Module 4: Public Financing of LongTerm Care Services

1
Module 4 Public Financing of Long-Term Care
Services
2
Medicares Coverage of Long-Term Care (LTC)

• Medicares nursing home benefit is limited to
  post-acute care
• Medicares home health benefit is limited to the
  need for skilled nursing care on an intermittent
  basis, or for specific therapies (e.g., physical
  or speech therapy)

3
Medicares Skilled Nursing Facility (SNF) Benefit

• Medicares SNF benefit provides nursing home
  coverage in very limited circumstances
• Physician has decided that beneficiary needs
  daily skilled care
• Only after a hospital stay of at least three days
  for same post-acute condition
• Must be provided in a Medicare-certified nursing
  facility

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Medicares SNF Benefit

• Medicares SNF benefit pays a portion of skilled
  nursing home care for up to 100 days
• 0 to 20 days - Medicare pays 100 percent
• 21 to 100 days - Beneficiary pays a daily
  co-payment and Medicare pays the balance
• 100 days no Medicare coverage
• Care continuously evaluated as medically
  necessary
• Average Medicare-covered stay is about 21 days.

5
Medicares Home Health Care Benefit

• Beneficiary must require skilled care on a
  part-time basis
• Home health aide services sometimes covered
  (part-time) when nursing care is also provided
• Other covered services include physical, speech
  and occupational therapy services, medical social
  services, certain medical supplies, and durable
  medical equipment (DME)

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Medicares Home Health Care Benefit

• Medicares Home Health benefit does not cover
• 24-hour care
• Meals delivered to the home
• Homemaker services (e.g., shopping, cleaning, and
  laundry)
• Non-skilled personal care services

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Medicares Home Health Benefit

• Medicare pays the full cost of covered home
  health visits if
• Physician certifies that home care is medically
  necessary
• Beneficiary is homebound (unable to move
  outside the home without assistance)
• Care is provided by a Medicare-certified home
  health agency

8
Medicare Supplemental Insurance

• Only pays Medicare co-pays and deductibles
• Does not cover additional nursing home days or
  home health visits not covered by Medicare
• Medicare Advantage and other Medicare plans
  generally waive (or reduce) Medicare deductible
  and co-payment requirements for their members

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Medicaids Coverage of LTC

• Joint Federal/State program
• States have considerable discretion regarding
  eligibility requirements and benefits, within
  broad federal guidelines
• Designed to provide LTC coverage for persons who
  lack the financial resources to pay for their own
  care
• Medicaid is the primary public financing source
  for LTC

10
Medicaid Eligibility Criteria

• Medicaid eligibility is complicated, and each
  state is different
• Financial eligibility criteria apply to both
  income and resources
• For non-married persons, applicants are generally
  limited to no more than 2,000 in countable
  resources
• Medicaid spousal impoverishment rules have
  greatly enhanced financial protections for
  community spouses

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Medicaid Treatment of the Home

• Primary residence is generally excluded as a
  countable resource, as long as the Medicaid
  beneficiary intends to return home
• States may in some circumstances recover costs
  from the beneficiarys estate after death, if
  this does not cause undue hardship
• Surviving spouses have a right to stay in the
  home for as long as they live, as do other family
  caregivers

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Texas Medicaid Estate Recovery

• In Texas, Medicaid estate recovery will apply to
  applications for long-term care Medicaid filed on
  or after March 1, 2005.
• Those who applied before March 1, 2005 will be
  grandfathered out (assuming they pursued their
  application through to approval).
• No liens are allowed under the Texas Medicaid
  estate recovery law.

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Texas Medicaid Estate Recovery

• Texas Medicaid estate recovery program is one of
  the most limited in the United States.
• It applies to the most limited group of services,
  has a wider array of excluding survivors than
  usual, has broad provisions for undue hardship,
  and affects only the probate estate.
• Recoveries are to fund long-term care.

14
Texas Medicaid Estate Recovery

• Federal law requires Medicaid estate recovery at
  a minimum to cover Medicaid nursing facility
  services, home and community-based services, and
  related Medicaid costs of hospital and
  prescription drug services, provided to persons
  55 years of age or older.
• The federally-required minimum scope of covered
  services is the Texas maximum.

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Texas Medicaid Estate Recovery

• Federal law prohibits recovery while there is a
  surviving spouse, surviving child under the age
  of 21, or surviving adult child who is blind or
  disabled as defined under SSI.
• CMS permitted Texas to add a further excluding
  survivor An unmarried adult child residing
  continuously in the recipients homestead for at
  least one year before the recipients death.

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Texas Medicaid Estate Recovery

• If there is no excluding survivor, Medicaid
  estate recovery can still be avoided if it would
  cause undue hardship.
• CMS has allowed Texas to have a very broad
  definition of undue hardship.
• Even if undue hardship is not present, recovery
  can be waived or compromised.

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Texas Medicaid Estate Recovery

• Undue hardship can be found if the homestead is
  worth not more than 100,000 fair market value
  and if the heirs have income of less than 300 of
  the Federal Poverty Income Limit.
• This is more generous than the original proposal
  of 50,000. CMS has agreed to 100,000.

