Effective Date of Rule: Thirty-one days after filing.

     Purpose: The department is clarifying language, updating outdated WAC references, and adding additional provisions relating to expenses an individual can use toward meeting spenddown. The rules 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 388-519-0100 and 388-519-0110.

     Statutory Authority for Adoption: RCW 74.04.055, 74.04.050, 74.04.057, 74.08.090, and 74.09.500.

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

      Adopted under notice filed as WSR 09-01-181 on December 24, 2008; and WSR 09-04-067 on February 2, 2009.

     Changes Other than Editing from Proposed to Adopted Version: WAC 388-519-0100 (5)(a), added the words "or family member."

     WAC 388-519-0100(14), added the phrase, "beyond the end of the original certification date..."

     WAC 388-519-0110(17), substituted the words "used to meet" for "assigned to." Added the phrase, "or accept or retain any additional amount for the covered service from the individual. Any additional amount may be billed to the department."

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 2, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 2, Repealed 0.

     Date Adopted: March 11, 2009.

Stephanie E. Schiller

Rules Coordinator

     (a) ((A person who meets the institutional status requirements of WAC 388-513-1320)) Meets the institutional status requirements of WAC 388-513-1320; ((or))

     (b) ((A person who receives waiver services under chapter 388-515 WAC)) Resides in a medical institution as described in WAC 388-513-1395; or

     (c) Receives waiver services under a medically needy in-home waiver (MNIW) according to WAC 388-515-1550 or a medically needy residential waiver (MNRW) according to WAC 388-515-1540.

     (2) ((MN coverage is considered under this chapter when a person:

     (a) Is not excluded under subsection (1) of this section; and

     (b) Is not eligible for categorically needy (CN) medical coverage because they have CN countable income which is above the CN income standard)) An SSI-related individual who lives in a department contracted alternate living facility may be eligible for MN coverage under the rules described in WAC 388-513-1305.

     (3) ((MN coverage is available for children, for persons who are pregnant or for persons who are SSI-related. MN coverage is available to an aged, blind, or disabled ineligible spouse of an SSI recipient even though that spouse's countable income is below the CN income standard. Adults with no children must be SSI related in order to be qualified for MN coverage)) An individual may be eligible for MN coverage under this chapter when he or she is:

     (a) Not covered under subsection (1) and (2) of this section; and

     (b) Eligible for categorically needy (CN) medical coverage in all other respects except that his or her CN countable income is above the CN income standard.

     (4) ((A person not eligible for CN medical and who is applying for MN coverage has the right to income deductions in addition to those used to arrive at CN countable income. The following deductions are used to calculate their countable income for MN. Those deductions to income are applied to each month of the base period and determine MN countable income)) MN coverage may be available if the individual is:

     (a) ((All health insurance premiums expected to be paid by the client during the base period are deducted from their income)) A child; ((and))

     (b) ((For persons who are SSI-related and who are married, see the income provisions for the nonapplying spouse in WAC 388-450-0210)) A pregnant woman; ((and))

     (c) ((For persons who are not SSI-related and who are married, an income deduction is allowed for a nonapplying spouse:

     (i) If the nonapplying spouse is living in the same home as the applying person; and

     (ii) The nonapplying spouse is receiving community and home based services under chapter 388-515 WAC; then

     (iii) The income deduction is equal to the one person MNIL less the nonapplying spouse's actual income)) A refugee;

     (d) An SSI-related individual including an aged, blind or disabled individual with countable income under the CN income standard, who is an ineligible spouse of an SSI recipient; or

     (e) A hospice client with countable income which is above the special income level (SIL).

     (5) ((A person who meets the above conditions is eligible for MN medical coverage if their MN countable income is at or below the medically needy income level (MNIL) in WAC 388-478-0070. They are certified as eligible for up to twelve months of MN medical coverage. Certain SSI or SSI-related clients have a special MNIL. That MNIL exception is described in WAC 388-513-1305)) An individual who is not eligible for CN medical and who is applying for MN coverage has the right to income deductions in addition to, or instead of, those used to arrive at CN countable income. Deductions to income are applied to each month of the base period to determine MN countable income. The following deductions are used to calculate countable income for MN:

     (a) All health insurance premiums, with the exception of medicare Part A, Part B, Part C and Part D premiums expected to be paid by the individual or family member during the base period(s);

     (b) Any allocations to a spouse or to dependents for an SSI-related individual who is married or who has dependent children. Rules for allocating income are described in WAC 388-475-0900;

     (c) For an SSI-related individual who is married and lives in the same home as his or her spouse who receives home and community based waiver services under chapter 388-515 WAC, an income deduction equal to the medically needy income level (MNIL) minus the nonapplying spouse's income; and

     (d) A child or pregnant woman who is applying for MN coverage is eligible for income deductions allowed under TANF/SFA rules and not under the rules for CN programs based on the federal poverty level. See WAC 388-450-0210(4) for exceptions to the TANF/SFA rules which apply to medical programs and not to the cash assistance program.

     (6) ((A person whose MN countable income exceeds the MNIL may become eligible for MN medical coverage when they have or expect to have medical expenses. Those medical expenses or obligations may be used to offset any portion of their income which is over the MNIL)) The MNIL for individuals who qualify for MN coverage under subsection (1) of this section is based on rules in chapter 388-513 and 388-515 WAC.

     (7) ((That portion of a person's MN countable income which is over the department's MNIL standard is called "excess income.")) The MNIL for all other individuals is described in WAC 388-478-0070. If an individual has countable income which is at or below the MNIL, he or she is certified as eligible for up to twelve months of MN medical coverage.

