April 29, 2021
By Brittany H Cone, Esq and Jordan S Johnson, Esq, attorneys at Hall Booth Smith, PC
In many ways, Medicaid reimbursement is the buoy that keeps skilled nursing facilities afloat. Unfortunately for facilities, however, actually obtaining Medicaid reimbursement for the care and services provided is dependent upon the resident and/or the resident's representatives providing the necessary financial verifications and the state Medicaid agency reviewing and approving the eligibility application. Naturally, countless issues can, and often will, arise during this process. Considering the importance of Medicaid reimbursement to a nursing facility's financial well-being, facilities must be prepared to successfully navigate the issues to secure payment for the care provided by its staff. In this article, we will walk through the Medicaid program generally, current practical issues that the industry is facing, and few possible approaches and solutions to these issues.
What is Medicaid?
Medicaid is a financial-need-based public health insurance, which is jointly funded by participating states and the Federal government. Medicaid is our Nation's largest insurer with more than 74 million Americans receiving benefits. Of this total, approximately 25% are seniors and people with disabilities. Because Medicaid is a shared program between each state and the Federal government, many specific policies, such as eligibility requirements and covered services vary from state to state. That said, state Medicaid agencies must work within the confines of the basic participation requirements set by the Federal government.
Medicaid Issues and Creative Solutions for Nursing Facilities
One of the universally common issues faced by nursing facilities is the inability to obtain the necessary financial verifications to establish Medicaid eligibility, which arises in various forms. Oftentimes, residents and their representatives are uncooperative with the Medicaid application process. In order to minimize this occurrence, detailed conversations should be had at or near the time of admission regarding the expected payor source(s) and the Medicaid application process, including the eligibility requirements and typical verifications needed. Not only do such conversations set the expectation, but they also initiate the verification acquisition process at admission, rather than weeks or months later when the resident's representative(s) may no longer be intricately involved in the resident's day-to-day.
Of course, having these discussions upon admission does not always result in cooperation. Should the required verifications not be provided in a timely fashion, the facility should continue to be proactively involved, including submitting applications as necessary to protect dates of service and providing the resident and his/her representative(s) with detailed correspondence regarding the actions and verifications needed to secure benefits. Should residents and/or representatives remain uncooperative, facilities should not hesitate to issue notices of involuntary discharge for non-payment in accordance with the Federal Requirements of Participation and applicable state law.
Another common scenario features an incompetent resident whose representatives have abandoned him/her or are otherwise unwilling or unable to assist. There are a few possible approaches or solutions to this scenario that can be taken individually or simultaneously. First, facilities should make the state Medicaid agency aware of the resident's circumstances and ensure they have done everything within the policy to obtain the information available to them through internal processes and systems. This can include verifying government-based income sources, including Social Security and VA, and obtaining bank account balances.
Second, facilities should consider whether such assets are "available to" the resident. The Federal requirements for state Medicaid plans expressly provide that only those income and resources that are "available to" the individual should be counted against him/her for eligibility purposes. Simply put, if a resident is riddled with severe cognitive issues and has no one with legal authority to access his/her assets such that they can be used for his/her care, such assets may be considered unavailable to him/her and not counted. This principal is not only inherent within the purpose of the Medicaid program, but is also present throughout federal Medicaid and Social Security law. For example, the income to be counted for eligibility purposes is that actually "received" by the resident. Likewise, regarding resources, the regulatory definition is expressly limited to the property that the individual owns and could convert to cash to be used for support and maintenance. Further, Social Security rules state that if an individual is unaware of his/her ownership of an asset, that asset is not a resource during the period in which the individual was unaware.
Lastly, nursing facilities can consider whether a Petition for Guardianship/Conservatorship might assist a resident insofar as the process will appoint a representative on the resident's behalf to assist with the management of his/her finances and property. While this process is governed by individual state law and, as a result, differs by state, the standard is relatively similar. If an individual lacks the capacity to make or communicate significant, responsible decisions regarding his/her property/finances, a Guardian of the Estate or Conservator is typically appropriate. Legal representation is recommended when bringing such a petition due to the numerous complexities involved, including family and friends coming out of the proverbial woodwork and objecting or seeking appointment. Once a Guardian/Conservator is appointed, he/she will begin the process of obtaining the necessary verifications and accessing possible assets. There is usually some level of court oversight of the Guardian/Conservator's actions to ensure that he/she is acting in the resident's best interest, which generally includes prioritizing payment for the care and services being provided to him/her.
These are just a few examples of the types of Medicaid issues faced by nursing facilities and possible approaches and solutions thereto. Regardless of the type of Medicaid issue, there is always a best practice or outside-the-box approach to resolve, many of which involve getting back to the basics: clear and effective communication and expectation management.
Brittany H Cone, Esq, is a partner at Hall Booth Smith, PC who focuses her practice on a wide range of regulatory, administrative and litigation matters in health care. She can be reached at firstname.lastname@example.org.
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