Written by Becky Ziviski, CPA, LNHA, speaker and author of Profit Without Census: A Nursing Home Administrator’s Guide to Profitability by Department.
A delay in the application process for Medicaid can have serious financial implications for the nursing facility. It is key to speak early with new residents and family members who might have a need to apply for Medicaid coverage. If the referring hospital hasn’t already discussed eligibility with the resident, it should be discussed during the inquiry and admission process. Reassure the family that you have a Medicaid expert who can help them throughout the entire application and review process.
If the resident plans to stay long term, the facility should follow these steps:
- Establish a communication campaign to help educate current residents and families about Medicaid eligibility and the application process.
- Send letters to your private-pay residents educating them on the benefits of Medicaid and asking them if they think they might need to apply within the next year. Consider including a copy of the Medicaid application and a checklist of documents they will need. (See sample letter included at the end of this article.)
- Offer facility assistance in obtaining or copying any evidentiary documents needed.
- Encourage any family potentially interested in applying for Medicaid to make an appointment with the facility social worker for a private consultation to offer additional information and assistance.
- Invite a representative from the local office on aging or county agency to speak at a family night about the Medicaid application process.
- If a resident or family will need to apply, inquire how long they think they can continue to pay privately. (Follow up with them two months prior to this predicted date, and get the application process started. Medicaid will usually only go back to the date of application, so apply as quickly as possible.)
- Be sure that the business office has established a Medicaid application “pending” log to track all applications in process to monitor follow-up tasks and conversations with applicants, caseworkers, etc. This will help ensure details do not fall through the cracks. Each month of Medicaid pending puts over $5,000 of revenue at risk.
If the resident plans to stay long term, recommend the following steps to the resident:
- Have the resident sign an authorization that will allow the facility to assist him or her in the process by being able to communicate directly with the caseworker.
- Suggest making the facility the representative payee for his or her monthly Social Security benefits to make life easier and expedite the payment of the monthly statement of charges. Indicate that the facility can keep the resident’s portion of his or her Social Security benefits in an interest-bearing resident trust account at the facility that can be accessed when funds are needed. The business office will provide a quarterly statement similar to a bank and will monitor the balance to help ensure that the total does not rise past the allowable threshold for Medicaid eligibility.
- Offer a space within the facility for the intake call with the caseworker.
- Help resident family members call their bank or attorney to obtain the paperwork they need. Offer to help them sort through their paperwork or complete the application. Ideally, the facility social worker will be knowledgeable enough to review all Medicaid applications prior to submission. (Many states offer the application process online.)
- Offer to set up an appointment with the social worker/business office to submit the application online together from the facility.
- The business office can estimate the resident liability and bill for it as soon as possible. Residents admitted under a Medicaid “pending” status should expect to pay this amount with the next billing cycle.
There are several financial risks for the facility if they wait until the Medicaid application is reviewed, which can be averted by considering the following:
- The anticipated resident liability should be calculated by adding all income, subtracting any health insurance premiums he or she pays, and the personal needs allowance he or she may keep. This amount should be collected every month until the Medicaid application is approved and the actual patient liability is calculated. This helps protect the resident’s funds.
Many business offices don’t consider the resident liability amount and then are owed a huge amount of money when the application is approved. This process also keeps the funds from being misappropriated by the family during the Medicaid pending status.
An application that is not approved might mean a high amount owed to the facility, presenting obvious collection issues.