Health Care FAQs
Medicare and Medicaid.
This manual contains only general information about legal topics. It is not legal advice and should not be used as a substitute for consulting an attorney about the details of your particular circumstances.
If you have a civil legal concern, you may contact the NH Legal Assistance Senior Law Project for free legal advice. Our toll-free number is: 1-888-353-9944.
Revised February 2021
Medicare
I just became eligible for Medicare. What coverage do I receive under this program?
Medicare is the government health insurance plan for all eligible individuals:
- 65 years of age or older
- Under 65 years of age, but have certain disabilities
- Any age, but have end stage renal disease (kidney failure requiring dialysis or transplant)
Medicare Part A Coverage
Medicare Part A covers various forms of hospital stays. Its focus is inpatient care in hospitals, skilled nursing facilities, hospice, and critical access hospitals. Home health care is also covered under this plan.
Medicare Part B Coverage
Medical services and supplies are covered by Medicare Part B. There is a premium that most Medicare recipients are required to pay in order to utilize the coverage. Doctor’s visits and other services are covered by the plan, as are occupational and physical therapists, outpatient care and additional home health care.
Medicare Part C Coverage (Medicare Advantage)
The Medicare Advantage Plan or Medicare Part C combines both Part A and Part B. Part C differs from the other plans, though, because it is supplied through private insurance companies. These companies have been approved by Medicare and can offer additional benefits and lower costs. Coverage for claims is not guaranteed.
Medicare Part D Coverage
Prescription drug coverage falls under Part D. It is a stand-alone insurance and covers all drugs that are medically necessary. Different plans are available, and each plan has its own differences and covers different medications. Coverage for this plan does, for most people, require that a premium is paid; however, the insured can select the plan that best meets their needs. In addition, there is assistance for low-income beneficiaries to help cover the cost of premiums and co-pays.
Medicare Plans and How they Work
Plans such as HMO’s and PPO’s are available through Medicare but are not run by Medicare. Instead, they are run by private companies. You must choose the plan that suits you and will include physical conditions, prescriptions you are taking and any special needs you may have. Some plans have networks. This means you must see a doctor in the network or be charged extra fees. There are others that will cover any doctor that takes Medicare. This also includes hospital charges. You must go to the hospital in their network or expect to pay a much larger percentage than your in-network hospital.
When you become qualified for Medicare, you will receive your red, white and blue card with Part A printed on the lower left-hand side. This is your hospitalization part of Medicare. It does not include physicians, other medical treatments, or prescriptions. These come under other parts of the Medicare program.
If you choose to take part B, you must notify Medicare. You can do this by signing the information you receive along with your card. Part B is not free. It will be less costly if you join within the allotted time than if you wait. If, however you are covered by a group plan through your own or your spouse’s company, you will not be charged when you convert to Part B after that coverage ends.
For low-income Medicare beneficiaries, there are programs available to help cover the cost of the Part B premiums, deductibles, and co-pays.
To learn more about Medicare enrollment and coverage you can speak with a Medicare counselor by contacting the NH ServiceLink Resource Center at 1-866-634-9412.
For more information, please see:
Centers for Medicare & Medicaid Services, Medicare & You https://www.medicare.gov/medicare-and-you/medicare-and-you.html or call Medicare at 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.
The hospital told me that Medicare would no longer pay for my hospital stay. What can I do?
When you are admitted to the hospital you should receive a notice called “An Important Message from Medicare About Your Rights.” This notice describes your rights as a Medicare beneficiary. You will receive a revised version of this notice at least two days prior to the hospital’s proposed discharge date. If you have misplaced the notice, ask for another one from the nurse or hospital administration. You will receive a detailed notice from the hospital or Medicare Advantage or other Medicare managed care plan (if you belong to one) that explains the reasons why they think you are ready to be discharged. On that notice you are told you can appeal the hospital’s decision to discharge you with an outside organization called a “Quality Improvement Organization (QIO).” You must contact the QIO no later than the proposed discharge date. If you appeal on time, you will not have to pay for your hospital stay while your appeal is pending. (Except for charges like copays and deductibles).
