A Montana trial court has refused to allow an institutionalized Medicaid beneficiary to deduct from the patient pay amount nursing facility expenses that had been incurred prior to Medicaid eligibility. The court implicitly held that only those rare past medical expenses that would not normally be covered by Medicaid are eligible to be deducted. Timm v. Montana Dep't of Public Health & Human Servs., 2006 Mont. Dist. LEXIS 341 (Mont. Dist. Ct. 2006).
Under federal law, institutionalized Medicaid beneficiaries may use the patient pay amount to pay off medical bills incurred prior to determination of Medicaid eligibility. 42 C.F.R. §§ 435.725(c)(4)(ii), 435.733(c)(4)(ii), and 435.832(c)(4)(ii). In a September 13, 2004, letter sent to ElderLawAnswers member Ron Landsman, the Centers for Medicare and Medicaid Services confirmed that old medical bills must be deducted from current income to determine the Medicaid share-of-cost for a Medicaid-eligible nursing home resident. (See "Medicaid May Pay Off Old Nursing Home Bills, CMS Confirms," ElderLawAnswers news article, Sept. 29, 2004.)However, some states have been unwilling to follow the existing authority, which requires previously-incurred health care bills to be used to meet Medicaid's monthly deductible (within reasonable limits, which must be spelled out in the state plan).
Now the National Senior Citizens Law Center (NSCLC) reports that a Montana trial court has misinterpreted the federal law and refused to allow a beneficiary's income deduction for previously incurred medical expenses. (Washington Weekly, June 30, 2006.) A nursing home resident requested an income deduction for nursing facility expenses incurred prior to Medicaid eligibility. The court denied the request, relying on a provision of the Montana state Medicaid plan that allows an income deduction only if the medical service at issue was prescribed by a physician, was not payable by a third party, and was '[n]ot a Medicaid covered service.'
"The court," the NSCLC writes, "ruled that the nursing facility services at issue did not qualify for a deduction because they were 'Medicaid covered.' The term 'Medicaid covered,' according to the court, referred to the type of service rather than to whether the resident had been eligible for Medicaid reimbursement at the time the service was provided, and without regard to whether the services, in real life, actually had been 'Medicaid covered.' . . . An argument on appeal would point out that the state plan provision as applied by the court is not a 'reasonable limit.' "
Ron Landsman filed an amicus brief.
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