility
• Limited to individuals who can be classified
into three eligibility groups:
– Categorically needy
– Medically needy
– Special groups
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Categorically Needy Groups
• Medicaid must be available to mandatory
Medicaid eligibility groups:
– Families who meet states’ TANF eligibility
– Pregnant women and children under age 6 whose family
income is at or below 133 percent of FPL
– Caretakers of children under age 18, or age 19 if still in
high school
– SSI recipients
– Individuals/couples living in medical institutions who
have monthly income up to 300 percent of SSI income
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Medically Needy Program
• Expands eligibility to additional qualified
persons and allows:
– Individuals to “spend down” to Medicaid eligibility by
incurring medical and/or remedial care expenses to offset
excess income
– Families to establish eligibility as medically needy by
paying monthly premiums in amount equal to difference
between family income and income eligibility standard
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Special Groups
• Qualified Medicare beneficiaries (QMB)
• Qualified working disabled individuals
(QWDI)
• Qualifying individual (QI)
• Specified low-income Medicare beneficiary
(SLMB)
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Qualified Medicare Beneficiaries
• Abbreviated as QMB
• States pay Medicare premiums, deductibles,
and coinsurance amounts for:
– Individuals whose income is at or below 100 percent of
the federal poverty level and
– Individuals whose resources are at or below twice the
standard allowed under SSI
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Qualified Working
Disabled Individuals
• Abbreviated as QWDI
• States pay Medicare Part A premiums for
certain disabled individuals who lose
Medicare coverage because of work
• Individuals have incomes below 200 percent
of FPL and resources no more than twice the
standard allowed under SSI
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Qualified Individual
• Abbreviated as QI
• States pay Medicare Part B premiums
for individuals with incomes between
120 percent and 175 percent of FPL
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Specified Low-Income
Medicare Beneficiary
• Abbreviated as SLMB
• States pay Medicare Part B premiums for
individuals with incomes between 100% and
120% of FPL
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11
State Children’s Health
Insurance Program (SCHIP)
• Implemented as a result of the Balanced
Budget Act (BBA)
• Allows states to create or expand existing
insurance programs, providing more federal
funds to states for purpose of expanding
Medicaid eligibility to include a greater
number of currently uninsured children
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12
Programs of All-Inclusive
Care for the Elderly (PACE)
• Uses capitated payment system to provide
comprehensive package of community-based
services as alternative to institutional care for
persons age 55 or older who require nursing
facility level of care
• Part of Medicare program, but is optional
service for state Medicaid plans
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13
Spousal Impoverishment Protection
• Implemented as result of MCCA of 1988
• Prevents married couples from being required
to spend down income and other liquid assets
(cash and property)
– Before one of the partners could be declared eligible for
Medicaid coverage for nursing facility care
• Spouse residing at home is called community
spouse
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Spousal Impoverishment
Protection (continued)
• Before monthly income is used to pay nursing
facility costs, MMMNA is deducted
• To determine whether spouse residing in
facility meets state’s resource standard for
Medicaid:
– Protected resource amount (PRA) is subtracted from
couple’s combined countable resources
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Protected Resource Amount
• Abbreviation is PRA
• For 2013, it is the greatest of:
– Spousal share, up to maximum of $115,920
– State spousal resource standard, which state could set at
any amount between $23,184 and $115,920
– Amount transferred to community spouse for support as
directed by court order
– Amount designated by state officer to raise community
spouse’s protected resources up to minimum monthly
maintenance needs standard
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Confirming Medicaid Eligibility
• Patients who receive Medicaid must present a
valid Medicaid identification card
• Sample Medicaid card
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Services for Categorically
Needy Eligibility Groups
•
Inpatient hospital
•
Outpatient hospital
•
Laboratory and x-ray
•
Certified pediatric/family nurse
practitioners
•
Nursing facility services
•
EPSDT for children under age 21
•
Family planning services/supplies
•
Physicians’ services
•
Medical/surgical services of dentist
•
Home health services
•
Intermittent/part-time nursing services
provided by home health agency or by a
registered nurse when there is no home
health agency
•
Home health aides
•
Medical supplies/appliances for home use
•
Nurse midwife services
•
Pregnancy-related services
•
Services for other conditions that might
complicate pregnancy
•
60 days postpartum pregnancy-related
services
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Early and Periodic Screening,
Diagnostic, and Treatment
• Abbreviated as EPSDT
• Services consist of:
– Routine pediatric checkups, including dental, hearing,
vision, and other screening services
– Other diagnostic services to detect potential problems,
treatment, and measures to correct or ameliorate defects
and physical and mental illnesses and conditions
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Services for Medically
Needy Eligibility Groups
• Prenatal and delivery services
• Postpartum pregnancy-related services for
beneficiaries under age 18 and who are entitled to
institutional/ambulatory services
• Home health services to beneficiaries entitled to
receive nursing facility services under state’s
Medicaid plan
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Preauthorized Services
• Elective inpatient admission
• Emergency inpatient admission
• More than one preoperative day
• Outpatient procedure(s) performed in an inpatient
setting
• Days exceeding state hospital stay limitation due to
complication(s)
• Extension of inpatient days
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21
Payment for Medicaid Services
• Operates as a vendor-payment program
• Providers paid on fee-for-service or
prepayment basis (e.g., HMO)
• Providers who accept payments directly must
accept reimbursement as payment in full
• States determine reimbursement methodology