The second page of the Medicare notice will have contact information for the QIO. You can appeal in writing or by telephone. If you request an appeal by telephone, make sure you write down the date and time you called and the name of the person you spoke with at the QIO. The QIO will then ask both the hospital and you for more information. You, or your representative, must give the QIO a statement about why you believe the discharge should not occur. The statement does not need to be in writing. Once the QIO receives all the needed information it will issue a decision within one day. If the QIO finds you are not ready to be discharged, Medicare will continue to cover your hospital stay. If the QIO agrees with the hospital, Medicare will only cover your stay until noon of the day after the QIO notifies you of its decision.
To learn more about the appeals process you can speak with a Medicare counselor by contacting the NH ServiceLink Resource Center at 1-866-634-9412.
For more information, please see:
42 U.S.C. § 1395cc (a) (1) (M) – Agreements with Providers of Services; Enrollment Processes
Centers for Medicare and Medicaid Services:
Centers for Medicare and Medicaid Services:
Hospital Discharge Appeal Notices – www.cms.gov/medicare/forms-notices/beneficiary-notices-initiative
Hospital-Issued Notices of Noncoverage – www.cms.gov/medicare/forms-notices/beneficiary-notices-initiative
My pharmacist tells me that my Medicare drug plan denied coverage for a medication that I need. What can I do?
First, you should:
- Call your doctor and have them try to resolve the problem with your pharmacist.
- Request a decision called a “coverage determination” from your plan, or
- Pay for the prescription and request that the plan pay you back by requesting a coverage determination, or
- Request a coverage determination if your plan requires you to try another drug before it pays for the drug prescribed for you, or there is a limit on the quantity or dose of the drug prescribed for you and you disagree with the limit.
You, your doctor, or your appointed representative can call your plan or write them a letter to request that the plan cover the prescription you need. (Be sure to call your plan to find out how to appoint a representative).
There is an appeal process when a Medicare drug plan provider denies coverage:
Centers for Medicare and Medicaid Services, Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance:
- You should call or write your drug plan company and request a “coverage determination.” If you have internet access, the company will also have these forms online which allow you to often fill them out and transmit them immediately. If you call, ask the representative to direct you to the proper links online to complete the request.
- Once your plan has received the request, it has 72 hours (for a “standard request for coverage” or for a “request to pay you back”),
- or 24 hours (for an “expedited request for coverage”) to notify you of its decision.
- Your request will be expedited if your plan determines or your doctor tells your plan that your life or health will be seriously jeopardized by waiting for a standard decision.
- If the company does not provide coverage, you should request a “coverage redetermination” (appeal). You must make this request within sixty days of asking for the coverage determination. (Also ask your plan for any “supporting statements” they may need for your request.) Once your plan receives your request for an appeal (coverage redetermination), the plan has seven days for a standard request or 72 hours for an expedited request to notify you of its decision.
- If the decision is unfavorable, you have another sixty days to appeal to an Independent Review Entity (IRE) and the IRE must notify you of their decision within seven days. The request must be in writing to the IRE. The request may be expedited (72 hours) if the IRE determines or your doctor tells the IRE that your life or health will be seriously jeopardized. The decision from your provider will have contact information for the IRE.
- If the IRE decision is unfavorable, you have another sixty days to appeal that decision to an Administrative Law Judge. There will be instructions on the decision from the IRE on how to request an appeal to an Administrative Law Judge. To receive an ALJ hearing, the projected value of your coverage must meet a minimum dollar amount which is listed in the IRE’s decision ($170.00 in 2020).
- If that decision is unfavorable, you have another sixty days to make an appeal in writing to the Medicare Appeals Council (MAC) who must issue a final decision within ninety days.
- Finally, if that decision is unfavorable, the beneficiary has sixty days from the date of the notice of the MAC’s decision to appeal the decision to Federal District Court. The controversy must be at least $1,670 in 2020.
When you joined a Medicare drug plan, the plan sent you information about the plan’s appeal procedures. If you have misplaced them, use the phone number on your card to get a new copy. You may also simply view the manual online at www.medicare.gov.
