Nursing Home Bills: Lawmaking Process Explained

Nursing home costs are a significant concern for many, and understanding the billing process is essential to avoid unpleasant surprises. While federal law prohibits nursing homes from seeking financial guarantees from third parties, there are exceptions and workarounds that can make family members liable for a resident's bills. This is where filial responsibility laws come into play, making children responsible for their parents' long-term care if they are unable to pay. However, these laws are rarely enforced due to federal assistance through Medicaid, which specifically prohibits pursuing adult children for payments. Nevertheless, it is crucial to be aware of one's rights and obligations, as nursing homes may employ aggressive collection tactics or illegal strategies to intimidate family members into paying.

Nursing home billing statements

For instance, if a resident enters the healthcare centre in the middle of a billing cycle, their first statement should show a prorated amount for that month (calculated by multiplying the number of days spent in the facility by the rate for room and board). Nursing care bills may also include a "pre-bill" for the upcoming month, and some states levy a tax on the total amount. After deducting payments from Medicare, Medicaid, health insurance, and long-term care insurance, the resident is responsible for the remaining balance.

It's important to understand the terms of the contract and ask questions before signing. This includes knowing what services are included in the daily rate and which services are considered ancillary. Additionally, when a loved one is admitted to a nursing facility, it is essential to inform the facility if they have a long-term care insurance policy. While most policies make payments directly to the policyholder, some carriers will pay the nursing home directly, which can save time and hassle.

In certain situations, adult children may be held responsible for their parents' nursing home bills due to filial responsibility laws. However, these laws are rarely enforced, and federal law prohibits Medicaid from seeking payment from adult children. It is recommended to consult an elder care attorney for specific advice regarding financial liability for nursing home care.

Medicare & health insurance coverage

Medicare Part A (Hospital Insurance) may cover care in a certified skilled nursing facility (SNF) if it is deemed medically necessary for the patient to receive skilled nursing care (e.g. changing sterile dressings). However, it is important to note that Medicare does not cover custodial care if it is the only type of care required. Custodial care, which includes assistance with activities of daily living such as bathing, dressing, using the bathroom, and eating, constitutes most nursing home care.

If you are enrolled in a Medicare Advantage Plan (Part C) or another Medicare health plan, it is advisable to check with your plan to determine if it covers nursing home care. Typically, these plans do not contribute to nursing home costs unless the facility has a contract with the plan. Therefore, it is recommended to verify nursing home coverage with your plan and assess the facility's quality ratings before making any arrangements.

For those with both Medicare and full Medicaid coverage, Medicare will automatically enrol you in a Medicare Advantage Plan with drug coverage or a Medicare Drug Plan if you do not choose one yourself. If you reside in a nursing home and have full Medicaid coverage, you won't have to pay for covered drugs after Medicaid has paid for your stay for a full calendar month.

Medicaid, a joint federal and state program, assists in covering healthcare costs for individuals with limited income and, in certain cases, resources, provided they meet other requirements. It is worth noting that eligibility criteria for Medicaid programs vary across states, and most nursing homes accept Medicaid payments. Even if you have assets to pay out of pocket or with long-term care insurance, you may eventually deplete your resources while in a nursing home, so it's prudent to ascertain if your chosen nursing home accepts Medicaid.

Long-term care insurance is another option to consider. This type of insurance policy can help cover various long-term care services, including skilled and non-skilled care. However, it's important to carefully review the coverage offered by different policies, as some may only cover nursing home care, while others may include a broader range of services such as adult day care, assisted living, medical equipment, and informal home care.

It's also worth noting that the 1987 Nursing Home Reform Law guarantees residents' rights, emphasising individual dignity, choice, and self-determination. Nursing homes participating in Medicare and Medicaid are required to meet these federal residents' rights standards.

Long-term care insurance policies

Long-term care insurance is a policy designed to cover the costs of long-term care services for the policyholder. It helps pay for skilled nursing care and assistance with personal care tasks such as bathing, dressing, and eating, which are not typically covered by traditional health insurance plans. Most long-term care policies provide coverage for nursing home care, and individuals can purchase these policies directly from an insurance company or through an agent.

When considering long-term care insurance, it is important to review the terms and exclusions of each policy carefully and ensure that the insurer is licensed in your state. The amount of coverage, age, health, gender, and marital status are among the factors that influence the cost of a long-term care policy. It is also worth noting that long-term care insurance can have tax advantages, as federal and some state tax codes allow for the deduction of a portion or all of the premiums as medical expenses.

