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.

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)

August 20

Medicaid Applicant with Care Agreement Assessed Transfer Penalty Because Rate Was Too High

A New Jersey appeals court rules that the state properly disregarded a Medicaid applicant’s care agreement and assessed a transfer penalty because the rate charged under the agreement was too high and the applicant did not provide enough details about the services provided in order to calculate their value. E.A. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A-2669-13T3, July 20, 2015).

E.A. lived with her daughter, B.C., from 2004 until 2012. In 2006, they entered into a care agreement in which E.A. agreed to pay B.C. a monthly fee for care. The fee was based on the amount charged by a private home health care company. B.C. occasionally made larger withdrawals than the contract called for and did not keep records of the services provided. In 2012, E.A. entered a nursing home and applied for Medicaid. The state ignored the care agreement and found that B.C. had transferred a total of $244,510 to B.C. and imposed a 936-day penalty period.

E.A. appealed, arguing that the state should not have disregarded the care agreement and that the state did not calculate the worth of B.C.’s services. After a hearing, the administrative law judge ruled the penalty period was appropriate, and E.A. appealed to court.

The New Jersey Superior Court, Appellate Division, affirms the state’s decision, holding that the state properly disregarded the care agreement. According to the court, B.C. and E.A. did not comply with the agreement when B.C. made additional withdrawals, and B.C. was not entitled to the rate charged by the private home health agency because she did not provide the same full-time services as the agency. In addition, the court rules that E.A. did not provide enough details of the types of services actually provided under the care agreement for the state to calculate the value of her services.

August 17

No Medicaid Undue Hardship Exemption for Transfer to Disabled Veteran

A federal district court rules that nothing in federal law requires the state to disregard a transfer of a life estate by a Medicaid applicant to a disabled veteran, so the applicant’s federal claims are dismissed. Pike ex rel. Estate of Pike v. Sebelius (D. R.I., No. CA 13-392 S, July 16, 2015).

F. Norris Pike’s mother transferred two life estates to her granddaughter, a disabled veteran. Later Mr. Pile’s mother was admitted to a Rhode Island nursing home and applied for Medicaid benefits. The state assessed a penalty period because of the transfers and denied Mr. Pike’s appeal.

Mr. Pike filed suit in federal court, claiming that the state should have applied the Medicaid undue hardship exemption to the transfers because the granddaughter is a disabled veteran. The state filed a motion to dismiss.

The U.S. District Court, District of Rhode Island, dismisses the federal claims. According to the court, there is nothing in federal law that requires a hardship exemption for a transfer to a disabled veteran, so Mr. Pike did not state a federal claim.   

For the full text of this decision, go to:

August 15

Agency-Created Rules on Medicare Home Health Services Appeals Are Binding on Agency

Medicare home health services are available for individuals who are “confined to the home.” Medicare pays for these services through contractors known as “Medicare Administrative Contractors” (MACs). A group of individuals filed suit against the Secretary of Health and Human Services alleging the Secretary does not follow its own agency regulations governing appeals of Medicare home health services, which has resulted in improper denial of plaintiffs’ benefits. Although administrative law judges found the plaintiffs to be homebound, the contractors repeatedly denied subsequent claims for services, which plaintiffs contend is in violation of Medicare regulations. The Secretary filed this Motion to Dismiss, which was denied.

The district court held the plaintiffs, who are eligible for both Medicare and Medicaid, have standing to sue even though, as the Secretary asserted, Medicaid would likely pay their claims if they were to be denied Medicare coverage. Plaintiffs are seeking a right to Medicare coverage, and an improper denial of benefits could impose personal liability for uncovered services. Moreover, should Medicaid be forced to pay, one of the plaintiffs would be exposed to estate recovery. In addition, there are differences in the home health services provided between Medicare and Medicaid. Plaintiffs have shown a concrete injury sufficient to support standing. As for jurisdiction, although the court agreed with the Secretary that it does not have mandamus or federal question jurisdiction, the matter is properly before the court under the appeals provision of the Social Security Act found in §405(g). Lastly, the court disagreed with the Secretary’s contention that plaintiffs cannot file a claim for failure to follow interpretive rules related to MACs that do not bind the agency. The court said that it is long settled that rules promulgated by an agency that affect the rights of others are binding on the agency. The regulations governing MACs and Medicare appeals are couched in mandatory language, which, according to the court, shows the agency’s intent to be bound by these regulations.

Ryan v. Burwell
, 2015 WL 4545806 (D. Vt. July 27, 2015)

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