Resolving Your Nursing Home’s Medicaid Application Challenges – Special Report
by: Begley Admin
Case Study 1: Private funds exhausted – Medicaid denied
Bill has been a resident at the Forget-Me-Not Nursing Home for 18 months. After 12 months, Bill’s private pay funds were exhausted and the Medicaid coordinator at the nursing home filed an application on his behalf. Bill’s wife, Linda, was not cooperative in providing the required financial information. Medicaid eventually dismissed the application because it was incomplete. By the time all the necessary information was finally obtained, and the application was re-filed, the nursing home had lost six months of revenue, totaling $60,000, and its cash flow had been interrupted for 12 months.
Case Study 2: Private funds exhausted – Medicaid funding secured
Harry is incapacitated and resides at the Leisure Acres Nursing Home. The Social Security Administration designated Harry’s closest relative, his nephew, Peter, as his representative payee. Peter paid Harry’s nursing home bill for 6 months, but then virtually disappeared. At that time, the nursing home retained the services of an elder law firm, which was able to gain immediate access to Harry’s financial records and complete a Medicaid application that included a request for retroactive benefits. The nursing home was paid in a timely manner and experienced no interruption in cash flow. The nursing home’s Medicaid coordinator was able to remain focused on other responsibilities.
Case Study 3: Private funds exhausted – hardship waiver approved
As the result of a stroke, Mary has lived at the Happy Trails Nursing Home for 5 months. Initially, Mary’s care was paid for privately. Once her assets dwindled to less than the Medicaid allowable amount, however, the nursing home filed a Medicaid application on her behalf. During the application process, it was discovered that Mary had made prior gifts consisting of monthly donations to her church, birthday and Christmas gifts to her children and grandchildren, and college tuition assistance for her eldest granddaughter. The total amount of gifts made after the Deficit Reduction Act (DRA) of 2005 became law was $18,300. The gifts were properly reported on Mary’s Medicaid application. Because of the gifts, the application was denied, and a two-month penalty period was imposed. Mary and her family do not have the funds to continue paying for her care privately. Consequently, the nursing home retained the services of an elder law firm, which filed a hardship waiver application on Mary’s behalf. The application stated that imposing the “transfer of assets penalty” would deprive Mary of medical care, endangering her health, and would also deprive her of food, clothing, shelter, and other necessities. The hardship waiver was approved, and Medicaid paid for Mary’s care retroactive to the date she otherwise would have been eligible for Medicaid. If the nursing home had not retained the elder law firm to assist with the hardship waiver process, it would have had to absorb the full cost of Mary’s care for the two month penalty period.
What is Required for Medicaid Applications?
Medicaid applications must be filed at county or regional Medicaid offices. An application can be filed by the individual requiring Medicaid funding or by his or her representative. The representative may be an authorized staff member of an institution or nursing home at which the person is receiving care or an attorney representing that institution or nursing home. An application must be made in writing on a form provided by Medicaid, and it must be signed under penalty of perjury. Applications for retroactive eligibility can be made for periods of up to 3 months prior to the month of application, provided that the individual otherwise would have been eligible for Medicaid at that time.
Medicaid applicants must meet financial and other eligibility requirements. An applicant must be age 65 or older, blind or disabled, and able to prove to Medicaid that he or she is a U.S. citizen or an alien meeting certain qualifications.
A Medicaid applicant must prove his or her status by submitting one of the following forms of identification along with the application:
1. A U.S. passport.
2. Form N-550 or N-570 (Certificate of Naturalization).
3. Form N-560 or N-561 (Certificate of U.S.Citizenship).
4. A valid, state-issued driver’s license or other Identity document described in section 274A(b)(1)(D) of the Immigration and Nationality Act, but only if the state issuing the license or other document requires proof of U.S. citizenship before issuing the license or document or obtains a Social Security number from the applicant and verifies, before certification, that the number is valid and assigned to an applicant who is a citizen.
5. Other documents that the Medicaid agency may specify, by regulation, that provide proof of U.S. citizenship or nationality and a reliable means of documenting personal identity.
Or one of the following:
1. A certificate of birth in the United States.
2. Form FS-545 or Form DS-1350 (Certification of Birth Abroad).
3. Form I-97 (U.S. Citizen Identification Card).
4. Form FS-240 (Report of Birth Abroad of a Citizen of the United States).
5. Another document (not described in #4 of the first list) specified by the Medicaid agency that provides proof of U.S. citizenship or nationality.
And one of the following:
1. Any identity document described in section 274A(b)(1)(D) of the Immigration and Nationality Act.
2. Any other type of personal identity documentation that the Medicaid agency finds, by regulation, provides a reliable means of identification.
What Specific Challenges Do Medicaid Applicants Face?
Medicaid applicants face a number of challenges. One significant challenge is that the burden of proof in the application process rests on the applicant, not the Medicaid agency. Problems can arise for numerous reasons. A Medicaid applicant may simply be a poor record keeper and not have the financial records required for the application process. Spouses or other family members may be uncooperative in providing state Medicaid agencies with the necessary information. Medicaid intake workers may not understand an applicant’s financial records. There may be a failure of communication between the Medicaid applicant and /or the applicant’s family and the Medicaid agency.
