WSR 06-09-086



(Health and Recovery Services Administration)

[ Filed April 18, 2006, 4:21 p.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 06-03-019.

     Title of Rule and Other Identifying Information: Amending WAC 388-502-0100 General conditions of payment, 388-519-0100 Eligibility for the medically needy program, and 388-865-0217 Psychiatric indigent inpatient program.

     Hearing Location(s): Blake Office Park East, Rose Room, 4500 10th Avenue S.E., Lacey, WA 98503 (one block north of the intersection of Pacific Avenue S.E. and Alhadeff Lane. A map or directions are available at or by calling (360) 664-6097), on May 23, 2006, at 10:00 a.m.

     Date of Intended Adoption: Not earlier than May 24, 2006.

     Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA 98503, e-mail, fax (360) 664-6185, by 5:00 p.m., May 23, 2006.

     Assistance for Persons with Disabilities: Contact Stephanie Schiller, DSHS Rules Consultant, by May 19, 2006, TTY (360) 664-6178 or (360) 664-6097 or by e-mail at

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department is clarifying the existing policy and practice of deducting any amounts required to be paid by clients, such as deductibles, copays, cost-sharing, spend down amounts, and emergency medical expense requirements (EMER), from payments made to providers. There are no "new rules" in this rule-making action. This action does not change current and long-standing department practice; it is intended only to clarify the already existing policy and rule interpretation. The sole purpose is to promote greater understanding of the policy.

     Reasons Supporting Proposal: Providers have been operating under current regulations and policy for many years with respect to deductions from payments for services furnished to department clients. Nonetheless, in light of comments from certain providers, the department is restating its rules regarding client financial responsibility and its effect on provider reimbursement.

     Statutory Authority for Adoption: RCW 71.05.560, 74.04.050, 74.04.057, 74.08.090, 74.09.500, and 74.09.530.

     Statute Being Implemented: 42 C.F.R. § 435.831(i)(5).

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Department of social and health services, governmental.

     Name of Agency Personnel Responsible for Drafting: Ann Myers, P.O. Box 45533, Olympia, WA 98504, (360) 725-1345; Implementation and Enforcement: Not applicable (not a new policy).

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed amendments do not change current policy or practice; they merely clarify existing policy and make it easier to understand.

     A cost-benefit analysis is not required under RCW 34.05.328. The rule meets the criteria in RCW 34.05.328 (5)(b). This section does not apply to: (iv) Rules that only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect.

April 12, 2006

Andy Fernando, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION(Amending WSR 00-15-050, filed 7/17/00, effective 8/17/00)

WAC 388-502-0100   General conditions of payment.   (1) The department reimburses for medical services furnished to an eligible client when all of the following apply:

     (a) The service is within the scope of care of the client's medical assistance program;

     (b) The service is medically or dentally necessary;

     (c) The service is properly authorized;

     (d) The provider bills within the time frame set in WAC 388-502-0150;

     (e) The provider bills according to department rules and billing instructions; and

     (f) The provider follows third-party payment procedures.

     (2) The department is the payer of last resort, unless the other payer is:

     (a) An Indian health service;

     (b) A crime victims program through the department of labor and industries; or

     (c) A school district for health services provided under the Individuals with Disabilities Education Act.

     (3) The department does not reimburse providers for client financial obligations, and deducts from the payment the costs of those services identified as client financial obligations. Client financial obligations include, but are not limited to, the following:

     (a) Co-payments (co-pays);

     (b) Deductibles;

     (c) Emergency Medical Expense Requirements (EMER); and

     (d) Spenddown (see WAC 388-519-0110).

     (4) The provider must accept Medicare assignment for claims involving clients eligible for both Medicare and medical assistance before MAA makes any payment.

     (((4))) (5) The provider is responsible for verifying whether a client has medical assistance coverage for the dates of service.

     (((5))) (6) The department may reimburse a provider for services provided to a person if it is later determined that the person was ineligible for the service at the time it was provided if:

     (a) The department considered the person eligible at the time of service;

     (b) The service was not otherwise paid for; and

     (c) The provider submits a request for payment to the department.

     (((6))) (7) The department does not pay on a fee-for-service basis for a service for a client who is enrolled in a managed care plan when the service is included in the plan's contract with the department.

     (((7))) (8) Information about medical care for jail inmates is found in RCW 70.48.130.

     (((8))) (9) The department pays for medically necessary services on the basis of usual and customary charges or the maximum allowable fee established by the department, whichever is lower.

