Patient Liability & Item D Expenses
- Elder Care Law Blogger
- Aug 8, 2018
- 2 min read
Updated: Oct 6, 2022
If you or your loved one receives CHOICES (i.e. Medicaid) benefits in a nursing facility, you are more than likely familiar with the term “patient liability.” This refers to the amount that a CHOICES recipient must contribute to his/her cost of care every month. The amount set by TennCare is reflected in your bill from the facility. Patient liability is calculated according to the individual’s gross income with certain deductions intended to meet the financial needs of both the individual and his or her dependents (if applicable).
All CHOICES recipients are allotted $50.00 out of his/her gross income to be used towards personal and incidental expenses (e.g. toiletries, haircut). Depending on the individual, deductions are also made to cover health insurance premiums, spousal living expenses, special bank fees, and Item D expenses. Of these, Item D deductions tend to be least understood and, therefore, under-utilized by CHOICES recipients. Please note, Item D expenses are not related to Medicare Part D.
Item D expenses are those not covered by TennCare or a third party such as Medicare or private insurance. Most of our clients have insurance (e.g. Medicare Part D, Advantage, or Supplement) that pays primary, followed by Medicaid (reminder: Medicaid is always the payor of last resort). Even so, there is a list of expenses that are not captured by these insurers, and can present added (unnecessary) financial burden. Our goal as Public Benefits Specialists is to relieve clients of exactly this. Therefore, we ask that you notify our office if/when you incur the following out-of-pocket expenses (i.e. Item D deductions), as TennCare is obligated to reduce patient liability accordingly:
• Eyeglasses & related services • Hearing aids & related services • Dental services • Prescription drugs • Nursing home bed-hold days • Medical bills generated 3 months prior to the month of Medicaid application • Any other medical-related, non-covered expense that you suspect may be considered an Item D expense
In order for TennCare to process a request that patient liability be changed, we must submit an Item D request, or rather, verification of the expense. For this reason, we strongly advise our clients to keep records of the above expenses. As your liaison with the State, we will coordinate with TennCare representatives to address and respond to the request. We also keep the nursing facility informed of a subject-to-change liability. Our biggest challenge at present is the wait-time for processing Item D requests, upwards of 2-3 months. While we hope to see improvement in response time, we still urge clients to contact us to discuss the option of an Item D request, or any questions related to paying for medical expenses.
Questions? Takacs McGinnis Elder Care Law may be able to help. Just give us a call at 615.824.2571.
The part about Item D being “least understood” rings true — it’s usually the boring categories that end up costing people the most. I’d love to see a couple concrete examples where you’ve watched someone’s liability drop meaningfully just from capturing expenses that were already happening. This might sound goofy, but it’s like finding a missing rule on this page and suddenly an outfit “works” because you adjusted one small thing. Are over-the-counter medical supplies ever treated as Item D, or is it mostly provider-billed stuff?
This is one of those Medicaid topics that seems simple until you’re actually in it — “patient liability” sounds straightforward, but then all the deductions (and the paperwork) show up. I’m especially curious how strict TennCare is on what counts as “not covered by a third party,” because that line can get blurry depending on the plan. Totally unrelated, but the way people chase a specific look with fun ghibli ai filters feels similar to chasing down the exact right category/receipt so it’s treated correctly. Do you have a checklist you suggest families keep to avoid missing Item D each month?
The distinction that Item D isn’t “Part D” seems obvious once you say it, but I can see how people would mix that up and never ask about it. Also interesting that a lot of these deductions are basically about making sure dependents/spouses aren’t left stuck while someone’s in a facility. Side note, the way this is laid out is the kind of thing I’d bookmark like this site and circle back to when a specific question comes up. Do facilities typically tell residents about Item D up front, or is it mostly on the family to discover it?
I didn’t realize TennCare’s calculation had so many moving parts beyond the obvious premiums/spousal allowance, and Item D being under-used totally tracks. The “payor of last resort” point is key too, because it explains why something can fall through the cracks even when you have Medicare. Random analogy, but it’s like a Caesar cipher tool — if you don’t know the shift exists, the message just looks wrong and you move on. Are Item D expenses usually denied for lack of receipts, or for being the wrong category?
The $50 personal needs allowance sounds tiny once you start listing real “incidental” costs, so the Item D piece feels like the only relief valve for a lot of folks. It reminds me of how you don’t notice the small gaps until you’re trying to make a budget actually work — like when I zone out with BlockBlast and realize I’m obsessing over one missing square. Do you usually recommend families keep a running log of potential Item D expenses month to month?