Certain paid and unpaid medical expenses for members of an applicant/recipient group may be deducted from income when determining eligibility for MNO (see Appendix B). Allowable medical expenses must be in the retroactive period. 55 Pa. Code § 181.14(d)
NOTE: There are three Medical Coverage (MCV) Codes to choose from on CAMEDX in CIS or Expenses/Medical in e-CIS. The correct use of these codes is instrumental in the determination of spend-down and patient pay liability. The three codes and their descriptions are as follows:
Code “B”: This code should be entered for a medical expense that will be covered by NMP or MNO if MA is authorized. For example, most hospital bills are to be coded as “B,” especially when seeking retroactive coverage for these bills.
Code “P”: This code should be entered for a medical expense that will only be covered if NMP is authorized. For example, most prescription expenses for adults are to be coded as “P.”
Code “N”: This code should only be entered for a medical expense that is not covered by MA (NMP or MNO) if MA is authorized. For example, a paid medical expense or an expense from a provider who does not accept MA is to be coded as “N.”
Reminder: When determining net income, the CAO must deduct expenses for medical and remedial care for members of an applicant/recipient group that are paid by a public program (other than MA) of a state, including programs run by political subdivisions of the state.
If the net income of an applicant/recipient group is more than the income limit in Chapter 369, Appendix A, the CAO must allow deductions from net income for certain paid and unpaid medical expenses to reduce the amount of income that is over the limit.
A medical expense is an allowable deduction if the following requirements are met: 55 Pa. Code § 181.14(d)(1)
The expense is not paid by a third party.
NOTE: When legal action is being taken for third-party coverage (for example, a Workers Compensation claim has been filed) and the case is not likely to be settled within thirty days, the coverage cannot be considered available for payment of a individual’s medical bills. The medical bills can be considered an unpaid expense, and a deduction can be given for those medical bills. When the legal action is settled, if the third-party coverage is approved, the CAO must treat the approval as a change in the individual’s situation. It will complete a renewal determination of the individual’s MA eligibility and send information about the case and the third-party coverage to:
Third-Party Liability
P.O. Box 8486
Harrisburg, PA 17105
The expense will not be paid under the MNO program, if MNO is approved.
A member of the applicant/recipient group is required by law to pay the expense.
NOTE: The medical expense may be for someone other than a member of the applicant/recipient group. The CAO must use the expense only if a member is held legally responsible for payment.
The amount and the date of the expense are confirmed.
NOTE: For medical insurance premiums, the date of the expense is the date when the bill was issued.
The expense was not already used as a deduction for MA eligibility.
NOTE: A payment plan is not required, but the individual must show proof that the bill has not been written off by the provider and payment is still required.
For continuing MNO, the CAO must count unpaid expenses from the retroactive period or unpaid expenses that are expected in the six-month period.
A paid medical expense is an allowable deduction if the following conditions are met: 55 Pa. Code § 181.14(d)(2)
The expense is the legal responsibility of a member of the applicant/recipient group.
The expense has not been paid by a third party.
The expense was paid by a member of the applicant/recipient group.
The expense was not already used as a deduction for MA eligibility.
The expense was paid in the month of application, in any month in the retroactive period or a combination of both. 55 Pa. Code § 181.14(d)(2)
The amount and the date of the expense are confirmed.
For retroactive or continuing MNO, the CAO must use expenses that were paid in any of the retroactive months or in the month of application.
55 Pa. Code § 181.14(d)(3)(iii)
Example: A case’s renewal due date is April 30. All required documents are received by the CAO on April 28. The CAO does not complete the renewal until May 15. The CAO can use any medical bills paid through May 15 to determine continuing eligibility.
The CAO must use the actual medical expenses that were charged or paid in a calendar month. 55 Pa. Code § 181.14(d)
Example: A quarterly insurance premium can be used only in the month when it was charged or paid.
The CAO must deduct the following medical expenses:
Payments for health insurance, including premiums, enrollment fees, deductibles, or coinsurance charges (such as Medicare, Blue Cross or Blue Shield), and the part of an automobile insurance premium that is for medical coverage
NOTE: The CAO may need to contact the medical provider to determine whether the individual has to pay an entire bill or only the part not covered by Medicare or medical insurance.
NOTE: When determining on a individual’s MA eligibility, the CAO must deduct any medical insurance premiums through the spend-down process. When a Health Insurance Premium Payment (HIPP) referral results in HIPP covering the premium and the individual’s income is over the income limit for MA, the individual is still eligible because the insurance premium is still considered a deduction.
Copayments required by DPW
NOTE: The copayment deduction is subject to the copayment fee set by the DPW. See Chapter 338, Medical Assistance Benefits, Appendix D, for a list of the copayment amounts for medical services.
The payment for each prescription for a individual who is eligible for the Pharmaceutical Assistance Contract for the Elderly (PACE) program.
The full payment for each prescription for a individual who has not been determined eligible for PACE.
The individual is under age 65 or is not disabled.
The individual was denied PACE benefits and the reason for denial has not changed.
The individual has applied for PACE but has not been determined eligible for the program.
The individual has good cause for not being in the program. Good cause includes, but is not limited to, the following:
The individual’s health or age makes it impractical for him or her to be in the program.
The individual does not know that he or she has to apply for PACE.
The individual was denied PACE benefits at an earlier date, and the reasons he or she was denied have not changed.
Medical and remedial expenses that are recognized by state rules or laws but are not covered by the MNO program. See the Health Care Benefit Packages (Chapter 338, Appendix A) for lists of services that are covered by different categories of MA.
NOTE: Payment for aspirin, nutritional supplements or other over-the-counter drugs can be allowed if a doctor says that the individual needs the drug for a physical or mental condition.
NOTE: Burial and individual care home costs are not medical expenses and cannot be used as deductions when determining a individual’s eligibility.
Medical expenses that are covered by the MNO program.
The individual has already made the payment.
The individual must pay because the medical provider does not accept the medical card.
NOTE: This includes patient-pay amounts from earlier periods of MNO eligibility, if they are in the allowable retroactive period. See Chapter 369, Determining Eligibility for MNO, Section 369.13.
The full cost for services which are paid in part by MH/MR. A individual who is eligible for MH/MR services is eligible for payment of services by MH/MR. The CAO must use the full cost of the services as the amount the individual owes or has paid without deducting the part which was or will be paid by MH/MR.
Once a medical expense is used as a deduction in computing income eligibility, that expense cannot be used again. The CAO must use only the part of the medical expense that is needed for eligibility. The rest can be used for eligibility in the future as long as the expense is used within the allowable time period. (See Appendix B.)
If a individual has no or limited medical expenses when he or she applies, the CAO must let the individual know that medical expenses can be used when he or she applies in the future. The medical expenses must be within the allowable time periods. (See Appendix B.)
Updated February 14, 2012, Replacing January 13, 2009