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Incurred Medical Expenses: Suggested Steps for State and County Medicaid Caseworkers

Paying the Nursing Facility's Bill

Upon admission to a nursing facility, a Medicaid Caseworker determines how much income a resident receives each month and applies that income to pay their Nursing Facility's bill, except for an amount for personal needs and certain other required deductions. Generally, residents on Medicaid don't have enough income to pay the total amount of the Nursing Facility's Bill, so the Caseworker notifies Medicaid to pay the remaining balance each month.

Paying the Dental Bill

When a resident receives a Dental Bill for services that are not covered by Medicaid or another third party payer, the bill may qualify as an Incurred Medical Expense. The resident's Medicaid Caseworker plays
an important role in this process. He or she would review the Dental Bill, approve it as an Incurred Medical Expense, and then notify the resident or the resident's financial representative to pay the Dental Bill instead of the portion of the Nursing Facility's bill. At the same time the Caseworker approves payment of the Dental Bill, he or she would also notify the state requesting an increase in the amount that Medicaid pays towards the Nursing Facility's Bill to make sure that the facility continues to be paid in full. If the total amount of the Dental Bill is less than the resident's total monthly income, then the Dental Bill can be paid in full with just one payment. If the total amount of the Dental Bill is greater than the monthly income, then several monthly payments will need to be approved so that the entire Dental Bill gets paid. During each of those months, the Nursing Facility's payment from Medicaid would be increased in the amount of the Dental Bill payment.

Each state will have variations in the procedures. Refer to your state's own policies for details.

Caseworker Considerations

When a Dental Bill is presented for a Medicaid recipient:

  1. Verify that dental services listed in the Dental Bill are not covered by Medicaid or any other third party payer, and that the dental services are medically necessary. These points may be highlighted in the Dental Bill. If not, the dental office could be contacted for information about these two requirements.
  2. Confirm that the nursing facility resident has applicable income that is currently used to pay for some or all of the resident's nursing facility care. Some states refer to this as Patient Liability Income (PLI).
    • Residents without such income will not be able to use this method to pay for dental services. Inform the resident and/or the dental office. Other arrangements will need to be made regarding this bill.
    • Residents with applicable income can use that income to pay the dental bill.
  3. If the resident has applicable income, speak with the resident or the resident's financial representative about how to pay the Dental Bill.
    • If the Dental Bill is less than or equal to the resident's monthly income, the Dental Bill should be paid in full. Adjust the amount to be paid by Medicaid towards the Nursing Facility's Bill by an amount equal to the Dental Bill, so the nursing facility is paid in full.
    • If the Dental Bill is greater than the resident's monthly income, several monthly payments may be needed to pay the Dental Bill in full. Regular monthly payments can be made
      until the Dental Bill is paid in full. In each of these months, increase the amount paid by Medicaid towards the Nursing Facility's Bill by an equal amount.

Incurred Medical Expenses: Suggested Steps for State and County Medicaid Caseworkers (PDF)