Your Rights in a Nursing Home

Last week, I described the different long-term care facilities.  There are three primary long-term care facilities:  assisted living residences, nursing facilities, and continuing care retirement communities (or CCRC).

This week, I wanted to write a little about the practical aspects of entering these facilities.  Your rights can vary quite a bit in these different facilities, and those rights can have a practical aspect on you.

Nursing facilities are governed by the Nursing Home Reform Act, a law that has existed since 1987.  There are various rights guaranteed to every nursing facility resident.  The right to privacy, the right to confidentiality, the right to be free of restraints, the right of free choice are just a few of the rights guaranteed to every nursing facility resident in the United States.

A nursing facility also cannot obtain a guarantee of private payment from a third-party and it cannot require a prospective resident to guarantee private payment for any length of time or to refrain from applying for Medicaid benefits. Nursing facilities also cannot treat residents who are eligible for Medicaid benefits differently than those residents who are ineligible for Medicaid benefits.

For those residents who are eligible for Medicaid benefits, nursing facilities must accept Medicaid as payment in full. For instance, a nursing facility cannot ask the resident’s family to supplement the resident’s stay in the nursing facility if the resident is eligible for Medicaid benefits.

Almost every nursing facility in the state of New Jersey accepts Medicaid benefits. If the facility accepts Medicaid benefits, then it must agree to accept a minimum amount of its residents as Medicaid beneficiaries.  For instance, a facility must agree to accept at a minimum 45% of its residents as Medicaid beneficiaries.

In almost every nursing facility, every bed in the facility is dual certified for both a Medicare and Medicaid patient, meaning that in those beds, the facility must accept a resident who is eligible for Medicare or Medicaid. This can be very important because most people enter a nursing facility after being discharged from a hospital.  The resident enters the nursing facility to receive rehabilitative services, frequently as a Medicare beneficiary.

The family may decide that the resident needs to remain in the facility after his rehab is over. The resident will then switch to being either a privately paying resident or a Medicaid beneficiary.

The nursing facility might tell the family that they don’t have any Medicaid beds, but as stated above, in most facilities, every bed is dual certified for Medicare and Medicaid patients. Chance are quite high that the resident already is in a Medicaid bed—the same bed from which he was receiving rehabilitative services covered by the Medicare program.

Since the nursing facility cannot require a resident to refrain from applying for Medicaid benefits pursuant to the Nursing Home Reform Act, the facility cannot prevent the resident from applying for Medicaid benefits to cover the cost of the Medicaid certified bed in which he currently lies his head. The facility also must refrain from requiring the family (a third-party) from guaranteeing private payment for the resident’s stay.

Knowing that they cannot discharge you simply because you are converting from a short-term Medicare beneficiary to a long-term Medicaid beneficiary, many nursing facilities pressure the resident or his family to remove the resident from the facility. “We don’t have any Medicaid beds.”  “We don’t take a person Medicaid pending.”  “You will have to take the resident home and care for him in your home.”  These are common statements that nursing facility staff make to family members.  These statements are almost always incorrect.

Next week, I will write about your rights in an assisted living residence and a CCRC. Hint:  Those rights are substantially less than your rights in a nursing facility.

What Are My Rights

There are several common facts that people should know about long term care facilities.  Long term care facilities come in different varieties.  There are assisted living residences, a nursing facilities (commonly known as a nursing homes), and a continuing care retirement communities or CCRC.  Each type of facility is governed by different laws and each has a different type of license.

From a layperson’s point of view—which to a large extent includes me because I am not qualified or overly knowledgeable about the licensing standards for each of these facilities—an assisted living residence is similar to a hotel in appearance.  Compared to a nursing facility, an assisted living residence typically will have fewer professional staff members (for instance, nurses) than a nursing facility.

The residents often live in a room by themselves and share common areas for eating and socializing. The residents of assisted living residences are typically more active than residents of nursing facilities.  The residents will frequently go on day trips organized by the facility.

Nursing facilities when compared with assisted living residences are more hospital-like in nature. There are a number of nurses on duty at any given time and the residents are frequently visited by a staff physician.

