August 31

Congress Overwhelmingly Approves Bill Bolstering Medicare Patients’ Hospital Rights

The U.S. Senate unanimously approved legislation Monday night requiring hospitals across the nation to tell Medicare patients when they receive observation care, but have not been admitted to the hospital. It’s a distinction that’s easy to miss until patients are hit with big medical bills after a short stay. The vote follows overwhelming approval in the U. S. House of Representatives in March. The legislation is expected to be signed into law by President Barack Obama, said its House sponsor, Texas Democratic Rep. Lloyd Doggett. It’s called the NOTICE Act, short for “Notice of Observation Treatment and Implication for Care Eligibility.” The law would require hospitals to provide written notification to patients 24 hours after receiving observation care, explaining that they have not been admitted to the hospital, the reasons why, and the potential financial implications. Meanwhile, the number of claims hospitals submitted for observation care continues to skyrocket. According to the most recently available data from CMS, total claims increased 91 percent since 2006, to 1.9 million in 2013. Long observation stays, lasting 48 hours or more, rose by 450 percent to 170,219 during the same period, according to a Kaiser Health News analysis. In 2013, Medicare officials attempted to control the use of observation care by issuing the so-called “two-midnight rule,” which would require hospitals to admit patients who doctors expect to stay at least two midnights. But Congress delayed its enforcement after hospitals said the rule was confusing and arbitrary.

For the article from Kaiser Health News, click here.

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August 29

Normal Agency Principles Apply to Arbitration Agreement

When Evergreen Woods’ admissions coordinator visited May Robinson in her room to review and sign admission documents, May stated that she wanted her husband, also present, to sign the documents. The packet of documents contained an arbitration agreement, and the coordinator stated that entry into the agreement was not a condition of admission. The husband signed the documents. At issue in the appeal is the trial court’s order denying the nursing home’s motion to compel arbitration on the grounds that the husband was not authorized to sign the arbitration agreement.

The appeals court held that a party to an arbitration agreement is bound to the agreement when the signatory was authorized to act as the party’s agent. The lower court failed to distinguish prior case law setting aside arbitration agreements where the facility relied solely on the representations of the agent and no apparent agency relationship existed. In this case, May represented to the facility that her husband was authorized to sign documents on her behalf, and the nursing home accepted the representation. It is true that arbitration agreements result in a waiver of the fundamental right to a jury trial; nevertheless, general agency principles apply when considering whether the agreement is enforceable. The facility’s care coordinator identified the document in May’s presence and stated that its execution was not a condition of admission. When May’s husband executed the agreement, it was reasonable for the nursing home to rely on his authority and all information contained therein was imputed to May. The order was reversed with instructions to grant the motion to compel arbitration.

Evergreen Woods, LLC v. Estate of Robinson, 2015 WL 4486504 (Fla. App. July 24, 2015)

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August 27

Centers for Medicare and Medicaid Services Proposes New Regulation to Govern Nursing Home Arbitration Agreements

On July 16, 2015, Centers for Medicare and Medicaid Services (CMS) published in the Federal Register an exhaustive proposed rule on requirements for long-term care facilities. One of the proposed provisions concerns dispute resolution — specifically, binding arbitration agreements — at Sec. 483.70(n). The posted background on this topic provides, “We considered not proposing any requirements concerning binding arbitration agreements. We share stakeholders’ concern that some nursing homes may be requiring residents to sign agreements for binding arbitration as a requirement for admission into the facility. In addition, if the nursing home is not requiring the agreement as a condition of admission, some facilities may be requesting the resident to sign the agreement without fully explaining the rights the resident is waiving and the consequences of that waiver. We have proposed specific requirements if a nursing home chooses to request that a resident sign an agreement for binding arbitration. These requirements include, among other things, that the nursing home must explain the agreement to the resident in a form and manner that he or she understands, and that the resident acknowledge that they understand the agreement. We have also proposed specific requirements for the agreement, including that admission to the facility cannot be contingent upon the resident signing the agreement, the agreement must be entered into voluntarily, and the arbitration must be conducted by a neutral arbitrator in a venue convenient to both parties.

