Types of Potential Medi-Cal Overpayments

Types of potential MC overpayments include, but are not limited to:

Potential Overpayment Due to Incorrect Income or Household Situations

A potential MC overpayment may occur when the client has unreported income that may affect MC eligibility.

Note: All other MC Eligibility should be explored before creating an overpayment, (i.e. MAGI MC, Non-MAGI MC, etc.).

Required Action for Incorrect Income or Household Situations

If the item not reported is income, then obtain verification of income.

To determine whether a referral is required, the EW must determine the correct SOC for each month of the potential overpayment period. Allow all exemptions, deductions, and allocations which would have been used if the correct information had been reported properly.
If a change occurred and a timely ten day notice of action (NOA) could not have been given before the next month, there is no overpayment in the month of occurrence or in the month following the month of change.
The potential overpayment is determined by computing the correct SOC for each month in the potential overpayment period using the same method of determining income and SOC which would have been used had the client reported properly.

Unemployment insurance of $300 is received every two weeks. The EW shall use $300 x 2.167 = $650 to compute the overpayment, not the actual amount received each month.

Determine the original SOC.
Subtract the original SOC from the correct SOC.
Request usage information from DHCS Investigation Unit, if necessary.
Make referral to DHCS Investigation Unit if the overpayment for the total period is equal to or more than $100.

If the item not reported correctly is a person no longer in the MFBU, the responsible client must complete a statement (preferably a “General Affidavit” [CSF 2]) regarding the exact date the MFBU member left the home.

To determine whether a referral is required the EW must determine the correct MFBU budget computation for each month of the potential overpayment. Allow all exemptions, deductions, and allocations which would have been used if the correct information had been reported properly.
If a change occurred and a timely ten day Notice of Action could not have been given before the next month, there is no overpayment in the month of occurrence or in the month following the month of change.
The potential overpayment is determined by computing the correct MFBU budget computation for each month in the potential overpayment period that would have been used had the client reported timely.
Make referral to DHCS Investigation Unit if the overpayment for the total period is equal to or more than $100.

Note: If a potential overpayment is due to the income and/or property of a Sneede class member, the potential overpayment is based solely on the Sneede class member’s MC usage.

Potential Overpayment Due to Total Ineligibility

A potential MC overpayment may occur when the client is determined to be totally ineligible for MC. Examples include but are not limited to:

When it is determined that a MC client is not a California resident or has no intent to reside in the State.

Note: All other MC Eligibility should be explored before creating an overpayment, (i.e. MAGI MC, Non-MAGI MC, etc.).

Calculating Overpayment Due to Total Ineligibility

The EW must initiate the overpayment process by completing and sending forms “Confidential Medi-Cal Complaint Report” (MC 609) and “Medi-Cal Potential Overpayment Reporting Worksheet-Property” (MC 224 B) to the local DHCS Investigation Unit.

Potential Overpayment Due to Increased SOC (Non-MAGI)

A potential Non-MAGI MC overpayment may occur when there is a change in income and/or household composition (MFBU) and it is not reported timely.

Calculating Overpayments Due to Increased SOC

The potential overpayment will be the LESSER of:

The cost of MC services paid by DHCS (usage) which were received in the potential overpayment month(s), or
The amount of the increased SOC for the potential overpayment month(s) in which services were received and paid by DHCS.

Potential Overpayment Due to Excess Property (Non-MAGI)

A potential Non-MAGI MC overpayment may occur when there is a change in property and it is not reported timely.

Note: Effective 1/1/2024, counties are no longer required to report overpayments based on excess property since resources will no longer be used to compute Non-MAGI eligibility. Overpayments occurring prior to 1/1/2024 may continue.

Calculating Overpayments Due to Excess Property

The potential overpayment will be the LESSER of:

The total cost of services paid by MC during the consecutive month period in which there was excess property throughout each of the months, or
The highest excess property reserve balance for any single month in the potential overpayment period.

Note: Actual MC usage is available upon request from DHCS Investigation Unit.

Computation

Determine the month(s) that the property reserve exceeded the property limit for the entire month.

