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Tuesday, August 7, 2007

Medicaid Reimbursement – Yet Another Puzzle Piece

Elderpride: Chapter 5

In a similar fashion to Medicare, Medicaid also reimburses nursing homes for care of patients and residents. I have an opinion about what makes an individual a resident of a nursing home rather than a patient. Shouldn’t nursing home care be transitional? And resident implies that this is where you live! I don’t want to live in a nursing home! Do you? I don’t want to be a resident! Do you? So in this blog we will always refer to individuals being treated in nursing homes or skilled nursing facilities as patients.

Medicaid is partially funded by revenue sharing to the 50 states from the federal government. The individual states also provide funding to the program. And the individual states are able to determine who qualifies and who does not although there are some broad federal requirements as well. Medicaid is basically healthcare provided for low income populations with a focus on children, pregnant women and the elderly. Therefore states may differ in who qualifies for Medicaid and who does not. The view I am giving here is a global view and there may be differences state to state. I encourage you to check your individual state requirements by searching on “Medicaid your state”.

Medicaid basically covers non-rehabilitative and unskilled care for elderly persons. This means care that usually can be given by an untrained person. No education or licensing is required for unskilled care. Some of the non-rehabilitative care may be given by licensed practical nurses, however it is not at the same level as skilled care covered by Medicare and does not cover therapies. Most states require that the individual is poor. This means if you are not, then you will need to spend down your assets to a specified level. In my own state, if there is a spouse then an individual can have a house, a car and enough money in the bank for burial – and that is all. If they individual does not have a spouse then they can only have enough money in the bank for burial. A patient must apply for Medicaid and qualify in order to receive these benefits. Once approved, however the individual is a Medicaid recipient.

Once an individual spends down their assets, they have fewer choices about their care. The patient (Medicaid recipient) is totally dependent upon the system at this point and if the system fails them, they are doomed. They will have no funds to implement another solution.

The reimbursement system works much like Medicare in that the nursing home completes a claim for services rendered and submits it to the appropriate state office. The claim is reviewed and either approved or denied. A denial can be appealed. However the similarity ends there. Medicaid coverage is much less of a mystery and the provider (nursing home facility) usually knows what is covered in advance because it is much more “cut and dried”. Therefore, there are fewer denials. Consider however that we are talking fewer dollars because skilled care is not covered by Medicaid and unskilled care is paid at a much lower rate. The rate varies state by state. Therefore, even though the dollars are more of a “sure thing” than Medicare, it is fewer dollars and unless a Long Term Care facility has a high percentage of “private pay patients” (patients who are paying the nursing home bill themselves, frequently in spend down mode), they cannot make it financially on Medicaid patients alone. The term “payer mix” refers to the ratio of patients who are on Medicare, Medicaid and Private Pay.

Many SNF and nursing homes are teetering on the brink of financial disaster if their payer mix is tipped toward the lower paying Medicaid patients. This impacts what they can offer patients in terms of treatment as well as amenities although what is considered an amenity (buildings in good repair, for instance) in a nursing home might be thought of as basic by most of us.

And yet, because the dollars lean towards being a “sure thing”, the tendency to move patients off Medicare, into spend down and subsequently Medicaid is rampant in the industry. And I don’t think it is even done consciously, it is simply done because it works marginally. But guess who is caught in that net? Yes, of course, the patient because had they received their full entitled Medicare benefits instead of the shift to spend down/Medicaid, a high percentage would be discharged home or graduate to a lower level of care. And, as I am going to show you later, restoring patients would save the government lots of dollars.

Please feel free to comment or share your stories of eldercare on my blog. It will take a nation to change things – that means all of us. I will try to be a catalyst, but I can’t do it alone!

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