Medicaid changes stall

Long-term care issue likely going to General Assembly

Opponents of proposed changes to Medicaid regulations have succeeded in bottling the issue up until next year, when the General Assembly will likely have to tackle the problem.

Although they don't have hard numbers, officials say that many North Carolinians are giving away money and land to relatives -- or even churches -- while planning to apply for Medicaid to pay for long-term care. And that's cheating. The guidelines are designed to ensure that federal tax dollars are not spent on care for people who can afford nursing homes.

Only lawbreakers out to scam the government by sheltering assets will feel the effects of the proposed Medicaid regulations, which make it tougher to qualify for the federal program when entering a nursing home, state officials say.

But advocates have succeeded in keeping the new rules from taking effect, arguing that older and disabled people will be denied care if the changes go into effect.

They have kept the process tied up in the rules commission, which has to adopt the state's criteria for exceptions to the new federal law.

Under the 2005 federal Deficit Reduction Act, Medicaid is supposed to "look back" five years from the date someone applies for the benefit to see if the person gave away money that could have gone to pay for long-term care.

In North Carolina now, the government looks back three years, so anything given away before then is not counted in the calculations of wealth for Medicaid eligibility.

"The only people affected by this [rule] are people who have broken the law in the first place," lawyer Belinda Smith, of the state Attorney General's Office, told the Rules Review Commission last week.

Under the state's proposed exceptions, some people who are suspected of spending down their assets to qualify for Medicaid would have to prove, within 24 days, that losing the Medicaid-covered care would put them in danger of death, based on a doctor's written opinion.

"The result of the proposed rule will ultimately be that nursing facilities will refuse to accept patients on discharge from the hospital [or] from the community that are not Medicaid-approved as they walk in the door," Black Mountain attorney Wendy Craig, chair of the state bar association's elder-law section, wrote in formal comments on the rule. "Our hospital emergency rooms will be overcrowded with this population of patients who cannot be discharged home and who will not be accepted into nursing facilities."

Another proposed exception would be for patients who can demonstrate that a nursing home would be the only place they could receive food, shelter and medical care. In addition, some applicants would have to show that they have taken steps, including hiring an attorney and trying to nullify a mortgage, to get the donated assets back.

After four trips to the rules commission, which is highly unusual, the proposals have yet to take effect.

From state government's point of view, North Carolina is at risk of losing millions in Medicaid funds if the state doesn't comply with the federal mandate. Meanwhile, state and county officials who handle Medicaid applications said they do not know how to counsel people about what's allowed and what's not.

"We frequently get questions about, 'What if I give away this amount of money?' " said Liz Scott, director of adult economic services at Wake County Human Services. "We have not been able to tell people what the changes are going to be."

Marjorie Morris, chief of the state's Medicaid Eligibility Unit, said people who have enough assets to pay their own long-term care should do so instead of finding ways to put money or land in the hands of others.

"Medicaid is not there to protect what the parents have saved for their children," Morris said.