To learn more about the appeals process you can speak with a Medicare counselor by contacting the NH ServiceLink Resource Center at 1-866-634-9412.
For more information, please see:
Centers for Medicare and Medicaid Services, Medicare Prescription Drug Appeals and Grievances – http://www.cms.gov/MedPrescriptDrugApplGriev/
Medicare.gov at https://www.medicare.gov/providers-services/claims-appeals-complaints/appeals/drug-plans or call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.
Department of Health & Human Services, Request for Administrative Law Judge (ALJ) Hearing or Review of Dismissal – https://www.hhs.gov/sites/default/files/OMHA-100.pdf
Part C & D Enrollee Grievances, Organization/Coverage determinations, and Appeals Guidance – see page 105 for chart overview
Centers for Medicare and Medicaid Services, How to Request a Review by a Federal District Court – https://www.cms.gov/Medicare/Appeals-and-Grievances/MedPrescriptDrugApplGriev/FederalCourtReview
Center for Medicare and Medicaid Services, Medicare Prescription Drug Appeals & Grievances Forms – https://www.cms.gov/Medicare/Appeals-and-Grievances/MedPrescriptDrugApplGriev/Forms
I have a complaint about my Medicare drug plan company; what can I do?
If you have a complaint about your Medicare drug plan that doesn’t involve coverage or payment for a drug covered by the Medicare drug plan, you have a right to file a complaint with the plan (called a grievance). You need to file your complaint within sixty days of the event that led to your complaint.
Some examples of why you might file a complaint include the following:
- You believe your plan’s customer service hours should be different.
- You have to wait too long for your prescription.
- The pharmacy is charging you more than you think you should have to pay.
- Call your company offering your plan to get the most up-to-date price. If the plan doesn’t take care of your complaint, call 1-800-Medicare (1-800-633-4227). TTY 1-877-486-2048.
- The company offering your plan is sending you materials not related to the drug plan; that you did not ask to be sent.
- The plan doesn’t give you a decision about a coverage determination or first-level appeal within the required time frame.
- The plan didn’t make a decision and send your case to the independent review entity (IRE) about a coverage determination or first-level appeal within the required timeframe.
- You disagree with the plan’s decision not to grant your request for an expedited coverage determination or first-level appeal.
- The plan didn’t provide the required notices.
- The plan’s notices don’t follow Medicare rules.
To learn more about the complaint process you can speak with a Medicare counselor by contacting the NH ServiceLink Resource Center at 1-866-634-9412.
For more information, please see:
Centers for Medicare and Medicaid Services, Medicare Prescription Drug Appeals and Grievances – http://www.cms.gov/MedPrescriptDrugApplGriev/
Centers for Medicare and Medicaid Services, Medicare Prescription Drug Appeals and Grievances – http://www.cms.gov/MedPrescriptDrugApplGriev/
Medicare.gov at https://www.medicare.gov/providers-services/claims-appeals-complaints/appeals/drug-plans or call 1-800-MEDICARE (1-800-633-4227) TTY users should call 1-877-486-2048.
I just got out of the hospital and even though I am on Medicare, I received a bill for my care. The hospital is telling me I was never admitted, but rather classified as an outpatient under “observation status.” What does that mean?
Observation status is supposed to mean that a patient needs short-term treatment while the hospital determines if the patient needs further treatment (and needs to be admitted) or should be discharged. Generally, under Medicare or Medicaid a patient is not supposed to be on observation status for more than two (2) days before he/she is either discharged or admitted. However, observation status is sometimes incorrectly and unfairly applied to patients who have more serious conditions and spend more than two days in the hospital. Sometimes this happens because the patient’s doctor classifies the patient as being on observation status, and sometimes it happens because a committee overrules the doctor and classifies the patient that way.
For more information, please see:
Bagnall v. Sebelius (No. 3:11-cv-01703, D. Conn)
Center for Medicare Advocacy at http://www.medicareadvocacy.org/medicare-info/observation-status/
What does being on observation status mean for me?
Unfortunately, it means that you are considered to be an outpatient and you may be charged for the services you received– services that Medicare or Medicaid might have paid for if you had been properly admitted as an inpatient.
