Nursing Home Properly Billed Medicaid Applicant at Private Pay Rate

A Delaware appeals court rules that a nursing home properly billed a resident at the private pay rate before the resident's Medicaid application was approved and that the resident's daughter is personally responsible for paying the nursing home. Miller v. Onix Silverside, LLC (Del. Super. Ct., No. C.A. N15A-03-009 AML, Aug. 26, 2016).

When Mary Miller entered a nursing home, her daughter, Deborah Miller, signed the admission agreement as the responsible party. The contract provided that Deborah would ensure the nursing home was paid from Mary's funds and would be personally liable for any funds under her control that she did not pay to the facility. When Mary's Medicare benefits ran out in February 2014, the nursing home began billing Mary as a private pay resident. Mary left the nursing home in April 2014. Deborah hired an attorney to do Medicaid planning, which required Mary to transfer her house to Deborah. The state approved Mary's Medicaid application in June 2014.

Mary and Deborah never paid the nursing home for March and April 2014. The nursing home sued Mary and Deborah to collect damages for breach of contract and fraudulent conveyance. The trial court awarded damages, and Deborah appealed, arguing that the nursing home improperly billed her mother as a "private pay" patient instead of "Medicaid pending." She also argued that because Medicaid is retroactive for three months before the application, the nursing home should be required to submit a bill to Medicaid for those months.

The Delaware Superior Court affirms the award of damages, holding that the nursing home properly billed Mary at the private pay rate. According to the court, even if a resident is classified as "Medicaid pending," under the admission agreement the resident is still required to pay the private pay rate. The court also holds that while Medicaid may cover up to three months before an application, Mary's financial situation made her ineligible for Medicaid until June 2014.

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