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Spend-down

HP Provider Relations/October 2013

Spend-down October 2013 2

Agenda

• Objectives

• Spend-down Rule

• Eligibility

• Billing the Member

• Quiz

• Claims Processing

• Helpful Tools

• Questions & Answers


Objectives

• To explain how the spend-down

process works

• To explain when it is appropriate to

bill Medicaid members for spend-

down

• To outline claims processing

procedures related to spend-down


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


Spend-down

• Spend-down is applicable to members assigned to

the following aid categories:

− Traditional Medicaid fee-for service (FFS)

− Medicaid for Employees with Disabilities (M.E.D. Works)

− Home and Community-Based Services (HCBS) Waiver

• Members with spend-down are not assigned to

Care Select or the risk-based managed care

(RBMC) programs


Spend-down determination

• Spend-down amounts are determined by the Division of Family

Resources (DRF)

− 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 the "spend-down obligation“

− The Medicaid member is responsible to pay their spend-down amount each

month

− A summary notice is sent on the third day of the following month, to the

member detailing the amount of the spend-down obligation to each provider

Note: The member should contact the DFR if they believe the spend-down

amount is not accurate

Eligibility


Eligibility

• Using the Eligibility Verification System (EVS), providers can determine:

− If the member has a spend-down, and if “yes”

− The amount of spend-down remaining to be met for a particular month

• Providers may use this information to prepare the member for the potential

of having to pay out-of-pocket expenses

• The amount indicated may not be the actual spend-down amount credited to

your claim; therefore, providers may not collect the spend-down amount at

the time of service

• 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


Spend-down

Billing a Member


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

− Providers may direct members to contact the DFR to update an old address

in.gov/fssa/dfr

1-800-403-0864


Billing a Member

• Providers can quickly determine when spend-down has impacted

claims on the weekly Remittance Advice (RA):

− Review the ARC code listing at the end of the RA to verify if ARC 178

appears

− 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 appears in the "Patient Responsibility" column on the RA


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

Quiz

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

A Providers can verify that a member has a spend-down 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 for the presence of ARC 178 and the

amount listed as patient responsibility to determine how much has been

credited to spend-down

Claims Processing


Claims Processing

• The first claims processed by the Indiana

Health Coverage Programs (IHCP) will credit

the spend-down

− The basis for crediting spend-down is the order in

which claims are processed, not the chronological

date of service within that month

• The system uses the billed amount to

determine how much to credit spend-down

− Therefore, providers should bill their usual and

customary charge

• Third-party liability (TPL) amounts are

subtracted from the billed amount prior to

crediting spend-down


Claim is Processed by IndianaAIM

• Services that are not covered by the Medicaid

program do not credit spend-down

• Exception:

− 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 among spend-down

months

Denied services


Claims Processing

Date Billed: September 25, 2013

• $100.00 Spend-down Remaining for September

• $200.00 Spend-down Remaining for October

Benefit limit exhausted

Billed Amount Claim Status Audit Credit to Spend-down

$200.00 Denied 6122 –

Chiropractic Therapeutic Physical Medicine Treatments Limited to 50

$100.00 – September

$100.00 – October


Claims Processing

• 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 the

spend-down amount owed to a provider

− Voids and replacements adjust the spend-down credit immediately

• In the event a refund is due to the member as a result of an adjusted or

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


Claims Processing

The Division of Family Resources may also credit

spend-down for certain “nonclaim” 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


Claims Processing

Note: Each month, HP performs

a month-end balancing

process to ensure all

spend-down credits follow

the prioritization of this

hierarchy

Nonclaim items entered by the DFR

State-mandated transportation

and pharmacy copayments

Denied details, when permitted

Paid details

Hierarchy of spend-down credits


Claims Processing

The month-end balancing process ensures that

all nonclaim transactions credit spend-down

before claim-related transactions

• 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

• The adjusted claims may result in additional

reimbursement to the provider

Month-end balancing


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.

Claims Processing Example 1 – Spend-down activity for September – $500 Order of Claims that Credit the Spend-down

Date of Service

Provider Type

Amount Incurred

Method of Claim

Submission

Claim Processing

Date

Claim Status Spend-down Balance for September

1 9/2/13 Pharmacy $50.00 (Includes Copay)

Point of Sale (POS)

9/2/13 Paid $0.00 $450.00

2 9/5/13 Physician $100.00 Web interChange

9/5/13 Paid $0.00 $350.00


Point Of Sale (POS)

9/8/13 Paid $0.00 $300.00

4 9/7/13 Nonclaim $50.00 ICES (County Office)

$250.00

5 9/8/13 Outpatient Hospital

$300.00 837I (Electronic)

9/15/13 $250.00 Credit spend-down Paid $0.00

$0.00 (Allowed amount is less)

6 9/2/13 Dental $100.00 Paper 9/20/13 Paid IHCP Allowed

Claims Processing Example 2 – Spend-down activity for October – $300 Order of Claims that Credit the Spend-down

Date of Service

Provider Type

Amount Incurred

Method of Claim

Submission

Claim Processing

Date



Point of Sale (10:00 a.m.)

10/2/13 Paid $0.00 $280.00

2 10/2/13 Physician $50.00 Web interChange (2:00 p.m.)

10/2/13 Paid $0.00 $230.00

3 10/8/13 Dental $100.00 Web interChange

10/8/13 Paid $0.00 $130.00

4 10/25/13 Physician Void of Claim #2 for $50.00

Web interChange

10/25/13 Void Entire Claim

$180.00

5 10/28/13 Dentist $100.00 Paper 10/15/13 Paid $0.00 $80.00

6 10/29/13 Transport $150.00 Paper 10/20/13 $80.00 Credit Spend-down


Claims Processing Example 3 – Spend-down activity for June – $400

Order of Claims that Credit the Spend-down

Date of Service

Provider Type

Amount Incurred

Method of Claim

Submission

Claim Processing

Date



Point of Sale (POS)

6/2/13 Paid $0.00 $350.00

2 6/5/13 Physician $100.00 Web interChange

6/5/13 TPL paid $25.00 Paid $0.00

$275.00


Point Of Sale (POS)

6/8/13 Paid $0.00 $225.00

4 6/8/13 Outpatient Hospital

$200.00 837I (Electronic)

6/15/13 Paid $0.00 $25.00

5 6/2/13 Transport $100.00 Paper 6/20/13 $25.00 Credit $2.00 copay rolls forward)


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


Spend-down Quiz

Rank the priority of spend-down transactions:

1. ? A – State-mandated copays

2. ? B – Paid details

3. ? C – DFR “nonclaim” transactions

4. ? D – Denied details

C, A, D, B

Find Help


Helpful Tools

• 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

• Provider Relations consultant

− Locate area consultant map on:

indianamedicaid.com (provider home page > Contact Us > Provider Relations Field Consultants) or

Web interChange > Help > Contact Us

• Written Correspondence

− HP Provider Written Correspondence P.O. Box 7263 Indianapolis, IN 46207-7263

http://provider.indianamedicaid.com/provider-home.aspx

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