Residents are often less cognizant of their surroundings than residents of assisted living residences. The residents rarely, if ever, go on day trips.  Unless there is a medical reason for a resident to have his own room, residents share rooms with one or more other residents of the facility.

A continuing care retirement community has various living arrangements at one facility. Most residents live in independent living areas, essentially apartments, but with common areas for eating and socialization.  If a resident’s care needs increase, the resident can move to the assisted living section of the CCRC, and if the resident’s care needs increase significantly, the resident can move to the nursing facility section of the CCRC.

The benefit of a CCRC is that the resident never has to leave the facility—or so they are told—if their care needs increase; the resident simply moves to a different area of the same CCRC. CCRC’s cost more than standalone assisted living residences and nursing facilities.  A CCRC will frequently require a large, upfront entrance fee—ranging anywhere from $100,000 to $500,000.  The entrance fee may be partially or wholly refundable when the resident vacates the CCRC, though the resident does not earn interest on the money given for the entrance fee.

Each of these facilities is governed by its own set of rules. For instance, residents of nursing facilities have significant rights that have been codified since 1987 in the Nursing Home Reform Act.  The right to privacy, the right to visit with friends and family, and the right to be free from restraints are just a few of the legal rights that have been established by the law for every nursing facility resident in this country for the past thirty years.  A resident of the nursing facility section of a CCRC would also be protected by the rights codified in the Nursing Home Reform Act.

On the other hand, a resident of an assisted living resident has far fewer legal rights than a nursing facility resident. I know of no codified system of rights that protects an assisted living resident.

The differences in the rights granted to the residents of these different facilities can make practical differences in the lives of the residents. Next week, I will write about how the rights of residents can have a practical application to the residents’ lives and the lives of their family members.

Beware of Your Own Generosity

Few issues prompt more questions to me than the concept of gifting.  In my experience, when it comes to gifts, people tend to focus on the unimportant and ignore, or are ignorant of, the important issues associated with gifting.

A gift occurs anytime a person gives something away and does not receive something of equal value in exchange for the thing given.  Clearly, if Mrs. Smith gives her son $10,000 and her son gives her nothing in return, a gift has occurred; however, gifts occur all the time without people knowing that a gift has occurred.

For instance, if Mrs. Smith gives her son her car, Mrs. Smith has gifted her car to her son.  Whatever the value of the car was at the time of the gift is the value of the gift.  Similarly, if Mrs. Smith “sells” her car to her son for $500 and the car is worth $5,000, then a partial gift has occurred.  If the son removes Mrs. Smith’s name from a bank account that held Mrs. Smith’s money and adds his name to the new account, then a gift of the bank account has occurred.  If Mrs. Smith adds her son’s name to the deed for her house, then a partial gift of Mrs. Smith’s house to her son has occurred.

Most people think they can only gift $15,000 a year without paying gift tax.  The fact of the matter is, a person can gift $11,200,000 during her lifetime without paying gift tax.  If a person gifts more than $15,000 in any given year to one person, then a gift tax return must be filed and the amount of the gift above $15,000 reduces the lifetime credit dollar-for-dollar.

Assume that Mrs. Smith gifts $20,000 to her son. Mrs. Smith must file a gift tax return, an IRS form 709.  No gift tax will be owed, but Mrs. Smith lifetime credit against gift tax will be reduced from $11,200,000 to $11,195,000.  Since most people have nowhere near $11,200,000, most people should have no concern about ever paying gift tax, and since a gift tax return is a simple tax form that most anyone can complete, there is little hassle associated with making a large gift.

What is a concern for gifting is the potential impact of the gift on the person’s eligibility for Medicaid benefits. If Mrs. Smith gives her son $20,000 or a partial interest in her house or her car, then those gifts could come back to haunt Mrs. Smith’s eligibility for Medicaid benefits if Mrs. Smith requires long-term care and applies for Medicaid benefits within five years of making the gift.

This is what the Medicaid five-year lookback is all about. When a person gifts any asset within five years of filing an application for Medicaid benefits, those gifts can come back to haunt the person’s application for Medicaid.

