Reimbursement Of Paid Medical Expenses Under 18 NYCRR §360 7.5(a) TB ADM10 10adm 9

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STATE OF NEW YORK
DEPARTMENT OF HEALTH
Corning Tower

The Governor Nelson A. Rockefeller Empire State Plaza

Richard F. Daines, M.D.
Commissioner

Albany, New York 12237

James W. Clyne, Jr.
Executive Deputy Commissioner

ADMINISTRATIVE DIRECTIVE
TRANSMITTAL:
TO:

Commissioners of
Social Services

DIVISION:

DATE:
SUBJECT:

10 OHIP/ADM-9

Office of Health
Insurance Programs

November 22, 2010

Reimbursement of Paid Medical Expenses Under 18 NYCRR §360-7.5(a)

SUGGESTED
DISTRIBUTION:

CONTACT
PERSON:

Medicaid Staff
Fair Hearing Staff
Legal Staff
Staff Development Coordinators
Temporary Assistance Staff

Local District Liaison
Upstate: (518)474-8887
NYC:
(212)417-4500
Reimbursement Procedures – Medicaid Financial Management
Unit, Tom Grestini, (518)473-5892

ATTACHMENTS:

Attachment
Attachment
Attachment
Attachment

I:
II:
III:
IV:

Attachment V:

Desk Aid: Reimbursement Policy
Sample Wording to Request a Claim Form
Claim Transmittal Form, OHIP-0031
Medical Assistance Reimbursement Detail
Form, OHIP-0032
Notice of Decision on Reimbursement of
Medicaid Bills by the Medical Assistance
Program, DSS-3869

FILING REFERENCES
Previous
ADMs/INFs

Releases
Cancelled

GIS 01 MA/046
88 ADM-31

Dept. Regs.

Soc. Serv. Manual Ref. Misc. Ref.
Law & Other
Legal Ref.

18NYCRR
360-7.5(a)

42 CFR
435.905 &
435.914

GIS
03 MA/025
03 MA/019
02 MA/033
98 MA/011
95 MA/032

Date:

November 22, 2010

Trans. No.

I.

10 OHIP/ADM-9

Page No. 2

PURPOSE
This Office of Health Insurance Programs Administrative Directive
(OHIP/ADM) advises social services districts of amendments to the
Department’s regulations at 18 NYCRR §360-7.5(a), which govern the
circumstances in which direct reimbursement of paid medical bills may
be made to eligible Medicaid or Family Health Plus recipients or their
representatives. As amended, these regulations reflect several federal
and State court decisions:
the federal district court orders in
Greenstein v. Dowling (1994) and Carroll v. DeBuono (1998) and the New
York State Court of Appeals decision in Seittelman v. Sabol (1998). At
the time of these court decisions, the Department issued several
General Information System (GIS) messages that instructed social
services districts regarding how they must implement the decisions.
Social services districts should now consult the instructions that are
contained in this directive.
It consolidates the Department’s prior
GIS messages, and explains the amendments to 18 NYCRR §360-7.5(a).

II. BACKGROUND
In general, payment for medical care provided under the Medicaid
Program is made to the enrolled Medicaid provider that furnished the
care.
However, the State’s Medicaid regulations at 18 NYCRR §360-7.5
have long provided for two exceptions that enable Medicaid recipients,
or their representatives, to be directly reimbursed for covered care
and services.
Under the first exception, Medicaid recipients or their representatives
may be directly reimbursed for covered care and services obtained
during
the
recipients’
retroactive
eligibility
periods.
The
retroactive eligibility period has two parts: a pre-application period
and a post-application period.
The pre-application period begins on
the first day of the third month prior to the month in which the
recipient applied for Medicaid and ends on the day the recipient
applied for Medicaid.
The post-application period begins on the day
after the recipient applied for Medicaid and ends when the recipient
receives the Common Benefit Identification Card (CBIC).
In the past, Department regulations at 18 NYCRR §360-7.5 provided that
reimbursement for care and services received in the retroactive
eligibility period could only be made if the recipient had obtained
such services from enrolled Medicaid providers.
This policy of
limiting reimbursement only to services provided by enrolled providers
was reflected in 88 ADM-31, “Medicaid Reimbursement for Certain Paid
Medical Bills (Krieger v. Perales).”
The Carroll and Seittelman plaintiffs challenged this requirement, and
the court ruled that 18 NYCRR §360-7.5 was invalid to the extent that
it denied direct reimbursement for Medicaid covered services that a
recipient, or the recipient's representative on behalf of the
recipient, purchased from non-Medicaid enrolled providers during the
pre-application part of the recipient’s retroactive eligibility period.