It also means that you will not be able to get coverage for recovery care after your hospital stay. Medicare generally covers after care, but only if you have spent three (3) or more days as a fully admitted inpatient at a hospital.
If Medicare determines that it will not cover your care because you were classified as being under observation status, you may still be able to have the costs covered if you did not know and could not reasonably be expected to know that payment would not be made. It will be presumed that you did not know “that services are not covered unless the evidence indicates that written notice was given” to you.
For more information, please see:
Medicare Claims Processing Manual, CMS Pub. 100-04, Chapter 30, §30.1.
What can I do if I’ve been classified as being on observation status?
It depends on whether you are still in the hospital or already discharged. Hospitals are supposed to give written notice to patients when they are classified as being on observation status, but oftentimes patients aren’t properly informed.
If you are still in the hospital, need medically necessary care, and discover you have been classified as an outpatient on observation status, you should talk to your doctor and ask him/her to admit you as an inpatient. If the hospital won’t change your status, ask for written notice of your outpatient status and tell the hospital that you want to appeal your status because the care you need is “medically necessary”.
If you have already been discharged from the hospital, you may still appeal your classification. However, it is much more difficult to appeal after your discharge.
I was discharged from my local hospital and am now recovering at a skilled nursing facility. I just received an ABN notice stating that Medicare won’t pay for my stay here. What can I do?
If you receive an Advance Beneficiary Notice of Non-Coverage (ABN) at the skilled nursing facility, it will inform you that Medicare does not cover all of your health care costs and asks you to make an informed choice about certain item(s) or service(s) because you will have to pay for them yourself or through other insurance you may have. You have to fill out the form and sign it. If Medicare decides not to pay, you have appeal rights.
Medicare will only cover stays at a skilled nursing facility if you were an inpatient at a hospital for three or more days. If you were classified as being under observation status, you may be required to pay for that care yourself.
None of the time you spent under observation status counts towards Medicare’s three (3) day hospital stay rule to qualify for skilled nursing home placement. If your status changed from observation to inpatient, your 3-day hospital stay begins from the time when you become an inpatient.
For more information, please see:
CMS Beneficiary Notice Initiative, https://www.cms.gov/Medicare/Medicare-General-Information/BNI/ABN
Center for Medicare Advocacy, The Medicare Advance Beneficiary Notice of Non-Coverage (ABN): A Tool for Limiting Beneficiary Liability, https://medicareadvocacy.org/the-medicare-advance-beneficiary-notice-of-non-coverage-abn-a-tool-for-limiting-beneficiary-liability/#:~:text=The%20ABN%20was%20formerly%20known%20as%20the%20Advance%20Beneficiary%20Notice.&text=The%20replaced%20ABNs%20are%3A%20ABN,of%20Exclusion%20from%20Medicare%20Benefits).
Do I need to show improvement in my condition to continue receiving services under Medicare?
No. Medicare coverage should be available even if your condition is chronic, unlikely to improve, or expected to last a long time. You do not have to prove that your condition can or will get better. To be covered, your condition must require skilled services in order to maintain your condition, slow or prevent your condition, or improve your condition. To be considered “skilled,” the care must be provided by a qualified professional, like a nurse or a trained therapist. You can receive these services at a variety of places, such as at home, in an agency, in a rehabilitation center, or in a hospital. Skilled services include physical or occupational therapy or simply maintaining your care plan. It does not make a difference which kind of skilled services you need – you should still be covered.
For further information, please see:
Jimmo v. Sebelius, No. 11-cv-17 (D.Vt.)
CMS Manual System, Transmittal 179, https://www.cms.gov/regulations-and-guidance/guidance/transmittals/downloads/r179bp.pdf
CMS MLN Matters, https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM8458.pdf
Center for Medicare Advocacy, https://medicareadvocacy.org/articles/article-archive/#chronic-conditions
Medicaid
How can I pay for nursing home care?
In order to evaluate the possible ways to fund your long-term nursing home care, you need to understand the different sources of payments for such care. Something you should consider is whether a different state is available to you for alternative programs and whether family is available in your choice. The short answer is you must apply and become qualified under Medicaid.
