Medicaid for Michigan Long-Term Care Residents

Medicaid for Michigan Long-Term Care Residents John B. Payne, Attorney

What About Medicaid? • Payer of last resort • Covers medically necessary treatments and services with no limit • Financial limits on income and assets • $2,000 asset limit for LTC patient • $20,880 to $104,400 asset limit for Community Spouse

Medicaid • Federally subsidized grant-in-aid for low-income individuals and families; i.e., welfare • Varies from state to state • Covers medically necessary services and most prescriptions • No cap on covered services • Stringent eligibility requirements

You Can Keep Some Property And Get Medicaid • Some property is “countable” • Some is “non-countable”

Home Is Exempt, But Planning May Be Necessary To Avoid Estate Recovery

Homestead Exemption • $500,000 limit on home equity unless occupied by spouse or dependant child • If over limit, home not exempt • Funds borrowed against home may be exempt if not commingled • Home in trust is not exempt.

Prepaid Funeral May Be Non-Countable

Final Arrangements • Irrevocable Funeral Agreement, DHS-8A, maximum $11,450 • Burial Fund Exclusion, $1,500 • Not commingled • Clearly designated • Some retroactive effect

Other Types Of Property Can Be Used To Preserve Assets And Still Qualify Toys Jewelry

IRA Loophole(in some states, other than Michigan) • The Community Spouse’s IRAs and 401(k)s are all exempt!

You Can Give Assets Away And Still Get Medicaid • You can be disqualified for giving away property--in some cases. • What is given away? • To whom? • When?

Many Transfers Are Not Penalized

You DoNotHave To Wait Five Years After Giving Anything Away To get Medicaid • The penalty isn’t always five years long--sometimes no penalty at all!

Deficit Reduction Act • Gifts subject to five-year look-back. • Penalty begins when donor is otherwise eligible for Medicaid.

Example • Rosco, a widower, is in good health when he gives his grandson $25,000 for college. He keeps $75,000 in savings. Three years later, he suffers a stroke and enters a nursing home at $6,500 per month. Four years and three months after the gift, he runs out of money. He cannot get assistance for a number of months. Divide $25,000 gift by average cost of private-pay care in a nursing home.

More Deficit Reduction Act • State must be beneficiary of annuity of Medicaid recipient or recipient’s community spouse to recoup Medicaid benefits paid. • CCRC entrance deposits are no longer protected as “homestead” assets.

Myth--You Can Keep Marital And Inherited Property When Spouse Gets Medicaid • Husband’s and wife’s property get lumped together for MA. • Separated? No matter! • Pre-nuptial agreement? Ignored!

“Liberal” Community Spouse Allowance • Calculate "total joint resources" on the day one spouse enters long-term care--the "snapshot.“ • Half may be retained: • Minimum (in 2010) $21,912 • maximum $109,560 • Once institutionalized spouse is approved for MA, community spouse's assets are no longer counted.

Community Spouse Spend Down

You Are Not Required To Spend Your Assets Before You Can Get Medicaid • You are not required to spend your money to pay for nursing care. • There are ways to get MA while preserving resources for your spouse, your heirs, or worthy causes.

Your Income Does Not Go For Your Spouse’s Nursing Care If He/She Is Eligible For Medicaid • Federal law provides that none of the community spouse’s income is available to pay for care of the institutionalized spouse who is receiving MA.

Not All Of Your Spouse’s Income Is Used To Pay The Nursing Home Bill If He/She Is On Medicaid • You may receive a portion of your spouse’s income if your income is below certain limits. • A state hearing officer or a judge may order a greater allowance.

You Can Keep Some Property And Get Medicaid • Some property is “countable” • Some is “non-countable”

You DoNotHave To Wait Five Years After Giving Anything Away To get Medicaid • The penalty isn’t always five years --sometimes no penalty at all!

Do Not Try To Hide Assets And Become Eligible For Medicaid • Intentional misrepresentation to MA is a crime and can be costly--the IRS shares information with the welfare department. In addition to prosecution, you or whoever applied may be required to pay MA back.

Caveat • The agency's policies and procedures must ensure that eligibility is determined in a manner consistent with simplicity of administration and the best interests of the applicant or recipient. 42 C.F.R. § 435.902

Battle of the Beds Bedhold Charges, Deposits, Discharges, and Due Process in Nursing Homes

Bed Deposits • Medicare and Medicaid providers prohibited from charging Medicare beneficiaries for services that are eligible for payment by Medicare

Bed Deposits (cont'd) • In general, nursing homes are not permitted to require a deposit or prepayment for skilled nursing after a qualifying three-day hospitalization. • A deposit may not be required where the resident has applied for Medicaid.

Notice Of Medicare TerminationBefore End Of 100 Days • Notice of Medicare Termination is issued by the facility, without consulting Medicare. • Patient should respond to the notice with a request for "demand bill“ so facility would not be allowed to bill until a determination of Medicare coverage is Medicare, itself.