     (8) ((When a person has or will have "excess income" they are not eligible for MN coverage until they have medical expenses which are equal in amount to that excess income. This is the process of meeting "spenddown)) If an individual has countable income which is over the MNIL, the countable income that exceeds the department's MNIL standards is called "excess income."

     (9) When individuals have "excess income" they are not eligible for MN coverage until they provide evidence to the department of medical expenses incurred by themselves, their spouse or family members who live in the home for whom they are financially responsible. See WAC 388-519-0110(8). An expense has been incurred when:

     (a) The individual has received the medical treatment or medical supplies, is financially liable for the medical expense but has not yet paid the bill; or

     (b) The individual has paid for the expense within the current or retroactive base period described in WAC 388-519-0110.

     (10) Incurred medical expenses or obligations may be used to offset any portion of countable income that is over the MNIL. This is the process of meeting "spenddown."

     (11) The department calculates the amount of an individual's spenddown by multiplying the monthly excess income amount by the number of months in the certification period as described in WAC 388-519-0110. The qualifying medical expenses must be greater than or equal to the total calculated spenddown amount.

     (12) An ((person)) individual who is considered for MN coverage under this chapter may not spenddown excess resources to become eligible for the MN program. Under this chapter ((a person is)) individuals are ineligible for MN coverage if their resources exceed the program standard in WAC 388-478-0070. ((A person)) An individual who is considered for MN coverage under ((chapter 388-513)) WAC 388-513-1395, 388-505-0250 or 388-505-0255 is allowed to spenddown excess resources.

     (((10) No extensions of coverage or automatic redetermination process applies to MN coverage. A client must submit an application for each eligibility period under the MN program.))

     (13) There is no automatic redetermination process for MN coverage. An individual must submit an application for each eligibility period under the MN program.

     (14) An individual who requests a timely administrative hearing under WAC 388-458-0040 is not eligible for continued benefits beyond the end of the original certification date under the medically needy program.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090. 98-16-044, § 388-519-0100, filed 7/31/98, effective 9/1/98. Formerly WAC 388-503-0320, 388-518-1840, 388-519-1930 and 388-522-2230.]

     (2) A ((person's)) base period begins on the first day of the month ((of application)), in which an individual applies for medical assistance, 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 that are over the applicable standard for any part of the required base period; or

     (c) The client is not or will not be able to meet the TANF-related or SSI-related requirement 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 was not otherwise eligible for MN coverage for each of the months of the retroactive base period.

     (5) ((The amount of a person's ")) An individual's 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 level (MNIL). ((The excess income from each of the)) Income which is over the MNIL (based on the individual's household size) in each month((s)) in the base period is added together to determine the total (("))spenddown((" for the base period)) amount. The MNIL standard is found at http://www.dshs.wa.gov/pdf/esa/manual/standards_C_MedAsstChart.pdf and is updated annually in January.

     (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))) 388-519-0100(7).

     (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 an individual's income decreases, the department approves CN coverage for each month in the base period when 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 must:

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

     (b) Not have been used to meet another spenddown;

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

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

     (ii) Thirty days after the base period ends.

     (d) Be an incurred expense for the individual:

     (i) The individual's spouse;

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

     (iii) A relative, residing in the home of the individual, who is financially responsible for the individual.

     (e) 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 assistance was not established in that base period. Paid expenses that meet this requirement may be applied towards the current base period; or

     (iv) Be for medical services incurred during a previous base period and either unpaid or paid for, 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 that have been paid on behalf of the individual by a publicly administered program during the current or the retroactive base period. The department uses the qualifying medical expenses to meet the spenddown liability. To qualify for this exception the program must:

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

     (b) Not pay the expenses prior to the first day of the retroactive base period; and

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

     (10) ((To be counted toward spenddown, medical expenses must)) 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) ((Not have been used to meet a previous spenddown)) First, medicare and other health insurance deductibles, coinsurance charges, enrollment fees, copayments and premiums that are the individual's responsibility under medicare Part A, Part B, Part C and Part D. (Health insurance premiums are income deductions under WAC 388-519-0100(5)); ((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)) Second, medical expenses incurred and paid by the individual during the three month retroactive base period if eligibility for medical assistance 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 that would not be covered by the department's medical programs, minus any third party payments which apply to the charges. The items or services allowed as a medical expense 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 that are potentially payable by the MN program (minus any confirmed third party payments that 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 that have been incurred by the individual during the base period that are potentially payable by the MN program (minus any confirmed third party payments that apply to the charges) and that 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 his or her application that 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 the application is submitted, the individual is not eligible until he or she provides proof of additional qualifying expenses that meet the spenddown liability.

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

     (a) The ((person)) individual did not meet ((their)) his or her total spenddown ((amount)) liability and ((did not)) become 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)) a bill incurred and paid within three months of the current application and the department could not establish eligibility for medical assistance for the individual in the retroactive base period.

     (14) ((To be considered toward spenddown, written proof of)) The individual must provide the proof of qualifying medical expenses ((for services rendered to the client must be presented)) to the department. The deadline for ((presenting)) providing 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 a 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 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 that 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 that has been used to meet 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 was assigned to the remaining spenddown liability, or accept or retain any additional amount for the covered service from the individual. Any additional amount may be billed to the department. See WAC 388-502-0160 Billing a client.

     (18) The department determines whether any payment is due to the medical provider on medical expenses that have been partially assigned to meet a spenddown liability, according to WAC 388-502-0100.

     (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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