Assisted Living/Alternate Family Care Waivers-- NJ Long Term Care Alternatives

Assisted Living/Alternate Family Care Waivers by Lawrence A. Friedman, Esq. Copyright 2002 [This article appeared in the New Jersey State Bar Association Elder & Disabilities Law Section newsletter in 2002] Medicaid programs are characterized as either nursing facility (also called institutional) level of services or non-institutional (also called community or medical care) level of services. Various states, including New Jersey, allow people who need nursing facility level services to elect Medicaid funded care in the community instead of nursing home admission. For instance, New Jersey Medicaid has long subsidized care 'at-home' under the Community Care Program for the Elderly and Disabled (CCPED). To provide additional choices to New Jersey families, the Garden State recently expanded community care alternatives under the rubric Enhanced Community Options ('ECO'). As alternatives to traditional nursing home care, CCPED and ECO are 42 U.S.C. §1915(c) home and community care waiver programs. Therefore, to obtain benefits an applicant must demonstrate a medical need for nursing facility level services and have countable resources and income must within Medicaid Only limits (for a single applicant $2,000 resources and $1,590 income in 2001 subject to annual cost of living income increase). [EDITOR, PLEASE CHANGE INCOME CAP TO 2002 FIGURE IF KNOWN AT THE TIME OF PUBLICATION] ECO may fund various services including case management, respite care, homemaker services, environmental accessibility adaptations, personal emergency response systems, home-delivered meal service, caregiver/recipient training, social adult day care, special medical equipment and supplies, chore service, transportation, attendant care, and home-based supportive care. However, this article focuses on ECO's assisted living and alternate family care benefit programs. Assisted living facilities are designed for individuals who can take care of most of their needs but need some help with certain activities of daily living or can't safely live alone due to limited confusion or dementia. Assisted living facilities normally offer living quarters, meals, and modest staff assistance, whereas nursing homes provide much more intensive staff care. Assisted living accommodations can range from fairly austere rooms similar to college dormitory quarters to comparatively lavish apartments. However, because Medicaid payment rates are based on modest living arrangements, Medicaid benefits generally are too low for fancier (and obviously more expensive) quarters. Alternate family care is analogous to senior foster care in a private home. Federal law permits Medicaid to fund health care but not ordinary living expenses. Because Medicaid treats room and board as incidental to nursing home care (in the same manner as meals and bed in an acute care hospital), Medicaid funds the full cost of residence in a Medicaid certified nursing home. Not so with assisted living facilities and alternate family care. Since these settings provide far less help with activities of daily living than nursing homes, Medicaid differentiates between the cost of care and room/board charges. Medicaid pays a fixed rate intended to cover a provider's cost of care while the resident pays a separate fee for room and board at rates set by the state. Consequently, a senior generally must have at least a modest personal income to obtain Medicaid funded assisted living or alternate family care. Everyone who meets eligibility criteria is entitled to Medicaid funding of nursing home costs. In contrast, people approved for Medicaid generally must wait to receive CCPED and ECO benefits because the number of persons who may participate in each waiver program is limited. Since all available slots usually are filled, Medicaid applicants who request waiver benefits rather than nursing home funding usually enter a waiting list. Some Medicaid waiver programs have allocated slots in ways that could lead to substantial disparities in waiting periods depending where an individual lives. To avoid such inherent unfairness, the Department of Health and Senior Services recently issued a new Assisted Living/Alternate Family Care Waiting List Policy, which allocates Medicaid slots from a statewide waiting list. Under the new policy, local offices will process Medicaid Only applications in the usual manner whether or not ECO waiver benefits are requested. Thus, the county board of social services or division of human services verifies financial eligibility, and the Medicaid field office conducts the usual clinical eligibility assessment (often called preadmission screening). Unless the applicant will remain in an existing assisted living facility once enrolled in ECO, the field office assessment also must demonstrate that needed benefits can't be obtained under another program. Appropriate paper work is then forwarded to Medicaid waiver administrators. On demonstrating financial and clinical eligibility for institutional Medicaid and requesting ECO assisted living or alternate family care Medicaid benefits, an applicant is placed on the waiting list. Waiver slots are allocated in chronological order first to individuals who apply for Medicaid while in a Medicaid ECO participating facility that agrees to retain the resident once approved for Medicaid. Remaining slots are allocated among the other applicants in chronological order. However, because there normally are more facility residents on the waiting list than available Medicaid waiver slots, Medicaid waiver funding may be unobtainable unless an individual enters an assisted living facility as a private pay resident before qualifying for Medicaid. According waiting list priority to facility residents allows them to pay privately while engaging in Medicaid planning without risking discharge for non-payment on finally 'spending down' to Medicaid levels. To qualify for Medicaid, an individual must impoverish himself to the point that he can't afford assisted living facility private pay charges. Because waiting list placement must await Medicaid approval, persons who qualify for Medicaid only after entering a facility could expect a lengthy wait for a Medicaid slot absent waiting list priority. Upon qualifying for Medicaid, they would have to wait many months for a slot but wouldn't have the resources to pay privately during the waiting period. If slots weren't first granted to facility residents, facilities would face the Hobson's Choice either to discharge Medicaid eligible residents or substantially subsidize their care for lengthy periods. The likely result would be that facilities would avoid participating in Medicaid whenever possible. Although recent legislation generally requires assisted living facilities licensed after September 1, 2001 to assign 10% of beds to Medicaid patients, pre-existing facilities aren't covered. Therefore, many facilities probably would refuse to accept even existing residents under the Medicaid program if they did not receive priority in allocation of Medicaid waiver slots. The new Medicaid Assisted Living/Alternate Family Care Waiting List Policy strikes a reasonable balance between fairness and practical considerations. As with nursing home planning, individuals in assisted living facilities may have to 'spend down' substantial sums to qualify for Medicaid, but they eventually can expect Medicaid to pay for their care. In developing the new Policy, program administrators sought to provide reasonable predictability to Medicaid applicants and care providers and avoid a nasty potential catch, which also benefits elder law attorneys. The new waiting list policy allows elder law attorneys to engage in assisted living Medicaid planning with almost as much certainty as nursing home Medicaid planning. [Note, discussion of uncertainties and ambiguities, which many elder law attorneys consider unlawful and endemic to New Jersey's nursing home Medicaid eligibility process, is beyond the scope of this article.] Lawrence A. Friedman, a former chair of the NJSBA Elder Law Section, practices disabilities, elder, estate planning, and tax law in Bridgewater, NJ. He has been Certified as an Elder Law attorney by the A.B.A. approved National Elder Law Foundation and frequently lectures for ICLE, National Academy of Elder Law Attorneys, New Jersey State Bar Foundation and other groups. Friedman received the NJSBA's Distinguished Legislative Service Award for writing legislation to further special needs trusts in New Jersey. He received his LL.M. in Taxation and J.D. from New York University School of Law.