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LTC Income and Deductions

LTC Income and Deductions. How to Determine MA Eligibility and Patient Liability for Long Term Care. 30 Full Days of LTC. To be eligible for LTC, the individual must have been in LTC for 30 full consecutive days, or have died prior to the 30 th day.

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LTC Income and Deductions

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  1. LTC Income and Deductions How to Determine MA Eligibility and Patient Liability for Long Term Care

  2. 30 Full Days of LTC • To be eligible for LTC, the individual must have been in LTC for 30 full consecutive days, or have died prior to the 30th day. • The 30 days begins on the day of admission and may be in different facilities or levels of care (Hospice, HCBS, SCL). • Do not use the special income standard if the applicant has not been in LTC for 30 full days. Instead, determine eligibility for a spend down.

  3. PA-1A, Pages 4 and 5 Obtain a PA-1A form, and turn to page 4. • The first item on this page is State Supplementation income eligibility calculations. Skip this section. • Under item “e.”, you will see “Step I”. This is where you start income eligibility calculations for LTC. • Review this form as you view the next few slides, which explain these calculations in more detail…

  4. Step I - MA Eligibility Determine MA eligibility using the Special Income Standard (SIS), and gross income: • Determine gross income, allowing no deductions • If gross income is equal to or less than the Special Income Standard, and the applicant has been in LTC for 30 consecutive days, the applicant is MA eligible. • If gross income is over the SIS, refer to MS 3505 for QIT procedures, except SCL, ABI, and ICF/MR/DD. • For SCL, ABI, and ICF/MR/DD individuals over the Special Income Standard, complete Step II on PA-1A.

  5. MA Eligibility Example Edna went into a NF on 1/1/2009. Her only income is RSDI of $985, and she pays her SMI premium. You are working this case on 2/1/09. $985 - RSDI Income (no deductions allowed) - $2022- Special Income Standard (eff.1/1/09) Ø - No excess- individual is MA Eligible

  6. Income Over Limits • For applicants in LTC at least 30 days with income over the special income standard, refer to MS 3505 for QIT procedures, except: • SCL, ABI, or ICF/MR/DD- QIT does not apply to these individuals. Use Step II procedures in MS 2840 • If QIT is denied by DMS, explore a spend down. (more on the QIT process later)

  7. Income Over Limits In some situations, the gross income may be equal to or less than the special income standard, but more than the private pay rate or actual cost of care. These individuals are MA eligible, but may be vendor payment ineligible.

  8. Step II: SCL, ABI & ICF/MR/DD Only If gross income is greater than the SIS OR individual has been in care less than 30 consecutive days, they may still be eligible for LTC. Step II: • Determining countable income- gross income and/or net profit, minus the $20 exclusion and work related expenses, if any. • Deduct the MA Scale for 1 ($217) or 2 ($267), as appropriate. • Deduct individual’s verified medical expenses such as: SMI or health insurance premiums, and/or actual payments on a current/prior medical bill not covered by MA. • Deduct the appropriate standard (depending on type of care) • If no excess income, the individual is MA eligible. If there is an excess, individual is ineligible; explore a spend down.

  9. LTC Deductions and Allowances Deduct the following from the LTC individual’s income when calculating patient liability: • Personal Needs Allowance (PNA) • Increased PNA, if appropriate • Plan for Achieving Self-Support (PASS) • Blind Work Expense (BWE) • Impairment Related Work Expense • $65 plus ½ the remainder of therapeutic earnings (for SCL and ICF/MR/DD only) Most of these are the deductions you learned about earlier…

  10. More Deductions and Allowances • Community Spouse Income Allowance • Family Income Allowance • SMI premium, if paid by individual • Health insurance premiums paid by individual • Verified medical expenses for services the LTC facility does not provide The next few slides explain LTC deductions in more detail…

  11. Personal Needs Allowance • The Personal Needs Allowance (PNA) of $40 is for personal and incidental needs for most LTC individuals. • NON-institutionalized LTC individuals (HCBS, SCL, ABI, etc.)- are allowed a PNA of the SSI Standard, plus $20 ($694eff.1/09)

  12. Increased PNA LTC individuals with legal, mandatory payroll deductions and/or Federal, state and local taxes withheld from earned/unearned income • Do not include withholdings resulting from recipient actions, such as: voluntary tax withholdings or court-ordered garnishments for child support or other debts or financial obligations. • This is a rare circumstance…

  13. Spouse and Family Allowances • For an individual with a spouse living in the community, a Community Spouse Income Allowance is calculated as described in MS 3550. • Allow a deduction for each dependent family member with income less than the Family Income Allowance, who is claimed by either spouse for tax purposes under the IRS Code. We’ll discuss this more when we look at LTC couples and children…

  14. Health Insurance Expenses • Costs of SMI, if paid by the individual • Premiums for health insurance paid by recipient. • Prorate premiums if paid prospectively. (If $90 is paid in May to cover June, July and August, allow $30 in each covered month or allow the entire premium in the month incurred (May). • View all insurance policies and record identifying information. Complete form PA-40 or KAMES Health Insurance screen, as appropriate. • Allow co-pays when computing patient liability.

  15. Other Medical Deductions Deduct verified medical expenses the facility is not required to provide (eyeglasses, hearing aids, etc.) • Cost of a medically necessary attendant if payment is not available from another MA provider at no cost. • Any unpaid, incurred medical expenses from prior to MA eligibility for which the individual is responsible. • Do not allow an unpaid cost of NF care incurred during an ineligibility period for transferring resources. • Do not deduct items/services the facility is required to provide (wheel chairs, crutches, walkers, etc.)

  16. Step III - Patient Liability Patient Liability Calculations-Single LTC individual: • Determine gross income/net profit of individual • Deduct the PNA or increased PNA, as appropriate • Deduct verified medical expenses not subject to third party payment (health insurance, etc.) • Add any third party payment paid directly to the facility for LTC costs, if any. The result is the individual's patient liability.

  17. Patient Liability Example Always include cents in your calculations, until you get to the final figure! $985- RSDI - $40- PNA $945.00 - $96.40- SMI Premium (01/09) $848.60- This final figure is 50¢ or more, so we round up to $849.00 This individual must pay $849 per month for their LTC services.

  18. Conclusion • In order to receive LTC MA, the individual must have been in LTC for 30 consecutive days, or have died prior to the 30th day. • Gross income and the Special Income Standard is used for MA Eligibility for LTC. • If the individual is over the Special Income Standard, explore a QIT or use Step II. • Once this criteria is met, patient liability is calculated using deductions from income.

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