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LTC Bullet:

What a Mess

Wednesday May 26, 1999


LTC financing issues are often presented or discussed in isolation, despite the fact that so many issues are inextricably linked. This bullet explains the role private financing, especially long-term care insurance, can play in cleaning up the mess created by overreliance on inadequate public financing.

Edward Dale, Director of Elder Law and Legal Assistance to Medicare Patients for Connecticut Legal Services, recently wrote the following passage about the fiscal reality of publicly-financed nursing home care:

"Because Medicaid typically pays much lower rates than homes receive from their private pay clients, facilities may try to limit the size of their Medicaid-covered populations. At the same time, recent changes in Medicare reimbursement rates are rendering residents covered by that program less attractive to nursing homes as well."

Do Mr. Dale's comments come from an article on how to help folks avoid the problems of public financing by planning ahead with long-term care insurance or other means of private financing? Not exactly.

Instead, Mr. Dale's article is about "Using Federal Protections to Fight Nursing Home Transfers and Discharges." Written for his fellow elder law practitioners in the May 1999 issue of The Elder Law Report, it describes a litany of strategies to prevent or delay nursing homes from discharging residents whose bills are being paid by Medicare or Medicaid.

Subscribers may recall the recently enacted "Nursing Home Resident Protection Act (Pub. L. No. 106-4) which prohibits a nursing home from evicting or transferring Medicaid patients if and when the nursing home decides to withdraw from Medicaid. Mr. Dale's article does not address this situation, but speaks to other issues such as nursing homes allegedly using permissible reasons for transfer or discharge (e.g., the discharge is necessary for the resident's welfare and the resident's needs cannot be met in the facility) as pretext to get rid of publicly-financed patients or allegedly running roughshod over their due process rights. The article gives practitioners several strategies for challenging the transfer and discharge processes.

So, let's see if we've got it. Nursing homes don't want too many Medicare and Medicaid patients. But if you are one, a well-trained elder law attorney can delay or prevent your allegedly unfair or even illegal transfer/discharge so you can stay at the nursing home that didn't want you in the first place.

What a Mess.

Nursing homes fear too many Medicaid and Medicare patients for a very good reason. Medicaid often reimburses nursing homes less than the cost of providing care. Medicare's new reimbursement system is asphyxiating nursing homes financially. A preference for private-pay patients is rarely a matter of taste for LTC providers. It can be a matter of financial survival. (See "LTC Bullet: HCFA Tells States to Prepare for Looming Crisis")

Inappropriate or illegal discharge practices, to the extent they exist, are in large measure the result of an LTC financing system plagued with perverse incentives which leave nursing homes desperate for private dollars--dollars that long-term care insurance could provide. This financial squeeze may lead some nursing homes to be overly aggressive with transfer and discharge practices.

Unfortunately, unwanted transfers and discharges, proper or improper, can have terrible consequences. According to Mr. Dale: "For a nursing home resident, few events are as traumatic as an involuntary transfer or discharge. At best such occurrences are stressful and disruptive. At worst, 'transfer trauma' will leave a frail elderly person frightened, disoriented and isolated from friends and family, causing irreparable psychological and physical harm."

Do your family, friends, co-workers and clients a favor. Encourage them to plan ahead with long-term care insurance so they can avoid this mess.

*source: Edward Dale, "Using Federal Protections to Fight Nursing Home Transfers and Discharges," The Elder Law Report, Vol. X, No. 10, May 1999, pps. 1-5.