Texas Health and Human Services Commission
Medicaid for the Elderly and People with Disabilities Handbook
Revision: 13-4
Effective: December 1, 2013

H-2000

Incurred Medical Expenses

H-2100  Deduction of Incurred Medical Expenses (IMEs)

Revision 12-1; Effective March 1, 2012

When determining a recipient's co-payment amount, certain incurred medical expenses (IMEs) not covered by a third party are deducted. HHSC limits these expenses to Medicare and other general health insurance premiums, deductibles and coinsurance, and to medical care and services that are recognized by state law but not covered under the Medicaid state plan.

General health insurance includes limited scope policies, such as vision policies and dental policies. Health insurance benefits must be assignable. For assignable, it is the applicant's/recipient's responsibility to provide verification that any payments made by the insurance company are made directly to the provider and not the applicant/recipient. If the applicant/recipient requests assistance in verifying this information, use Form H1253, Verification of Health Insurance Policy, as verification of assignable benefits. If money is paid directly to the applicant/recipient, this is considered an income maintenance policy and is not an allowable IME.

Assignable insurance policies must be reported on the Third-Party Resources (TPR) screen in the system of record.

H-2110  When to Consider an IME Deduction

Revision 10-3; Effective September 1, 2010

An incurred medical expense (IME) is based on, and must be paid from, the recipient's available income.

In spousal impoverishment budgets with a co-payment amount other than zero, allow the recipient an IME deduction whether an IME is paid for by the recipient or a community-based spouse.

The applicant/recipient must provide verification of all medical expenses to be considered.

An IME deduction applies only to Medicaid applicants/recipients with a co-payment amount other than zero.

H-2120  Medically Necessary

Revision 10-3; Effective September 1, 2010

Before allowing an incurred medical expense (IME) deduction, the expense must be certified as medically necessary.

Medically necessary is defined as the need for medical services in an amount and frequency sufficient, according to accepted standards of medical practice, to preserve health and life and to prevent future impairment. For durable medical equipment, such as prosthetic devices and walking aids/shoes, the recipient must provide a statement of medical necessity from his physician or a nurse practitioner, clinical nurse specialist or physician's assistant who is working in collaboration with his physician.

Use Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, for a certification of medical necessity. For medically necessary items and services, Form H1263-A or Form H1263-B, Certification of No Medical Contraindication – Dental, must be completed and signed by the recipient's physician or a nurse practitioner, clinical nurse specialist or physician's assistant who is working in collaboration with the recipient's physician.

The attending physician's signature and specific language certifying medical necessity is required on Form H1263-A for a durable medical equipment request or other non-dental IME requests.

For dental IMEs, the attending physician (medical practitioner) can certify that a dental procedure is not medically contraindicated for the recipient, but is not able to certify medical necessity for dental. As long as the dental IME is verified as not medically contraindicated for an individual, consider the expense for a deduction.

The attending physician's signature and specific language certifying that the dental procedure(s) is not medically contraindicated for the recipient is required on Form H1263-B for a dental IME request.

H-2130  Form H1263-A and Form H1263-B

Revision 10-3; Effective September 1, 2010

Form H1263-A, Certification of Medical Necessity - Durable Medical Equipment or Other IME, or Form H1263-B, Certification of No Medical Contraindication – Dental, does not need to be requested from an MEPD specialist. These forms are available online. However, each form must contain original signatures and dates of the recipient or recipient's authorized representative and attending physician. Faxing Form H1263-A or Form H1263-B is acceptable in order to start the process, but the original Form H1263-A or Form H1263-B containing original signatures and dates of the recipient or the recipient's authorized representative and attending practitioner is required for final approval of the IME and income deduction.

There are no restrictions on who may begin to complete Form H1263-A or Form H1263-B; however, only the following individuals can request a deduction from the recipient's personal income to pay for dental services:

  • recipient;
  • recipient's authorized representative;
  • recipient's primary practitioner (that is, the nursing facility (NF) attending physician);
  • NF administrator or representative (that is, social worker); or
  • NF director of nurses.

The requestor is responsible for making sure Form H1263-A or Form H1263-B is properly completed and all required signatures are obtained.

By signing Form H1263-A or Form H1263-B in Section II of page 2, the recipient is requesting an income deduction to pay for an IME service.

If the authorized representative who signed Form H1263-A or Form H1263-B is different than the person listed as the authorized representative for HHSC, check with the authorized representative listed with HHSC to resolve the discrepancy. This will ensure all parties are knowledgeable of the request. If the authorized representative has changed, thoroughly document that explanation.

Return the IME request if Form H1263-A or Form H1263-B is received without any of the following:

  • No signature of requestor (such as recipient or authorized representative).
  • No description of authority to act for the recipient listed in Section II of Page 2.
  • No signature of attending practitioner.

