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LTC Bullet:

Another Reason to Avoid Medicaid

Wednesday November 17, 1999


In Monday's (11/15/99) Modesto Bee, a reader asks for advice from the paper's "Next Steps" columnists, Jan Collins and Jan Warner, regarding his or her father's long-term care. The Q & A exchange is reprinted below.

In a nutshell, the reader complains that his or her father's nursing home is moving him to another room against the reader's wishes now that he must rely on Medicaid to finance his nursing home care. As Collins and Warner point out, the nursing home is within its rights to do so as long as it conducts the process in accordance with relevant rules and procedures.

In this case, the father paid privately for 2 1/2 years before relying on Medicaid. In doing so, he is not representative of most nursing home patients. The most recent "spend-down studies" reveal that no more than 10-25 percent of Medicaid patients start off as private payers. Moreover, these studies don't account for the fact that a patient can "spend down" by transferring or sheltering assets (i.e., Medicaid planning) rather than paying for care.

Medicaid's generous eligibility rules in combination with widespread Medicaid planning have led to an unsustainable burden which is the crux of the problem. Medicaid reimburses providers at roughly 80 percent of the private pay rate. This is often less than the cost of providing care. It should come as no surprise, therefore, that nursing homes transfer Medicaid-eligible patients out of private pay beds to make room for new private-payers who provide the financial oxygen necessary for survival.

Until lawmakers support public policy that creates the necessary incentives for people to plan ahead for their care with insurance or other planning vehicles, stories like this one will abound. The most frustrating aspect of this reader's experience is that his or her father played by the rules (in not sheltering or transferring his assets) and yet he still must endure the indignity of being treated as a second-class patient. When will lawmakers get serious about LTC reform so that people can purchase top-quality care for themselves and care providers can afford to offer it?

Below is the Q & A from the Modesto Bee's "Next Steps" column:

"Nursing homes separate patients based upon source of payments

"Q: After 2 1/2 years of paying privately at the rate of nearly $4,000 per month, our father ran out of money, and we were forced to apply for Medicaid. After informing the facility, the first thing we were told by the administrator was that Dad would be moved out of his room into a Medicaid bed in another part of the nursing home.

"Because he is doing well where he is, we felt a move would be very detrimental to his condition. But the nursing home insisted this was necessary. What are our rights in this area?

"A: If a Medicaid-eligible resident occupies a bed that otherwise could be offered to a person who can pay privately, the nursing home will miss out on additional revenue because the costs that are funded by Medicaid are generally significantly less than the amount the facility could generate from a private-pay patient.

"Most nursing facilities separate residents based on level of care and source of pay by placing them on different floors or in different areas of the facility. Before a facility can transfer your father, the facility must give notice of the pending transfer and the reason for it. This notice must include information about the resident's right to appeal and other important information and generally must be given at least 30 days before the resident is transferred or discharged. In addition, the facility must provide sufficient preparation and orientation to allow for a safe and orderly transfer.

"TAKING THE NEXT STEP: If the bed your father has been using is certified for Medicaid, you may be able to stop the move; however, it is our view that you will be fighting a losing battle unless you have other significant grounds...."

Source: Jan Collins and Jan Warner, "Next Steps: Nursing Homes Separate Patients Based Upon Source of Payment," The Modesto Bee, November 15, 1999. On-line at:,1155,115091,00.html