Revised Temporary Procedure for Processing Medicare Savings Program (MSP) Applications Received from Social Security Administration

Helping Families. Supporting Communities. Empowering Individuals.

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06/23/10

Summary:

Revises Action Memorandum: Temporary Procedure for Processing Medicare Savings Program (MSP) Application Received from Social Security Administration dated 02/26/10.

This Action Memorandum revises instructions on how to process untimely MSP applications received through the LIS application from Social Security Administration.

  1. What is the Medicare Savings Program (MSP)?
  2. What is the Low Income Subsidy (LIS) Program?
  3. Ways to Apply For MSP
  4. Process
  5. New Asset Limits for MSP
  6. Beginning Eligibility
    1. QMB
    2. SLIB/QI-1
  7. Medical Backdating
    1. QMB
    2. SLIB and QI-1
  8. Form referenced:

What is the Medicare Savings Program (MSP)?

The Medicare Savings Program (MSP) program consists of three programs, Qualified Medicare Beneficiaries (QMB), Specified Low-Income Medicare Beneficiaries (SLIB or SLMB) and Qualified Individuals-1 (QI-1).  A person may apply for MSP when an application for the Low Income Subsidy (LIS) program is completed through the Social Security Administration (SSA).  Current procedures for processing MSP applications are unchanged.

What is the Low Income Subsidy (LIS) Program?

The Low Income Subsidy (LIS) Program helps persons with Medicare Part D.  These costs include their annual deductible, monthly premiums, and co-payments or coinsurance amounts for each prescription.

Beginning 01/01/2010, a person may apply for MSP when an application for LIS is completed through the SSA.  These new applications that come to DHS because of the LIS application have to be treated differently by federal law.  The date of application for MSP is the same date the applicant applied for LIS.

If the application is received after the due date it is no longer considered a LIS application and should be treated as a regular MSP application.  See due date posted on the bottom of Form 2378M.

Ways to Apply For MSP

There are three ways to apply for MSP:

  • A person may complete Form 2378M, Mail-In Application for Payment of Medicare Premiums, Deductibles and Coinsurance.
  • A person may apply through SSA when they apply for the Low Income Subsidy Program.
  • A person may complete the Medicare Savings Programs (MSP) Model Application, APPLICATION FOR MEDICARE PREMIUM ASSISTANCE, which is available on the Centers for Medicare & Medicaid Services (CMS) website in 11 different languages.

If the FCRC receives the CMS Application for Medicare Premium Assistance, do not require the applicant to complete Form 2378M.  Process this application the same as Form 2378M is processed.  This is not an LIS application.

A facsimile of the ModelApplicationforMedicareSavingsPrograms (pdf) is attached.  This application is not to be issued by the FCRC.

Process

A temporary procedure has been established to process MSP applications that will be received from SSA until AIS is updated.  Applications will be processed in the following manner.

SSA sends an electronic file to DHS for persons who applied for LIS and want to apply for MSP.  This file will be treated as an application for MSP.  The application date is the date the LIS application was filed with SSA.

DHS will send the name, address and the date the applicant applied for LIS to the Health Benefits for Workers with Disabilities (HBWD) Unit.

HBWD will write or stamp the date of the LIS application in the "Agency Use Only" box on the 2378M.  The date that the application is due to the FCRC will be indicated on a sticker on the bottom of the first page of Form 2378M.  HBWD will mark 'LIS' in red at the top of the first page.  New Form 267MSP will be mailed along with Form 2378M to the applicant.  The 267MSP will have instructions to complete the 2378M and return it to the FCRC within 10 days.

FCRC registers Form 2378M upon receipt.  Use the date in the "Agency Use Only" box (not the date the application is received by FCRC).  Register these applications under caseload "LIS".  Do not use "LIS" as the caseload number for applications received after the due date. Register the untimely application using the regular caseload assignment.

If Form 2378M is returned timely, process the application in the usual manner.  After disposition, immediately change the caseload number to the regular caseload number.

If Form 2378M is returned untimely, do not use the date in the "Agency Use Only" box as the date of application. The application date is the first workday the correct office receives the application. Process the application in the normal way according to PM 02-04-06/WAG 02-04-06.

No action is required by the FCRC if Form 2378M is not returned.

New Asset Limits for MSP

Effective 01/01/2010, the asset limit for the Medicare Savings Program (MSP) increased from $4,000 to $6,600 for one person and from $6,000 to $9,910 for a couple.

Higher assets limits do not apply when determining retroactive coverage for months prior to 01/01/2010.  Use 2009 asset limits for all 2009 retroactive months.