Medicaid
Medicaid is the only federal/state program that pays for long-term skilled and intermediate nursing home care. In order to qualify for Medicaid, you need to be both financially and medically eligible.
To be medically eligible, you must need to receive nursing home level of care. In general, this means that you must need assistance with at least two activities of daily living. Your doctor or nurse will be able to determine whether you need nursing home level of care.
To be financially eligible, a person must meet the income and resource eligibility requirements. Thus, in order to assess Medicaid eligibility for long-term nursing home care, the Medicaid application asks for information about money that you receive on a regular basis (income), as well as your assets and savings (resources).
An individual residing in a nursing home that participates in the Medicaid program will be eligible for Medicaid funding if s/he does not have a monthly income that exceeds the Medicaid reimbursement rate for the cost of the care in that particular nursing home. The Medicaid monthly reimbursement rates generally exceed $3,000. As long as your income is below the rate for the nursing home you are residing in, you should be income eligible for Medicaid benefits.
In addition, an individual can have no more than $2,500 in countable assets in order to be resource eligible for Medicaid. A person’s home, motor vehicle, furniture, clothing, and other personal belongings are not countable assets. Liquid assets such as stocks, bonds, bank accounts, IRAs, etc., are countable. Unless the combined face value of life insurance policies is $1,500 or less, the cash values of the policies are countable. However, an individual can qualify for Medicaid for three months even if the value of his/her life insurance policies is greater than $1,500 if the nursing home bills (or other medical bills) offset the excess countable assets.
If a person is income and resource eligible, most of his/her income will be used to pay for the nursing home services. However, every Medicaid recipient is allowed to keep a small amount of money every month for personal spending money. This is known as a “personal needs allowance.”
For married Medicaid applicants, there are significant protections for the community spouse. A community spouse will be entitled to a resource allowance and may also be entitled to an income allowance.
Medicare
Medicare does not pay for long-term nursing home care; rather, Medicare only covers certain, short-term rehabilitative stays in nursing home. For example, Medicare hospital insurance (Part A) helps pay for inpatient hospital or inpatient CAH (critical access hospital) services and post-hospital skilled nursing facility care. It also pays for home health services and hospice care. However, there are limitations on the number of days of care that Medicare can pay for and there are deductibles and coinsurance amounts for which the beneficiary is responsible.
In many instances, Medicare will pay the full charges for skilled nursing facility care for the first twenty days. For the next eighty days, you are responsible to pay a per day charge (this changes every year) and Medicare pays the rest. Maximum coverage is 100 days per benefit period, which means one continuous period of illness. A gap of thirty days in institutional care can trigger a new benefit period (referred to as a new “spell of illness”).
To qualify for Medicare coverage for a skilled nursing facility, you must meet the following criteria:
- First, you must be a Medicare recipient and eligible for skilled care. Medicare does not cover lesser care levels, such as custodial and personal care provided in an institution or personal care boarding home.
- Second, in order to qualify for skilled nursing Medicare payments, you must have been hospitalized for at least three days and have entered the skilled nursing facility within thirty days of the hospital discharge. In addition, your reason for being placed in a skilled nursing facility needs to be the same reason for which you were hospitalized.
Medigap
Medigap, also known as Medicare Supplemental Insurance Program, does not pay for long-term nursing home care. Medigap is a health insurance policy offered by a private entity that is primarily designed to provide payment for expenses incurred for Medicare-covered services and items that are not reimbursed by Medicare (such as deductibles and co-pays). You must privately acquire and pay for this type of insurance.
Low-income Medicare beneficiaries may qualify for enrollment in the Medicare Savings Program which provides coverage similar to Medigap policies at no cost to the beneficiary. New Hampshire residents can complete an application for enrollment in the Medicare Savings Program through ServiceLink or the NH Department of Health and Human Services.
Long-Term Health Insurance
Some insurance providers offer policies that help pay for long-term nursing home care. Such policies vary greatly. Each policy has its own eligibility requirements, limitations, costs, and benefits. It is important to research the background of any company you are considering as an insurance carrier in order to find out what types of services are covered. Also, find out if there are any requirements that need to be met before the benefits are available.
