H-3700, How to Reconcile

H-3710 Variable Income

Revision 12-1; Effective March 1, 2012

  • To obtain the variable income adjustment, subtract the total projected income from the total actual income.

    Note: Make adjustments in the Service Authorization System Online (SASO).

    Example: The review is completed in February with the preceding six months being August through January. Actual variable income for this period totaled $200; projected variable income for the period totaled $75. Calculation: $200 − $75 = +$125. $125 ÷ 6 = +$20.83 per month (reconcile since monthly average is over $5).

    If the variable income adjustment is a positive number (for example, the person underpaid co-payment), add the adjustment to the co-payment for the most recent month in the reconciliation period.

    Examples:
    • If reconciling the period of October through March, the most recent month in the reconciliation period is March. Form H1259, Correction of Applied Income, is sent to the person and nursing facility, and after 12 days the co-payment is adjusted in SAS in the most recent month. There is no month-by-month adjustment in the reconciliation period (October-March) in SAS for this underpayment. Form H1202-A, MAO Worksheet-Income Changes, Page 2, may be used to assist in calculating the correct reconciliation period and the most recent month in the reconciliation period.
    • Same situation as the first example above. Co-payment for the most recent month in the reconciliation period (January) was $230. Add the variable income adjustment (+$125) to the co-payment for January. Calculation: $230 co-payment for January + $125 variable income adjustment = $355 reconciled co-payment for January.
       
  • If the variable income adjustment is a negative number (for example, the person overpaid co-payment), subtract it from the co-payment for the most recent month in the reconciliation period. If the co-payment for the most recent month in the reconciliation period is insufficient to absorb the adjustment, subtract the excess negative adjustment from the next-to-most-recent month in the reconciliation period.

    Example: The review is completed in February, with the preceding six months being August through January. Actual variable income for this period totaled $100; projected variable income for this period totaled $150. Calculation: $100 actual − $150 projected = –$50 variable income adjustment. Co-payment for the most recent month in the reconciliation period (January) was $25. Co-payment for the next-to-most-recent month in the reconciliation period (December) was also $25. Reconciliation for January: $25 co-payment − $50 variable income adjustment = $0 (or –$25 rollback). Thus, reconciled co-payment for January is $0.

    Reconciliation for December: $25 co-payment − $25 rollback = $0 reconciled co-payment.
     
  • If co-payment must be increased or decreased because of income averaging, use Form H1259 to correct retroactive periods. Notify the person about the correction to co-payment. Send copies of the notice and Form H1259 to the nursing facility. For ongoing adjustments, process through the automated system.

 

H-3720 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

To obtain the IME adjustment, subtract total actual expenses from total projected expenses.

Example: A review is completed in February, with the reconciliation period being August through January. Actual IMEs for the reconciliation period totaled $90; projected IMEs totaled $60. Calculation: $60 total projected − $90 total actual = –$30 IME adjustment. Reconcile as it is to the person's advantage.

 

H-3730 Both Variable Income and IMEs

Revision 09-4; Effective December 1, 2009

  1. ach review of variable income/IMEs (at least every six months), determine the total actual amount of variable income received/IMEs paid during the reconciliation period (the block of months being considered for reconciliation).
     
  2. Total the amount of variable income/IMEs that were projected during the reconciliation period (the same block of months considered for reconciliation in the paragraph above).

    Note: Use reconciliation worksheet to complete your calculations.
     
  3. If the IME adjustment is a negative number, subtract it from the variable income adjustment. The difference is the overall adjustment.

    Examples:
    • A review is completed in October, with the reconciliation period being April through September. Actual variable income totaled $150, and actual IMEs totaled $90. Projected variable income totaled $160, and projected IMEs totaled $60.
      • Calculation of income adjustment $150 actual − $160 projected = –$10 income adjustment.
      • Calculation of IME adjustment $60 projected &minus $90 actual = –$30 IME adjustment.
      • Overall adjustment –$10 income adjustment + –$30 IME adjustment = –$40 overall adjustment.
    • A review is completed in October, with the reconciliation period being April through September. Actual variable income for this period totaled $160; actual IMEs totaled $60. Projected variable income totaled $150; projected IMEs totaled $50. Monthly co-payment for the reconciliation period was $150.
      • Calculation for variable income $160 actual &minus $150 projected = +$10 variable income adjustment.
      • Calculation for IMEs $50 projected &minus $60 actual = –$10 IME adjustment.
      • Overall adjustment +$10 variable income adjustment + –$10 IME adjustment = $0 overall adjustment.

    There is no adjustment to the co-payment for the most recent month in the reconciliation period (September).
     
  4. If the IME adjustment is a positive number, add it to the variable income adjustment. The difference is the overall adjustment.

