Medicare has traditionally covered costs of a limited period of nursing home care. A patient who was hospitalized for three days or more and who then moved into a nursing home at the recommendation of the treating physician was eligible for Medicare coverage. This coverage provided for payment in full for up to the first 20 days, plus a portion of the daily rate for up to an additional 80 days.
Although limited, Medicare coverage has been a tremendous help, especially to patients who were admitted to nursing homes for rehabilitation. A patient who suffered a fall with broken bones and was able to regain strength and mobility through therapy could then return home. With Medicare covering much of the cost, the patient did not have to deplete private funds and could afford to return to independent living.
Two recent changes in Medicare policies have had a major effect on the realities of paying for care. One change is a serious detriment to patients and one is a progressive improvement.
The negative change has resulted in “recharacterization” of hospital stays. In the recent past, someone spending three days in the hospital would then receive Medicare coverage as stated above. Now, hospitals are being pressured to characterize patients as “under observation” rather than “admitted.” An observation status does not qualify the patient for Medicare for subsequent nursing home care, while an admitted status does. The patient may firmly believe she has been admitted and there are no obvious clues in care levels to indicate observation versus admission. In fact, the hospital may “recharacterize” or change an admission into an observation even after discharge. The elderly patient and her family are later shocked to be told that Medicare has denied coverage for the nursing home rehabilitation stay. The average cost of one day in a skilled nursing home in Pennsylvania is $288.21 in 2014, and so the first 20 days will cost the senior citizen $5,764.20, a sum which Medicare would have paid if there had been an admission.
The second change is much more positive and extends Medicare coverage in some progressive illnesses. Medicare has traditionally covered “skilled” care for the above number of days. Skilled care included specific types of therapy, such as physical, occupational, or speech therapy. If a patient reached a plateau such that therapists ruled that there was no further potential likelihood of improvement, or if the patient refused to accept therapy, the label on the care was downgraded to custodial and was no longer “skilled.” At that point, Medicare coverage would terminate. In 2013, there was a challenge to the required improvement standard. The family of a patient who was in a nursing home for care needs caused by a progressive incurable disease challenged the requirement of improvement. The case was Jimmo v. Sebelius, filed in Vermont. The case was ended by a settlement agreement in which the federal government agreed to eliminate the requirement of improvement. The Centers for Medicare and Medicaid Services (CMS) acknowledged that patients suffering from Alzheimer’s, Parkinson’s, and other irreversible progressive diseases have need of nursing home care to maintain them and/or slow the rate of decline. Medicare will now cover the above daily costs if the need for maintenance or reduced rate of decline are shown. However, this is a limited benefit both in covered time, and in the fact that many progressively ill patients may go directly from independent or assisted living to the nursing home; with no hospital admission, no Medicare coverage will apply.
The change to the maintenance standard gives more coverage to a limited and very needy population but only in specific circumstances. The increasing pressure to observe rather than to admit patients will sharply reduce covered nursing home stays. Fear of spending limited assets may drive seniors to refuse rehabilitation, which will cause harm in failure to regain strength or health. Even in the covered case of an Alzheimer’s patient, the coverage will be 20 days plus a portion of the daily cost for the next 80 days, after which the patient’s assets will be spent.
Immediately after being diagnosed with a long term progressive illness, seek advice of an elder law attorney who can guide the patient and family through steps to protect assets. If a loved one is admitted to long term care, the family should immediately ascertain if Medicare coverage is in place. If not, a Medicaid application should be considered and an elder law attorney should be contacted as soon as possible. Waiting will cost the patient to spend down assets below required levels. Our Firm is here to help and would welcome your call.