To qualify for long-term care insurance, individuals must typically be at least 18 years old and not have a serious medical condition, such as Parkinson's or Alzheimer's disease. The ideal time to purchase a policy is between the ages of 50 and 65, as most claims are filed after the age of 70. Additionally, it is important to be aware that long-term care insurance rates can increase over time, and insurers may need to seek permission from state regulators to implement these changes.

In summary, long-term care insurance can provide valuable financial protection for individuals who may require extra support to meet their daily needs in the future. It is a useful tool for covering the costs of long-term care services, including those provided in nursing homes.

What if I run out of money?

If you run out of money while in a nursing home, the facility can discharge you for non-payment. However, you can avoid this outcome by applying for financial support. Low-income seniors who require nursing home care are likely to qualify for Medicaid, which can cover the costs.

Medicaid is a federal and state benefit that can pay for a nursing home when money runs out. It is the largest payer for long-term care for seniors and will usually pay for the full cost of nursing home care. However, to qualify, your income and assets must fall below a certain threshold. This includes cash, savings, investments, or other financial resources.

The application process for Medicaid is complex and can take three months or more to complete, so it is recommended to start the process as early as possible. Consulting a Certified Medicaid Planner or a Medicaid Crisis Planning Attorney can be beneficial to ensure a seamless transition and to avoid any issues with your application. They can also advise on the specific eligibility criteria and requirements in your state.

Additionally, it is important to note that nursing homes must follow certain guidelines when discharging a resident for non-payment. They are generally required to give a written notice 30 days prior to the discharge and provide a discharge plan that includes information on the resident's health, treatments, medications, and their next location.

Understand the terms

Understanding the terms of a nursing home contract is essential to protecting your rights and ensuring your loved one receives the care they need. Here are some key terms and concepts to be aware of:

• Billing statements and frequency: Most nursing homes bill monthly for the resident's care, but it's important to review the contract for the specific billing frequency. The bill will include basic charges and may also include ancillary service costs.
• Factors affecting the billing rate: The rate is determined by factors such as the complexity of care, the level of services provided, the type of room (private or semi-private), and any additional amenities.
• Prorated billing and "pre-bills": The first billing statement should show a prorated amount for the month of admission, calculated based on the number of days spent in the facility. Some nursing homes may also include a "pre-bill" for the upcoming month.
• Taxes and deductions: Some states levy taxes on the full bill amount. After deducting payments from Medicare, Medicaid, health insurance, and/or long-term care insurance, the resident is responsible for the remaining balance.
• Medicare coverage: If the resident meets Medicare Part A criteria for "skilled medical care," Medicare will typically pay in full for the first 20 days, with a variable daily coinsurance amount for days 21-100. Beyond 100 days, the resident becomes fully financially responsible.
• Secondary health insurance or Medigap plans: These policies may cover some or all of the expenses during days 21-100. Review the specific terms of the policy to determine coverage for skilled nursing care and nursing home billing.
• Long-term care insurance policies (LTC): Notify the facility if the resident has an LTC policy. Some carriers will pay the nursing home directly, while others make payments to the policyholder. Any expenses not covered by the policy become the resident's responsibility.
• Running out of money: If the resident's funds are depleted, contact the county's Department of Social Services for information on applying for Medicaid. This process can be complex and time-consuming, so it's important to notify the facility's social work department or billing office.
• Responsible party and financial liability: Be cautious of terms like "responsible party" in admission agreements. Review the contract carefully to ensure you are only signing as a representative and are not agreeing to be financially liable. Federal law prohibits nursing homes from requiring third parties to be financially responsible.
• Resident's rights: The 1987 Nursing Home Reform Law guarantees residents' rights, emphasizing individual dignity and self-determination. Nursing homes participating in Medicare and Medicaid must meet federal residents' rights requirements. These rights include being fully informed of available services, charges, facility rules, and the right to present grievances without fear of reprisal.
• Filial responsibility laws: Some states have filial responsibility laws that make adult children responsible for their parents' medical care if they cannot pay. However, these laws are rarely enforced as most individuals who need help qualify for Medicaid, and federal law prohibits Medicaid from pursuing adult children for payment.

Understanding these terms and conditions will help you navigate the financial and legal aspects of your loved one's care in a nursing home. It is always a good idea to seek legal advice if you have any concerns or questions about your specific situation.

Frequently asked questions