Reminder: Income received during any month is not counted as property during that month when deposited in an account at a financial institution.

Determine the property reserve at the lowest point in the month for each month of the potential overpayment.
Determine the correct property limit for each month involved.
Determine the month in which the client has the highest amount of excess property.
The amount determined in (4) above will be reported to DHCS Investigation Unit as a potential resource overpayment, if the potential overpayment amount equals or exceeds $100.

If a potential MC overpayment of $100 or more exists, the EW must make a referral to the local DHCS Investigation Unit with a completed “Confidential Medi-Cal Complaint Report” (MC 609), and a completed “Medi-Cal Potential Overpayment Reporting Worksheet-Property” (MC 224 B).

Potential Overpayments Due to Unreported Other Health Coverage (OHC)

A potential MC overpayment may occur when the client has OHC and does not report this timely.

Calculating Overpayments Due to Unreported Other Health Coverage (OHC)

When processing a potential MC overpayment due to unreported other health coverage (OHC), the EW must complete the following forms:

The “Confidential Medi-Cal Complaint Form” (MC 609), and
The “Medi-Cal Potential Overpayment Reporting Worksheet Income or Other Health Coverage Form” (MC 224 A).

The “Health Insurance Questionnaire” (DHCS 6155) and send to EW Services, Health Insurance Section. If OHC information is received by the EW via MEDS alert through DHCS’ periodic match, completion of the DHCS 6155 is not necessary. Instead, the EW must attach a copy of the MEDS HIAR screen.

CalWORKs Ineligibility

Eligibility for CalWORKs results in automatic eligibility for Cash-Linked MC. Therefore, when ineligibility for CalWORKs is later determined, ineligibility for MC may also exist, creating a potential MC overpayment.

Since the eligibility rules for CalWORKs and MC are different, DO NOT assume that an overpayment or fraud in the CalWORKs case results in an overpayment or fraud in the MC case.

Note: All other MC Eligibility should be explored before creating an overpayment, (i.e. MAGI MC, Non-MAGI MC, etc.)

Calculating Overpayments due to CalWORKs Ineligibility - Excess Property

To determine whether a potential MC overpayment exists the EW must:

Evaluate for MAGI MC Eligibility, if the client is eligible there is no MC overpayment, or
Evaluate for MC eligibility using MC property limits at the time the CalWORKs ineligibility occurred, and
If a potential MC overpayment of $100 or more exists, make a referral to DHCS Investigation Unit.

CalWORKs related MC fraud referrals to DHCS Investigation Unit must include copies or documentation of any MC pamphlets, information sheets or other MC information that were given to the applicant during the CalWORKs intake process.

CalWORKs Ineligibility - All Other Reasons (Property Within Medi-Cal Reserve Limits)

To determine whether a potential MC overpayment exists, the EW must consider other reasons, including but not limited to the following:

Excess income (may have MAGI MC eligibility or should have had a SOC)
Loss of CalWORKs deprivation (Evaluate for all MC programs before establishing OP)
No eligible child in the home (Determine if MAGI MC eligibility exists)

If property was not in excess of the limits, complete a SOC budget determination using the income to the cash aid assistance unit (AU), documenting the reason for the computation at the bottom of each monthly budget.

Reminder: The CalWORKs grant is exempt for MC. Use actual other income received in the month(s) of the potential overpayment period. Do not budget retrospectively.

If it is shown by this computation that there is no SOC, document on the Journal page that no overpayment exists. No further action is required.
If a SOC exists, and the SOC for the total overpayment period is under $100, document the results on the Journal page. No further action is required.
If a SOC exists, and the SOC for the total overpayment period is equal to or over $100, complete a referral to DHCS Investigation Unit.

Potential Overpayments Due to CalWORKs Fraud

A potential MC overpayment may occur in a CalWORKs fraud case. The EW must review the MC portion of the case independently to establish whether MC eligibility existed for EACH family member under any MC program.

When a CalWORKs overpayment occurs, the EW will review the case to:

Determine if MC eligibility exists under any other program,
Determine if there is a potential MC overpayment, and
Refer potential MC overpayments of $100 or more to the local DHCS Investigation Unit.