Effective Date of Rule: October 20, 2008.

     Purpose: The department has started the permanent rule-making process to amend this rule, but adopting an emergency rule in the interim is essential so the program is compliant with the federal regulations that allow both paid and unpaid medical expenses incurred by a client during the retroactive eligibility period to be applied towards the client's spenddown in the current eligibility period. Treatment of hospital bills will no longer be singled out, but will mirror the federal rule by eliminating specific references to hospital bills and amending the language regarding the prioritization of expenses.

     Citation of Existing Rules Affected by this Order: Amending WAC 388-519-0110.

     Statutory Authority for Adoption: RCW 74.04.050, 74.08.090, 74.09.500.

     Other Authority: 42 C.F.R. 435.831 (3)(e) and (f).

     Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest; and that state or federal law or federal rule or a federal deadline for state receipt of federal funds requires immediate adoption of a rule.

     Reasons for this Finding: Some individuals may be adversely affected if this rule is not changed to mirror federal requirements. Adoption of the rule ensures compliance with federal requirements and continuation of federal funds.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 1, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.

     Date Adopted: October 7, 2008.

Stephanie E. Schiller

Rules Coordinator

     (2) A ((person's)) base period begins on the first day of the month ((of application)), in which an individual applies, subject to the exceptions in subsection (4) of this section.

     (3) An individual may request a separate base period ((may be made for a retroactive period. The retroactive base period is made up of the)) to cover the time period up to three calendar months immediately prior to the month of application. This is called a retroactive base period.

     (4) A base period may vary from the terms in subsections (1), (2), or (3) of this section if:

     (a) A three month base period would overlap a previous eligibility period; or

     (b) ((A client is not or will not be resource eligible for the)) The individual has countable resources which are over the applicable standard for any part of the required base period; or

     (c) The ((client)) individual is not ((or will not be)) able to meet the ((TANF-related or)) SSI-related requirement or other program requirements for the required base period; or

     (d) The ((client)) individual is ((or will be)) eligible for categorically needy (CN) coverage for part of the required base period; or

     (e) The ((client)) individual was not otherwise eligible for MN coverage for each of the months of the retroactive base period.

     (5) The ((amount of a person's "spenddown")) spenddown liability is calculated by the department. The MN countable income from each month of the base period is compared to the medically needy income limit (MNIL). ((The excess income from each of the months in the)) Income which is over the MNIL standard (based on the individual's household size) in each month in the base period is added together to determine the ((")) total spenddown((")) ((for the base period)) amount. The MNIL standard is found at http://www1.dshs.wa.gov/pdf/esa/manual/Standards_C_MedAsst_Chart.pdf.

     (6) If household income varies and ((a person's)) an individual's MN countable income falls below the MNIL for one or more months, the difference is used to offset the excess income in other months of the base period. If this results in a spenddown amount of zero dollars and cents, see WAC 388-519-0100(5).

     (7) ((Once a person's spenddown amount is known, their qualifying medical expenses are subtracted from that spenddown amount to determine the date of eligibility. The following medical expenses are used to meet spenddown:

     (a) First, Medicare and other health insurance deductibles, coinsurance charges, enrollment fees, or copayments;

     (b) Second, medical expenses which would not be covered by the MN program;

     (c) Third, hospital expenses paid by the person during the base period;

     (d) Fourth, hospital expenses, regardless of age, owed by the applying person;

     (e) Fifth, other medical expenses, potentially payable by the MN program, which have been paid by the applying person during the base period; and

     (f) Sixth, other medical expenses, potentially payable by the MN program which are owed by the applying person)) If income decreases, the department approves CN coverage for each month in the base period where the individual's countable income and resources are equal to or below the applicable CN standards. Children under the age of nineteen and pregnant women who become CN eligible in any month of the base period remain continuously eligible for CN coverage for the remainder of the certification even if there is a subsequent increase in income.

     (8) ((If a person meets the spenddown obligation at the time of application, they are eligible for MN medical coverage for the remainder of the base period. The beginning date of eligibility would be determined as described in WAC 388-416-0020)) Once an individual's spenddown amount has been determined, qualifying medical expenses are deducted. To be considered a qualifying medical expense, the expense:

     (a) Must be an expense for which the individual is financially liable;

     (b) Must not have been used to meet another spenddown;

     (c) Must not be the confirmed responsibility of a third party. The department allows the entire expense if the third party has not confirmed its coverage within:

     (i) Forty-five days of the date of service; or

     (ii) Thirty days after the base period ends.