H-2140  Allowable Deductions – General IME

Revision 10-3; Effective September 1, 2010

Allowable deductions include, but are not limited to:

  • routine dental services that are not medically contraindicated for an individual, including dentures, for nursing facility recipients and medically necessary prosthetic devices;
  • medically necessary walking aids and special shoes/support devices for feet;
  • physicals; and
  • wheelchairs that are not customized power wheelchairs.

H-2150  Non-Allowable Deductions – General IME

Revision 10-3; Effective September 1, 2010

HHSC does not allow deductions for:

  • items covered by the nursing home vendor rate (including, but not limited to, diapers, sitters, durable medical equipment, dietary supplements or physical, speech or occupational therapy);
  • covered services that are beyond the amount, duration and scope of the Medicaid state plan (including, but not limited to, additional prescription drugs);
  • services covered by the Medicaid state plan but delivered by non-Medicaid providers;
  • expenses for medical services received before the applicant's medical effective date;
  • premiums for cancer or other disease-specific insurance policies, income maintenance policies or general health insurance policies with benefits that cannot be assigned;
  • health care services provided outside of the U.S.;
  • expenses incurred during a transfer of assets penalty (including, but not limited to, nursing facility bills);
  • expenses for eyeglasses, contact lenses (if medically necessary), hearing aids, services provided by a chiropractor or a podiatrist (these are covered through the Medicaid program);
  • specialized augmentative communication device systems, also referred to as speech-generating device systems (a facility is reimbursed if purchased by the facility for a Medicaid recipient); and
  • expenses incurred by Medicaid-eligible recipients 21 years of age and older requiring mental health and counseling services provided by a licensed psychologist, licensed professional counselor, licensed clinical social worker or a licensed marriage and family therapist (effective for dates of service on or after Dec. 1, 2005).

H-2200 Third Party Reimbursement Considerations

Revision 10-3; Effective September 1, 2010

Incurred medical expense (IME) deductions are allowed for reimbursements by the recipient to a third party who has paid an allowable IME on behalf of the recipient after it is determined the following conditions exist:

  • recipient and third party had an agreement before services were rendered that the third party would be reimbursed; or
  • recipient's medical condition precluded such an agreement before service delivery.

H-2300 IME Budget Adjustments Due to Death or Change in Living Arrangement

Revision 13-3; Effective September 1, 2013

An incurred medical expense (IME) is not an allowable deduction if a recipient has a zero co-payment or the co-payment ceases due to death or a change in the recipient’s living arrangement. If the recipient dies, do not make any retroactive adjustments to allow the IME. If the recipient is no longer eligible for Medicaid with a co-payment, do not make any retroactive adjustments to allow the full IME amount. The IME deduction stops and payment of any remaining balance is an agreement between the recipient and the provider.

Do not retroactively adjust the co-payment amount for an IME deduction if:

  • the recipient dies;
  • the recipient discharges from facility/waiver services; or
  • someone has been paying the bill for the recipient, but the recipient will take over payments beginning in a specified month.

Recipient Moves from Facility to Community Waiver

When a facility Medicaid recipient moves to the community with Waiver Medicaid benefits, continue the approved IME deduction when there is a co-payment amount other than zero in each type of assistance. The IME deduction ceases if there is no co-payment amount for the community waiver program.

Recipient Moves from Community Waiver to Facility

When a waiver Medicaid recipient enters or returns to a Medicaid facility, verify if the Medicaid recipient has any balance due on the IME allowance. If there is a balance due upon entering or returning to the facility, continue the approved co-payment deduction for the remaining balance of the IME. If the recipient has a balance due on an IME from a previous facility stay, allow an IME deduction for the remaining balance.

 

H-2400  Ongoing IME Budget

Revision 12-1; Effective March 1, 2012

Average and project medical expenses, but reconcile the projection with actual expenses every six months, per 42 Code of Federal Regulations §435.725(e).

For routine dental incurred medical expense (IME) deductions, retroactively allow the deduction beginning the first month the work began. Do not allow any routine dental IME deductions until after the dental work has been completed.

Example 1: Form H1263-B, Certification of No Medical Contraindication – Dental, for dentures is received on May 24, 2010. Dental work began in March 2010. Lower the co-payment in the month of March 2010 and ongoing.

For non-routine dental IME deductions, allow the deduction beginning the first month following approval. Do not allow any deductions for non-routine before approval is received.

Example 2: Form H1263-B for implants is received on June 19, 2010. Approval is received on Form H1263-B on July 15, 2010. Dental work begins Aug. 2, 2010. Lower the co-payment in the month of August 2010 and ongoing.

Documentation of the IME deductions should be entered in the automated system, even if the co-payment amount is $0. See Appendix XVI, Documentation and Verification Guide.

