Nursing Home Medicaid

Institutional Medicaid (also known as long-term Medicaid and nursing home Medicaid) is a federally funded program that is administered by each state that pays for room & board in a nursing home on a long-term basis. Institutional Medicaid pays for patients who can’t afford to pay privately for their nursing home placement; it also pays for in-home care for patients who are receiving care under Medicaid waiver programs, in which the client meets all of the eligibility guidelines for Medicaid except the part about being inpatient in a medical facility.

In order to qualify for institutional Medicaid, patients must have less than $2,000 in assets, can own one home, one car, and a burial plan that holds no cash value to them. If the patient is even one penny over the asset or income limit, Medicaid won’t pay for a patient to stay in a nursing home. The patient can’t have given away or transferred assets in the past 36 month (or 5 years in some cases).

Medicaid eligibility is a dirty little secret that most nursing homes won’t tell you, because they often are able to charge more for private-pay patients and therefore have little incentive to offer information about Medicaid. Nursing homes are required to provide information about federal and state programs to help pay for the placement if the patient or family asks – so if the family doesn’t specifically ask, the facility won’t offer. The nursing home doesn’t know if a patient’s family is struggling to make his payment – and certainly won’t know if the patient is running out of money – unless the family mentions the problem. The end result is many people aren’t aware that they are able to qualify the patient for Medicaid, and might pay thousands of dollars out of their own pocket before they find out.

Unmarried patients who utilize Medicaid for the payment of room & board in a nursing home are allowed to keep a minimum of $30.00 per month for a personal needs allowance (this amount varies from state to state). The rest of the patient’s income is paid to the nursing home - this is called their share of cost, or patient liability.

If a patient has an insurance policy that pays secondary to Medicare, the Medicaid program allows the patient to continue paying the premiums out of the patient’s funds, with the rest of his income going to the nursing home. Medicaid will make up the amount the patient is paying for the policy so that the nursing home doesn’t lose out. This saves the Medicaid program from having to pay for some or all of the out-of-pocket costs of medical care, such as doctor visits, therapy, and hospital stays.

Patients who are married don’t always pay 100% of their income to the nursing home; the community spouse (the spouse who remains in the home or a facility that isn’t a nursing home, such as an assisted living) is allowed to keep an amount that is determined by Medicaid to be sufficient to sustain the household, usually up to $2,500 or so (this amount varies from state to state). The community spouse is also allowed to keep some of the joint assets. The program that determines the amount of income and assets that the community spouse will be allowed to keep is called spousal impoverishment. This program is part of the application process and automatically figured into the amount the patient has to pay. Although this program is able to preserve some of the spouse’s assets, a good elder law attorney might be better able to help preserve the spouse’s financial position and save them tens of thousands of dollars.

 After the patient’s share of cost, institutional Medicaid will provide for the full cost of the patient’s room & board. It may also act as a secondary insurance to Medicare for days 21-100 in the nursing home, although with the economic recession many states no longer pay this amount. Medicaid is a complicated program; unless the patient’s finances are simple it’s worth the cost of an elder law attorney to help with the application. The attorney’s retainer counts toward the patient’s spend down amount.

Another important aspect of Institutional Medicaid is that it is only awarded to patients who are residents of nursing homes or other facilities that meet the CMS eligibility criteria for a SNF. Institutional Medicaid recipients who are discharged from approved medical facilities and admitted into facilities such as hospice inpatient units (facilities that provide end-of-life care to patients) or assisted living facilities are not eligible for institutional Medicaid. It doesn’t matter if institutional Medicaid was the payment source in the last setting; a patient loses his eligibility if he is admitted to a non-approved facility. In order to requalify for Medicaid, it’s possible that the patient will have to be readmitted to a nursing home on a Medicaid pending basis and re-apply for institutional Medicaid. This can be distressing to the family member who’s stuck dealing with the application process all over again.

If for some reason the Medicaid patient in a non-CMS approved facility is difficult to place – such as displaying behavioral problems, has a high acuity (greater medical needs), or has a difficult family to deal with, the patient probably won’t be going anywhere for awhile. The facility will be providing free room & board until they can develop a safe discharge plan.  Some facilities don’t understand the differences in Medicaid and Medicare, and it ends up creating a huge problem for them.

If a patient is receiving services from the nursing home under the Medicare program, he will be provided with a low air-loss mattress, feeding tube, etc. Once he’s exhausted his Medicare benefit, however, he will often be provided with a much cheaper version of the mattress. The nursing home will be paid a set amount for the Medicaid patient, and feeding tubes, wound care or other treatments can be costly. It’s possible that the patient will be discharged to another facility when the Medicare is exhausted due to the (unreimbursed) high cost of his care.

Nursing home patients who require feeding tube assistance can have the pump and supplies provided at home, but if they’re paying privately will have to pay thousands of dollars each month for the same service Medicaid patients get for free.

There really isn’t a huge difference in the care received by patients whose bills are paid by Medicaid versus those who are paying privately. The direct care staff rarely knows who has which payment source. The biggest difference is that Medicaid denies an awful lot of treatments, and the nursing home is responsible for providing the care regardless of the patient’s ability to pay.