     (d) Must be an incurred expense for the individual, if he or she is the applicant or:

     (i) His or her spouse;

     (ii) A family member, residing in the home of the individual, for whom the individual is financially responsible; or

     (iii) A financially responsible relative.

     (e) Must meet one of the following conditions:

     (i) Be an unpaid liability at the beginning of the base period;

     (ii) Be for medical services either paid or unpaid and incurred during the base period;

     (iii) Be for medical services incurred and paid during the three month retroactive base period if eligibility for medical was not established in that base period. Paid expenses which meet this requirement may be applied towards the current base period; or

     (iv) Be for paid or unpaid medical services and incurred during a previous base period, if it was necessary for the individual to make a payment due to delays in the certification for that base period.

     (9) ((If a person's spenddown amount is not met at the time of application, they are not eligible until they present evidence of additional expenses which meets the spenddown amount)) An exception to the provisions in subsection (8) of this section exists for qualifying medical expenses which have been paid on behalf of the individual by a publicly administered program during the current base period. The department uses the qualifying medical expenses to meet the spenddown liability. To qualify for this exception the program:

     (a) Must not be federally funded or make the payments from federally matched funds;

     (b) Must not pay the expenses prior to the first day of the base period; and

     (c) Must provide proof of the expenses paid on behalf of the individual.

     (10) ((To be counted toward spenddown, medical expenses must:

     (a) Not have been used to meet a previous spenddown; and

     (b) Not be the confirmed responsibility of a third party. The entire expense will be counted unless the third party confirms its coverage within:

     (i) Forty-five days of the date of the service; or

     (ii) Thirty days after the base period ends; and

     (c) Meet one of the following conditions:

     (i) Be an unpaid liability at the beginning of the base period and be for services for:

     (A) The applying person; or

     (B) A family member legally or blood-related and living in the same household as the applying person.

     (ii) Be for medical services either paid or unpaid and incurred during the base period; or

     (iii) Be for medical services paid and incurred during a previous base period if that client payment was made necessary due to delays in the certification for that base period)) Once the department has determined that the expenses meet the definition of a qualified expense as defined in subsection (8) or (9) of this section, the expenses are subtracted from the spenddown liability to determine the date the individual is eligible for medical coverage to begin. Qualifying medical expenses are deducted in the following order:

     (a) First, Medicare and other health insurance deductibles, coinsurance charges, enrollment fees, copayments and premiums which are the individual's responsibility under Medicare Part A, Part B, Part C or Part D. (Medical insurance premiums are income deductions under WAC 388-519-0100(3));

     (b) Second, medical expenses incurred and paid by the individual during the three month retroactive base period if eligibility for medical was not established in that base period;

     (c) Third, current payments on, or unpaid balance of, medical expenses incurred prior to the current base period which have not been used to establish eligibility for medical coverage in any other base period. The department sets no limit on the age of an unpaid expense; however, the expense must still be a current liability and be unpaid at the beginning of the base period;

     (d) Fourth, other medical expenses which would not be covered by the department's medical programs, less any third party payments which apply to the charges. The allowable items or services must have been provided or prescribed by a licensed health care provider;

     (e) Fifth, other medical expenses which have been incurred by the individual during the base period which are potentially payable by the MN program (less any confirmed third party payments which apply to the charges), even if payment is denied for these services because they exceed the department limits on amount, duration or scope of care. Scope of care is described in WAC 388-501-0060 and 388-501-0065; and

     (f) Sixth, other medical expenses which have been incurred by the applying person during the base period which are potentially payable by the MN program (less any confirmed third party payments which apply to the charges) which are within the department limits on amount, duration or scope of care.

     (11) ((An exception to the provisions in subsection (10) of this section exists. Medical expenses the person owes are applied to spenddown even if they were paid by or are subject to payment by a publicly administered program during the base period. To qualify, the program cannot be federally funded or make the payments of a person's medical expenses from federally matched funds. The expenses do not qualify if they were paid by the program before the first day of the base period)) If an individual submits verification of qualifying medical expenses with their application which meets or exceeds the spenddown liability, he or she is eligible for MN medical coverage for the remainder of the base period unless their circumstances change. See WAC 388-418-0005 to determine which changes must be reported to the department. The beginning of eligibility is determined as described in WAC 388-416-0020.