H-2500  IME and Medicare Part D Prescription Drugs

Revision 13-4; Effective December 1, 2013

Allow Medicare Part D prescription drugs and related expenses as incurred medical expense (IME) deductions for any individual who:

  • has Medicare;
  • has a co-payment;
  • is residing in a long-term care (LTC) facility:
    • nursing facility,
    • intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID),
    • ICF/IID small group home,
    • state supported living center, or
    • institution for mental disease;
  • is residing in the community, in a community assisted living facility or in a community foster care setting and is either receiving waiver services through:
    • STAR+PLUS, or
    • the Community Based Alternatives (CBA) program; and
  • has a qualified income trust (QIT).

To develop Medicare Part D prescription drug expenses for an IME, consider the premium, co-payment and other prescription expenses as any other IME. Do not determine if the chosen plan is basic or enhanced. Continue to give an IME deduction for all prescription expenses prior to enrollment in a Prescription Drug Plan (PDP) and follow procedures in Appendix XXXII, Incurred Medical Expenses (IME) Deductions for Medicare Rx Drugs, for the first month.

Procedures for Ongoing IME After Initial PDP Enrollment

If the Medicare Part D premium is deducted from the RSDI check, verify the amount deducted via WTPY or SOLQ and document the deduction. The Social Security Administration (SSA) is paying the benchmark allowance to the PDP and charging the beneficiary for the difference between the PDP premium and the benchmark allowance. The SSA amount may be different because of SSA rounding. Use the amount deducted by SSA unless the applicant/recipient submits verification that substantiates the applicant/recipient is paying a different amount than indicated on the WTPY or SOLQ. If the applicant/recipient is paying the PDP directly, the applicant/recipient must submit expenses and proof of payment for verification.

Average and project prescription drug expenses and reconcile the projection with actual expenses every six months. There may be reimbursement of some drug expenses from the PDP that needs to be monitored. There may be a change in the premium amount, or the applicant/recipient may change plans. For IME documentation and verification guidelines, see Appendix XVI, Documentation and Verification Guide.

Reminders:

  • A full benefit dual eligible (FBDE) is an individual who is eligible for Medicaid and Medicare.
  • If an FBDE is not enrolled in a PDP, allow full Rx costs until enrolled.
  • When the FBDE enrolls in a PDP and is identified as "institutionalized" because of entry into a long-term care facility, the person will not be billed for deductibles, co-payments or coverage-gap related PDP expenses. The PDP will reimburse charges to the enrolled "institutionalized" FBDE back to the first full month of institutionalization.
  • Benchmark refers to the regional low-income premium subsidy amount as calculated annually by SSA. The federal government pays up to 100 percent of the Part D premium for FBDEs who are in plans with premiums at or below the benchmark premium amount. See Appendix XXXI, Budget Reference Chart.
  • If the PDP premium is greater than the benchmark, allow the difference between the benchmark and the PDP premium as an ongoing IME.
  • For an individual in the community, a co-payment results from living in an assisted living arrangement, living in a foster care arrangement, or having a QIT.
  • Do not allow any IME deductions for an individual in the Program of All-Inclusive Care for the Elderly (PACE) or for an individual who has a zero co-payment.
  • If the individual has private insurance that is equivalent to or better than Medicare Part D, allow IME deductions as billed and/or anticipated for deductibles, co-payments and coinsurance.
  • Do not allow IME deductions for prescription drugs that are beyond the amount, duration and scope of the Medicaid state plan.
  • If residing in a long-term care facility, it is in the best interest of the facility to ensure the individual is enrolled in a PDP, unless the individual is covered by private insurance that is equivalent to or better than Medicare Part D.
  • A Medicaid individual who is eligible for Medicaid only will continue to receive prescription drugs through Texas Medicaid. Example: An individual who cannot get Medicare.
  • Do not allow IME deductions for prescription drugs and related expenses for any Medicaid-only individual.
  • When budgeting any IME deduction, the IME deduction cannot begin until the individual is Medicaid eligible. Medical expenses incurred before Medicaid eligibility are not allowed as an IME deduction.
  • When budgeting the IME deduction and the individual has insufficient income to cover the full cost of the IME in a given month, the difference may be carried over to the following month(s) until the liability is satisfied.

H-2510  Requesting an IME Deduction for Medicare Part D

Revision 10-3; Effective September 1, 2010

Form H1263, Certification of Medical Necessity, is not necessary to request an incurred medical expense (IME) deduction for Medicare Part D prescription drugs and related expenses for an individual in a long-term care facility, but may be used for documentation of the request. The request for the IME deduction may be reported at the time of application or treated as a change as any other reported IME. If the individual is unable to make this request and has no authorized representative, the facility staff may request an IME deduction. If the individual is living in the community and is unable to make this request and has no authorized representative, the DADS case manager may request an IME deduction for the individual.

