Applying Unpaid Medical Bills to the SOC (Hunt v. Kizer)

Any MC applicant or recipient having medical expenses incurred and unpaid must be allowed to use those medical expenses to reduce any current or future SOC, provided the medical bills remain unpaid and acceptable documentation of the unpaid expense is received.

Old medical bills are not acceptable if they are fully paid prior to the month of submission. Only any unpaid portion may be applied toward a SOC adjustment.

An old medical bill may not be accepted if it was paid by the recipient in a previous month and then refunded by the provider in the month it is submitted to the EW.

Exception: Individuals receiving MC under state only programs (aid codes 53 and 81) are not able to apply old medical bills to their SOC.

A medical bill is considered current when it is incurred in the same month for which it will be applied to the recipient's SOC.

A medical bill is considered old when it is incurred in a month previous to the month for which it will be applied to the SOC.

Note: If a portion of the old medical bill has been paid, only the unpaid portion may be applied toward the beneficiary's SOC.

Acceptable Medical Bills

Acceptable medical bills and medical expenses are those which are rendered by a state-licensed health-care provider.

In addition, when a client wishes to adjust expenses for medically-related equipment, supplies or drugs which have been prescribed but which are available without a prescription, the EW may require a statement from the health-care provider if the expense is questionable. The provider's statement must include:

A short description of the condition being treated.
The name of the drug, supply or equipment which was prescribed.
A statement that it is customarily considered by the medical profession to be an item primarily for health care and medical treatment and that it will be used solely by the recipient for that purpose.

Qualifying Criteria

Liability for Debt

A person must be legally liable for the debt. A person is considered to be legally liable for the debt if it is less than four years old on the date of submission to the EW. If the debt is more than four years old, then the client must show evidence of current liability, such as:

There has been a judgment; or
There is a contract between the provider and the recipient which extends the statute of limitations beyond four years and the bill falls within the contract period, or
A payment has been made on the debt within the last four years, or
There is other reasonable verification showing the person is still liable for the debt.

One Time Only Rule

A medical bill (or portion of a medical bill) can only be used once. For example, if a $30 office visit charge is used towards the client's September 2005 SOC and an MC card is issued for September, then the same bill cannot be applied to the October 2005 SOC, even though the bill remains unpaid.

Other Health Coverage

Only medical bills (or a portion of the medical bill) which will not be paid by a third party can be used to meet a SOC. If a client has any other health coverage, only medical expenses which are not covered by his/her insurance can be used to reduce the SOC.

Medical expenses which have been paid (or will be paid) by Medicare, MC or other private or group coverage cannot be used to meet or reduce a share of cost.

If the bill does not show the amount owed solely by the client, then the client must obtain a statement from the provider or the insurer showing the total amount of the service and the amount for which solely the client is liable.

MFBU

Medical expenses for anyone who would have been a member of the MFBU on the date the medical expenses were incurred may be used to reduce the SOC.

Provider Expenses (IHSS, Licensed, Certified etc.)

IHSS expenses cannot be used to reduce the SOC; however out of pocket personal care services paid to a qualified provider can be used to meet the SOC when the required services are included in the IHSS needs assessment or prescribed by a physician. The services must be intended solely for the health care and medical treatment of the individual. The MC recipient is required to verify the out of pocket expenses for the services each month in order to meet their SOC.

Interest Charges

Interest or other finance charges accumulated on unpaid medical bills cannot be used to offset the SOC.

No Payment Required

There is no requirement that the client be making payments on a bill in order for the remaining balance to be used to reduce a SOC.

Verification Requirements

The client must provide the EW with an original billing statement which includes ALL of the following:

The date the bill was issued. The bill must be unpaid at some time during the month that it is submitted to the EW. Generally, this condition is satisfied if the bill's date of issuance is within the last 90 days at the time it is given to the EW, unless there is evidence that it has already been paid.
- Reminder: A statement over 90 days old can be used if supplemental documentation is provided.
The name and address of the provider who rendered the service.
The name of the person who received the medical service.
A short description of the service.
The date(s) of the medical service.
A “Procedure Code” (medical reference number) unless the bill was incurred prior to 1/1/92.
The provider's MC provider identification number, federal tax identification number, provider's license number, or the provider's MC identification number. (It is not necessary that the provider accept MC in order for the expense to be allowed.)
The amount still owed by the client which is not subject to any third party or other health coverage.

Important: An original or any substitute billing statement which has been altered is not acceptable unless the bill has been updated by the provider and the provider has signed or initialed the notation.

