Financial Strugle Closes Large Medicaid Assisted Living Facility

Westchester Plaza in Fort Worth, Texas—the largest assisted-living facility for Medicaid recipients in the state announced in July it will close its doors after 19 years, and gave residents until Aug. 10 to find new living arrangements, according to the Associated Press over 100 people were affected by the closing.

The 12-story building, located at the center of Fort Worth’s medical district, has operated as an assisted living community since 1998. The facility has been advertised as “affordable luxury assisted living,” with each resident occupying a one-bedroom apartment.

The age and size of the building have caused regulatory and financial challenges.

The nonprofit controlled by Sweeney, WGH Heritage, reported a more than $2 million deficit in its most recent tax filing; the organization also reported multi-million dollar deficits in 2014 and 2013.
The company faced even more financial struggles beforehand, as it defaulted on its loans and had to reconstruct $20 million in debt backed by the U.S. Department of Housing and Urban Development.
In 2014, a deal fell through between the company and Irvine, California-based real estate investment trust which had plans of buying the property to build a $108.6 million combined residential/commercial development in its place.

Despite the selling point of “affordable luxury assisted living,” the facility faced operational issues as it was handed a lawsuit based on complaints that it did not have a proper sprinkler system for eight months in 2012, according to Tarrant County district clerk records. As a result, WGH Heritage shelled out $30,000 in civil penalties to the Texas attorney general’s office to settle the suit.

The Texas Department of Aging and Disability Services also investigated complaints against the facility in 2012. Most recently, state regulators investigated a complaint in March, finding that the facility had “failed to follow its internal policies regarding the prevention, detection and reporting of abuse, neglect or exploitation.”

According to a press release, “Despite the ballooning population of low-income seniors and individuals with disabilities, the number of Medicaid-assisted living providers in Texas has steadily declined due to low reimbursement rates, changes in process management of the Medicaid Waiver program, and expansion of alternative entitlement programs”. The release also stated that Westchester Plaza property management would be helping residents find relocation with the help of local groups and “Managed Care Organizations contracted to manage the Star+Plus Medicaid Waiver program.

Medicaid cuts in the healthcare bill proposals could be brutal for people living in nursing homes

Is this the future of Medicaid funded Nursing Home and Assisted Living in America?

The New York Times reports that 42% of Medicaid spending goes to services like nursing home care. Cutting spending in the program would hit the elderly, or put pressure on nursing home operators to cut back. That rollback in Medicaid funding could particularly hit one unexpected group of people: elderly people living in nursing homes.

Even though elderly Americans get medical coverage from Medicare — that program doesn't automatically cover long-term stays in nursing homes. For the most part, people pay out of pocket for nursing homes. Once that gets depleted, residents start to qualify for Medicaid to cover their stay.

Westchester Plaza residents must move out 

Medicaid covers more than 74 million Americans, including low-income people, families, and kids, as well as pregnant women, people with disabilities, and the elderly. The New York Times detailed the impact of Medicaid cuts on nursing home care in a story , and reports that — even though they only make up 6% of all Medicaid enrollees — those who use long-term services like nursing homes account for about 42% of total Medicaid spending.

Cuts to Medicaid spending could put those services on the chopping block.

"Moms and kids aren’t where the money is," Damon Terzaghi, senior director at the National Association of States United for Aging and Disabilities told The Times. "If you’re going to cut that much money out, it’s going to be coming from older people and people with disabilities."

Failure to enroll in Medicare Part D could cost you a huge late enrollment penalty.

the medicare drug cost penalties

Enrollment for Medicare Part D may be coming up for you soon. If you are approaching age 65 and will soon be eligible for Medicare you need to sign up for part D coverage as soon as you are eligible. You do not have to wait until open enrollment. Open enrollment is the time when you may look at other plans and change coverage if you are not happy with your current coverage.

If you have not enrolled in Medicare Part D, and are on Medicare, here are some things you should know.

Failure to enroll in a Medicare Part D plan or a similar plan such as an HMO or PPO that provides drug coverage could subject you to a penalty once you do sign up. This information is available to Medicare recipients however many still do not understand the facts about the penalties and so chose to go without coverage thinking ‘why should I pay for drug coverage when I am very healthy and take no medication’.

As with all insurance plans, coverage of healthy people paying premiums into the pool helps defray the costs of those who need to use the coverage. Because this is so, the government imposes a penalty on those who do not pay into that pool when they are eligible.

The penalty works like this: Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($34.10 in 2016) times the number of full, uncovered months you didn't have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium. The national base beneficiary premium may increase each year, so your penalty amount may also increase each year.

Here is an example from the Medicare.gov website:

 

Example
 

Mrs. Martinez, a fictitious Medicare enrollee

 

Mrs. Martinez is currently eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2012. She doesn’t have prescription drug coverage from any other source. She didn’t join by May 31, 2012, and instead joined during the Open Enrollment Period that ended December 7, 2014. Her drug coverage was effective January 1, 2015.