    Examples:

    Same as second example above, except that actual income totaled $170 and actual IMEs totaled $90. Projected income totaled $160, and projected IMEs totaled $150.
    • Calculation of variable income $170 actual − $160 projected = +$10 income adjustment.
    • Calculation of IMEs $150 projected − $90 actual = +$60 IME adjustment.
    • Overall adjustment +$10 income adjustment + $60 IME adjustment = +$70 overall adjustment. Since the overall adjustment exceeds the monthly threshold of +$5 (+$70 ÷ 6 months = +$11.67 > + $5 monthly threshold), reconcile the entire overall adjustment.
       
  5. If the overall adjustment for the reconciliation period is a positive number, this means the person underpaid co-payment. If the overall adjustment is +$30 or more (+$30 ÷ 6 months = +$5 per month), reconcile the overall adjustment. If the overall adjustment is +$29.99 or less (+$29.99 ÷ 6 months = +$4.99 or less), do not reconcile.

    Examples:
    • A review is performed in October, with the period considered for reconciliation being April through September. The variable income adjustment is +$10; the IME adjustment is +$10. Thus, the overall adjustment is +$20 (+$10 variable income adjustment + $10 IME adjustment = +$20). Since the overall adjustment is less than +$30 (+$20 ÷ 6 months = +$3.33 < $5 threshold), do not reconcile.
    • Same situation as above, except that the variable income adjustment is +$15; the IME adjustment is +$15. Thus, the overall adjustment is = +$30 (+$15 variable income adjustment + $15 IME adjustment = +$30). Since the overall adjustment is equal to the +$5 monthly threshold (+$30 overall adjustment ÷ 6 months = +$5), reconcile for the most recent month in the reconciliation period (September). Co-payment for September was $240.

      Reconciliation for September: $240 co-payment + $30 overall adjustment = $270 reconciled co-payment.
    • The case is worked in October, and verification of variable income for September is unavailable. The eligibility specialist averages variable income from March through August (total divided by six months), and projects that average through the following April. He reconciles for the months of April through August (five months). (He does not reconcile for March, since that month was reconciled at the previous semi-annual review the preceding April. Never reconcile for the same month twice!)

      The variable income adjustment is +$60; the IME adjustment is –$30. Thus, the overall adjustment is +$30 (+$60 variable income adjustment − $30 IME adjustment = +$30). Since the overall adjustment exceeds the monthly threshold $30 ÷ 5 months = $6 > + $5 threshold), reconcile for the most recent month in the reconciliation period (August). Co-payment for August was $300.

      Reconciliation for August: $300 co-payment + $30 overall adjustment = $330 reconciled co-payment.
       
  6. If the overall adjustment for the reconciliation period is a negative number, this means the person overpaid co-payment. For overpaid co-payment in any amount, reconcile using Form H1259. Do not perform a month-by-month reconciliation. Rather, subtract the overall adjustment from co-payment for the most recent month in the reconciliation period.

    Example: The case is worked in October. At the previous semi-annual review the preceding April, variable income for March was unavailable, so the eligibility specialist averaged variable income received from September through February, and projected that average through this review month (October). At this review (in October), the eligibility specialist reconciles for the months of March through September (seven months). (He does not reconcile for February, since that month was reconciled at the previous semi-annual review the preceding April. Never reconcile for the same month twice!) Co-payment from March through September was $200.

    The variable income adjustment is –$10, and the IME adjustment is –$10. Thus, the overall adjustment, is –$20 (–$10 variable income adjustment, –$10 IME adjustment). Since the overall adjustment is a negative number, it must be subtracted from co-payment for the most recent month in the reconciliation period (September).

    Reconciliation for September: $200 co-payment − $20 overall adjustment = $180 reconciled co-payment.
     
  7. If the negative overall adjustment exceeds co-payment for the most recent month in the reconciliation period, roll the excess negative adjustment back and subtract the excess amount from the co-payment for the next-to-most-recent month in the reconciliation period.

    Example: A review is performed in October, with the period considered for reconciliation being April through September. Monthly co-payment for the reconciliation period was $45. The variable income adjustment is –$30; the IME adjustment is –$20. Thus, the overall adjustment is –$50 (–$30 variable income adjustment + –$20 IME adjustment = –$50).

    Reconciliation for September: $45 co-payment − $50 overall adjustment = $0 (or –$5 rollback). Reconciled co-payment for September is $0.

    Reconciliation for August: $45 co-payment − $5 rollback = $40 reconciled co-payment for August.
     
  8. Never reconcile for the same calendar month twice, even at different reviews. While it is permissible to overlap months in averaging and projecting variable income, it is not permissible to overlap months for reconciliation purposes.

    Example: A review is performed in October, with the period considered for reconciliation being April through September. Verification of variable income received in September is not available, so the eligibility specialist averages variable income from March through August and projects that average through the following April. (This is true even though at the previous six-month review the preceding April, variable income for March was part of the average for October through the March, which was projected through this review month (October). At this review, the eligibility specialist reconciles for the months of April through August. The month of March was reconciled at the previous review the preceding April.