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Texas Medicaid Estate Recovery

• If the estate property has been a family
  business, farm, or ranch for at least 12 months
  before the death of the recipient and is the
  primary income producing asset of the heirs and
  legatees, and produces 50 of their livelihood,
  and recovery would result in heirs and legatees
  losing their primary source of income, recovery
  can be avoided.

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Texas Medicaid Estate Recovery

• Recovery can also be avoided if heirs or legatees
  would become eligible for public and/or medical
  assistance if recovery were to occur.
• Recovery can also be avoided if allowing one or
  more survivors to receive the estate will enable
  him or her to stop receiving public or medical
  assistance.

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Texas Medicaid Estate Recovery

• Recovery can also be avoided if the Medicaid
  recipient received medical assistance as the
  result of a crime.
• Additionally, for other compelling circumstances,
  recovery can be avoided.
• Undue hardship must be requested within 60 days
  of Medicaids Notice of Intent to File a Claim.

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Texas Medicaid Estate Recovery

• Even if one of the grounds for undue hardship
  does not exist, and if there is an heir or
  legatee who is not an excluding survivor, the
  Texas Medicaid program can settle a claim for
  less than its full extent, or waive the claim
  entirely, for good cause shown.
• Also, if recovery is not cost-effective, it can
  be avoided.

22
Texas Medicaid Estate Recovery

• Recovery will be deemed not cost-effective
• If the value of the estate is 10,000 or less, or
• If the recoverable amount of Medicaid costs is
  3000 or less.

23
Texas Medicaid Estate Recovery

• The Texas Medicaid program will issue Notice of
  Intent to File a Claim once a long-term care
  Medicaid recipient (55 years of age or older) has
  died, if there are no excluding survivors. No
  claim will be filed if the recipient is
  grandfathered out.
• As noted above, an undue hardship exemption must
  be requested within 60 days of the Notice of
  Intent to File a Claim.

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Texas Medicaid Estate Recovery

• If the Texas Medicaid program decides to file a
  claim (either in whole or in part), the claim
  will be filed as a Class 7 claim in probate.
• Only property in the probate estate will be
  affected.
• As noted above, recoveries will fund long-term
  care.

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Texas Medicaid Estate Recovery

• When Medicaid long-term care is applied for,
  applicants will be informed of the estate
  recovery program.
• The information will also cover transfer of
  assets and the penalty periods for uncompensated
  transfers.

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Other Medicaid Rules

• Transfer of Assets
• Applies penalties to person who transfers assets
  with the sole purpose of becoming eligible for
  Medicaid

27
Medicaid Nursing Home Coverage

• Functional criteria for nursing home coverage are
  set by each state
• Many persons enter nursing homes as private pay
  and spend down resources to Medicaid
• Once on Medicaid, beneficiaries must contribute
  all income above the state personal needs
  allowance to the cost of care

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Medicaid Nursing Home Coverage (continued)

• At any one time, about 60 of all nursing home
  residents are receiving Medicaid
• States spent 46.5 billion for nursing home care
  in FY 2002

Sources  Medical Expenditure Panel Survey (MEPS)
and Medstat Analyses of CMS 64 Data.
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Medicaid Coverage of Home Care

• Medicaid programs cover non-skilled home care
  either
• Under the regular state Medicaid plan, or
• Under the Medicaid Home and Community-Based Care
  Waiver (HCBS) Program
• Regular state plan services (e.g., personal care)
  must be provided equally to all Medicaid
  beneficiaries
• HCBS waiver services can be targeted to
  designated populations, geographic areas and/or
  LTC settings

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Medicaid Coverage of Home Care (continued)

• HCBS waivers can only be provided to persons who
  meet functional eligibility criteria for nursing
  home care
• HCBS waivers cover a wide range of
  community-based services that are not covered
  under regular Medicaid
• States are expanding HCBS waiver programs as an
  alternative to nursing home care

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Other Public LTC Financing Options

• Older Americans Act Programs
• Administered by the AOA/DHHS, 56 State Units on
  Aging, 655 Area Agencies on Aging, 244 Tribal
  Organizations and 29,000 Community Service
  Providers
• Provides a broad range of community-based
  services, including home delivered and congregate
  meals to persons over the age of 60
• Not means-tested

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Other Public LTC Programs

• Veterans Administration (VA)
• Provides LTC coverage for service-related
  disabilities or for certain eligible veterans
  and/or their spouses
• VA owns and operates its own network of nursing
  homes

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Some New LTC Financing Options

• Programs of All-Inclusive Care for the Elderly
  (PACE) programs integrate Medicare and Medicaid
  in one managed care plan
• Some Medicaid programs cover LTC services under a
  managed care model
• Arizona Long-Term Care System (ALTCS)
• Minnesota Senior Health Options (MSHO)
• Wisconsin Family Care
• Texas StarPlus
• Cash and Counseling Demonstration provides
  voucher to Medicaid beneficiaries who purchase
  their own LTC services