How to Pay for Nursing Home care

Once a nursing home has been selected, the focus shifts to paying for care. Most people eventually rely on Medicaid to cover these expenses.

The nursing home admitting office or other fiscal/financial department should be available to discuss payment options with you. Be aware that nursing facilities are prohibited from requiring a waiver of Medicare or Medicaid coverage. It is also unlawful for a nursing facility to require a third party such as yourself to guarantee payment as a condition of admission.

Within broad national guidelines provided by the federal government, each state establishes its own Medicaid eligibility standards, determines the type, amount, duration and scope of services, sets the rate of payment for services and administers its own program.
 

There are a variety of ways to pay for nursing home care:

Medicare

The traditional Medicare "fee-for-service program" is generally available to qualified individuals 65 years of age or older and those under age 65 who have been disabled for at least 24 months.

Medicare is divided into two parts, Part A Hospital Insurance Benefits and Part B Supplemental Medical Insurance:

Part A covers hospitalization, skilled nursing care in a skilled nursing facility (SNF/NF), home health care and hospice care. There is automatic enrollment for Part A.

There are deductible and co-payments for hospital and nursing home care.

To qualify for skilled nursing care in a SNF/NF, the following five requirements must be met:

1. The resident requires daily skilled nursing or rehabilitation services that can be provided only in a SNF/NF.

2. The resident was hospitalized for at least three consecutive days, not counting the day of discharge, before entering the SNF/NF.

3. The resident was admitted to the facility within 30 days after leaving the hospital.

4. The resident is admitted to the facility to receive treatment for the same condition or conditions for which he or she was treated in the hospital.

5. A medical professional certifies that the resident requires skilled nursing care on a "daily basis." A Resident requires skilled nursing or skilled rehabilitation services on a daily basis when services are medically necessary and provided seven days a week. There is an exception if they are only provided by the facility for five days per week due to staffing levels at the facility. Additionally, there may be a one- to two-day break if the resident's needs require suspension of the services.

Where these five criteria are met, Medicare may provide coverage of up to 100 days of care in a SNF/NF. The first 20 days of covered services are fully paid for; and the next 80 days (days 21 through 100) of the covered services are paid for by Medicare subject to a daily coinsurance amount for which the resident is responsible. The Medicare Part A co-insurance amount for 2003 is currently $105 per day.

With limited exceptions, a resident who requires more than 100 days of SNF/NF care in a benefit period will be responsible for private payment of all charges beginning with the 101st day.

A new benefit period may begin when the resident has either not been in a facility or has not been receiving a covered level of care in a SNF/NF for at least 60 days, returns to the hospital for another three-day stay, and then re-enters the SNF/NF.

Part B Supplemental Medical Insurance covers physician services, ambulance, durable medical equipment, screening for pap smear, screening mammography, X-rays, out-patient care and prescriptions (very limited). Part B is voluntary and requires a monthly premium payment of $58.

Medicare payment for the above services is based on Medicare's "reasonable charge" standard rather than the actual bill.

The resident in a SNF/NF is responsible for private payment of therapy charges and any other ancillary charges above the Medicare Part B coverage limitation.

The Facility can bill and receive payment if the resident fills out a Medicare assignment of benefits form. If the resident completes an assignment of benefits form, a health care provider cannot charge the resident above the Medicare approved charge.

Contact the Social Security Administration to determine the Resident's Part B coverage.

Managed Care Medicare HMO

This insurance is supposed to provide the same benefits as the Medicare fee-for-service program, but many people find out that this is not the case. Enrollees are limited as to which facilities are providers in their HMO, as well as the types of coverage. The HMO will require reports on the residents progress on a regular basis to determine the residents need for continued coverage.

Medicaid

This is a joint federal and state program designed to cover the cost of certain medical expenses incurred by individuals with limited resources and to pay for the cost of their nursing home stay. Individuals who are age 65 or older), certified blind or certified disabled are eligible for this program. Please be aware that there are income and resource limitations.

Individuals are eligible for Medicaid:

• If they receive Supplemental Security Income

• If they are determined to be "medically needy"

• If their income is below a state-designated cap

When a nursing home resident is married and his/her spouse resides in the community, certain action may be taken to accelerate the Medicaid eligibility of the nursing home resident by protecting assets for the spouse at home at the time of the initial eligibility determination of the nursing home resident.

In a spousal situation before an institutionalized person's monthly income is used to pay for the cost of institutional care, a minimum monthly maintenance needs allowance must be established to bring the income of the community spouse up to a moderate level. This means there may be instances where the community spouse is permitted to keep his/her income as well as the income of the institutionalized spouse.

Check your state's eligibility requirements.

Private Pay

Individuals who are not eligible for Medicare or Medicaid or those who have exhausted their benefits, and who have no insurance or other sources of payment, will be responsible for paying the costs of nursing home care. Daily nursing home rates should be posted in a common area of the facility.

Managed Care

Residents who are members of a managed care benefit plan that is under a contract with a facility to provide specified services to plan members will receive those services with full coverage so long as the resident meets the eligibility requirements of the managed care benefit plan. The resident is then financially responsible only for those services that are not included in the list of covered services, co-payments and deductibles. Residents who have not received a list of covered services and eligibility requirements from their managed care benefit plan are advised to contact their social worker and/or managed care benefit plan.

Medigap Insurance

Medigap is supplemental health insurance which will provide payment for Medicare deductibles and co-payments. There are numerous insurance companies which sell these policies. The plans range from Plan A through Plan J and vary in terms of coverage.

See New York's Medigap Insurance page ( www.hiicap.state.ny.us/mgap ) for more information on Medigap, and the federal government's Medicare Personal Plan Finder ( www.medicare.gov/MPPF/Home.asp ) to search for available plans.

Private Insurance

Residents who are covered by a private insurance plan that does not have a contract with the facility must exhaust all available insurance coverage before seeking Medicare or Medicaid coverage. If the insurance proceeds under the private plan are insufficient to cover the cost of care, the resident will be responsible for any difference. The coverage requirements for nursing home care vary depending on the terms of the insurance policy. Questions regarding private insurance coverage should be directed to the social work staff and/or the resident's insurance carrier or agent.

Long Term Care Insurance

These policies are purchased to cover the cost of nursing home care and/or home care services. There are many different features that require careful review before purchasing.

Veterans Administration (VA) or Other Government Insurance Exclusive of Medicaid/Medicare

The Department of Veterans Affairs contracts with community facilities to care for VA patients. A rate is usually established annually and provides for a small percentage above the facility's Medicaid rate. The VA rate, however, is generally all inclusive, and the facility may not be able to bill another source, such as Medicare B, for physician services, lab, x-ray, therapies, etc. As with managed care contracts, the facility must be sure that the agreed-upon rate covers the cost. Additionally, most contracts cover the veteran for six months for service-related conditions and three months for non-service related issues. The facility must be sure to make provisions for another payer source when the benefits for the veteran end.

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