Date:

November 22, 2010

Trans. No.

10 OHIP/ADM-9

Page No. 3

This is the period that begins on the first day of the third month
prior to the month in which the recipient applied for Medicaid and that
ends on the date the recipient applied for Medicaid.
Direct
reimbursement may, however, be limited to the Medicaid rate.
The
provider must be otherwise lawfully qualified to provide the service
and must not have been excluded or otherwise sanctioned under 18 NYCRR
Part 515.
The court sustained the regulation to the extent that it denied direct
reimbursement for services purchased from non-Medicaid enrolled
providers
during
the
post-application
part
of
the
recipient’s
retroactive eligibility period; that is, from the day after the
recipient applies for Medicaid until the day the recipient receives his
or her CBIC.
However, the court also ruled that Medicaid applicants
must be notified in writing on the day that they apply that they must
obtain covered services during this period only from providers that are
enrolled in the Medicaid program.
In addition, reimbursement may be
limited to the Medicaid rate.
Under the second exception to the rule that Medicaid payments are
generally made only to the provider, the Department’s regulations have
long provided that Medicaid recipients or their representatives may be
reimbursed when, due to social services district error or delay,
recipients or their representatives must purchase services that would
otherwise have been paid by Medicaid.
Department regulations at 18
NYCRR §360-7.5 previously limited direct reimbursement due to social
services district error or delay to the Medicaid fee or rate in effect
when the service was rendered.
plaintiffs
challenged
the
limitation
of
direct
The
Greenstein
reimbursement to the Medicaid rate or fee in effect at the time medical
services were received in cases where an erroneous determination or
agency delay caused the recipient or the recipient's representative to
pay for medical expenses that should have been paid for by the Medicaid
program.
The court ruled that 18 NYCRR §360-7.5(a)(1) was invalid to
the extent that it limited direct reimbursement in cases of agency
error or delay to the Medicaid rate or fee in effect at the time
services were rendered.
The Department has amended its regulations at 18 NYCRR §360-7.5(a)(3)
and (a)(4)to reflect these court decisions.
The Family Health Plus (FHPlus) statute [SSL §369-ee(5)(c)] provides
that, except where inconsistent, the provisions of Title 11 (Medicaid)
apply to applicants/recipients of FHPlus. Therefore, the provisions of
18 NYCRR §360-7.5(a)(3) also apply to cases of agency error or delay
relating to FHPlus case processing.
The provisions at 18 NYCRR §3607.5(a)(4), which govern reimbursement for expenses paid in recipients’
There is no
retroactive eligibility periods, do not apply to FHPlus.
retroactive eligibility for FHPlus enrollees.

Date:

November 22, 2010

Trans. No.