2015

Since Mrs. Martinez was without creditable prescription drug coverage from June 2012–December 2014, her penalty in 2015 was 31% (1% for each of the 31 months) of $33.13 (the national base beneficiary premium for 2015) or $10.27. Since the monthly penalty is always rounded to the nearest $0.10, she paid $10.30 each month in addition to her plan’s monthly premium in 2015.

Here's the math:

.31 (31% penalty) × $33.13 (2015 base beneficiary premium) = $10.27

$10.27 rounded to the nearest $0.10 = $10.30

$10.30 = Mrs. Martinez's monthly late enrollment penalty for 2015

2016

In 2016, Medicare recalculated Mrs. Martinez’s penalty using the 2016 base beneficiary premium ($34.10). So, Mrs. Martinez’s new monthly penalty in 2016 is 31% of $34.10 or $10.57 each month. Since the monthly penalty is always rounded to the nearest $0.10, she’ll pay $10.60 each month in addition to her plan’s monthly premium.

Here's the math:

.31 (31% penalty) × $34.10 (2016 base beneficiary premium) = $10.57

$10.57 rounded to the nearest $0.10 = $10.60

$10.60 = Mrs. Martin's monthly late enrollment penalty for 2016

So in simple terms, because she went without coverage for just under 3 years she could now have to pay almost $11.00 extra per month on top of her policy premiums for the rest of her life! That’s almost $130.00 per year. Yes the penalty will be recalculated every year, however it never goes away!

Now think about it, if a person was healthy at age 65 and they decided to go without coverage at an average cost of $33.00 a month (could be as low as $20.00) and then at age 75 they started to need medications when they apply for Part D coverage they would have to pay a penalty based on 120 months of non coverage which with the above example would be roughly $40.92 each month in addition to their monthly premium. That’s almost $500.00 per year!

“The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.” – medicare.gov

 

There are so many reasons to sign up for Medicare Part D as early as you can.reasons to sign up medicare part d early

So give it some thought. Do the numbers yourself. That penalty could add up to thousands of unnessary dollars over the years past age 65, IF you do not sign up for Medicare Part D at the beginning.

Remember - Medicare premiums could be higher and more difficult to pay for if you do not sign up for Part D early.

And the fact is: “Medicare drug plans can disenroll members who don't pay their premiums, including the late enrollment penalty portion of the premium.” - Medicare.gov website (italics ours)

 

Sources: Part D late enrollment penalty - Medicare.gov

Also see: 3 ways to avoid the late enrollment penalty - Medicare.gov

More and more of us are living longer, and we need a Long-Term care solution more than ever.

"About half of all senior citizens will need to spend about $138,000 for personal care over two years"

Yet, for one in seven, five years of care becomes necessary, and the cost "is far beyond the ability to pay.” This according to Howard Gleckman of the Urban Institute. And that five-year cost can exceed $250,000.

Now a nonpartisan group, the Long-Term Care Financing Collaborative, has called for a push for a new national universal policy for just that – Long Term Care for Seniors. The Urban Institute is a part of that Collaborative.

With a goal of getting employers to automatically enroll their employees in long-term care insurance policies at work, with employees paying regularly toward insurance from each paycheck, businesses would get insurance companies to offer long-term care insurance again after fleeing the market during the last few years, and getting people to enroll in more affordable insurance than has been offered previously.

Many Americans do not realize that Medicare and other health insurance plans will not cover long term care such as bathing, dressing and other help seniors often end up needing as they become frail or suffer debilitating diseases like Alzheimer's later in life. Referred to as ADL’s or "Activities of Daily Living", this is care that seniors and their families can be left with, often becoming a crushing financial burden.

The group emphasized that family responsibility will continue, but the collaborative wishes to lessen the burden. The Urban Institute has estimated that services delivered by family members total about $470 million each year.

"A woman in her 50s who leaves a job to care for aging parents loses an average of $300,000 in lifetime income," the collaborative reported. "Unpaid family caregivers lose an estimated $3 trillion in lost lifetime wages and benefits," while employers suffer $17 billion to $33 billion in lost productivity and absenteeism.

According to the group's research, about half of all senior citizens will need to spend about $138,000 for personal care over two years. Yet, for one in seven, five years of care becomes necessary, and the cost "is far beyond the ability to pay," said Howard Gleckman of the Urban Institute. The five-year cost can exceed $250,000.

Senior care costs are rising

What about Medicaid and Long-Term Care?

It’s true, regular health insurance doesn’t cover Long-Term care, and neither does Medicare. The Medicare program covers only short nursing home stays or limited amounts of home health care when a senior requires skilled nursing or rehab. It does not pay for custodial care, which includes supervision and help with day-to-day tasks. So will Medicaid fill that gap? Not necessarily. You can get help through Medicaid, the federal and state health insurance program for low-income people, but only after you’ve exhausted most of your savings, depleting a retirement nest egg quickly. The median cost of care in a semiprivate nursing home room now tops $80,000 a year, according to Genworth’s 2015 Cost of Care Survey.

And if you have to rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program. Medicaid does not pay for assisted living in many states.