H-2520  Potential Items for Prescription Drug Program (PDP) IME Deductions

Revision 10-3; Effective September 1, 2010

Potential items for incurred medical expense (IME) deductions from PDP-related expenses for an individual in a long-term care facility are:

  • Part D premiums,
  • Part D enhanced plan premiums,
  • prescription drug co-payments/costs,
  • prescription drug deductibles,
  • prescription drug coverage gap, and
  • non-formulary Part D drugs.

See Appendix XXXII, Incurred Medical Expenses (IME) Deductions for Medicare Rx Drugs, for treatment and processes to use when determining an IME deduction for Rx drugs and related expenses for an individual in a long-term care facility or in the community.

H-2600  Fee Schedules Overview

Revision 10-3; Effective September 1, 2010

A durable medical equipment (DME) fee schedule and the TX Dental incurred medical expense (IME) fee schedule are used to determine the appropriate deduction of reimbursable IMEs for:

  • DME for Medicaid residents in nursing facilities and intermediate care facilities for people with mental retardation (ICF/MR); and
  • dental services for Medicaid recipients in nursing facilities.

Allowable IMEs for DMEs are based on the Medicare DME fee schedule.

Allowable IMEs for dental services on the TX Dental IME Fee Schedule are based on the American Dental Association Survey of Fees at the 90th percentile for the West South Central Region, General Dentistry.

See Section H-2710, Using the TX Dental IME Fee Schedule.

See Section H-2810, Using the DME Fee Schedule.

H-2700  Dental

Revision 10-3; Effective September 1, 2010

The TX Dental IME Fee Schedule is located on the HHSC Office of Family Services website at ofs.hhsc.state.tx.us/mepd/mepd-fee.aspx. The TX Dental IME Fee Schedule is updated yearly. Odd years are updated using the Consumer Price Index.

Note: Due to legal liabilities associated with the copyright for the American Dental Association Survey of Fees, the TX Dental IME Fee Schedule is a view-only internal document and is only accessible by Health and Human Services enterprise employees. Do not print, make copies or distribute any of the TX Dental IME Fee Schedule.

Use Form H1263-B, Certification of No Medical Contraindication – Dental, for a dental IME request. Form H1263-B is required for any new treatment plan for an individual.

If Form H1263-B is received from a requester with the notation that the attending physician does not agree that the procedure is not medically contraindicated for the recipient, do not process the IME. Send Form H4808, Notice of Change in Applied Income/Notice of Denial of Medical Assistance, to notify the recipient and/or recipient's authorized representative of the denial. Add a statement in the Comments section that the request for IME was not approved. Send a copy of Form H4808 to the dental provider.

H-2710  Using the TX Dental IME Fee Schedule

Revision 13-2; Effective June 1, 2013

Determine the appropriate incurred medical expense (IME) deduction by comparing the fees submitted by a dental provider to the fees listed in the TX Dental IME Fee Schedule. The TX Dental IME Fee Schedule is based on the American Dental Association (ADA) Survey of Dental Fees and contains the ADA’s current dental terminology (CDT) codes at the 90th percentile for the West South Central Region. The TX Dental IME Fee Schedule separates the CDT codes between routine and non-routine dental services.

Due to legal liabilities associated with the copyright for the ADA Survey of Fees, the TX Dental IME Fee Schedule is a view-only internal document and is only accessible by HHS enterprise employees. Do not print, make copies or distribute any of the TX Dental IME Fee Schedule.

The amount allowed for a particular code cannot exceed the amount listed on the TX Dental IME Fee Schedule. If the dental provider submits a charge with an amount greater than the maximum allowable amount listed for that particular code, allow the amount listed on the TX Dental IME Fee Schedule for that particular code as an IME deduction. If a dental provider submits a charge less than the amount allowed on the TX Dental IME Fee Schedule, allow the amount submitted by the provider as an IME deduction.

Examples:

  • The dental provider submits a charge for code D0272 with the amount of $45. The code D0272, under Radiographs, reflects a maximum of $37.74. Consider $37.74 as an IME deduction.
  • The dental provider submits a charge for code D0150 with the amount of $60. The code D0150, under Clinical Oral Evaluation, reflects a maximum of $72.15. Consider $60 as an IME deduction.

Any CDT code(s) listed on the TX Dental IME Fee Schedule may be allowable as an IME.

Contact the dental provider to resolve the discrepancy if the treatment plan received contains:

  • a discrepancy in the CDT code and description;
  • a CDT code not on the TX Dental IME Fee Schedule; or
  • no CDT code listed.

H-2720 Non-Allowable Deductions – Dental

Revision 13-2; Effective June 1, 2013

Dental services are not allowable IMEs for individuals in intermediate care facilities for individuals with intellectual disabilities (ICFs/IID). A recipient in an ICF/IID receives dental care through the Medicaid program.

