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Page Updated: February 20, 2004 |
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Defending Disoriented
Persons from Nursing Home By Larry Smith, Staff Attorney Waukegan Office A nursing home issues a notice of discharge for non-payment to a confused and disoriented long time resident whose funds have run out. The resident does not want to move to another nursing home. The nursing home accepts Medicaid. Harsh, you say? Yes, but not unheard of. Here is the scenario. A resident is admitted to a long term care facility as a private pay, whether it be from life savings or with proceeds of a Long Term Care insurance policy. There are also monthly Social Security benefits. After a while, the private pay funds or the insurance proceeds are exhausted. The nursing home gets the resident’s signature on a Medicaid application, requests backdating and files it but does not follow up. The resident is unable to provide the documentation required by the Medicaid agency. Shortly thereafter, the Medicaid application is denied for failure to provide the necessary documentation. The nursing home assists the resident by filing an appeal but the help stops there. No one shows for the appeal hearing. The Medicaid appeal is denied. By this time, the resident is virtually penniless and owes thousands of dollars. Most nursing homes have the professionalism and foresight not to let this happen, but not all. There are defenses and a way to satisfy the arrearage despite the fact that the timely application date is lost. (Medicaid coverage will only backdate for 90 days from the first day of the month in which the application is filed.) In a case I recently handled, the application had been filed almost a year before. The first order of business was to get the Medicaid application approved to cover current bills. The next thing was to defeat the 30 day notice of discharge for non-payment. Medicaid, which is essentially a welfare program, requires documentation of income and assets for eligibility determination. Normally, the Illinois Department of Human Services (hereafter IDHS or the Medicaid Agency) issues a form called INSTRUCTIONS TO CLIENT asking for verifications such as driver’s license, birth certificates, bank records, proof of income, etc. The Medicaid workers are looking for income and assets which may be available to pay for the nursing home care as well as transfers of assets made to cheat the means test. When a resident does not have the capability of knowing where his or her assets are or cannot provide documentation of such assets and has no one to assist, it should be argued that these assets, if any, are not accessible. There is a provision in the Illinois Administrative Code that contemplates this situation: a transfer is allowable if... it is determined that denial of assistance would create an undue hardship. Examples of undue hardship include, but are not limited to situations in which ... the individual is mentally unable to explain how the assets were transferred... 89 IL. Admin. Code 120.387. Further, the nursing home will likely have some information about the residents income and assets or lack thereof. Remember the nursing home has been getting paid. It would be extremely unusual for the nursing home to accept a patient on a private pay basis without doing some investigation into the patient’s ability to pay. The nursing home should be made to turn over to the Medicaid agency whatever financial information it has. This along with information that the patient is disabled and cannot provide the necessary documentation will likely be enough to convince IDHS that present eligibility for Medicaid exists. The next step is to convince the nursing home and/or the Department of Public Health that the discharge should not go forward despite the residents inability to pay the bill in full within the prescribed time limits. The resident’s receipt of current Social Security benefits (not SSI) makes it possible for the arrearage to be eventually satisfied. The concept is known as “spend-down.” Spend-down permits old medical bills to be applied against the amount the Medicaid beneficiary incurs for the current month. In other words, the nursing home can reimburse itself by using the current Social Security benefit to pay the arrears and billing the entire current month’s charges to Medicaid. There are several compelling arguments why the nursing home should do this. First, unless a non-exempt asset is later located, the nursing home will likely receive no satisfaction for the arrears. This argument should work with a nursing home administrator who has any sense for business, that is, unless the facility is happier dumping the impoverished client in hopes of getting another private pay at the higher rate. If the argument does not persuade the nursing home or its attorney it should be used at the appeal in front of the hearing officer from the Illinois Department of Public Health along with the other arguments listed below. Second, the nursing home had an obligation to assist it’s residents in the application for Medicaid. The requirements extends, at a minimum, to informing the Medicaid agency that the patient has a disability that affects his or her ability to provide the requested verification. Included in the minimum requirement is that the nursing home to be forthcoming with whatever financial information it has that affects Medicaid eligibility. Once the Medicaid agency becomes aware of the patient’s diminished mental condition, it has obligations to assist the applicant as well. The obligations of the nursing home to provide assistance in the application process arise from various sources. The Illinois Administrative Code requires a “signed documentation in (patient) records denoting that staff has counseled resident and/or family and /or guardian on Medicare/Medicaid programs...and assisted with applications as needed.” 89 Ill. Admin. Code 147 Table F a) 7). Further, the nursing home has a fiduciary duty by virtue of its privy to knowledge of the resident’s health condition, its knowledge of the resident’s financial condition and its contractual duty to provide care. Moreover and resoundingly, the nursing home has obligations to make reasonable accommodations to assure that discrimination does not occur based on the resident’s disabling handicaps. The duty to make reasonable accommodations for the handicapping conditions arise from the Rehabilitation Act of 1973 (applying to those who accept federal funds) and the Fair Housing Act Amendments. Fortunately, in the case I recently handled, after convincing the hearing officer that it was a win-win situation for the nursing home to reimburse itself over time for the arrears, he was able to shame the facility into agreeing to withdraw its notice of discharge. I was left with somewhat of a bad taste knowing that the nursing home benefited from its negligence and is now reimbursing itself at the private pay rate when it should have helped the resident establish her eligibility earlier. My client is happy and I suppose that is what counts.
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