Long-Term Care Residents Need Protection from Oppressive Medicaid Policies

Last month, the Department of Health and Human Services Office of Inspector General (OIG) issued a report, “Adverse Events in Skilled Nursing Facilities: National Incidence Among Medicare Beneficiaries,” February 2014. The OIG investigation revealed harm, up to and including death, to more than one third of skilled and long-term nursing home patients as a result of neglectful care. The injuries suffered included excessive bleeding caused by improper medication, infections and pressure ulcers, blood clots, kidney failure and exacerbation of preexisting conditions. Most of these events of harm resulted from preventable instances of substandard, delayed or failed necessary care, all of which can be attributed to inadequate patient monitoring.

Frequent visits by family members or paid care monitors are vital in ensuring that the patient will receive the best care available in a given facility. Aides who know that a given patient’s care is monitored several times a week by an outside visitor will be more attentive to the patient’s needs than to the needs of a patient who lacks outside monitoring. However, the Medicaid agencies of Michigan and some other states prohibit payment by a nursing home patient to anyone for visiting, reviewing treatment plans, bringing food, reading or providing other entertainment, or taking the patient out. According to Michigan Department of Human Services policy, any such payment is considered a “divestment” and results in a period of ineligibility for payment of the nursing home bill by Medicaid.

Divestment equals gift. If the nursing home resident is paying for care and the money is running out, giving away money will cause a period when the resident will have neither funds to pay for care nor Medicaid eligibility. At that point, the nursing facility will threaten involuntary discharge, sue the patient’s family or representative, or try to dump the resident in a hospital.

This policy is grossly unfair and contrary to federal law. A transfer is not divestment if there is a “satisfactory showing” that the transfer is under a claim of right, that individual intended to dispose of the assets either at fair market value, or for other valuable consideration, or that the assets were transferred exclusively for a purpose other than to qualify for medical assistance. 42 U.S.C.A. § 1396p(c)(2)(C)(i) & (ii). Under federal law, a payment for services in an arms-length transaction is for fair market value. It is not divestment.

If Betty wants someone to sit with her, read to her, or supervise her care and pays a reasonable amount, whether it is her nephew, a neighbor, a professional geriatric care manager, or a granny nanny, she should have the right to use her own funds for this purpose. Individuals have the right to spend their money – even if they have foolishly allowed their age to creep past 65. Michigan Department of Human Services Bridges Eligibility Manual Item 405 and similar policies in other states are unwarranted restrictions on the right to spend one’s money for one’s comfort and convenience, not to mention health and security. Unfortunately, it takes money to support lawsuits to attack this pernicious abuse of government power.

If you want to help enforce the rights of senior citizens in general and long-term care residents in particular, consider donating to The National Consumer Voice for Quality Long-Term Care or the National Academy of Elder Law Attorneys Foundation.


John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
©2014 John B. Payne, Attorney

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