10 OHIP/ADM-9

Page No. 4

III. PROGRAM IMPLICATIONS
For Medicaid eligible individuals, social services districts must
reimburse the individual or his/her representative for paid medical
expenses obtained from non-Medicaid enrolled providers during the
three-month retroactive eligibility period and up until the day the
individual applies for Medicaid.
Documentation of income and/or
resources, if appropriate, must be provided in order for eligibility to
be determined for the three-month retroactive period.
Districts must ensure that every applicant is informed in writing when
he or she applies that, should he or she be determined Medicaid
eligible, direct reimbursement will be made for medically necessary
Medicaid
covered
services
the
applicant,
or
the
applicant's
representative on the applicant's behalf, purchases during the period
beginning immediately after the date of application and ending on the
date the recipient receives his or her CBIC only when the recipient
obtains the services from a provider enrolled in the Medicaid program.
Direct reimbursement to the recipient or the recipient's representative
for Medicaid covered services purchased during the period beginning
three months prior to the month of application, and ending on the day
the recipient receives his or her CBIC, continues to be limited to the
Medicaid rate or fee in effect when the service was provided even when
the service was purchased from a non-Medicaid enrolled provider.
The
recipient must have been eligible for Medicaid when the services were
received and must document payment for such services.
The services
must be medically necessary and must not exceed amount, duration and
scope requirements; these requirements are generally at issue with
respect
to
reimbursement
requests
for
personal
care
services.
Therefore, the district may have to obtain retroactive nursing and
social assessments to determine the amount of personal care services
that were medically necessary at the time, or obtain these documents
from the agency that provided care to the recipient.
Direct reimbursement is not limited to the Medicaid rate or fee in
instances where agency error or delay caused the recipient or the
recipient's representative to pay for medical services which should
have been paid under the Medicaid program.
Instead, direct
reimbursement must be made for the recipient’s, or such recipient’s
representative’s, reasonable out-of-pocket expenditures.
For FHPlus eligible individuals, social services districts must
reimburse the individual or his/her representative for paid medical
expenses covered by FHPlus when a social services district's error or
delay in the eligibility determination delays enrollment in a plan.
Such reimbursement must not be limited to services provided by Medicaid
enrolled providers or to the Medicaid rate or fee.
In all cases in which direct reimbursement is sought, the recipient or
the client’s representative must provide proof that the bills for which
direct reimbursement is sought were paid.
Claims that are not
supported by proof of payment, such as cancelled checks or notarized
affidavits, are not reimbursable.

Date:

November 22, 2010

Trans. No.

Page No. 5

10 OHIP/ADM-9

A desk guide for workers, which outlines reimbursement policy for the
Medicaid and Family Health Plus programs, is attached to this directive
(Attachment I).

IV.

REQUIRED ACTION
A.

Medicaid Eligibles – Reimbursement of Paid Medical Expenses
1.

Expenses Paid in the Three-Month Retroactive Period:
§360-7.5(a)(4)(i)

18 NYCRR

The procedures for reimbursement of paid medical expenses
outlined in the New York State Fiscal Reference Manual, Volume
1, Chapter 7 and Volume 2, Chapter 5 remain generally unchanged
for cases that are correctly determined eligible within the
prescribed timeframes, with one exception.
Reimbursement for
paid medical expenses incurred in the period beginning three
months prior to the month of application and ending on the day
the recipient applies for Medicaid must not be restricted to
expenses incurred from providers enrolled in the Medicaid
program.
However, all providers must be lawfully permitted
under State law or regulation (i.e., duly licensed or
certified) to provide the care, services or supplies for which
the recipient is requesting reimbursement.
The provider must
also not have been excluded or otherwise sanctioned by the
Medicaid program.
Reimbursement must be for services covered by the Medicaid
program, and must not exceed the Medicaid rate or fee in effect
when the service was provided.
This applies even when the
recipient,
or
the
recipient’s
representative,
seeks
reimbursement
for
services
furnished
by
a
non-Medicaid
provider. Districts must ensure that all existing third party
health insurance is exhausted and any potential third party
coverage has been explored before reimbursement is provided.
Note: For new SSI recipients, reimbursement for paid medical
expenses incurred in the period beginning three months prior to
the month of application, and ending on the day the recipient
receives the "Dear SSI Beneficiary" letter, must not be
restricted to expenses incurred from providers enrolled in the
Medicaid program.
2.

Expenses Paid
7.5(a)(4)(ii)

Subsequent

to

Application:

18

NYCRR

§360-

Social services districts must ensure that every applicant is
informed in writing at the time of application that, if
determined eligible, direct reimbursement will be made at the
Medicaid rate for Medicaid covered services received after the
date of application and before the date of receipt of the CBIC,
This
only if furnished by a Medicaid enrolled provider.
includes all Temporary Assistance/Medicaid applicants and

Date:

November 22, 2010

Trans. No.