Original Bills versus Photocopies

Generally, old, unpaid medical bills which are submitted to be applied towards a SOC must be original, conventional health-care provider billing statements or invoices. An original bill does not have to be the first bill.

If the medical bill is a photocopy:

It must be signed, initialed or signature-stamped by the provider; or,
There must be other original documentation submitted that verifies the validity and accuracy of the bill.

Missing Information

If an original bill lacks any required information, supplemental information can be provided by a supplemental bill or written statement from the provider, or the provider's representative, e.g., a collection agency, attorney.

The client has an obligation to make an effort to obtain any missing verification information. If the client has made an effort but has not been able to get the missing information, the EW must assist in obtaining it. The EW must contact the provider to request the needed information.

The EW is not required to obtain a medical bill for a client who claims to have a medical expense but has no medical bill.
When the missing verification is provided by phone, document the information and initial and date on the old medical bill.

Affidavit

When the client and the EW are unable to obtain the missing information, a sworn statement can be signed by the client, provided he/she can attest to the accuracy of the information, including:

Date of service and person who received it.
Provider's name and address.
Type of service.
Provider's federal tax ID number, Medi-Cal provider ID number, or the provider's license number.
Procedure code (if the client has contacted the provider to get it).

Important: An affidavit signed by the client cannot be used to confirm the amount of the bill which is owed solely by the client or the date the bill was issued. Only the provider (or the provider's representative) can supply this information.

Credit Card Statements

Unpaid medical expenses which have been charged to a credit card may be allowed if the client provides a credit card statement for every month beginning with the month in which the medical expense was incurred and ending with the month previous to the one in which the statement is submitted to the EW.

The statements must show that no payments have been made on the account since the medical expense was incurred.

If payments have been made, the medical expense applied to the SOC must be reduced by the amount paid on the account.
If the client is unable to provide all credit card statements necessary to show his/her payment record since the charged medical expense was incurred, then the credit card statement cannot be used to verify the medical expense.

Reminder: Do not allow any finance charges.

In a situation where the client had to use someone else’s credit card to charge the medical bill and subsequently been paid by the owner of the credit card, the amount of the medical bill may still be allowed as long as there is clear documentation and verified that client’s obligation to pay continuous to exist.

Example Example The granddaughter used her personal credit card to pay her grandmother’s medical expenses. When the monthly statement is received, the granddaughter paid the entire credit card bill to avoid finance charges; however, she expects her grandmother to pay the medical expenses originally charged to her credit card.

Incomplete Information

If the medical bill does not meet all of the qualifying criteria and verification requirements, the EW must contact the client by mail or by phone to request the missing information within ten days from the date that the medical bill is submitted to the EW.

Return the original bill to the client and scan a copy of the bill into the IDM system.
Allow 10 days for the client to provide the information.
- Note: The EW may contact the provider directly to get additional information. Also, additional time may be allowed to obtain the missing information, as long as the client is cooperating.
The client is responsible to keep the returned medical bills if he/she wishes to resubmit them at a later date.

Denial of Medical Bill(s)

If the missing information is not provided within 10 days and the client has not requested an extension, or if the missing information is provided but the expenses cannot be adjusted, the EW must record the denial in CalSAWS.

Record the denial in CalSAWS.
CalSAWS automatically generates a Hunt v. Kizer denial NOA (MC 353 HK). Review to ensure it is correct before issuing to the client.
Scan a copy of the rejected bill into the IDM system and return the original to the client.

Note: If the missing information is eventually provided, a SOC adjustment can later be allowed.

Limitations of Hunt v. Kizer SOC Adjustment

When applying Hunt v. Kizer, consider the following limitations:

The old medical expense must completely meet the SOC in the month it is being applied. If it does not fully meet the SOC, the client will not benefit. Return the bill to the client for future use.
The client may request that the SOC adjustment begin in the future month, but he/she does not have the right to request that the SOC adjustment start several months in the future. Advise the client to resubmit the bill one month before he/she wishes to use it.
If the bill(s) submitted exceed the client's monthly SOC, the SOC adjustment must be continued in consecutive months until the bill(s) are fully used. The client does not have the right to start and stop the adjustments. The adjustments will stop only if the case changes to no share of cost or Medi-Cal is discontinued. Any remaining SOC adjustment will be applied when the case is later reopened.
Clients can request that an old medical bill be applied to a past month if all of the following conditions are met:
- The medical bill was incurred prior to the past month to which it is being applied.
- The client has not already met the SOC and/or received a MC card for the past month(s).
- The month(s) for which the adjustment is requested is not more than 12 months prior to the current month (unless a Letter of Authorization is being issued due to county error or another valid reason).