and payment rates for services
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22
Payment for Medicaid
Services (continued)
• Exceptions to state reimbursement
methodologies and payment rates include:
– Institutional services, when payment may not exceed
amounts that would be paid under Medicare payment rates
– Disproportionate share hospitals (DSHs), which treat a
disproportionate number of Medicaid patients
– Hospice care services, for which rates cannot be lower
than Medicare rates
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Federal Medical
Assistance Percentage
• Abbreviated as FMAP
• Determines federal annual payments to states
• Wealthier states receive smaller share of
reimbursed costs
• Federal government shares in administration
expenses
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Medicare-Medicaid Relationship
• Abbreviated as Medi-Medi
• Low-income Medicare beneficiaries with
limited resources may also qualify for
Medicaid
• For those eligible for full Medicaid coverage,
Medicare coverage is supplemented by
services available under Medicaid program
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Dual Eligibles
• Medicaid is always payer of last resort
• If patient is covered by another medical or
liability policy, that coverage must be billed
first
• Medicaid is billed only if:
– Other coverage denies responsibility for payment
– Other coverage pays less than Medicaid fee schedule
– Medicaid covers procedures not covered by other policy
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Medicaid as a Secondary Payer
• Individuals entitled to Medicare and eligible
for some type of Medicaid benefit
• Services are paid first by Medicare, and
difference is paid by Medicaid
• Medicaid also covers:
– Nursing facility care beyond 100-day limit covered by
Medicare, prescription drugs, eyeglasses, and hearing aids
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27
Participating Providers
• Any provider who accepts Medicaid patient
must accept the Medicaid-determined
payment as payment in full
• Balance billing is prohibited, which means
providers cannot bill patients for Medicaidcovered benefits
• Patient may be billed for any service that is
not a covered benefit
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Medicaid and Managed Care
• States can make managed care enrollment
voluntary
• States can seek Social Security Act waiver to
require populations to enroll in MCO
• Medicaid beneficiaries also enrolled in
primary care case management (PCCM) plans
– Primary care provider authorizes access to specialty care
but is not at risk for the cost of care provided
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Medicaid Managed Care
Preauthorization Guidelines
•
•
•
•
•
Elective inpatient admission
Emergency inpatient admission
More than one preoperative day
Outpatient procedure performed in inpatient setting
Days exceeding state hospital stay limitation due to
complication
• Extension of inpatient days
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or posted to a publicly accessible website, in whole or in part.
30
Medicaid Eligibility
Verification System
• Abbreviated as MEVS
• Also called recipient eligibility verification
system (REVS)
• Allows providers to electronically access
state’s eligibility file via:
– Point-of-service device
– Computer software
– Automated voice response
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Medicaid Remittance Advice
• Document sent to provider, which contains
current status of all claims
• Adjusted claim – payment correction, resulting
in additional payment(s) to provider
• Voided claim – one that Medicaid should not
have originally paid, and results in a deduction
from lump-sum payment made to provider
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32
Sample Remittance Advice
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Utilization Review
• Surveillance and utilization review subsystem
(SURS)
– Safeguards against unnecessary or inappropriate use of
Medicaid services
– Safeguards against excess payments
– Assesses the quality of those services
• Postpayment review process – monitors use
and delivery of health services
• Recovers overpayments made to providers
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Medical Necessity
• Covered services must be:
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–
–
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Consistent with symptoms, diagnosis, condition, or injury
Recognized as prevailing standard
Consistent with medical standards of provider’s peer group
Provided:
•
•
•
•
In response to life-threatening condition
To treat pain, injury, illness, or infection
To treat condition that could result in physical or mental disability
To achieve level of physical/mental function consistent with
prevailing community standards for diagnosis or condition
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Medical Necessity (continued)
• Medically necessary services are:
– Consistent with symptoms, diagnosis, condition, or injury
– Not furnished primarily for the convenience of recipient or
provider
– Furnished when there is no other equally effective course
of treatment available or suitable
• For recipient requesting the service that is more conservative or
substantially less costly
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36
Billing Notes
• Fiscal agent – varies from state to state
• Timely filing deadline – varies from state to
state
– Medicare-Medicaid crossover claims follow Medicare
deadlines for claims submission
• Accept assignment – Providers must accept
assignment or claim may be denied
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37
Billing Notes (continued)
• Assignment of benefits – Patients must assign
benefits so provider is paid by Medicaid
• Deductibles/copayments – May be required
• Major medical/accidental injury coverage –
Medicaid will conditionally subrogate claims
when liability insurance covers injuries
– Subrogation – assumption of obligation for which another
party is primarily liable
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38
Billing Notes (continued)
• Medicaid eligibility – Based on income;
patients can be eligible one month, ineligible
the next
• Medicaid cards – Cards issued for “Unborn
child of . . .” are only for services that promote
life and good health of unborn child
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39
Billing Notes (continued)
• Remittance advice – Other health and liability
programs are primary to Medicaid
– Remittance advice from primary coverage must be attached
to Medicaid claim
– Combined Medicare-Medicaid (Medi-Medi) claim should
be filed by the Medicare deadline on CMS-1500 claim
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