Example: Ms. Jones applies for MSP in January.  Ms. Jones' income is $1,000 monthly and reported assets are $6,000.  Ms. Jones meets all the eligibility requirements for Qualified Medicare Beneficiary (QMB) except countable income is more than 100% but less than 120% of the Federal Poverty Level (FPL).  Due to the increased asset limit for MSP, she is eligible for Specified Low-Income Medicare Beneficiaries (SLIB).  Ms. Jones is approved for MSP beginning 01/10.  Ms. Jones is not eligible for retroactive coverage for October, November or December because her reported assets exceed the asset limit of $4,000 for 1 person for 2009.

Beginning Eligibility

QMB

For QMB eligibility, refer to PM 06-12-02-a.

QMB eligibility starts the first day of the month after the month the application is approved.  If Form 2378M is returned untimely, do not use the date in the "Agency Use Only" box as the date of application. The application date is the first workday the correct office receives the application.

SLIB/QI-1

For SLIB or QI-1, use the date of the LIS application when determining eligibility.

Example:  Mr. Johnson applies for LIS in January.  DHS receives the application from SSA in March.  Mr. Johnson returns Form 2378M by the due date.  Mr. Johnson's monthly income is $1,000 and reported assets are $5,000.  Mr. Johnson is SLIB eligible because his income is more than the 100% but less than 120% of the Federal Poverty Level (FPL).  Approval is based on the month the applicant applied for LIS.  Mr. Johnson is eligible for coverage beginning January.

Example: Ms. Johnson applies for LIS in February.  DHS receives the application from SSA in March.  Form due to the FCRC in April.  Ms. Johnson returns Form 2378M in May. The FCRC registers the application on the date of receipt.  Ms. Johnson's income is $1,050 monthly and reported assets are $2,000. Ms. Johnson meets all the eligibility requirements for Qualified Medicare Beneficiary (QMB) except countable income is more than 100% but less than 120% of the Federal Poverty Level (FPL).Ms. Johnson returned the application after the due date.  Approval is based on the month the applicant returned Form 2378M to the FCRC (not the date of the LIS application).

Medical Backdating

QMB

For QMB, the applicant is approved according to PM 06-12-02-a.

Example:  Ms. Miller applies for LIS in January.  DHS receives the application in February.  Ms. Miller returns Form 2378M to the FCRC.  Ms. Miller's income is $700 monthly and reported assets are $6,000.  Ms. Miller meets all the eligibility requirements for QMB.  Approval is based on the date the FCRC determines she is eligible for QMB (February).  Ms. Miller is eligible for QMB beginning March.  Applicant is not eligible for retroactive coverage because QMB eligibility starts the first day of the month after the month the application is approved.

SLIB and QI-1

The Department may pay premiums for SLIB and QI-1 clients retroactive to 3 months before the month of application, if the applicant met eligibility factors during this period.

Applications received from SSA may be backdated more than 3 months, if eligible, because retroactive coverage is based on the application date for LIS if received timely.

If the application was received untimely determine retroactive eligibility based on the date the application was received in the FCRC.

Example:  Mr. Smith applies for LIS in January.  DHS receives the application from SSA in March.  Mr. Smith returns the 2378M by the due date.  His monthly income of $1,000 and reported assets are $3,000.  Mr. Smith is SLIB eligible because his income is more than 100% but less than 120% of the FPL.  Approval is based on the month the applicant applied for LIS.  Mr. Smith is eligible for retroactive coverage beginning October.  Mr. Smith is eligible for retroactive coverage because his assets do not exceed the asset limit in 2009.

Example:  Mr. Jones applies for LIS in April.  DHS receives the the application from SSA in May.  The FCRC receives the 2378M by the due date.  Mr. Jones' income is more than 120% but less than 135% of the FPL and his assets are below $6,600.  He is eligible for QI-1.  The date of his MSP application is the same as the month of application for LIS (April).  His application for MSP is approved regular role effective June.  Mr. Jones is eligible for retroactive coverage beginning January.

Example: Ms. Moore applies for LIS in February.  DHS receives the application from SSA in March.  Form 2378M was due in March.  The FCRC receives Form 2378M in April. Ms. Moore's income is more than 120% but less than 135% of the FPL and her assets are below $6,600.  She is eligible for QI-1.  The date of her MSP application is the date the FCRC received the application (April).  Her application for MSP is approved regular role effective May.  Ms. Moore is eligible for retroactive coverage beginning January.

[signed copy on file]

Michelle R.B. Saddler

Secretary, Illinois Department of Human Services

Julie Hamos

Director, Healthcare and Family Services

Form referenced:

Federal Model MSP Application