Private Payment
Once your public and/or private insurance benefits are exhausted, you will become liable for the expenses of care. Nursing home care is normally considered to be a necessity, which means that married persons will generally be liable for the care of a spouse. In New Hampshire, adult children may be obligated to assist in the support of a parent who needs long-term nursing home care. It is therefore wise to consider an application for Medicaid coverage, described above.
PACE: Program of All-Inclusive Care for the Elderly (PACE)
New Hampshire is not a PACE state, but several States in New England (Massachusetts, Rhode Island, and Vermont) are PACE states. This manual includes information about PACE since many older adults may choose instead to move to a state closer to members of their family, or closer to a member of the family who lives in a PACE state.
PACE is unique. It is an optional benefit under both Medicare and Medicaid that focuses entirely on older people, who are frail enough to meet their state’s standards for nursing home care. It features comprehensive medical and social services that can be provided at an adult day health center, home, and/or inpatient facilities. For most patients, the comprehensive service package permits them to continue living at home while receiving services, rather than be institutionalized. A team of doctors, nurses and other health professionals assess participant needs, develop care plans, and deliver all services which are integrated into a complete health care plan. PACE is available only in states which have chosen to offer PACE under Medicaid.
Eligible individuals who wish to participate must voluntarily enroll. PACE enrollees also must:
- Be at least 55 years of age.
- Live in the PACE service area.
- Be screened by a team of doctors, nurses, and other health professionals as meeting that state’s nursing facility level of care.
- At the time of enrollment, be able to safely live in a community setting.
While New Hampshire is not a PACE state, it does operate the Choices for Independence Program, a Medicaid program for older and disabled adults who require nursing home level of care but want to remain in the community. Individuals must meet certain medical and financial eligibility requirements to qualify for the program.
To learn more about long-term care options you can contact the NH ServiceLink Resource Center at 1-866-634-9412.
For information on private insurance policies, go to the NH Insurance Department website at https://www.nh.gov/insurance/ or call 603-271-2261.
For more information, please see:
Medicaid Eligibility – https://www.dhhs.nh.gov/programs-services/medicaid/nh-medicaid-medical-assistance-eligibility
N.H. Rev. Stat. Ann. Ch. 165:19 – Liability for Support
42 U.S.C § 1396a – State Plans for Medical Assistance
42 U.S.C § 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
42 C.F.R. § 409.12 – Nursing and Related Services, Medical Social Services
42 C.F.R. § 409.30 – Basic Requirements
42 C.F.R. § 409.31 – Level of Care Requirement
42 C.F.R. § 409.61(b) – General Limitations on Amount of Benefits
42 C.F.R. § 460, et seq. – Programs of All-Inclusive Care for the Elderly (PACE)
NHLA pamphlet, Medicaid Income and Asset Rules for Nursing Home Residents – https://www.nhla.org/resources/pamphlets
Is it true that a nursing home resident must sell his or her residence to receive Medicaid?
Not necessarily. Even as a homeowner, you may still qualify for Medicaid and not have to sell your home. A home is not a countable resource, as long as the equity value is less than $603,000, for Medicaid eligibility purposes. In addition, if your home produces income that is sufficient to pay the personal maintenance expenses, it will not be counted as a resource and you will not be required to sell it. However, if you are single you may be required to sell the home within six months if it is unlikely that you will be returning home. Once sold, the proceeds from the sale would be considered a countable resource.
If certain qualified individuals are living in the house, the house does not have to be sold. For example, if a spouse or a minor or disabled child still lives in the home, a lien cannot be placed on the home and the state cannot force the sale of the home. Also, if a sibling of the Medicaid recipient still lives in the home and has a claim of title to the property and has lived there for at least one year prior to the Medicaid recipient entering into the nursing home, no forced sale can be made. Finally, although a lien can be placed on the home if the Medicaid recipient is the sole owner, a forced sale cannot occur if an adult child is living in the home, has lived with his/her parent (the Medicaid recipient) for at least the two years immediately preceding the parent’s entry into the nursing home, and can establish that s/he provided uncompensated care that delayed the parent’s entry into the nursing facility.
