ELA Member Confirms the Law on Key Medicaid Coverage Issue

[This article was originally published on September 27, 2004. The links were updated on July 23, 2018.]

There sometimes is a lengthy gap between the time that a nursing home resident shifts from being a private pay resident to officially going on Medicaid. Particularly if the transition is poorly managed, a nursing home resident can amass thousands of dollars in uncovered nursing facility bills during this time. Should Medicaid cover these unpaid bills? Thanks to the efforts of Maryland attorney and ElderLawAnswers member Ron Landsman, we now know that the official answer is, in most cases, yes.

Landsman wrote the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicaid program, after the Maryland Medicaid program refused to cover $54,000 in nursing home expenses that one of his clients had incurred.

Landsman believed that Medicaid law allows Medicaid's share of nursing home costs (often called the "patient pay amount") to be used to pay off old medical expenses like these, but that not every state was following the law.

In its reply, CMS confirmed that Landsman's understanding of the law was correct and that states should be following it.

Here's how the law would work in a sample case: Suppose a Medicaid-eligible nursing facility resident owes $5,000 for past-due nursing facility expenses. If the resident's contribution to his nursing home costs is $500 a month, that $500 can be designated to pay the past-due balance (rather than going towards his current nursing home expenses). For 10 months, until the past-due bill is paid off, Medicaid would pay all the resident's nursing home expenses. After ten months, the resident would resume designating the $500 towards his current-month expenses.

The letter notes that a state may place 'reasonable limits' on deductions for medical expenses. Examples of "reasonable limits" are a requirement that services be prescribed by a physician, or that costs be limited to the market rate for the service in question.