What is an Uncovered Medical Expense Deduction (UMED)?

An uncovered medical expense deduction (UMED) is a credit received for out-of-pocket medical expenses. The deduction reduces the amount the nursing facility or Medicaid services provider is paid each month and enables individuals to keep more money to pay for uncovered medical expenses.

Who can receive the deductions?

Individuals who receive Medicaid under ICP, Hospice, HCBS Waivers (Cystic Fibrosis, iBudget, SMMC LTC only) or PACE Program and have a patient responsibility (share of the cost for care) to pay from their income may be entitled to a deduction.

What types of medical expenses can be deducted?

Deductible expenses include: (1) Health insurance costs (premiums, deductibles and co-payments); (2) the cost of medically necessary medical services or items, such as dental services, hearing supplies and services, visions services and supplies and services, therapy services, over-the-counter medications, and certain medical supplies like adult diapers, vitamins and nutritional supplements; and (3) nursing facility care not covered by Medicare, Medicaid or another third party (nursing facility bills incurred no earlier than three months prior to the month of application, not paid by Medicaid or another third party, and were not incurred during a transfer of assets penalty period).

How we determine the deduction and apply it to monthly income?

Medical expenses paid during a recent period (no earlier than three months prior to the month of application or the past six months prior to a renewal) are used to get an estimate of the expenses expected to occur over the next six months.

The average cost is determined and is deducted from the income when calculating patient responsibility for the next six months. This is called a projection period. Near the end of a projection period, actual medical expenses incurred during the projection period are verified and compared to the projected expenses.

If the projected amount is less than or more than the actual expenses by more than $120, the expenses are reconciled by averaging the balance over the next projection period together with an average of actual expenses.

This process repeats every six months while an individual receives Medicaid.

What must Medicaid recipients do?

Recipients must notify the Department of Children and Families of what medical expenses (paid or unpaid) they have to pay. Proof of the types of expense, the cost and proof that it was not paid by Medicare, Medicaid or a third party may be required. It is important that new expenses or changes in current expenses are reported within ten days after receiving a bill/receipt.