The following items are either not listed on the TX Dental IME Fee Schedule or remain unallowable as an IME:

  • adjustments to the fees for X-rays or other procedures performed by mobile dentists;
  • sedation charges, CDT code D9248;
  • more than two times per year per patient for dental cleaning and exam;
  • more than one time per year per patient for X-rays;
  • trip charges (house call fees), CDT codes D9410, D9430 and D9440, and finance charges (these are not reasonable medical expenses and cannot be considered when determining IMEs); and
  • further add-ons or increased fees for the initial denture and fittings.

Each of the following CDT codes related to dental exams and dental cleanings should not be allowed more than two times per year per patient:

  • initial/routine exams (D0120, D0150, D0180);
  • problem focused exams (D0140, D0160, D0170);
  • dental cleanings (D1120);
  • topical fluoride treatments (D1204, D1206);
  • Oral Hygiene Instructions (D1330);
  • Periodontal Maintenance (only for patients who have received active periodontal therapy in the previous 24 months) (D4910).

H-2730  Reserved

Revision 13-2, Effective June 1, 2013

H-2740  Reserved

Revision 13-2, Effective June 1, 2013

H-2750  Codes Not on the TX Dental IME Fee Schedule

Revision 13-2; Effective June 1, 2013

The TX Dental IME Fee Schedule is based on the American Dental Association (ADA) Survey of Dental Fees. The ADA Survey of Dental Fees Catalog is published every two years. Current Dental Terminology (CDT) codes can change between publications.

The Department of Aging and Disability Services (DADS) has established a contract with the University of Texas Health Science Center at San Antonio (UTHSCSA) for a Texas-licensed dentist to ensure dental-incurred medical expense (IME) determinations are appropriate and cost effective.

Until new updates are made available to HHSC and the TX Dental IME Fee Schedule is updated, submit clarification requests regarding CDT codes not on the TX Dental IME Fee Schedule to the contracted dentist for review.

Due to the Health Insurance Portability and Accountability Act (HIPAA), external email communication with the contracted dentist must be encrypted. If an MEPD specialist has access to encrypted email (such as Voltage), IME requests may be sent via encrypted email to the contracted dentist. Each email request must be encrypted. Do not send any requests via regular email to the contracted dentist. If an MEPD specialist does not have access to encryption, the request must be sent via fax to the contracted dentist. Ensure the fax cover sheet has the fax number and region number of the MEPD specialist sending the request. The contracted dentist will fax a response to the MEPD specialist. Use the following procedure to submit request(s) for review of CDT code(s) to the contracted dentist:

  • Title the email subject line with only the client name and CDT code (for example, Mary Smith, CDT 5822). If there are multiple codes, list all of the CDT codes that need review in the subject line.
  • In the email, provide the CDT code, description of the CDT code (as listed on the treatment plan), the amount charged for that CDT code, and any additional questions or comments.
  • For hospice recipients, type only the recipient’s name, CDT code and the word “HOSPICE” in the subject line.
  • Scan and attach the treatment plan and any supporting documentation (except form H1263-B, Certification of No Medical Contraindication - Dental) to the encrypted email.
  • If faxing the actual request to the dental contractor, send an email and indicate when the fax will be sent to the contracted dentist (for example, "Treatment plan has been faxed" or "Treatment plan is being faxed this morning"). This will ensure the fax is monitored.
  • Fax the treatment plan, along with a copy of the email, to the attention of the contracted dentist. Ensure the fax cover sheet has the fax number and region number of the MEPD specialist sending the request. The contracted dentist will fax a response to the MEPD specialist.

If a dental treatment plan contains CDT codes that are on the non-routine schedule and CDT codes that are not on either schedule, send the complete treatment plan/request to the contracted dentist to review.

Contracted Dentist Contract Information:

Dr. Jeff Hicks
hicksj@uthscsa.edu
Telephone: 210-567-3450
Fax: 866-313-1395

H-2751  Hospice Recipients

Revision 13-2; Effective June 1, 2013

For hospice recipients with a dental incurred medical expense (IME), Current Dental Technology (CDT) codes notated with an asterisk (*) (cleanings, exams and X-rays) on the routine schedule can be allowed by staff without further review.

For CDT codes not marked with an asterisk (cleanings, exams and X-rays), submit the request to the contracted dentist for clearance. The contracted dentist reviews each request for hospice recipients regardless if the CDT codes are routine or non-routine.

Before sending the request to the contracted dentist, obtain the following:

  • documentation from the hospice provider/attending practitioner regarding the prognosis; and
  • reason for the dental request and how the dental services will benefit the recipient.