Involuntary Discharge • Transfer and discharge regulations apply if any residents participate in Medicare or Medicaid. • No exclusion for facilities that have designated themselves as offering "respite care," "subacute care," "short-term rehabilitation," or "Alzheimers care."

Legitimate Grounds For Discharge • Transfer or discharge is necessary for resident's welfare and resident's needs cannot be met in the facility • Resident's health has improved sufficiently that resident no longer needs services provided by the facility.

Legitimate Grounds For Discharge (cont'd) • The safety of individuals in the facility is endangered • The health of individuals in the facility would otherwise be endangered • The resident has failed, after due notice, to pay or have Medicare or Medicaid pay, or • The facility ceases to operate.

Contesting Discharge • Payment requirements for a resident who becomes eligible for Medicaid after admission to a facility, are limited to allowable charges under Medicaid. • Facility may not discriminate against Medicaid recipient.

ContestingDischarge (cont'd) • Common Rationale:"the resident's needs cannot be met in the facility" • Often reflects facility's desire to specialize in a particular type of patient or care--e.g., Alzheimer’s, respite or short-term rehabilitation • Reform Law, Medicare and Medicaid do not support such distinctions

ContestingDischarge (cont'd) • There is no basis for a discharge simply because the resident may now require long-term custodial care rather than rehabilitation, or no longer qualifies for Medicare-covered skilled care.

Contesting Discharge (cont'd) • Every nursing facility "must provide services to attain or maintain the highest practicable physical, mental and psycho-social well-being of each resident" ... "in such a manner and in such an environment as will promote maintenance and enhancement of the quality of life of each resident."

Contesting Discharge (cont'd) Discharges Based on Behavior: • Residents face discharge because of difficult behaviors that may be manifestations of dementia. • This is type of need facilities are supposed to be able to address.

Contesting Discharge (cont'd) Nurse’s aides are required to be trained and tested regarding care of cognitively impaired including: • Techniques for addressing the unique needs and behaviors of individuals with dementia (Alzheimer’s • Communicating with cognitively impaired residents • Understanding behavior of cognitively impaired residents • Appropriate responses to the behavior of cognitively impaired residents • Methods of reducing the effects of cognitive impairments.

Contesting Discharge (cont'd) • A facility must provide services according to the Nursing Home Reform Law to the extent needed to fulfill all plans of care: • Nursing and related services and specialized rehabilitative services to allow or maintain the highest practicable physical, mental, and psycho-social well-being of each resident • Pharmaceutical services • Dietary services • Ongoing program of activities • Dental services

Contesting Discharge (cont'd) • Persons suffering from Alzheimer’s Disease may not be excluded from nursing homes; indeed, there may be no other facility to which they can go. • Behavior that could pose a threat should be addressed with better supervision, room changes, adjustments to medications, or efforts to address whatever irritants cause the resident to exhibit the dangerous behavior.

Contesting Discharge (cont'd) • A facility would be out of compliance if it refused to provide a statutorily defined service to eliminate certain residents. • Administrative hearing officers and judges have ruled that even very disruptive and potentially dangerous resident behavior is insufficient justification for discharge. • The cost of care is not one of the six legitimate reasons for discharge set forth in the federal regulations.

Nonpayment and Change in Payment Source • Change to Medicaid is not legitimate reason for discharge. • Be suspicious of claims that facility does not have “Medicaid bed.” • Where the Medicaid application is in process facility is barred from discharging resident. • No discharge for termination or denial of Medicaid during administrative appeal.

Nonpayment And Change In Payment Source (cont'd) • Facilities have obligation to notify resident of the Medicaid application requirements and procedures. • To discharge for nonpayment, facility must document nonpayment and efforts to collect • Resident has right to redeem and remain up to date of transfer.

Procedural Protections • Reasons for transfer or discharge must be recorded in clinical record • location to which transferred or discharged • effective date of the transfer or discharge

Procedural Protections (cont'd) • 30-day written notice required unless: • the health and safety of resident or other individuals would be endangered • the health of the resident improves sufficiently to allow a quicker transfer • resident has been at the home less than 30 days

Procedural Protections (cont'd) • Change in condition or behavior as basis for transfer requires re-assessment, new plan of care and notice. • Further reassessment is appropriate alternative to eviction if new plan of care is inadequate. • Facility’s failure to comply with any requirement may be bar to discharge.

Procedural Protections (cont'd) Discharge planning is required. • Written discharge summary and post-discharge care plan must be developed with participation of resident. • Specification of types of care required after discharge and may help prove resident's needs can be met in current nursing home. • For those transferred to a hospital, the nursing home is required to provide written notice of its bed reservation policies and allow priority readmission

Medicaid for Michigan Long-Term Care Residents