For more information, please see:
42 U.S.C. § 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
Adult Assistance Manual, 411 – Common Types of Resources (Real Property)
NHLA pamphlet, Medicaid Income and Asset Rules for Nursing Home Residents – https://www.nhla.org/resources/pamphlets
Is it legal for a nursing home to require that I have a responsible party, sponsor or guarantor sign the admission contract before I enter the facility?
It is illegal for a nursing home to require the signature of a responsible party to the resident on the admissions contract before admitting a resident. This illegal practice is known as a third-party guarantee. The Omnibus Budget Reconciliation Act of 1987 (OBRA-87) strictly prohibits a nursing facility from requiring a third-party guarantee as a condition of admission or continued stay. However, it is not illegal for a facility to require an individual, who has legal access to a resident’s income or resources available to pay for care in the facility, to sign a contract (without themselves incurring a personal financial liability) to provide payment from the resident’s income or resources for such care.
The Office Long-Term Care Ombudsman (OLTCO) is a state program that receives complaints from and provides consultation services to residents of long-term care facilities or concerned family members. You can contact the OLTCO toll free at 1-800-442-5640.
For more information, please see:
N.H. Rev. Stat. Ann. Ch. 151:21 – Patients’ Bill of Rights
42 U.S.C. § 1396r(c)(5)(A)(ii) – Requirements for Nursing Facilities
42 U.S.C. § 1395i-3(c)(5)(A)(ii) – Requirements for, and Assuring Quality of Care In, Skilled Nursing Facilities
Is it legal for a nursing home to require me and/or my family to sign a contract agreeing to pay private pay rates for a certain period of time before converting to Medicaid?
No. In the past, some nursing homes required applicants to remain private-pay residents for specified periods of time (usually two or three years) before applying for Medicaid. Contracts that have such provisions are called “duration of stay” contracts and are now prohibited by the Medicaid Fraud and Abuse Amendment. Both state and federal laws prohibit nursing home facilities from discriminating on the basis of an individual’s source of payment. Thus, it is an illegal practice for a nursing home that participates in the Medicaid program to ask residents to sign such agreements.
For more information, please see:
N.H. Rev. Stat. Ann. Ch. 151:21 – Patients’ Bill of Rights
42 U.S.C. § 1320a-7b (d)(2)(a)(b) – Illegal Patient Admittance and Retention Practices
42 U.S.C. § 1396r (c)(D)(5)(iii) – Admissions Policy
Office of Long-Term Care Ombudsman 1-800-442-5640
If I am a private-pay nursing home resident, can the nursing home transfer or discharge me if I deplete my assets and become eligible for Medicaid?
Facilities that choose not to accept government reimbursement for their services can limit admission of residents to only those who can privately pay. However, if the nursing home is a Medicaid-certified facility, you cannot be transferred or discharged simply because you were a private-pay resident and are now eligible for Medicaid.
You can be discharged or transferred only in specific circumstances (for medical reasons, for the patient’s welfare or that of other patients, if the facility ceases to operate, or for nonpayment for the patient’s stay), after you receive proper notice and have been granted the opportunity to appeal. In addition, a Medicaid-certified facility must maintain identical transfer and discharge policies regardless of your source of payment.
Since the nursing home participates in the Medicaid program, it cannot claim that the Medicaid reimbursement amount, which will be less than what you paid privately, amounts to non-payment. Federal law specifically states that payment under Medicaid does not qualify as non-payment. Further, a nursing home cannot require you to pay privately before you apply for Medicaid. This is an illegal practice. Finally, the nursing home cannot force you to waive your rights under the law.
For more information, please see:
N.H. Rev. Stat. Ann. Ch. 151:21 – Patients’ Bill of Rights
42 U.S.C. § 1320a-7b (d)(2)(A), (B) – Illegal Patient Admittance and Retention Practices
42 U.S.C. § 1395i-3(c)(E)(2) – Medicare transfer/discharge
42 U.S.C. § 1396r(c)(D)(2) – Medicaid transfer/discharge
42 U.S.C. § 1396r(c)(D)(4) – Equal Access to Quality Care
42 U.S.C. § 1396r(c)(D)(5)(A) – Medicaid Admissions
42 U.S.C. § 1395i-3(c)(D)(5)(A) – Medicare Admissions
Is it possible to set up a trust for a beneficiary who is receiving Medicaid without jeopardizing his or her eligibility?
