Case Mix reimbursement operates on a weighted scale, the more resources needed to provide resident care, results in a higher CMI score and a higher reimbursement level. The Minimum Data Set (MDS) Assessment is used by states to collect objective data regarding a resident within specific timeframes, across multiple disciplines. When an MDS assessment is completed, a clinical score that reflects resident acuity is assigned. This clinical score, known as a Resource Utilization Group (RUG) level, correlates with direct care costs in a Case Mix reimbursement system.

Implementing systems that strengthen documentation of care provided and data capture in the MDS assessment, can have a significant impact on a provider’s Medicaid revenue.

Illinois is the latest battleground state where Stotler Hayes Group (SHG) has brought the fight for post-Medicaid eligibility income deductions for recipients of long-term care Medicaid benefits. In an ideal world, residents would have all of their financial affairs in order prior to being admitted to a skilled nursing facility so that they secure Medicaid benefits as soon as they exhaust their insurance coverage or private resources. Anyone in the long-term care industry knows, however, that many residents are unable to secure the Medicaid start-date that they need, which leaves the resident – and their provider – with unpaid bills for services rendered prior to their Medicaid eligibility.

Medicaid is a cooperative Federal and State program intended to assist needy and indigent individuals with the costs of care. In order to receive federal funding, State plans for Medicaid must comply with Federal requirements. The Centers for Medicare and Medicaid Services (“CMS”) has long interpreted unpaid expenses incurred prior to Medicaid approval as “not covered” under the State plan for Medicaid. As a result, Federal law requires State Medicaid programs to deduct unpaid medical expenses incurred prior to Medicaid eligibility when determining the amount of income that a resident is required to contribute toward the cost of his or her care; this amount is known as a resident’s “Cost Share” or “Patient Pay Liability.” In other words, Federal law provides Medicaid recipients the ability to apply their Cost Share/Patient Pay Liability towards uncovered pre-eligibility medical expenses. States are permitted to impose reasonable restrictions and many states have done so – allowing deductions, for example, only for uncovered medical expenses incurred three months (or, in some states, six months) prior to the month of the Medicaid application. Some states have elected to impose no time restrictions and allow for deductions in Cost Share/Patient Pay Liability for uncovered medical expenses regardless of when the expenses were incurred prior to the month of the Medicaid application.

Stotler Hayes Group Attorney, Nathan Peters, presented at the Texas Healthcare Association’s Board of Directors meeting on August 21st, 2019. Nathan shared two updates on how Stotler Hayes Group’s (SHG) Texas-based attorneys are successfully fighting to recover every Medicaid dollar available for our clients, and all Texas providers. SHG attorneys have litigated two major issues with the Texas Health and Human Services Commission (THHSC) and both could significantly impact future Medicaid payments in Texas. The issues the cases have dealt with include (1) the THHSC’s denial of an application for failing to exclude inaccessible resources for incapacitated Medicaid Applicants and (2) THHSC’s improper restrictions on Incurred Medical Expenses (IME). By some estimates, the IME payments could alone boost Medicaid provider payments over $40 million annually.

Unlike some state Medicaid agencies, THHSC previously refusing to exclude certain resources when reviewing Medicaid applications for incapacitated individuals. This policy is leading to a significant loss in payments for providers, because affected providers are left without a payor source until the incapacitated resident can secure a guardian with the authority to spend down their resources. Unfortunately for these providers, securing a guardian and spending down resources for incapacitated individuals is often a lengthy and complicated process. However, SHG’s recent victory in the case of Tex. HHS Comm’n v. Marroney, 2019 Tex. App. LEXIS 4298, 2019 WL 2237885 (Tex. App. – Austin May 24, 2019, Pet. Denied) should lead the THHSC to change its policy and start excluding inaccessible resources for incapacitated residents.