For the full text of the proposed regulations from the Federal Register, click here.

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August 24

Medicaid-Eligible Nursing Home Resident Is Stuck With Costs of Private-Pay Room

An Illinois appeals court rules that Medicaid does not cover a Medicaid-eligible nursing home resident who was in a private-pay room and that the nursing home was not required to move her to a Medicaid-certified bed earlier than it did, meaning that the resident could be discharged from the nursing home for nonpayment. Slepicka v. State (Ill. Ct. App., 4th Dist., No. 12MR743, July 7, 2015).

Mary Slepicka entered a nursing home as a Medicare patient. When her Medicare nursing home coverage ran out in April 2011, she became a private-pay resident.  At the time Ms. Slepicka signed the private-pay contract, money from the sale of her house was her main asset. The nursing home did not place Ms. Slepicka in a Medicaid-certified bed until March 2012. After visiting a financial planner, Ms. Slepicka put the assets from the sale of her house in an annuity and applied for Medicaid. The state granted her benefits retroactive to June 2011.

The nursing home claimed it could not bill Medicaid for the days Ms. Slepicka was not in a Medicaid-certified bed, so it billed Ms. Slepicka. Ms. Slepicka did not pay the nursing home, and the nursing home served Ms. Slepicka with a notice of discharge. Ms. Slepicka appealed the discharge, arguing that she could not be charged for the days Medicaid covered. The nursing home argued it did not put Ms. Slepicka in a Medicaid-certified bed right away because it believed she had assets that she needed to spend down. The trial court granted the nursing home summary judgment, and Ms. Slepicka appealed.

The Illinois Court of Appeals affirms, holding that Medicaid is not required to cover expenses incurred by private-pay residents even if the resident is eligible for Medicaid, and that the nursing home was not required to move Ms. Slepicka into a Medicaid-certified bed. According to the court, “just because a resident is financially eligible for Medicaid, it does not necessarily follow that Medicaid will cover every expense the resident incurs during the period of eligibility, regardless of where the resident incurs the expense.” In addition, the court holds that the nursing home did not know that Ms. Slepicka would qualify for Medicaid as soon as she did, so it was not required to move her into a Medicaid-certified bed any sooner.

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August 22

Probate Court May Appoint Public Guardian in Absence of Suitable Private Guardian

Colleen McIntosh suffered from schizophrenia and spent five years in various psychiatric hospitals. Concerned about her diagnosis and with the negative impact of constant medication changes Colleen was requesting, the Maine Department of Health and Human Services sought full guardianship authority to oversee Colleen’s medical care and financial management. Although Colleen’s mother had expressed interest in serving as Colleen’s guardian, the Department argued that her mother, serving as Representative Payee for Colleen’s Social Security benefits, had not provided any financial support to Colleen while hospitalized, and that she would also likely agree with Colleen’s request to change medications counter to physician recommendations. Following a full hearing the probate court determined Colleen to be an incapacitated person and appointed the Department as her guardian.

On appeal, the Maine Supreme Court held that there was clear and convincing evidence to support an order finding incapacity and warranting the appointment of the Department as public guardian. Colleen was appointed a court visitor, she had the opportunity to be present and testify at a hearing, all interested parties were served, and a hearing was conducted in a manner consistent with Colleen’s due process rights. The medical evidence verified Colleen’s incapacity, justifying the need for a guardianship. In determining the appropriate guardian, the court stated that a public guardian cannot be appointed when a suitable private guardian is willing to serve. In this case, however, there was sufficient evidence to show that Colleen’s mother would be unable to appropriately manage her daughter’s finances or address her medical needs outside of a hospital setting, and thus appointment of a public guardian was proper.

Guardianship of McIntosh, 2015 WL 4529747 (Me. July 1, 2015)

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