2555 Incurred Medical Expenses | Medicaid
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Georgia Division of Family and Children Services |
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Policy Title: |
Incurred Medical Expenses |
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Effective Date: |
July 2026 |
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Chapter: |
2550 |
Policy Number: |
2555 |
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Previous MT Number(s): |
MT 68 |
Updated or Reviewed in MT: |
MT 80 |
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Requirements
Medical expenses incurred by the recipient that are not subject to payment by Medicaid or other third parties can be deducted in the patient liability/cost share budget.
Basic Considerations
Incurred medical expenses (IME) include the following:
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Health and/or dental insurance premiums (100%)
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Co-insurance and deductible payments not covered by Medicaid
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A prescription drug that is NOT covered on an A/R’s Medicare Part D plan may only be allowed as an IME if the A/R provides verification that he or she has gone through the appeals process with their plan’s carrier and has received an unfavorable decision.
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Medicare Part D premiums, co-payments, and deductibles incurred until such time they are paid by Medicaid. Unless evidence to the contrary exists, assume these bills will be incurred through the month following the month that the case is finalized. The A/R will not be reimbursed for any of the expenses they have paid.
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Deductions for expenses not covered by Medicaid as listed on the Form 960 - IME Pricing Document, such as the following:
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dental services
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medical supplies
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orthopedic services
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physician services
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prescribed over the counter drugs
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prescription drugs on the DMA pricing document
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psychiatric or psychological services.
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Long Term Care Medical Expenses (effective 04-09)
| This list is not all-inclusive. |
IMEs must be incurred by the recipient, but not necessarily paid by the recipient. However, if the recipient’s medical expense is paid by a state or federal entity, the IME is not an allowable expense for an IME.
| Institutional Long-Term Care Medical Expenses incurred within three months prior to the month(s) of application that were ineligible due to income or resources may be deducted as an allowable expense. |
Long term care medical bills (such as the Nursing Home or Hospice provider bill) incurred in months in which a transfer penalty has been imposed may not be deducted from the patient liability/cost share as an IME.
Form 960 - IME Pricing Document
The Form 960 - IME Pricing Document is a list of the medical services and supplies, which are allowable deductions.
The Form 960 - IME Pricing Document also identifies certain items and services that are allowable deductions for Elderly and Disabled Waiver Program (EDWP) recipients but are not allowed for nursing home recipients. These are primarily items and services which are included in the nursing home per diem reimbursement rate.
Procedures
Follow the steps below to determine an Incurred Medical Expense:
Health and Dental Insurance Premiums
Verify the following information on a health insurance premium from the source:
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that the policy is in force
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the amount of the premium
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the frequency of the premium
Health and Dental Insurance IME Deduction for Couples
When both spouses in a Medicaid couple reside in LA-D with a patient liability or cost share, allow the premium as an IME for the spouse who is financially responsible for payment of the premium. If both spouses are equally responsible or neither is designated as having primary financial responsibility for the premium payment, allow 50% of the premium as an IME for each spouse. If the A/R receiving Medicaid under Nursing Home, Institutionalized Hospice, or EDWP COA has a community spouse and the health insurance premiums for both are deducted from A/R’s income, allow the full amount of the insurance premium as a deduction from the PL/CS.
Institutional Long-Term Care
Institutional long-term care medical expenses incurred within three months prior to the month of application may be allowed as a deduction at an amount equal to or less than the Medicaid reimbursement rate for that facility. The A/R’s monthly income and any other insurance payments made to the Long-Term care facility must be taken into consideration when determining the IME. These expenses are not subject to the three-month IME averaging period and may be combined and rolled over to subsequent months until the full expense(s) is absorbed.
Form 942 - IME Verification Form is used to verify the amount owed to the facility. When determining the maximum LTC IME allowed for each month, compare the Medicaid reimbursement rate multiplied by the number of days in the month client was institutionalized to the amount client actually owed or paid for that month after insurance. The maximum LTC IME for a month is the actual owed after insurance versus the Medicaid reimbursement rate multiplied by the number of days—WHICHEVER IS LESS.
Other Deductions
Use Form 942 - IME Verification Form to determine the items or services requested as IMEs.
The form should be date stamped with the date received by DFCS office and must be received by the end of the averaging period in which the IME was incurred (the 10th of the reconciliation month) OR the 10th of the month following the month the IME was incurred if eligibility is determined under AMN (however, AMN is not in effect at this time).
Form 960 - IME Pricing Document and Form 942 - IME Verification Form Comparison
The DFCS caseworker will compare Form 942 - IME Verification Form to the Form 960 - IME Pricing Document to determine whether the item or service is listed.
If the item or service is listed on the Form 960 - IME Pricing Document - Deduct the amount found in the pricing document or the amount charged by the provider, whichever is less.
If the item or service is not listed on the Pricing Document – the caseworker sends a Form 955 - IME Query Form to DCH. See IME Query below.
IME Query
If an item or service is not listed on the Form 960 – IME Pricing Document, send a Form 955 - IME Query form to DCH by email to Eligibility.Updates@dch.ga.gov requesting review of the medical expense. DCH will determine whether the item or service can be deducted as an IME.
If DCH determines the expense is not allowable as an IME, deny the IME deduction. Send Form 943 - Notification of Deduction of Medical Expense to the recipient prior to the last day of the month for which the deduction is requested.
| For certain expenses, such as drugs, the provider must specify quantity, size, strength of dosage, etc., for the expense to be correctly identified in the pricing document. |
Denial of Medical Expense Hearing Request
If a request for hearing is received due to the denial of the IME, process the hearing using the same regular hearing procedures. Refer to Appendix B - Hearings.
Averaging
Use averaging procedures for the IME deduction. Refer to Section 2557 - Averaging Income and Incurred Medical Expenses.
Averaging Period
Use a monthly average for the 3 months averaging period, when a one-time IME is submitted. This could cause the liability to be reduced to zero for the entire averaging period. Refer to Section 2557 - Averaging Income and Incurred Medical Expenses.
| There is no carryover of an excess IME to successive averaging periods. |
Allowing the LTC IME Deduction in the System
Calculate the IME deduction (using instructions above) to be allowed in the patient liability/cost share budget and enter this amount in the incurred medical field on the NH screen. The system will allow the LTC IME as a deduction as the last step in the budgeting process.
Allowing Incurred Medical Expenses in the System
Enter each Incurred Medical Expense individually in the system. For each Incurred Medical Expense, list the Type, Frequency, Amount, and Date of Service. The system will allow the total of the Incurred Medical Expense(s) as a deduction in the budgeting process.
Client Notification
A system-generated notice will be sent to the A/R and Authorized Representative with the patient liability or cost share change for the months for which the deduction is allowed. If manual notification is required, send Form 214 - Medicaid Notification Form. Refer to Section 2701 - Notification for specifics of notification requirements.