And so it is easy to understand why groups such as the The Long-Term Care Financing Collaborative see such an urgent need to address this growing problem, a lack of adequate and affordable Long-Term Care insurance. What is seen as a failure of policy makers to reach agreement on viable solutions has pushed the issue to the forefront.

Today, 10-12 million adults require supports that help them maintain the best possible quality of life, supports and services such as non-medical assistance and help with food preparation, personal hygiene, assistive devices, transportation, as well as help with activities such as bathing and eating. And the number is expected to double by 2030.

What is the Long-Term Care Financing Collaborative?

The Collaborative brings together national experts and stakeholders who cross ideological divides in pursuit of a common goal: to improve the way Americans pay and prepare for the non-medical care needed by our frail elders and people living with disabilities to live with dignity and autonomy through consensus-based, concrete policy recommendations. – Convergencepolicy.org

For more about the groups efforts, and a list of the groups participants, you can follow this link to the Long-Term Care Financing Collaborative.

Long-Term Care for Seniors is a need that is growing fast. It's good news to see this kind of effort toward finding a long term solution.

Three People Accused in Massive Medicare Fraud in Florida

The U.S. Justice Department is calling it the largest criminal health care fraud case ever brought against individual suspects. The $1 Billion health care fraud took advantage of Medicare in Florida, agents said.

Three people are accused of a massive fraud involving a number of Miami-based health care providers. Many assisted living facilities may also have been part of the health care fraud.

The three facing charges are all from Florida's Miami-Dade County; they are Philip Esformes, 47, owner of more than 30 Miami-area nursing and assisted living facilities; hospital administrator Odette Barcha, 49; and physician assistant Arnaldo Carmouze, 56, according to the Justice Department .

"Medicare fraud has infected every facet of our health care system," U.S. Attorney Wifredo Ferrer said Friday while indictments against the three were announced.

Included in the indictments are accusations of leading "a complex and profitable health care fraud scheme that resulted in staggering losses, in excess of $1 billion," said Special Agent in Charge George L. Piro of the FBI's Miami field office.

Community Mental Health Centers and Home Health Care Providers Received Payments

Investigators say Esformes access to thousands of Medicare and Medicaid beneficiaries were instrumental to perpetrate the fraud. How this will affect the future of Florida Medicare remains to be seen.

It was also announced that money, in the form of kickbacks, were paid to Esformes and his co-conspirators in return for "steering beneficiaries to other health care providers including community mental health centers and home health care providers, who also performed medically unnecessary treatments that were billed to Medicare and Medicaid."

"Many of these beneficiaries did not qualify for skilled nursing home care or for placement in an assisted living facility. However Esformes and his co-conspirators nevertheless admitted them to Esformes Network facilities where the beneficiaries received medically unnecessary services that were billed to Medicare and Medicaid."

Charges of conspiracy, money laundering and health care fraud against Esformes and Barcha were also included in the announcement.

I was on the forums these past few days and one of the threads was talking about how many days are covered by Medicare in a Nursing Home or Rehab after a hospital stay. The answers were all over the map and quite confusing I must confess, so I thought I would do a post about it to clear things up. I have always told my readers I am no expert, but when it comes to this subject I know it all to well. You see my mom has been in and out of rehab 3 times in the past 2 years so we know the rules by heart.

According to Medicare rules a person must have a qualifying hospital stay of at least 3 days, ( 24 hours) and be in need of further skilled nursing or rehab care in order for them to pay for the stay. The doctor and the physical therapy department at the hospital must agree that the patient would benefit from continued care or therapy at a nursing home or rehab facility. 

It is important to note at this point that the patient needs to be an inpatient at the hospital for 3 days, and time spent in observation or the ER does not count. They have to be admitted to the hospital. This is very important!

Insurance companies and Medicare are putting increased pressure on doctors so that they do not admit patients. They have narrowed the guidelines for admittance and now many patients are ending up in observation for 1, 2 or 3 nights and then they do not qualify to go to rehab under Medicare. 

If a person has a qualifying stay of 3 days then Medicare will pay for nursing home or rehab as follows:

1. Day 1-20 Covered 100%
2. Day 21-100 partial coverage with a 161.00 a day co-pay
3. Day 101 and beyond no coverage

Many Medicare supplement policies like the one my mother has will cover the copay on days 21-100 so there is no out of pocket for the patient. However this is something you should look into ahead of time so you know your coverage should you or a loved one be in this situation. 

During the time in rehab the patient must continue to show that the services provided are helping them to improve. So if at anytime during their stay the team feels they have done all they can for the patient the team is obligated to discharge them, even if they have days left.

Now there is something to be said about having days left over. If the patient leaves rehab or nursing care and they need to be readmitted to the facility within 30 days and have days remaining they will have coverage through Medicare. If they use up all their days then they would have to wait 60 days and have another qualifying hospital stay of 3 days before Medicare would pay for skilled nursing care or rehab again. This would start their 100 day benefit period over again. 

I am providing a link here that goes to the Medicare.gov site for skilled nursing care. It has more information for you. 

I do hope this information helps you understand the process a bit better. If you have any questions or comments please feel free to contact me or leave a comment at the bottom. We always love to hear from you. Remember you are not on this journey alone.