Use the following procedure to submit request(s) for review of CDT code(s) to the contracted dentist:

  • Begin the title of the email with the word "HOSPICE" in all caps in the subject line and list only the recipient's name and CDT code (for example, HOSPICE - Mary Smith, CDT 5822). If there are multiple codes, list all of the CDT codes in the subject line.
  • In the email, provide the CDT code, description of the CDT code (as listed on the treatment plan) and the amount charged for that CDT code.
  • Scan and attach the treatment plan and any supporting documentation (except form H1263-B) to the encrypted email.
  • If faxing the request, reference in the email when the fax is sent to the contracted dentist (for example, "Treatment plan has been faxed" or "Treatment plan is being faxed this morning"). This will ensure the fax is monitored.
  • Fax the treatment plan, along with a copy of the email, to the attention of the contracted dentist.

After the contracted dentist reviews the request, an email response will be returned with the decision.

H-2760  Replacement of Lost Dentures

Revision 10-3; Effective September 1, 2010

The replacement of dentures is an allowable incurred medical expense (IME) as long as the recipient/authorized representative provides written verification from the facility that the facility will not cover the replacement of lost dentures. The verification request for a facility’s written statement is to be sent to the recipient/authorized representative and not the dental provider. The recipient or the authorized representative is to provide the facility’s written statement to the MEPD specialist. The request for replacement of lost dentures is to be initiated by the recipient/authorized representative, not the dental provider.

H-2770  Emergency Dental Services

Revision 10-3; Effective September 1, 2010

The DADS Emergency Dental Services System pays for emergency dental services for nursing facility recipients regardless if a co-payment is available. Emergency dental services are not allowable incurred medical expenses. For questions regarding emergency dental services, call 512-438-2200 and select Option 6.

H-2780 Notices

Revision 12-1; Effective March 1, 2012

Use Form H1052-IME, Notice of Delay in Decision for Incurred Medical Expenses, to notify the client/authorized representative of a delay in processing the deduction for IME when the:

  • signature of the client/authorized representative is missing on Form H1263-B, Certification of No Medical Contraindication – Dental.
  • signature of the client/authorized representative is not an original signature on Form H1263-B.
  • authority to act for the client is not complete on Form H1263-B.

Use Form H1052-IME to notify the service provider of a delay in processing the deduction for IME when:

  • Current Dental Terminology (CDT) codes are needed.
  • the original signature of the attending practitioner is needed.
  • other information is needed.

Use Form H1054-IME, Proof of Dental Services, to notify a client/authorized representative that proof is needed for dental services received. Do not send this form to the dental provider. The dental provider may assist the client in providing the needed information, but the client/authorized representative must complete the form.

Use Form H1053-IME, Provider Notice of Incurred Medical Expense Decision, to notify a dental provider that an IME deduction request is approved or denied. This form does not contain space for the co-payment amount. Do not add co-payment information to this form.

Following approval and completion of the dental IME, notify the recipient of the adjusted amount of co-payment in accordance with established agency notification requirements.

Reminder: To safeguard confidentiality, do not provide the co-payment amount to any provider (either verbally or in writing) without written authorization from the recipient.

H-2790  When the Co-Payment Adjustment is Not Used to Pay Dental Provider

Revision 10-3; Effective September 1, 2010

Payment for services in accordance with the agreed treatment plan is a matter between the recipient and the dental provider. The recipient or the recipient's payee is expected to actually pay the dental provider in a timely manner using the income from the co-payment adjustment.

If the MEPD specialist is notified the recipient has not appropriately used the income from the co-payment adjustment to pay the dental bill, the MEPD specialist consults with legal counsel as to the appropriate action to take.

H-2800  Durable Medical Equipment (DME)

Revision 10-3; Effective September 1, 2010

The Medicare fee schedule for DME contains Healthcare Common Procedural Coding System (HCPCS) codes used by DME providers to file claims and the Texas-specific amounts allowed for claims for each code. A link to the Medicare fee schedule is available on the HHSC Office of Family Services website at ofs.hhsc.state.tx.us/mepd/mepd-fee.aspx.

If a resident requires an oversized wheelchair, bed or any other item that could be used by other residents, then the item is not an allowable IME. The Nursing Facility Requirements for Licensure and Medicaid Certification Handbook states that if a recipient desires equipment for exclusive use, the recipient is responsible for the purchase; therefore, it is not an allowable IME.

Any repairs to the DME after purchase are the responsibility of the facility. Refer to DADS rules at Texas Administrative Code §19.2601(b)(8)(C).

Use Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, for a DME IME request.

H-2810  Using the DME Fee Schedule

Revision 10-3; Effective September 1, 2010

Determine the appropriate IME deduction by comparing fees submitted by a DME provider to the fees listed in the DME fee schedule. The amount allowed for a particular HCPCS code cannot exceed the amount listed on the fee schedule. If a DME provider submits a charge less than the amount allowed on the fee schedule, allow the amount submitted by the provider as the IME deduction.