Two new challenges are presented by the Deficit Reduction Act of 2005 (DRA). The first is the extension of the look back period from three years to five years. Historically, Medicaid offices have not always insisted that applicants produce financial records for the required three-year period. Passage of the DRA has resulted in higher expectations for compliance by Medicaid, which requires the agency to obtain detailed financial records for five years. In particular, there is a focus on any transfer of assets or the purchase of annuities during the look back period.
The second challenge created by the DRA is that change in the transfer of assets penalty. If assets were transferred during the look back period, Medicaid imposes a penalty. That penalty, which is a period of ineligibility for Medicaid, is calculated by dividing the amount transferred by the average cost of a nursing home in New Jersey determined by the Division of Medical Assistance and Health Services. Unfortunately, this divisor is always less than the actual cost of care. Penalties may be for a period of months or partial months. The larger the transfer, the longer the period of ineligibility. The penalty does not begin until the applicant is eligible for an institutional level of care, is otherwise financially eligible for Medicaid (i.e. has spent down assets to $2,000), and has no other period of ineligibility outstanding. For example, assume that a person transferred $50,000 within the look back period, triggering a seven-month penalty or period of ineligibility for Medicaid. The penalty period would begin when that person was already in a nursing home, had spent down assets to $2,000, and had no other period of ineligibility outstanding. Consequently, the individual would have no money with which to pay for the nursing home care for seven months. This is likely to impact many nursing home residents, who may transfer assets without understanding the law and be unable to reverse the transfers.
Given these challenges, nursing homes may increasingly face the need to threaten to discharge patients who are unable to pay. Such threats are difficult to enforce because there must be a discharge plan, which cannot readily be devised when there is no source of payment, either private or public.
What Solutions Are Available to Nursing Homes?
Nursing homes can obtain the assistance they need to successfully address Medicaid application challenges by retaining the services of an experienced elder law firm such as Begley Law Group, who can offer a range of appropriate solutions, including assistance with the hardship waiver applications, permitted in certain instances under the DRA. Payment to nursing homes may be permitted for 30 days while such applications are pending.
What Benefits Can Nursing Homes Obtain by Hiring Elder Law Firms?
By helping to resolve Medicaid application challenges, an experienced elder law firm such as Begley Law Group can enable a nursing home to realize several important benefits:
- A reduction of write offs for periods of time not covered by Medicaid.
- Acceleration of cash f low.
- Devotion of staff time to other important projects and responsibilities.
What Value Can Elder Law Firms Provide?
Experienced elder law firms like Begley Law Group offer the expertise and capabilities nursing homes need to successfully resolve Medicaid application issues. Begley Law Group has expertise in all aspects of the Medicaid application process, including the:
- Eligibility process.
- Application process.
- Hardship Waiver Program.
Additionally, Begley Law Group offers a number of important capabilities.
Independent contractor status. As an independent contractor, Begley Law Group can deal firmly with the Medicaid applicant and /or the applicant’s family without undermining the relationship between the nursing home and the resident.
Collection threat. Begley Law Group can threaten collection action against the nursing home resident and /or uncooperative family members.
Collection action. As a last resort, Begley Law Group can institute collection action against the resident for any unpaid balance.
Fair Hearing. If the Medicaid agency denies an application that should be approved, Begley Law Group can file for a Fair Hearing and (with proper authorization from the nursing home resident or the resident’s representative) represent the resident at that hearing, including oral argument and the filing of any necessary briefs.
What Related Services Can Elder Law Firms Provide?
Establishing a relationship with Begley Law Group allows a nursing home to obtain a range of estate planning and elder law services in a timely manner. These services include assistance with:
Guardianship cases. Nursing homes often need to have guardians appointed for residents.
Advance Medical Directives. Many nursing home residents do not have advance medical directives. It is important for a resident to have someone of his/her choosing authorized to make health care decisions on his/her behalf in the event that he/she becomes unable to make such decisions on his/her own. It is equally important for the nursing home to know who the resident has authorized to make such decisions.
Living Wills. Many nursing home residents lack living wills. A living will is important for both the resident and the nursing home in order to clarify the resident’s wishes with respect to end-of-life treatment.
Powers of Attorney. In many cases, a nursing home resident either has no power of attorney or an inadequate power of attorney. It is important for both the resident and the nursing home to be certain that the resident has appointed someone to act on his or her behalf in the event that he or she can no longer do so. Power of attorney documents must contain specific, appropriate powers.
Last Will and Testament (Will). A will is a document that passes financial assets from an individual to his or her loved ones. It also appoints an executor to act on behalf of the estate upon the individual’s death. It is important that nursing home residents have wills. It is also important for the nursing home to know what to do with the resident’s personal property and personal needs account upon the individual’s death.
Begley Law Group can provide assistance with guardianship cases and with drafting the above-mentioned documents.
What Is Your Next Step?
If your nursing home requires professional assistance with the Medicaid application process, contact the experienced elder law firm, Begley Law Group. Thomas D. Begley, Jr. has practiced law since 1962 and is a Certified Elder Law Attorney, known nationally for his work andncontributions to the practice of elder law. Begley Law Group has four attorneys and a large paralegal and administrative support staff who are available to assist you in a timely manner. We are confident that our exceptional staff, resources, and experience can benefit your residents and your organization. Please contact us at (856) 235-8501 or visit our web site at www.begleylawgroup.com for more information.