Spreading the Risk: Managed Medicaid Home Care - Cona Elder Law

Spreading the Risk: Managed Medicaid Home Care

May 2013

By Jennifer B. Cona, Esq.

The advent of Medicaid Managed Long Term Care has long been in the making in New York State.  As Elder Law attorneys, we braced for the roll-out in Nassau and Suffolk Counties while watching New York City and the boroughs begin to implement the program.  As expected, panic amongst our clients ensued as client after client received the dreaded letter stating substantially: “You must join a Managed Long Term Care Plan.  If you do not choose a plan, we will choose it for you.”  This of course, makes one wonder: where’s the meaningful “choice” in the so-called “Medicaid Choice”?

Medicaid Managed Long Term Care (MLTC) is a program through which New York State pays for long-term care in the community setting, most typically what we think of as “home care,” that is, a home health aide/personal care aide providing care in a residential setting.  What is different under MLTC is that payments are capitated so that instead of “fee-for-service” Medicaid reimbursement to a home care agency, the managed Medicaid plan provider receives a fixed monthly amount per plan member – regardless of the amount of services actually provided.  The idea is one of “spreading the risk” so that members in the plan who only need minimal services balance out those members with greater needs and medical costs.

The problem for the consumer is obvious:  no managed care provider will want to take on a split-shift case (two home health care aides each working a 12-hour shift) or even a 24/7 home care case because the reimbursement will be inadequate.  The managed Medicaid providers will seek out the four to eight hour cases as their profit centers.  Federal law of course prohibits this kind of “cherry-picking” but cases have already come to light where such high-cost patients have been dropped by the managed Medicaid provider.  In one such instance, a wheelchair-bound disabled woman with a progressive disease who received split-shift care for 17 years suddenly lost her 2 twelve-hour aides when she was placed in a Medicaid Managed Care plan.

There are two models under managed Medicaid:  Program for All-Inclusive Care for the Elderly (PACE) and Medicaid Managed Long-Term Care plans (MMLTC).  The MMLTC plans are by far the largest provider in New York State.  Both plans have the same eligibility requirements which follow community Medicaid asset and income rules.  
In brief, the current resource allowance is $14,400 and the income allowance is $800/per month to be eligible for Medicaid home care/community benefits.  In the month of application, the applicant must document that his or her total assets are at or below $14,400, excluding the primary residence, one car, personal property and certain burial allowances.  If the applicant has income in excess of $800/month, he or she may either spend the excess down on the cost of their care or establish a pooled income trust to protect said excess income for their use.  If married, the non-applying spouse is entitled to maintain $21,150 in total assets and $1,175 in income each month.  If the non-applying spouse has assets or income in excess of these figures, he or she will be required to invoke spousal refusal.  Assets must be documented as of the month of application instead of the full five-year look back required for institutional Medicaid benefits and there is no penalty for transferring assets.  As a practical matter, this means that an applicant can transfer excess resources and be eligible for Medicaid home care benefits the following month.  

As our clients are being enrolled one by one in MLTC plans, several issues are coming to the fore.  Of particular concern is the alteration to a Medicaid recipient’s right to a Fair Hearing.  In the home care context, a Fair Hearing may be requested to challenge a denial of benefits, challenge a reduction in services or hours or seek an increase in hours of home care services based on a change in circumstances.  Importantly, a Medicaid recipient could request “aid continuing” while the appeal was pending whereby the same level of services currently provided to the recipient was required by law to be continued until a decision was made after the hearing (which could take anywhere from four months to a year).  Under MLTC, an applicant must exhaust an internal appeal process before a Fair Hearing may be requested.  (This is not to be confused with a “grievance”, which is a complaint about something other than a change in scope, amount or duration of services.)  In addition to the internal appeal, there is also an external appeal, which is a review by an independent entity as to the decision in the internal appeal.  An external appeal need not be exhausted before proceeding with a Fair Hearing and a decision rendered in the external appeal process is superseded by a Fair Hearing decision.

In certain circumstances under a MLTC plan, the Managed Medicaid provider has the right to reduce or terminate hours of home care services with no notice and no right to receive the current level of services while the appeal is pending.  The right to aid continuing is a long-held, almost sacred right guaranteed by the Due Process clause of the Fourteenth Amendment.  As such, both the right to a Fair Hearing and the right to aid continuing under MLTC plans should and will most certainly be the subject of litigation in the very near future.

To be sure, managing costs and “spreading the risk” to cover the increasing fiscal burden of caring for our aging population is sound, but it must be done with great care as it affects the weakest members of our population.


About the Author Cona Elder Law

Cona Elder Law is a full service law firm based in Melville, LI. Our firm concentrates in the areas of elder law, estate planning, estate administration and litigation, special needs planning and health care facility representation. We are proud to have been recognized for our innovative strategies, creative techniques and unparalleled negotiating skills unendingly driven toward our paramount objective - satisfying the needs of our clients.

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