If you have a loved one who requires care in a nursing home there are a number of things that you want to learn about now, rather than later, as it relates to nursing home billing and contracts. By understanding a few key points you could help prevent unwelcome, and potentially costly, surprises in the future.
Most nursing homes bill monthly the resident (or the resident’s legal appointee) for care; the billing frequency should be laid out in the terms of your contract. The bill will include the cost of basic charges but may also include the cost of ancillary services. It is important to know the difference. The rate will also be determined by factors such as the complexity of care, level of services, the type of room (whether it is private or semi-private), and other amenities.
Assuming the resident did not enter the healthcare center on the first day of the billing cycle, the first billing statement should show a prorated amount for the month of admission (the number of days spent in the facility x the rate for room and board). Many nursing care bills will also include a “Pre-Bill” for the cost of the upcoming month; and again, some states will levy a tax on the full bill amount. The balance of these figures will be the amount owed by the resident after all Medicare/Medicaid, health insurance, and/or long-term care insurance payments are deducted.
If your loved one is moving into the skill healthcare center within a continuing care retirement community (CCRC), the billing process could work a little differently, particularly if there is a lifecare agreement in place. Learn more about continuing care retirement communities.
Medicare & health insurance coverage
First, if the medical needs of the resident meet Medicare Part A criteria for “skilled medical care,” Medicare will generally pay in full for up to 20 days in the healthcare facility. Medicare continues to pay for days 21-100, but a variable rate daily coinsurance amount kicks in, which is the resident’s financial responsibility. Beyond 100 days, 100 percent of the charges become the responsibility of the resident.
If the resident has a secondary health insurance policy or Medigap plan, on days 21-100, it may cover some or all of the balance of expenses not covered by Medicare. Check the terms of your specific policy to determine if there is any coverage for skilled nursing care.
Long-term care insurance policies
When your loved one is first admitted to a nursing facility be sure to let the facility know if he/she has a long-term care (LTC) insurance policy. Most of these policies will make payments on the policy directly to the resident (policy holder), but some LTC carriers will pay the nursing home directly. If this is the case with your loved one’s policy, ask the billing office if they will send the invoices for nursing care services directly to the policy carrier on a monthly basis to save you time and hassle. Any expenses that are not paid by the policy become the responsibility of the resident. Note that most long-term care policies will not pay any state taxes assessed on the full month’s balance.
What if I run out of money?
Thanks to the wonders of modern medicine, people are living longer, even those with terminal health issues that require skilled nursing care. With this longevity comes the very real concern that seniors will outlive their savings.
If a resident’s available funds dip to the point of having money to cover only three more months of private payments for nursing care, contact the county’s Department of Social Services (or other appropriate department, depending on the state/county). They should be able to provide a packet of information on the requirements for filing for Medicaid. This application process is complex and can take three months or more to complete, so be sure to notify the facilities social work department and/or billing office when you begin the Medicaid process, and keep them abreast of any status updates you receive. Some providers will offer residents (or their proxy) assistance with the application paperwork, free of charge.
Please be aware that if you sign an agreement with a nursing home that makes you the responsible party then you could be on the hook for any payments due to the nursing home. The nursing home would much prefer to bill for private payment than to seek Medicaid reimbursement. Some nursing homes may insist on this but many states will not allow this to be forced. In rare instances a state with filial law could require an adult child to pay even if they did not sign an agreement. If you feel that you have a loved one who may need nursing home care in the near future it is probably worth consulting with a knowledgeable elder care attorney before signing any documents or contracts.
NOTE: Residents who run out of money while receiving skilled nursing care within a continuing care retirement community may be able to continue receiving services, even if they do not qualify for Medicaid or other assistance. Many CCRCs make a commitment to provide lifetime housing and care to residents, even if they run out of money. However, the CCRC will also do a financial evaluation of new residents to help ensure that the probability of this occurring stays low.
Leaves of absence
Sometimes, for either medical or personal reasons, a resident may temporarily leave the healthcare center, so it is important to understand how such leaves of absence will be handled.
Typically, when someone is admitted to the nursing care facility, they (or their proxy) will sign a bed hold waiver, which says the nursing home will reserve the resident’s room during any absences. But keep in mind that this agreement also gives the provider consent to bill the resident privately for room and board, including any state tax assessments, for each day the resident is absent from the facility. On the flip side, if a bed hold agreement is not signed, and the resident has a leave of absence from the center, they will be discharged, and their room in the care facility will not be held.
Note that if the resident becomes eligible for Medicaid, they the charges will still be billed to Medicaid during the leave of absence.
Understand the terms
Be sure to thoroughly review the details of the contract, and ask as many questions as you can prior to signing on the dotted line to ensure you feel comfortable with the availability, quality, and price of healthcare at the facility. Also be sure to understand what services are included in the facilities daily rate and which services are not included that may be needed.