2005 COLA and Medicare Premiums

COLAs for 2005 will not be effective until March 2005 due to a problem with the file from Bendix. Therefore, nursing facilities should use the amount of the income the CAO had indicated on the PA162 notice that was previously issued effective prior to or in December 2004, for January and February of 2005 claims. This represents a 'Gross Patient Pay' amount calculated using the old SSA benefit amount.

The amount that is to be deducted for the Medicare premium is the new amount effective for January 2005 ($78.20). Nursing facilities control what are deducted as drug deductions, health insurance premium deductions and medical expense deductions on claims submitted to Medical Assistance (MA). Therefore, the nursing facilities will deduct the new Medicare premium amount of $78.20 from the Gross Patient Pay on the claim for the service period in which the premium was paid. If paid in January 2005, it would be used as a deduction on the claim for January 2005.

If the individual is enrolled in Buy-In, the nursing home uses the SSA amount provided by the CAO that was effective for the month of December 2004. The differences in the SSA amount that is listed on the PA162 notice and what the individual actually will receive in January and February for 2005 are additional funds that can be used as Personal Funds by the MA recipient.

For new applicants determined eligible for and authorized as MA in January or February 2005 the CAO will be using the current SSA benefit and the current Personal Needs Allowance (PNA) of $30.00 to calculate their contribution towards the cost of care. There will be 2 separate PA162 notices issued for those individuals; one for the month(s) of January and February and a revised one effective March 2005 to reflect new SSA benefits and the increase to $40.00 for the PNA. The nursing home will receive copies of these notices to confirm what figures they are to use when calculating contribution towards cost of care.