Pursuant to the five-year lookback, all gifts made within five years of applying for Medicaid benefits are aggregated. The aggregate value is then divided by a number, which is based upon the statewide average cost of a nursing home room.  That number is currently around $10,500.  So, for every $10,500 of aggregate gifts that Mrs. Smith made during the lookback period, she will be ineligible for Medicaid benefits for one month.

Since Mrs. Smith has no money—she is, after all, applying for Medicaid—she is subject to being discharged from the nursing home in which she resides if Medicaid assesses a penalty period against her for making gifts during the lookback period. If her son doesn’t want her discharged from the nursing home, her son may have to pay for the cost of her care.  Since a nursing home can cost upwards of $14,000 a month, the cost of Mrs. Smith’s care might exceed the value of the gifts that Mrs. Smith made to her son.

 

My Mom

This past week, my mother passed away.  She was 93 years old—three weeks shy of 94.  For the last six years of her life, my mother resided in a nursing home.

Like most children, I believe that my mother was a great person.  Without question, she was someone who loved being a parent and tried her hardest to be the best parent she could be.  All my mother wanted to be in life was a mother, so measured from that perspective, her very long life was an absolute success.

Years ago, I was able to qualify my mother for Medicaid benefits.  The fact that I qualified her for those benefits saved my father, aged 90, from financial ruin.  My dad still lives at home and has been able to reside at home because my mom qualified for Medicaid benefits.

There are several things that I gathered from my personal experiences that resonate with me every day.  People seek my advice about their parents and their parents’ need for long-term care.  After meeting with thousands of people and measuring their experiences against my own, I can tell you that while we all believe we are unique people with a unique set of facts, the reality is, on whole, we are mostly very much the same.

My mother never wanted to live in a nursing home.  I hear similar statements from clients all the time.  But when I say my mother never wanted to live in a nursing home, I mean she never wanted to live in a nursing home and would have rather just died on the spot if she thought she would ever live in such a place.

Before my mother became a full-time resident of a nursing home, she was in nursing homes on two occasions for rehabilitation.  When I would visit her during those short stays, she was practically hyperventilating from her agitation.  No matter how many times I would tell her that she was only there for rehabilitation and would be going home soon, she wanted to go home right then and there.  And she was adamant and angry.

After suffering several strokes, my mother suffered from vascular dementia.  Due to her strokes, her care needs simply reached a level where it wasn’t feasible for her to remain at home, so we placed her in a nursing facility where she received excellent care for six years.

Because of the effects of dementia, my mother never realized that she was living in a nursing facility, so she was actually comfortable and peaceful in the nursing home.  For the first four years of her stay, she was somewhat conversational and always appeared relaxed and relatively happy.  Eventually, the dementia took over her mind to an extent where she wasn’t conversational, but she always appeared relaxed and comfortable.

So many people come to see me and tell me that they will never live in a nursing home. When they tell me this, I remember my mother.  Sometimes a person’s care reaches a level where family members cannot provide the care.  It would be unsafe for the person who needs the care to remain at home and for the caregiver to provide that care.  Many caregivers—spouses or adult children—suffer mental and physical harm attempting to provide care to an elderly person at home.

So, the point I take away is, never say never, because if my mother spent six years in a nursing home, anyone can end up spending a significant amount of time in a nursing facility.

Another point I bear in mind with respect to my mother’s care is the way people view a particular nursing facility. Many people ask me for a referral of a “good” nursing home.  I always tell people to visit www.medicare.gov, which is a government site that ranks nursing facilities on various criteria, and to visit the actual nursing home to get a sense of the care that is being provided.  I also suggest that people chose a nursing home near their house, because it makes it much easier to visit the family member.

I thought the facility in which my mother resided is the best nursing facility. I thought the care she received was outstanding.  The facts of her case bear my opinion out.  She resided in that facility for six years, which is longer than any other client of mine has ever resided in a nursing facility and a lot of my clients have resided in nursing facilities.  But I have had clients tell me they don’t like the nursing home where my mother lived.  That’s fine, and that’s why I try not to recommend facilities.  It’s a personal opinion.