HP Provider Relations October 2010 Spend-down. Spend-downOctober 20102 Agenda –Objectives –Spend-down Rule –Spend-down Eligibility –Eligibility Verification

HP Provider RelationsOctober 2010

Spend-down

Spend-down October 20102

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


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


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

DefineSpend-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


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 risk-based managed care (RBMC) program


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.


Eligibility Verification System

– 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

Enhanced spend-down information

http://provider.indianamedicaid.com/ihcp/Bulletins/BT200950.pdf


Eligibility Verification System

– 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

Enhanced spend-down information


Eligibility Verification SystemEnhanced spend-down information

LearnBilling 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


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


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

• 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


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


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

ExplainClaims 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


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 non-Medicaid providers

–Services rendered prior to eligibility


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


Claims Processing

– 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

Denied services


Claims Processing

Date Billed: September 25, 2010

– $100.00 Spend-down Remaining for September

– $200.00 Spend-down Remaining for October

Benefit Limit Exhausted – Example 1

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

Date Billed: September 25, 2010

– $700.00 Spend-down Remaining for October

Benefit Limit Exhausted – Example 2

Billed Amount

Claim Status

Audit Credit to Spend-down

Paid to Provider

$800.00 Denied 6238 –

Dental Services Limited to $600.00

$700.00 September

$0.00

$100.00 rolls forward to 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 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

Voids and replacements


Claims Processing

– 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 month-end balancing process that ensures all credits applied by the county are used first

Month-end balancing


Claims Processing

– This process ensures that any Indiana Client Eligibility System (ICES) non-claim and claim items and State-mandated 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 spend-down on a claim only decreases by this process

Month-end balancing


Claims ProcessingExample 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 9/2/10 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


Point Of Sale (POS)

9/8/10 Paid $0.00 $300.00

4 9/7/10 Non-Claim

$50.00 ICES (County Office)

$250.00

5 9/8/10 Outpatient Hospital

$300.00 837I (Electronic)

9/15/10 $250.00 Credit spend-down

Paid $0.00

$0.00 (Allowed amount is less)

6 9/2/10 Dental $100.00 Paper 9/20/10 Paid IHCP Allowed


Claims ProcessingExample 2 – Spend-down Activity for October - $300


Spend-down

Date of Service

Provider Type Amount Incurred

Method of Claim

Submission

Claim Processing

Date

Claim Status

Spend-down

Balance for October


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 Spend-down

$0.00 (Allowed amount is less)


Claims ProcessingExample 3 – Spend-down Activity for June - $400


Spend-down

Date of Service

Provider Type Amount Incurred

Method of Claim

Submission

Claim Processing

Date

Claim Status

Spend-down

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 $25.00Paid $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)


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?


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

Find HelpResources Available


Helpful ToolsAvenues of resolution

– IHCP Web site at www.indianamedicaid.com

– IHCP Provider Manual (Web, CD-ROM, or paper)

– Customer Assistance• Local (317) 655-3240

• All others 1-800-577-1278

– Written Correspondence• HP Provider Written CorrespondenceP. O. Box 7263Indianapolis, IN 46207-7263

– Provider field consultant

http://www.indianamedicaid.com/

Q&A

Documents

HP Provider Relations October 2010 Spend-down. Spend-downOctober 20102 Agenda –Objectives –Spend-down Rule –Spend-down Eligibility –Eligibility Verification