     (12) ((The following medical expenses which the person owes are applied to spenddown. Each dollar of an expense or obligation may count once against a spenddown cycle that leads to eligibility for MN coverage:

     (a) Charges for services which would have been covered by the department's medical programs as described in WAC 388-501-0060 and 388-501-0065, less any confirmed third party payments which apply to the charges; and

     (b) Charges for some items or services not typically covered by the department's medical programs, less any third party payments which apply to the charges. The allowable items or services must have been provided or prescribed by a licensed health care provider; and

     (c) Medical insurance and Medicare copayments or coinsurance (premiums are income deductions under WAC 388-519-0100(4)); and

     (d) Medical insurance deductibles including those Medicare deductibles for a first hospitalization in sixty days)) If an individual cannot meet the spenddown amount at the time he or she submits their application, they are not eligible until they provide proof of additional qualifying expenses which meet the spenddown liability.

     (13) Each dollar of a qualifying medical expense may count once against a spenddown period that leads to eligibility for MN coverage. However, medical expenses may be used more than once ((if)) under the following circumstances:

     (a) The ((person)) individual did not meet their total spenddown ((amount)) liability and ((did not become)) became eligible in ((that)) a previous base period and the bill remains unpaid; ((and)) or

     (b) The medical expense was ((applied to that unsuccessful spenddown and remains an unpaid bill)) a bill incurred and paid within three months of the current application and the department could not establish eligibility for the individual in the retroactive base period.

     (14) ((To be considered toward spenddown, written)) The individual is responsible to give the proof of qualifying medical expenses ((for services rendered to the client must be presented to the department)). The deadline for presenting medical expense information is thirty days after the base period ends unless there is a good ((cause)) reason for delay ((can be documented)).

     (15) ((The medical expenses applied to the spenddown amount are the client's financial obligation and are not reimbursed by the department (see WAC 388-502-0100).

     (16))) Once ((a person)) an individual meets ((their)) the spenddown ((and they are issued a medical identification card for MN coverage)) requirement and the certification begin date has been established, newly identified expenses cannot be considered toward that spenddown unless there is a good reason for the delay in submitting the expense or there was department error in determining the correct begin date. ((Once the application is approved and coverage begins the beginning date of the certification period cannot be changed due to a clients failure to identify or list medical expenses.))

     (16) Good cause reasons for delay in providing medical expense information to the department include, but are not limited to:

     (a) The individual did not receive a timely bill from his or her medical provider or insurance company;

     (b) The individual has medical issues which prevents him or her from submitting proof in a timely manner; or

     (c) The individual meets the criteria for needing a supplemental accommodation under chapter 388-472 WAC.

     (17) The department is not responsible to pay for any expense or portion of an expense which has been assigned to an individual's spenddown liability. If an expense is potentially payable under the MN program, and only a portion of the medical expense has been assigned to meet spenddown, the medical provider may not bill the individual for more than the amount which as assigned to the remaining spenddown liability. See WAC 388-502-0160 Billing a client.

     (18) The department follows rules and methodologies described in WAC 388-502-0100 to determine whether any payment is due to the medical provider on medical expenses which have been partially assigned to meet a spenddown liability.

     (19) If the medical expense assigned to spenddown was incurred outside of a period of MN eligibility, or if the expense is not the type that is covered by the department's medical assistance programs, the department is not responsible for any portion of the bill.

[Statutory Authority: RCW 74.04.050, 74.08.090, 74.09.530, and 74.09.700. 06-24-036, § 388-519-0110, filed 11/30/06, effective 1/1/07. Statutory Authority: RCW 71.05.560, 74.04.050, 74.04.057, 74.08.090, 74.09.500, 74.09.530. 06-13-042, § 388-519-0110, filed 6/15/06, effective 7/16/06. Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057, and 74.08.090. 05-08-093, § 388-519-0110, filed 4/1/05, effective 5/2/05; 98-16-044, § 388-519-0110, filed 7/31/98, effective 9/1/98. Formerly WAC 388-518-1830, 388-518-1840, 388-519-1905, 388-519-1910, 388-519-1930 and 388-522-2230.]

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