It is possible to set up a trust for a beneficiary who is receiving Medicaid, but care must be taken not to jeopardize his or her eligibility and benefits. If the trust is not properly crafted, the person you wish to help might actually lose benefits they may otherwise be entitled to receive from Medicaid.
Since Medicaid is a need-based program for people who cannot afford to pay for medical care, you must meet income and asset resources requirements in order to be eligible. Medicaid has a look-back feature which is intended to prevent the hiding of assets in order to qualify and receive government paid benefits. Previously, people would set up trusts in order to lower the amount of assets they had so they would qualify for benefits.
When you set up a trust, you transfer ownership of the assets by placing them into the trust instrument. The person who places assets or property in the trust no longer owns those assets or property. The trustee (person who manages the trust) has legal title of the property and is the person who controls how the funds are distributed. If you are not the person who manages the trust, but you receive payments from the trust, then you are the beneficiary (person who gains a benefit from the trust). Thus, the trustee controls the money and gives it to the beneficiary according to the terms of the trust. Typically, the beneficiary will receive interest payments from the trust, which counts as income. However, the beneficiary may or may not receive payments of principal (balance of the trust minus the interest) from the trust. In the past, since the principal was not subject to the Medicaid spend-down requirement, people would escape the Medicaid asset limit by setting up trusts where the beneficiary had no access to the principal balance. Some of the concerns are “when was the trust established?” Depending on the establishment of the trust differing rules may apply.
Now, after legislative changes, if you set up a trust, the income you receive from the trust is counted toward the Medicaid income limit. Depending on the type of trust created, the principal may be counted as an asset even though you may not have access to the principal balance. Therefore, your beneficiary may actually be disqualified for Medicaid because of the income or resources amount established for the beneficiary by your trust.
Irrevocable Trusts
One type of trust is called an irrevocable trust where restrictions are placed on your access to the principal. Some irrevocable trusts were not counted as assets in the past. However, today, if there is any chance that the principal can be used for your benefit, it will be counted as an asset.
For example, say you have a trust worth $50,000. Suppose that the terms state that you are to receive $50 per month. In addition, suppose that the terms provide that if you have a heart attack, you can have the rest of the principal balance of the trust. So, unless you have a heart attack, you cannot access the $50,000. Nonetheless, since there is some way that you may access the money, thus benefiting from it, it will be counted as an asset. Likewise, the $50 per month will be counted as income.
Transfer of Assets
Medicaid requires that you dispose of assets only for fair market value. That means you cannot give them away. If you transfer assets for less than fair market value, you will be subject to a period of disqualification, which acts as a penalty. The penalty is a disqualification from Medicaid coverage for long-term care for a period of time. Medicaid only looks at transfers of assets that were made within sixty months of filing your Medicaid application.
For instance, if you transferred $500,000 into an irrevocable trust that was not to be used for your benefit, you may be penalized. If you were trying to obtain nursing home care, the penalty would be disqualification for the number of months that it would take you to use up $500,000 for your nursing home care. This number is calculated by dividing the asset transferred for less than fair market value by the average monthly private pay cost of nursing home care in New Hampshire ($10,458 for 2021). So, a transfer of $500,000 would trigger a disqualification period of nearly four years ($500,000 ÷ $10,458 = 47.8 months). The disqualification period would start to run from the date of Medicaid eligibility or on the date of the transfer, whichever is later.
It is important to remember that if you set up a trust where you cannot access the money, then you cannot use the money. You may benefit more from the use of your money even though you may be ineligible for Medicaid. You should contact an experienced estate planning attorney before transferring assets to a trust.
For more information, please see:
- N.H. Rev. Stat. Ann. Ch. 167:4 – Eligibility for Assistance
- N.H. Rev. Stat. Ann. Ch. 167:14 – Claims and Liens
- 42 U.S.C. § 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets