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									Spend-down


HP Provider Relations
October 2011
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
    – Spend-down Quiz
    – Helpful Tools
    – Questions & Answers

2    Spend-down        October 2011
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




3   Spend-down    October 2011
Spend-down Rule

    405 IAC 1-1-3.1 – Providing
    services to members enrolled
    under the Medicaid spend-down
    provision
    – Subsection (d) states:
      •   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




4    Spend-down            October 2011
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 spend-
      down 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

6   Spend-down           October 2011
Spend-down Eligibility

Spend-down may be applied to members in the following aid
 categories:
– Traditional Medicaid fee-for service (FFS)
– MEDWORKS
– Home and Community-Based Services (HCBS) Waiver


Members assigned to Care Select or the risk-based managed
care (RBMC) program are not assigned a spend-down




7   Spend-down   October 2011
Eligibility Verification System
    Spend-down information on EVS

– Enhanced spend-down information became available on the Eligibility
  Verification System (EVS) beginning January 1, 2010
– Using EVS, providers can determine the amount of spend-down
  remaining to be met for a particular month
     Note: The amount indicated may not be the actual spend-down amount credited to your
           claim

– With the exception of pharmacy claims billed on a POS system,
  providers may not collect the spend-down amount at the time of
  service
– Reference the IHCP Provider Manual, Chapter 2, Section 4, for
  additional information



8    Spend-down         October 2011
Eligibility Verification System
    Enhanced spend-down information




9    Spend-down    October 2011
Learn
  Billing a Member
Billing a Member

– Providers should always review the Remittance Advice (RA) to see
  if Adjustment Reason Code (ARC) 178 applies to any claims on the
  RA
     • The end of the RA lists the ARC codes that appear within that week’s RA. Review
       the listing to verify if ARC code 178 is included.

– ARC 178 indicates there is a spend-down amount billable to at least
  one member on that week’s RA
– A provider may bill a member for the dollar amount identified beside
  ARC 178 on the RA statement
– This amount will also appear in the "Patient Responsibility" column
  on the RA




11   Spend-down         October 2011
Billing a Member

– Once the claim has adjudicated, providers
  are responsible to bill the member for the
  spend-down amount credited on the claim
– 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




12   Spend-down          October 2011
Billing a Member

What if the member doesn’t pay
 their spend-down?
– 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




13   Spend-down   October 2011
Error Codes 0387 and 0388
– Providers may have encountered claim denials due to explanation of
  benefits (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.




14    Spend-down    October 2011
Quiz

Q        How can providers determine when a member has a spend-down?


Q        Why can’t providers collect the spend-down at the time of service?


Q        How is the provider informed that spend-down has been credited on
         claims?




15   Spend-down        October 2011
Quiz Responses
Q        How can providers determine when a member has a spend-down?
A        Providers can verify a member’s eligibility using Web interChange,
         Automated Voice Response (AVR), Omni, or the Health Insurance
         Portability and Accountability Act (HIPAA) 277/278 transaction


Q        Why can’t providers collect the spend-down at the time of service?
A        The amount credited to spend-down is not known until the claim
         adjudicates


Q        How is the provider informed that spend-down has been credited on
         claims?
A        Providers should review the RA to determine if and how much has
         been credited to spend-down

16   Spend-down        October 2011
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
     • Therefore, providers should bill their usual and
       customary charge

– 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


18   Spend-down           October 2011
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




19   Spend-down        October 2011
Claims Processing
Benefit limit exhausted – Example 1

 Date Billed: September 25, 2011
 – $100.00 Spend-down Remaining for September
 – $200.00 Spend-down Remaining for October

 Billed Amount      Claim Status           Audit        Credit to
                                                       Spend-down
 $200.00          Denied              6122 –          $100.00 –
                                      Chiropractic    September
                                      Therapeutic
                                      Physical        $100.00 –
                                      Medicine        October
                                      Treatments
                                      Limited to 50

20   Spend-down   October 2011
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




21   Spend-down          October 2011
Claims Processing
The Division of Family Resources may also
credit spend-down for certain “non-claim”
expenses, including:
– Medical expenses incurred by a
  recipient’s spouse or other person whose
  income is considered in determining
  eligibility
– Medical services provided by non-
  Medicaid providers
– Services rendered prior to eligibility




22   Spend-down    October 2011
Claims Processing
     Hierarchy of spend-down credits:
     – Non-claim items entered by the DFR
       caseworker
     – State-mandated transportation and
       pharmacy copayments
     – Denied details, when permitted
     – Paid details




23    Spend-down      October 2011
Claims Processing
Month-end balancing

 – Each month, HP performs a month-end balancing process that
   ensures all “non-claim” items entered by the DFR are credited first
 – This process ensures that all spend-down items are applied in
   accordance with the established hierarchy
 – HP may initiate claim adjustments as a result of month-end balancing
      •   Claims adjusted by the month-end balancing process have an internal control
          number (ICN) that begins with 64

 – These adjusted claims result in additional reimbursement to the
   provider




24   Spend-down            October 2011
Claims Processing
Example 1 – Spend-down activity for September – $500
       Order of    Date of   Provider          Amount       Method of       Claim        Claim      Spend-down
     Claims that   Service     Type            Incurred      Claim        Processing     Status     Balance for
      Credit the                                           Submission        Date                    September
       Spend-
        down

     1             9/2/11    Pharmacy         $50.00      Point of Sale   9/2/11       Paid $0.00   $450.00
                                              (Includes   (POS)
                                              Copay)
     2             9/5/11    Physician        $100.00     Web             9/5/11       Paid $0.00   $350.00
                                                          interChange

     3             9/8/11    Pharmacy         $50.00      Point Of Sale   9/8/11       Paid $0.00   $300.00
                                              (Includes   (POS)
                                              Copay)
     4             9/7/11    Non-             $50.00      ICES (County                              $250.00
                             Claim                        Office)

     5             9/8/11    Outpatient       $300.00     837I            9/15/11      $250.00      $0.00
                             Hospital                     (Electronic)                 Credit       (Allowed
                                                                                       spend-       amount is
                                                                                       down         less)

                                                                                       Paid $0.00
     6             9/2/11    Dental           $100.00     Paper           9/20/11      Paid IHCP
                                                                                       Allowed

25   Spend-down                October 2011
Claims Processing
Example 2 – Spend-down activity for October – $300
   Order of         Date of   Provider Type     Amount          Method of      Claim       Claim      Spend-
 Claims that        Service                     Incurred         Claim       Processing    Status      down
  Credit the                                                   Submission       Date                Balance for
   Spend-                                                                                            October
    down
1                 10/2/11     Pharmacy        $20.00         Point of Sale   10/2/11      Paid      $280.00
                                              (Includes      (10:00 a.m.)                 $0.00
                                              Copay)
2                 10/2/11     Physician       $50.00         Web             10/2/11      Paid      $230.00
                                                             interChange                  $0.00
                                                             (2:00 p.m.)
3                 10/8/11     Dental          $100.00        Web             10/8/11      Paid      $130.00
                                                             interChange                  $0.00
4                 10/25/11    Physician       Void of        Web             10/25/11     Void      $180.00
                                              Claim #2 for   interChange                  Entire
                                              $50.00                                      Claim


5                 10/28/11    Dentist         $100.00        Paper           10/15/11     Paid      $80.00
                                                                                          $0.00
6                 10/29/11    Transport       $150.00        Paper           10/20/11     $80.00    $0.00
                                                                                          Credit    (Allowed
                                                                                          Spend-    amount is
                                                                                          down      less)



26   Spend-down               October 2011
Claims Processing
Example 3 – Spend-down activity for June – $400
   Order of        Date of   Provider Type     Amount        Method of      Claim        Claim         Spend-
 Claims that       Service                     Incurred       Claim       Processing     Status         down
  Credit the                                                Submission       Date                    Balance for
   Spend-                                                                                               June
    down
1                 6/2/11     Pharmacy         $50.00      Point of Sale   6/2/11       Paid $0.00    $350.00
                                              (Includes   (POS)
                                              Copay)
2                 6/5/11     Physician        $100.00     Web             6/5/11       TPL paid      $275.00
                                                          interChange                  $25.00
                                                                                       Paid $0.00
3                 6/8/11     Pharmacy         $50.00      Point Of Sale   6/8/11       Paid $0.00    $225.00
                                              (Includes   (POS)
                                              Copay)
4                 6/8/11     Outpatient       $200.00     837I            6/15/11      Paid $0.00    $25.00
                             Hospital                     (Electronic)



5                 6/2/11     Transport        $100.00     Paper           6/20/11      $25.00        $0.00
                                                                                       Credit        (Allowed
                                                                                       $2.00         amount
                                                                                       copay rolls   is less)
                                                                                       forward)




27   Spend-down                October 2011
Spend-down Quiz (True or False)
 Q        A provider may refuse to provide service to a member if they verify
          eligibility and determine the member has a spend-down?
 Q        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?
 Q        A provider may bill the member for spend-down as soon as they
          receive a Remittance Advice that includes ARC 178?
 Q        Spend-down is credited based on the provider’s usual and
          customary charge (UCC)?
 Q        Spend-down is credited to claims in date-of-service order?
 Q        The highest priority transaction to credit spend-down are “non-
          claim” items entered by the DFR?



28   Spend-down         October 2011
Spend-down Quiz (True or False)
 Q        A provider may refuse to provide service to a member if they verify
          eligibility and determine the member has a spend-down? FALSE
 Q        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
 Q        A provider may bill the member for spend-down as soon as they
          receive a Remittance Advice that includes ARC 178? TRUE
 Q        Spend-down is credited based on the provider’s usual and
          customary charge (UCC)? TRUE (when the provider bills the UCC)
 Q        Spend-down is credited to claims in date-of-service order? FALSE
 Q        The highest priority transaction to credit spend-down are “non-
          claim” items entered by the DFR? TRUE



29   Spend-down         October 2011
Find Help
  Resources Available
Helpful Tools
Avenues of resolution


– IHCP Provider Manual, Chapter 2, Section 4
  (Web, CD, or paper), available at
  indianamedicaid.com
– Customer Assistance
      • Local       (317) 655-3240
      • All   others 1-800-577-1278
– Written Correspondence
      • HP Provider Written Correspondence
       P. O. Box 7263
       Indianapolis, IN 46207-7263
– Provider field consultant



 31    Spend-down             October 2011
Q&A

								
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