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By Joseph A. Bollhofer, Esq.            

For those who are financially needy, the Medicaid program in New York pays for long- term (“custodial”) care at home and in nursing homes. Last year, I wrote about the change to the home care Medicaid system that began in Nassau and Suffolk Counties during the first few months of 2013. Under that program, Medicaid has become privatized, that is, for-profit. Private companies now contract with the State’s Department of Health to provide care for qualified persons in their homes. These services include personal care assistants and home health aides.           

New York State is now about to begin such a privatized long-term care program for nursing homes in New York City and Nassau and Suffolk Counties. The program was scheduled to begin on April 1, 2014 for all new Medicaid applicants for nursing home care. However, as a result of objections from consumer advocacy organizations, as well as from nursing home representatives and managed care company representatives, the start date has been pushed back to June 1, 2014. Several substantial concerns were raised in an eleven page letter sent March 14, 2014 from the New York Legal Assistance Group to directors of the State Department of Health and the U.S. Department of Health and Human Services.           

As with the managed care program for Medicaid home care, eligible persons in nursing homes will be required to choose and join a managed care company that contracts with and pays the nursing home. If nursing home residents do not choose a managed care company, a company will be chosen for them. Although this process is to be phased in and is initially only applicable to new Medicaid applicants (and conversions from home care Medicaid to nursing homes), ultimately all persons receiving Medicaid benefits will be required to be a member of a managed care organization. This process will begin in upstate counties in the fall.            

Also as exists in the home care program, the managed care companies will receive a fixed monthly “capitated” (per person) amount of money from New York, and will pay a fixed monthly amount to the nursing homes no matter what level of services is necessary and provided for nursing home residents. Also as with the home care Medicaid program, it is logical that the need for these companies to profit from the programs with conflict with the legitimate needs of their members for services.            

Another problem that likely will develop concerns the choice of nursing home placement. Home care Medicaid recipients who then need to be placed in a nursing home will be directed by the managed care organization to nursing homes with which that organization contracts. If the Medicaid recipient desires to enter a nursing home that does not contract with his or her managed care organization, that person will need to enroll with a different managed care organization.            

In reality, the options, rules and restrictions regarding membership in managed care organizations are complicated. It is difficult enough for an elderly person receiving home care, or even a healthy person with high cognitive capabilities, to intelligently choose among available plans. Under the proposed nursing home managed care plan, no adequate safeguards are in place or proposed to assist and protect nursing home residents, who often suffer from cognitive disabilities. Informed consent should be a basic requirement for any decision making. At a minimum, a written acknowledgment of a family member or other personal representative should be required to confirm understanding that the chosen plan will now control access to medical services and that all providers must be in the plan’s network.

Under this new plan, nursing home residents who also are on Medicare will have the option of enrolling in a “partially capitated” plan that does not control access to Medicare services. However, it is doubtful that such an option will be explained adequately to them, and understood. There is not even a clear explanation as to what type of assistance, if any, will be provided in making plan selections and completing the enrollment process. Many nursing home residents do not even have telephones.           

 It may be that several years from now the system about to be implemented will be shown to be better or worse than the current system. However, it is hopefully now clear to the state officials that the new system is far from ready to go live. At a March 10th meeting with nursing home representatives, many of those representatives complained that key aspects of proposed contracts between nursing homes and the managed care companies had not even been finalized, nor had billing systems and systems for communicating authorizations for care and many other elements been put in place. Nursing homes and hospitals are scrambling to set up the systems with dozens of managed care plans, and have asked the state to establish templates for many of the important issues. However, as of now, the State Department of Health has indicated that it would leave these items to be worked out between the plans and nursing homes directly.            

Unfortunately, the lack of readiness and uncertainty likely will result in consumer confusion and pressure to transfer to a different plan, or to a different nursing home, or to privately pay part of a bill if the system breaks down.            

Often nursing home stays are temporary, for rehabilitation purposes. Without clear plans in place, discharges from the nursing home back to the community can be delayed or blocked altogether if authorization for home care cannot be obtained. Consumer advocates and nursing home and managed care company representatives likely all agree that much more involvement and oversight from the Department of Health is needed to insure that these complex systems are ready to go and that consumers receive quality care. If the state does not push back the June 1 planned date of implementation, it is likely that consumers involved in this system will experience an extremely bumpy ride on what is already a rocky road.

 Copyright 2014 Joseph A. Bollhofer, Esq.

Editor’s Note:
Joseph A. Bollhofer, Esq., is an attorney who practices law in the areas of elder law, Medicaid, estate and business planning and administration, real estate and personal injury. He is a member of the National Academy of Elder Law Attorneys (NAELA) and of the Elder Law, Real Property, and Surrogate’s Court Committees of the Suffolk County Bar Association and the Elder Law, Real Property Law and Torts, Insurance and Negligence Sections of the New York State Bar Association. He has been serving area residents since 1985 and is admitted to practice law in New York and New Jersey. His office is located at 291 Lake Ave., St. James, NY. (631-584-0100). For reprints of this article and others send a request to info@bollhoferlaw.com or visit www.bollhoferlaw.com.