Nursing Home Alerts

Most seniors who enter a nursing home are understandably anxious about their future, especially their ability to afford the high cost of continued care. Thus, assurances from nursing home administrators that the senior won't be displaced from the nursing home after they have exhausted their funds come as welcome news. The administrator explains that, once the cost of the home has depleted the senior's funds, the cost of their continuing care will be picked up by Medicaid. And when such time comes, the nursing home further informs the senior, they will submit the Medicaid application for the senior, free of charge.

What the senior and their family are not aware of is that the nursing home is only telling them part of the story. Yes, Medicaid will cover the cost of the senior's care after they have run out of funds, but these funds do not need to be expended only on such care. In fact, significant portions can be preserved for the benefit of the senior and his or her family through transfers and other planning techniques. Conveniently, the Nursing homes neglect to tell the family about other legitimate ways to become eligible for Medicaid without spending all of the senior's money on nursing home care.

Nursing homes are engaging in a form of Medicaid planning and counseling which inures to their benefit and not that of the senior. Such practice is far from appropriate, can be construed as an unauthorized practice of law, and illustrates the inherent conflict of interest present when a nursing home prepares and submits a Medicaid application on behalf of a resident. More often than not the advice received by the potential resident and their family is advice to benefit the home at the expense of the resident. Nursing homes often advocate "spending down" a resident's assets because the private pay rate for residents is higher than that of a Medicaid recipient. In other words, nursing homes make more money from private paying individuals than residents who are covered by Medicaid. Nursing home residents and applicants should be aware of these potentially costly traps which are presented as a form of free Medicaid planning.

Further, a recent decision by the Tennessee Court of Appeals held that a nursing home can also be held liable. In Smith vs Chattanooga Medical Investors, Inc., the Court of Appeals for the State of Tennessee found that the nursing home's inadequate preparation of a resident's Medicaid application, which resulted in a denial of Medicaid benefits, was a violation of a Tennessee State regulation.

The Court stated that a facility which has entered into a provider agreement with the state has a duty to assist a resident or applicant applying for Medicaid eligibility... The Court went on to state that such assistance included properly completing all the necessary paperwork and then providing relevant documentation to support the Medicaid application. This ruling suggests that a facility could, under Federal guidelines (42 C.F.R. section 483.10 (b)(7)(ii)), be held similarly responsible for failure to properly prepare and submit an application pursuant to Medicaid guidelines and procedures. The Court stated that since the State of Tennessee elected to participate under Title XIX and to receive federal funds, it was obligated to provide Medicaid services to qualified recipients in a manner consistent with federal law.

The Smith decision, while an important victory for nursing home residents and their families, underscores the importance of completing and submitting an accurate Medicaid application and should serve as a warning to nursing homes.

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