Policy Changes to Medicare Will Keep You In Therapy Longer

Asking for HelpMy first job as a social worker was in skilled nursing facilities, aka nursing homes.  While I loved many aspects of my job, I dreaded the weekly meeting that was held to determine which Medicare patients were making progress from our therapy services, and who was not.  Those who were deemed to be plateauing and no longer benefiting from physical, occupational, speech, respiratory, or nursing skilled therapy services were given a 72 hour written notice from our team that Medicare would no longer be covering their stay in our rehabilitation facility.

For many patients, this meant a scramble to find alternative care settings, or arranging services to be brought into their homes for the transition.  No one was happy to see me walk in the door with that letter.  It meant that Medicare had given up on them, at that particular juncture, with that particular injury.  Some would appeal our decision, but it was rare that the ruling would be in their favor.  The saddest cases were those who had some form of dementia along with their diagnosis that landed them with us (broken hip, stroke, etc…).  These folks simply could not follow the instructions given to them in order to make progress/improvement with their injury.  Typically they were discharged just a week or two after admission, and they were the lucky ones!  They had straight Medicare, not an HMO or they would have been shown the door earlier… But that’s for another post.

So, it is with great pleasure to have learned about a recent ruling that will have an immediate effect on this process.  A federal court settlement in Jimmo v. Sebelius has been approved.  New policy provisions will state that skilled nursing and therapy services necessary to maintain a person’s condition can be covered by Medicare.  This replaces the “improvement standard” that providers have subscribed to for years.  

According to Medicare Advocacy.org “CMS will undertake a comprehensive nationwide Educational Campaign to inform health care providers, Medicare contractors, and Medicare adjudicators  that they should not limit Medicare coverage only to beneficiaries who have the potential for improvement.  Instead, providers, contractors, and adjudicators must recognize “maintenance” coverage and make decisions based on whether a beneficiary needs skilled care that must be performed or supervised by a professional nurse or therapist.”   

To break it down, Medicare recipients can’t be kicked off skilled services (therapy services such as PT, OT, etc…) simply because they aren’t making significant improvement.  In the case of the Medicare recipient with dementia and a fractured hip, he/she will now receive therapy services despite the dementia diagnosis until the hip is treated to maintain his/her current condition and to prevent further decline.

“Lawyers for the beneficiaries say the settlement could help people with chronic conditions like Alzheimer’s, Parkinson’s, multiple sclerosis, strokes, spinal cord injuries and brain trauma. Often the prospects for improvement are slim, but there are ways to slow a patient’s deterioration and help the patient to live long enough to take advantage of new treatments as they are developed.” New York Times

While substantial costs are expected to be added to the Medicare program because of these changes, there may also be savings realized if recipients can receive therapy services in their homes.  The increased therapy should also keep these patients out of more costly settings like hospitals and nursing facilities and keep readmission rates low.

To learn more about the settlement, or if you would like to appeal a past decision made by a Medicare provider, the article from the Center for Medical Advocacy has many helpful links and resources.

Medicare Facts and Figures

What is Medicare?

Did you know… That Medicare was created in 1965 as a federal health insurance program for those age 65 and older (regardless of income or medical history)?  Today Medicare covers 46 million Americans, and will encompass 15% of our federal budget.  That’s $504 BILLION dollars people (says the CBO)!  The Kaiser Family Foundation publishes an annual medicare fact sheet called “Medicare At A Glance” which we will summarize in this post.  Click through (read more) to explore further…

The following facts and figures are credited to The Henry J. Kaiser Family Foundation’s Medicare Fact Sheet entitled “Medicare At A Glance

Demographics of Medicare Recipients:

  • Medicare covers a diverse population- 47% have incomes below 200% of the poverty line, and 44% of recipients have 3 or more chronic conditions.  83% of the Medicare insured are under age 65 and permanently disabled.

Medicare Structure:

  • Part A-  Part A covers inpatient hospital stays, skilled nursing facility stays, home health visits, and hospice care.
  • Part B-  Part B pays for physician visits, outpatient services, preventative services, and home health visits.
  • Part C-  Refers to the Medicare Advantage Program where beneficiaries can enroll in private insurance plans (like HMO’s) where they can receive additional benefits like hearing exams and other services.
  • Part D-  Is the voluntary government subsidized outpatient prescription drug benefit plan.  Part D can also cover individuals with very low incomes.

For addition information on Medicare, Medicaid and other “Health Matters” we invite you to click through to the Kaiser Family Foundation.

Will My Loved One Need An Income Cap Trust to Qualify for Medicaid Benefits?

Applying for Medicaid assistance (to help pay for the cost of long-term nursing home care) has always been a confusing process. It is pretty rare for a person to be able to apply for Medicaid and be eligible right away. Usually there is some advance planning required, and for many Medicaid applicants, that planning includes the creation of something called an Income Cap Trust.

What is an “Income Cap”?

Many states, including Oregon, have something called an “Income Cap.” The Income Cap rule states that if your monthly income is over a certain amount (currently $2,022 per month), you do not qualify for Medicaid long-term care assistance. This is true even if you have care costs that far exceed your income. For example, if your monthly Social Security and pension income is $2,200 per month, and your care costs are $6,000 per month, you do not qualify for Medicaid since your income is higher than the Income Cap.

This used to be a real problem for people, and many years ago, the only answer was to move to another state that did not have an Income Cap rule. Fortunately, the laws have changed, and a person whose income is over the Income Cap can now become qualified for Medicaid assistance by setting up a special type of trust known as an Income Cap Trust.

What is an “Income Cap Trust”?

An Income Cap Trust is designed to hold the Medicaid applicant’s pension and Social Security income. A bank account is set up in the name of the Income Cap Trust. Each month, all of the ill person’s income is deposited into the Income Cap Trust account. So long as the trustee of the Income Cap Trust (usually a spouse, partner or adult child) agrees to spend the income in a manner approved by Medicaid, the ill person will not be disqualified from receiving Medicaid assistance, even though his or her income is over the Income Cap.

How an Elder Law Attorney can help:

An experienced elder law attorney can be of tremendous help in this process. Most importantly, the elder law attorney prepares a plan for the spending of the ill person’s monthly income in accordance with the Medicaid rules, and submits the plan to Medicaid for approval. There are ways to design the “spending plan” in a way that provides the maximum benefit to the ill person and a healthy spouse. An experienced elder law attorney can make sure you don’t miss out on these opportunities. Remember that an Income Cap Trust takes some time to set up. You don’t want to get all of the way through a Medicaid application and be told “your application would be approved, but where is your Income Cap Trust?” Having your Income Cap Trust established at the right time can prevent long delays in Medicaid eligibility. At an average nursing home cost of $6,500 per month, a delay in your Medicaid application can prove very costly.

Do you know someone with a loved one who is in long-term care, or may need it in the future? Please pass this article along to them, so they will know about the need to plan in advance. You may save them from a stumble upon the Elder Care Path.

Geoff Bernhardt is an elder law attorney in Portland, Oregon. For more information on his firm and on Medicaid issues, please visit his website at www.elderlawpdx.com.