[Statutory Authority: RCW 74.08.090, 74.09.500, 74.09.530. 00-15-050, § 388-502-0100, filed 7/17/00, effective 8/17/00.]

AMENDATORY SECTION(Amending WSR 05-08-093, filed 4/1/05, effective 5/2/05)

WAC 388-519-0110   Spenddown of excess income for the medically needy program.   (1) The person applying for MN medical coverage chooses a three month or a six month base period for spenddown calculation. The months must be consecutive calendar months unless one of the conditions in subsection (4) of this section apply.

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

     (3) A separate base period may be made for a retroactive period. The retroactive base period is made up of the three calendar months immediately prior to the month of application.

     (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 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 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 "spenddown" is calculated by the department. The MN countable income from each month of the base period is compared to the MNIL. The excess income from each of the months in the base period is added together to determine the "spenddown" for the base period.

     (6) If income varies and a person'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.

     (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.

     (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.

     (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.

     (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.

     (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 chapter 388-529 WAC, 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.

     (13) Medical expenses may be used more than once if:

     (a) The person did not meet their total spenddown amount and did not become eligible in that previous base period; and

     (b) The medical expense was applied to that unsuccessful spenddown and remains an unpaid bill.

     (14) To be considered toward spenddown, written proof of 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 good cause 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 meets their spenddown and they are issued a medical identification card for MN coverage, newly identified expenses cannot be considered toward that spenddown. 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.

[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.]

AMENDATORY SECTION(Amending WSR 03-24-030, filed 11/24/03, effective 12/25/03)

WAC 388-865-0217   Psychiatric indigent inpatient program.   (1) The psychiatric indigent inpatient (PII) program is a state funded, limited casualty (LCP) program specifically for mental health clients identified in need of inpatient psychiatric care by the regional support network (RSN).

     (2) The psychiatric indigent inpatient (PII) program pays only for ((involuntary and)) emergent voluntary inpatient psychiatric care in community hospitals within the state of Washington. Psychiatric indigent inpatient (PII) does not cover ancillary charges for physician, transportation, pharmacy or other costs associated with an inpatient psychiatric hospitalization.

     (3) To be eligible for the psychiatric indigent inpatient (PII) program, a client is subject to the following conditions and limitations:

     (a) The client must have ((an involuntary or)) a voluntary inpatient psychiatric admission authorized by a regional support network (RSN) in the month of application or within the three months immediately preceding the month of application.

     (b) Consumers applying for the psychiatric indigent inpatient (PII) program are subject to the income and resource rules for TANF and TANF-related clients in chapters 388-450 and 388-470 WAC.

     (c) If a client's income and/or resources exceed the standard for medically needy (MN), as described in WAC 388-478-0070, the client must spend down the excess amount as described in WAC ((388-519-0100)) 388-519-0110 for the client to be eligible for the psychiatric indigent inpatient (PII) program. Spenddown is a client financial obligation for medical expenses. The department deducts the spenddown from payments to providers (see WAC 388-502-0100).

     (d) A client who is voluntarily admitted must have incurred an emergency medical expense requirement (EMER) of two thousand dollars over a twelve-month period. ((A client who is detained under the Involuntary Treatment Act (ITA) is exempt from the emergency medical expense requirement (EMER))) EMER is a client financial obligation. The department deducts the EMER from payments to providers (see WAC 388-502-0100).

     (i) Qualifying emergency medical expense requirement (EMER) expenses are psychiatric inpatient services in a community hospital.

     (ii) The emergency medical expense requirement (EMER) period lasts for twelve calendar months, beginning on the first day of the month of certification for psychiatric indigent inpatient (PII) and continuing through the last day of the twelfth month.

     (e) A client is limited to a single three-month period of psychiatric indigent inpatient (PII) eligibility per twelve-month emergency medical expense requirement (EMER) period.

     (4) Clients are not eligible for the psychiatric indigent inpatient (PII) program if they:

     (a) Are eligible for, or receiving, any other cash or medical program; or

     (b) Entered the Washington state specifically to obtain medical care; or

     (c) Are inmates of a federal or state prison; or

     (d) Are committed under the Involuntary Treatment Act (ITA).

[Statutory Authority: RCW 71.05.560, 71.24.035, 71.34.800, and 2003 1st sp.s. c 25. 03-24-030, § 388-865-0217, filed 11/24/03, effective 12/25/03.]

     Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.

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