If no HCPCS code is listed on the treatment plan, contact the:

  • provider and request the code(s); or
  • MEPD Policy Section at state office to request assistance with a crosswalk between a certain description and an HCPCS code.

There are no copyright issues with the DME Fee Schedule posted on the Office of Family Services website. This fee schedule is available to the public on the Centers for Medicare and Medicaid Services website.

H-2820  DME Procedures

Revision 10-3; Effective September 1, 2010

DADS regional nurses are not part of the process for durable medical equipment (DME) incurred medical expense (IME) requests.

  1. If the MEPD specialist receives an IME request, send Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, to the requestor within two working days of receipt of the request.
  2. Inform the requestor to have Form H1263-A completed and the service or equipment provider submit written, detailed specifications for the requested service or equipment to the recipient's attending practitioner after assessing the recipient's needs. The specifications must include the following:
    • a detailed explanation of medical equipment/services recommended;
    • an itemized listing of all equipment and accessories and costs;
    • the appropriate DME Healthcare Common Procedural Coding System (HCPCS) code for each service or equipment; and
    • a clear explanation of why the nursing facility equipment will not meet the recipient's needs.
  3. The recipient's attending practitioner, physician assistant or advance practice nurse employed by the attending practitioner, must sign and date the form that lists the medical procedure and the itemized list of equipment and accessories that includes the explanation of why the nursing facility equipment is not adequate for the recipient.
  4. The requestor submits to the MEPD specialist:
    • completed Form H1263-A;
    • a provider service statement reflecting service or equipment provided along with the appropriate HCPCS code(s); and
    • a statement from the provider showing the equipment is delivered and the date of delivery.

    The MEPD specialist must document on the form the date the form was received by the agency.

    If the request does not contain a detailed explanation or identification of the equipment needed, return the request to the provider. Explain to the provider that more information is needed regarding the need to identify the equipment or an explanation for the need of the equipment.
  5. Once the completed Form H1263-A, written/detailed specifications and itemized list are received, the MEPD specialist determines the correct amount of the recipient's co-payment adjustment by comparing the fees submitted by the provider to the appropriate HCPCS codes and charges on the Medicare DME Fee Schedule. This is in accordance with Section B-8200, Redetermination Cycles, for treatment of a change. Within this same time frame, the MEPD specialist ensures entry into the appropriate automated system and notifies the recipient of the co-payment adjustment, using Form H4808, Notice of Change in Applied Income/Notice of Denial of Medical Assistance, or Form H1259, Correction of Applied Income, in accordance with established agency notification requirements.
  6. Complete the same type of form that was sent to notify the recipient of the IME adjustment and mail it to the provider with only the following information:
    • the particular claim that is approved;
    • total amount approved;
    • recipient's co-payment is adjusted (not the actual co-pay amount); and
    • the beginning month of the co-payment or adjustment.

To safeguard confidentiality, do not send a notice to a provider that includes specific information about the recipient's finances, sources of income or the amount of co-payment. Do not use auto-populated forms or a copy of the same notice that was sent to the recipient. If a provider inquires about a recipient's finances, refer the provider to the recipient or the recipient's authorized representative. Do not refer the provider to nursing facility staff.

Reminder: To safeguard confidentiality, do not provide the co-payment amount to any provider (either verbally or in writing) without written authorization from the recipient.

H-2830  DME Exception Processing/Codes Not on the Fee Schedule

Revision 10-3; Effective September 1, 2010

The Medicare fee schedule does not contain all of the Healthcare Common Procedural Coding System (HCPCS) codes used by durable medical equipment (DME) providers. Medicare considers these codes as miscellaneous codes or codes not otherwise specified or classified. Based on the DME exception processing information from the Centers for Medicare & Medicaid Services, certain miscellaneous codes are allowable incurred medical expenses (IMEs) even though the HCPCS codes are not on the Medicare fee schedule.

Appendix XLIII, Durable Medical Equipment (DME) Healthcare Common Procedural Coding System (HCPCS) Miscellaneous Codes, contains the most common miscellaneous codes used by DME providers. Refer to this appendix for steps in determining the allowable IME deduction amount for each miscellaneous code.

If a DME provider does not provide the wholesale pricing for a particular HCPCS miscellaneous code and that particular code is not allowed as an IME deduction for a particular request, do not consider this as an across-the-board DME IME denial for that particular recipient. The recipient and/or authorized representative may choose to work with a different DME provider and submit information from that provider.

If the code is not listed on Appendix XLIII, use the following procedure to submit request(s) for review of HCPCS codes to state office:

  • Title the email subject line with only the client name and HCPCS code (for example, Mary Smith, HCPCS A4267). If there are multiple codes, list all of the HCPCS codes that need review in the subject line.
  • In the email, provide the HCPCS code, description of the HCPCS code (as listed on the treatment plan) and the amount charged for that HCPCS code.
  • Reference in the email when the fax is sent to state office (for example, "The paperwork has been faxed," or "The paperwork is being faxed this morning."). This will ensure the fax is monitored.
  • Fax the paperwork, along with a copy of the email, to 512-206-5211, Attention: DME Reviewer.