10 OHIP/ADM-9

Page No. 6

Medicaid/FHPlus applicants who apply at outreach sites.
The
DSS-2921,
"Application
For:
Public
Assistance-Medical
Assistance-Food Stamps-Services"; DOH-4220, "Access NY Health
Care" application; and the LDSS-4148B, "What You Should Know
About Social Services Programs" have been modified to include
this information.
When a correct and timely decision regarding eligibility is
made, all reimbursement to the recipient or the recipient's
representative for Medicaid services furnished by a Medicaid
enrolled provider during the period after application and prior
to receipt of the CBIC is limited to the Medicaid rate or fee
in effect when the service is provided.
Once a CBIC is received, no reimbursement may be made
expenses incurred after that date and paid by a recipient.
3.

for

Expenses Paid Due to Agency Error or Delay: 18 NYCRR §3607.5(a)(3)
When
the
applicant,
or
the
applicant's
representative,
purchases medical services as a result of a social services
district's error or delay, he or she may receive reimbursement
in excess of the Medicaid rate or fee.
Reimbursement for
reasonable out-of-pocket expenditures may be made when, through
no fault of the applicant:
a)

a
social
services
district
fails
to
determine
an
applicant's Medicaid eligibility within the time period
required under 18 NYCRR §360-2.4(a) and the district's
delay in determining eligibility causes the applicant or
the applicant's representative to pay for medical services
that should have been paid by the Medicaid program; or

b)

a social services district incorrectly determines an
applicant
ineligible
for
Medicaid,
the
incorrect
determination causes the applicant or the applicant's
representative to pay for medical services that should have
been paid by the Medicaid program, and the social services
district later reverses its incorrect determination due to
the district discovering its own error or as the result of
a fair hearing decision or court order.

Reimbursement under (a) must be made for documented bills
incurred beginning 45 days after the date of application (90
days, when Medicaid eligibility is based on disability; 30 days
when the application includes a pregnant woman or child under
age 19) until the date the recipient receives a CBIC.
Reimbursement under (b) must be made for documented bills
incurred from the date of the social services district's
incorrect determination until the date the applicant receives a
CBIC.

Date:

November 22, 2010

Trans. No.

10 OHIP/ADM-9

Page No. 7

Reimbursement may also be available when, due to social
services district delay in the provision of authorized
services, such as personal care services, the recipient, or the
recipient’s representative, must privately obtain covered
services.
Reimbursement in cases of district error or delay must be made
for reasonable out-of-pocket expenditures.
This means that
reimbursement
may
be
made
for
the
full
out-of-pocket
expenditures when these expenditures are considered to be
reasonable. As a general rule, out-of-pocket expenditures that
do not exceed 110 percent of the Medicaid rate are always
reasonable and may be fully reimbursed.
Out-of-pocket
expenditures that exceed 110 percent of the Medicaid rate may
also be reasonable under the particular circumstances and may
be fully reimbursed.
For example, the prevailing private pay
rate in the community for the services may exceed 110 percent
of the Medicaid rate or the recipient may have had to pay more
to obtain services in a remote location or on a holiday or may
demonstrate other special circumstances warranting full out-ofpocket reimbursement.
The district may, but is not required
to,
request
that
the
recipient,
or
the
recipient's
representative, explain why services could not have been
obtained at a lesser cost.
In all cases, however, the
recipient or the representative must provide documentation that
the expenses for which direct reimbursement is claimed were
actually paid.
In addition, reimbursement in cases of district error or delay
must not be limited to services provided by Medicaid enrolled
providers. However, the provider must be lawfully qualified to
provide the services and not be excluded or otherwise
sanctioned by the Medicaid program.
B.

FHPlus Eligibles – Reimbursement of Paid Medical Expenses
Because FHPlus benefits do not begin until eligibility is
determined and enrollment in a plan has occurred, there is no
reimbursement available under the FHPlus program during the threemonth retroactive period.
There is also no reimbursement available for the period after
application and prior to enrollment unless there has been an agency
error in the eligibility determination or a delay in enrollment of
an eligible person.
Persons who are otherwise eligible under the
Medicaid spenddown program during the three-month retroactive
period through the date of enrollment in a FHPlus plan may be
reimbursed for paid expenses in excess of their Medicaid spenddown,
following the guidelines in Section IV.A of this directive.

Date:

November 22, 2010

Trans. No.

1.

10 OHIP/ADM-9

Page No. 8

Expenses Paid Due to Agency Error (See GIS 02 MA/033)
In situations where the agency made an error in its initial
determination, the recipient may be reimbursed for reasonable
out-of-pocket expenses paid after the date of the agency’s
error. In determining the date on which an error occurred, the
agency should use the date on the decision notice. Therefore,
reimbursement for reasonable out-of-pocket expenses would be
provided from the date of the decision notice until the first
day the person's FHPlus enrollment is effective.

