What is Retroactive Medicaid
Retroactive Eligibility for Medicaid means that the coverage of Medicaid benefits for an applicant may date back for a full three months prior to the month in which the application for Medicaid is filed. While there is federal regulation that states that retroactive eligibility must extend back for three months, some states have used 1115 demonstration waivers to change this rule. Learn more below under “State Restrictions to Retroactive Medicaid”.
How is the Coverage Period Determined for Retroactive Eligibility?
As an illustrative example of 3-month retroactive eligibility, an individual enters a nursing home in June and remains there through July, August and September. On September 12th, an application for Medicaid is filed. The retroactive period would be from June 1st through August 31st, since the application was filed on September 12th. Therefore, if found to be eligible for Medicaid at the point in time when the retroactive period began, Medicaid would pay the cost of the nursing home care for the individual.
Some states use the date an application was received instead of the date on the application.
Some states use the date an application was received rather than the date on the application as the determining factor for the beginning of the three-month retroactive eligibility period. For example, if an application is dated September 30th, but is not received until October 5th, the dates of retroactive eligibility would be from July 1st through September 30th instead of June 1 through August 31st. This can have a major financial impact if, as in this example, the dates cross the month threshold.
Eligibility for retroactive coverage is determined separately for each month. Therefore, staying with this example, it would be possible for the individual to not meet the eligibility criteria for June, but to be eligible for coverage in July and August.
Why is it Important to Families?
Retroactive eligibility can have a large impact on the amount of money a senior or their family pays for a hospital stay, residence in a nursing home, etc. For many aging individuals, the need for nursing home care can come on suddenly. For example, a fall may result in a broken hip, from which a frail senior may never fully recover. A sudden need does not allow for pre-planning, and therefore, retroactive Medicaid coverage provides a 3-month window of opportunity to get one's Medicaid coverage in order. With nursing home care costing $4,867 - $12,699 / month, a 3 month bill can run $14,601 - $38,097.
It should be emphasized that the Medicaid application is complicated, and a three-month window does not allow a family the luxury of taking their time completing the application. Even with the retroactive eligibility period, a family must be organized and driven to arrange their paperwork and complete an application within that time frame. Assistance options are available to help families with this process.
What are the Services Covered by Retroactive Medicaid?
If an applicant is eligible and the services received are those that are covered by Medicaid, Medicaid will pay the unpaid medical and care bills. In some states, Medicaid will cover bills that have previously been paid (so that the care providers may reimburse payers). Of course, Medicaid must deem the services to have been medically necessary. There are also services covered by Medicaid that require prior authorization. Fortunately, with retroactive eligibility, these claims are not necessarily declined. Medicaid services covered may include the following:
Durable medical equipment
Home health care
In-patient and out-patient hospital services
Laboratory work, x-rays and imaging
Non-Emergency Transportation for Medical Appointments
Nursing home care
Services covered under HCBS (Home & Community Based Services) waivers may also be covered under retroactive eligibility.
Both one-time and recurring expenses can be covered. However, retroactive Medicaid coverage is determined month by month, so if an applicant is found to be ineligible for a certain month, then recurring expenses for that month would not be covered.
State Restrictions to Retroactive Eligibility
As mentioned above, some states have used 1115 demonstration waivers to change the retroactive eligibility period in their state. For instance, both Florida and Arizona have changed their retroactive eligibility timeframe so that it only extends to the first day of the month in which an application is filed. (Pregnant women and children are exempt). This means the retroactive period is just 1-30 days instead of 3 months. Hawaii and Massachusetts have also changed their period of retroactive eligibility, with both states limiting retroactive eligibility to 10 days. However, in Hawaii, persons requesting long-term care services are exempt from the 10-day retroactive eligibility rule.
Although not intended for a consumer audience, MACPAC released a brief in August of 2019 that includes a chart of the states that have submitted 1115 demonstration waivers to make changes to their retroactive eligibility rules. This brief can be found here.
What is the Qualifying Process for Retroactive Eligibility?
In order to meet eligibility requirements for retroactive eligibility, the applicant must meet the same eligibility criteria required for Medicaid. This includes having limited income and assets, with the amount varying based on one’s state. There are no additional or special requirements. Complete Medicaid eligibility information is available here.
Applicants must meet the eligibility requirements for each of the three months separately. As mentioned previously, one may not be eligible for all three months of retroactive eligibility. One may be eligible for one month, two months, or all three months, depending on one’s circumstances.
All states have some sort of retroactive Medicaid eligibility options. Applicants may spend down in order to qualify for retroactive eligibility. Learn more about Medicaid Spend Down.
How to Apply for Retroactive Medicaid Eligibility?
The process for filing for retroactive Medicaid is different in every state, as is the broader Medicaid application process. It can be as simple as a checkbox on the form or it can be an additional form altogether which requires completion.
The challenge lies not so much in the application, but in gathering the supporting documentation for the retroactive period. One must provide evidence of their medical condition, as well as their financial situation. Since both one's functional need and their financial status can change over time, it is likely the applicant will be required to provide documentation of their progression.
Make note, the individual who sought medical services remains responsible by law for the unpaid medical bills until the health care provider has received notice that retroactive eligibility has been granted. The health care provider must also agree to bill Medicaid for the unpaid bills.
Applications for retroactive Medicaid can also be filed for a senior that has passed away to cover unpaid bills for which they would have been eligible.
Are there Assistance Options to Help File for Retroactive Medicaid?
There are a variety of assistance options available when applying for Medicaid (with or without retroactive eligibility). Some are free public services, while others are private professionals who charge a fee. Read our overview of Medicaid planning assistance to determine which approach is best for your situation.
How Payment / Reimbursement Works
Once it has been determined that the individual is eligible for retroactive Medicaid, a copy of the approval must be given to the health care provider where unpaid medical bills remain. The copy of approval can be attached to the claim and submitted so the provider can be paid. As mentioned before, some states will allow an individual to be reimbursed for paid bills. In this case, the Medicaid card should be presented to the health care provider, and they should be asked to refund the money paid out of pocket and then bill Medicaid. Not all health care providers accept Medicaid. Therefore, not all providers accept retroactive eligibility.