After a review is done by state office, an email response will be returned with the decision.

H-2840  DME Modifier Code for Rental Items

Revision 10-3; Effective September 1, 2010

Because of Medicare regulations regarding durable medical equipment (DME), an individual owns the DME after a set number of payments. This is common for wheelchairs.

On the Medicare Fee Schedule, some DMEs are considered capped rental items. In these situations, the first Modifier column (column labeled Mod) will reflect only RR for rented. The DME supplier must transfer ownership of the capped rental equipment to the individual after the 13th continuous month of rental. An individual in an institution makes a one-time purchase instead of renting the DME. Calculate the incurred medical expense (IME) deduction by multiplying the monthly rental amount on the Medicare Fee Schedule by 13. This is the total allowable amount of IME deduction for this item.

Example: An individual purchased a heavy-duty wheelchair with modifications specific for his use. The code submitted with Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, is K0006. The monthly rental amount for this code is 125.41. The total IME deduction for this DME is $1,630.33 ($125.41 x 13).

To safeguard beneficiary access to quality equipment throughout the duration of the rental period, Medicare requires that the DME supplier may not provide different equipment from that which was initially furnished to the individual at any time during the 13-month rental for capped rental DME unless one of the following exceptions applies:

  • the equipment is lost, stolen or irreparably damaged;
  • the equipment is being repaired while loaner equipment is in use;
  • there is a change in the beneficiary's medical condition such that the equipment initially furnished is no longer appropriate or medically necessary; or
  • the DME carrier determines that a change in equipment is warranted.

Based on this, an individual is limited to only one IME deduction for each identified DME during the capped rental period. If an exception is met and a need is identified for a change, request the DME provider to submit a copy of the exception request/approval.

H-2850  Customized Power Wheelchairs

Revision 10-3; Effective September 1, 2010

Effective May 1, 2008, a customized power wheelchair (CPWC) is considered a covered service in the Medicaid Nursing Facility program. Reimbursements to a nursing facility for a CPWC are handled through the DADS Claims Management System. A CPWC is no longer an allowable IME deduction, even if not reimbursed by DADS.

This policy change does not apply to other wheelchairs that are not CWPCs. Other wheelchairs that are not CWPCs (for example, manual wheelchairs or basic power wheelchairs that are not customized) may still be considered for an IME deduction provided there is:

  • a certification of medical necessity (completed, signed and dated Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME); and
  • a clear explanation of why the nursing facility equipment will not meet the recipient's needs.

Basic power wheelchairs are the wheelchair and necessary batteries.

Reference: DADS rules at Texas Administrative Code §19.2614, Customized Power Wheelchairs.

H-2860 Notices

Revision 12-1; Effective March 1, 2012

Use Form H1052-IME, Notice of Delay in Decision for Incurred Medical Expense, to notify the client/authorized representative of a delay in processing the deduction for IME when the:

  • signature of the client/authorized representative is missing on Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME.
  • signature of the client/authorized representative is not an original signature on Form H1263-A.
  • authority to act for the client is not complete on Form H1263-A.

Use Form H1052-IME to notify the service provider of a delay in processing the deduction for IME when the:

  • Healthcare Common Procedural Coding System (HCPCS) codes are needed.
  • the original signature of the attending practitioner is needed.
  • other information is needed.

Use Form H1051, Receipt of Durable Medical Equipment, to notify the client/authorized representative that proof of receipt of DME is needed. Do not send this form to the DME provider. The DME provider may assist the client in providing the needed information, but the client/authorized representative must complete the form.

Use Form H1053-IME, Provider Notice of Incurred Medical Expense Decision, to notify a DME provider that an IME deduction request is approved or denied. This form does not contain space for the co-payment amount. Do not add co-payment information to this form.

Following approval and completion of a DME IME, notify the recipient of the adjusted amount of co-payment in accordance with established agency notification requirements.

Reminder: To safeguard confidentiality, do not provide the co-payment amount to any provider (either verbally or in writing) without written authorization from the recipient.

H-2870  When the Co-Payment Adjustment is Not Used to Pay DME Provider

Revision 10-3; Effective September 1, 2010

Payment for services in accordance with the agreed plan is a matter between the recipient and the durable medical equipment (DME) provider. The recipient or the recipient's payee is expected to actually pay the DME provider in a timely manner using the income from the co-payment adjustment. If the MEPD specialist is notified the recipient has not appropriately used the income from the co-payment adjustment to pay the DME bill, the MEPD specialist consults with legal counsel as to the appropriate action to take.