2.

Expenses Paid Due to Enrollment Delay (See GIS 02 MA/033)
After eligibility for FHPlus has been determined, the agency
must process the plan enrollment by the 45th day following the
eligibility decision if the decision was timely.
If the
decision was made after the proper timeframe, the agency must
process the plan enrollment by the 45th day following the day
the decision should have been made.
When enrollment does not
occur within these timeframes, the applicant is entitled to be
reimbursed for reasonable out-of-pocket expenses paid from day
45, until the date enrollment is actually effective.
Reimbursement to the recipient for both agency error and delay
may be made for the reasonable out-of-pocket amount as
described in Section IV.A.3. of this directive.
The services
must be those that are covered under the FHPlus plan.
The
provider of service does not need to participate in a FHPLus
plan or be enrolled in the Medicaid program, but must be
lawfully permitted to provide the care, services or supplies
for which the recipient is requesting reimbursement.

C.

Reimbursement Procedures
Social services districts have the option of reimbursing eligible
recipients directly or requesting the Department to make payments
for expenses that the districts have determined to be reimbursable.
Districts should consult the New York State Fiscal Reference
Manual, Volume 1, Chapter 7, and Volume 2, Chapter 5.
When
requesting the Department to make payments, use the OHIP-0031
(formerly the LDSS-3664), “Claim Transmittal Form” which has been
revised, and is attached to this directive as Attachment III. Make
sure to include the Medicaid provider identification number on the
transmittal form unless direct reimbursement is to be made for
services provided by a non-medical provider.
Questions regarding reimbursement can be directed to the Medicaid
Financial Management Unit in the Department of Health, as indicated
on the front page of this directive.

Date:

November 22, 2010

Trans. No.

D.

10 OHIP/ADM-9

Page No. 9

Notice Requirements
Information concerning the policy for direct reimbursement of
medical expenses is contained in the LDSS-4148B: "What You Should
Know About Social Services Programs".
Social services districts
must
ensure
that
this
information
is
provided
to
every
Medicaid/FHPlus applicant, including those who apply at outreach
sites, and to all Temporary Assistance applicants who also apply
for Medicaid.
Individuals who request a determination of eligibility for
reimbursement of paid medical bills must be sent the LDSS-3869:
"Notice of Decision on Reimbursement of Medical Bills by the
Medical Assistance Program."
The OHIP-0032 (formerly the DSS3870), "Medical Assistance Reimbursement Detail Form" (Attachment
IV) or a local equivalent must be included with the notice.

E.

Unpaid Expenses
There may be situations when a recipient has incurred a medical
expense under the circumstances described in this directive, and
payment has not yet been made. In this situation, payment must be
made to the provider of service. Payment must only be made if the
provider is enrolled in the Medicaid program.
Department
regulations prohibit payment to non-participating providers.
For Medicaid eligible individuals, districts must authorize the
appropriate coverage for the date(s) of service in the Welfare
Management System (WMS).
The provider must submit the claim for
payment to eMedNY in the usual manner.
For FHPlus eligible individuals, there is no mechanism to provide
coverage in WMS prior to plan enrollment.
Therefore, payments to
providers for agency error and delay cannot be processed through
eMedNY. When it is determined appropriate to pay such expenses, a
Medicaid paper claim form that lists the proper Medicaid rates,
codes and billing information must be completed. Attachment II of
this directive provides sample wording districts may use to request
the needed claim form from a provider.
Upon completion of the
appropriate paper claim form, the provider must return the form to
the local district.
Social services districts have the option of
processing these claims and issuing payment to the provider, or
requesting that the Department of Health process the claim and
issue payment as outlined in Section IV.C. of this directive.
Local Departments of Social Services (LDSS) are reminded that
billing statements from providers are not acceptable for payment of
claims.
The LDSS are required to submit the actual billing forms
that the providers would submit to Medicaid for processing in the
normal manner. It is also important to remember that the providers
must be actively enrolled in the Medicaid program for unpaid bills
to be paid.

Date:

November 22, 2010

Trans. No.

V.

10 OHIP/ADM-9

SYSTEMS IMPLICATIONS
There are no systems implications.

VI.

EFFECTIVE DATE
The provisions of this directive are effective immediately.

Page No. 10



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