Chapter 10: Paying For Nursing Home Care

Many people assume that Medicare or their insurance will pay for their nursing home care.  They are usually wrong.  Medicare pays for no more than the first 100 days of nursing home care, and has so many other restrictions that almost nobody entering a nursing home gets even that much paid for.  Most residents’ health care insurance stops when Medicare coverage stops.  Unless your mother has unusually good long term care insurance, she is likely to end up paying for her nursing home care out of her own pocket or with Medicaid.


1.  What Medicare pays for.

For Medicare to pay for any part of your mother’s nursing home care, she must:

  • have been hospitalized (this does not mean “kept for observation”) for at least 3 days; and
  • go into a nursing home that is in the Medicare program, no more than 30 days after leaving the hospital; and
  • need nursing home care for the same reason she was hospitalized; and
  • need what Medicare calls “skilled care.”  

Medicare pays for part or all of up to 100 days a year of what it calls “skilled care.”  What Medicare means by “skilled care” is:

  • she is on oxygen; or
  • she has an IV or a feeding tube; or
  • she needs daily injections, daily wound care or other skilled care; or
  • she needs daily physical, occupational or speech therapy.  Medicare is supposed to pay for her care if she needs daily therapy either to improve or to maintain her ability to function; or
  • her medical condition is so unstable that she needs to be monitored by a registered nurse.  For example, she might be on a new medication and need to have daily blood tests for her doctor to decide on the right dosage, or have her condition closely watched to make sure the medication is not harming her, or need her blood sugar levels monitored.. 

Part B Medicare will also pay for some physical, occupational and speech therapy for nursing home residents, including residents whose daily care is not being paid for by Medicare.  Part B is not supposed to pay for therapy which is covered as part of the daily nursing home rate.

Medicare will pay for your mother’s doctor’s visits, and care by other medical professionals such as her podiatrist, just as if she were not in a nursing home.

Medicare has copayments and deductibles for some of the days of care for which it pays. 


2.  Billing Medicare.

If your mother has Medicare, the nursing home must tell her in writing if it thinks her nursing home care will not be covered by Medicare.  The nursing home cannot charge her for any days she is in the home before they give her this written notice.  Of course, the nursing home could be wrong when it tells her that it thinks Medicare will not pay for her stay.  For this reason, the home must also tell her in writing that she has a right to have the nursing home apply to have Medicare pay for her care, even if it thinks the claim will be denied.  

The nursing home may not require your mother to pay for any care for which it is submitting a claim to Medicare, until Medicare sends a notice in writing that it will not pay for that care.  The nursing home must wait to get this written notice before it can bill your mother, even if it thinks the claim will be denied.  It cannot require her to pay copayments in advance of when they become due.  It cannot charge her a fee for doing the paperwork or submitting the claim to Medicare. 


3.  When Medicare coverage ends.

Your mother must be given written notice before her Medicare coverage is ended.  The notice will tell her how to appeal if she wants.  The notice can take effect immediately: it does not have to be even one day in advance.


4.  “Gap” insurance.

Many people have Medicare “gap” or “supplementary” insurance.  This is an insurance policy approved by Medicare, from a private insurance company, which pays the copayments and deductibles Medicare does not pay during the maximum 100 days of coverage.  “Gap” insurance will not pay for any part of your mother’s nursing home stay for which Medicare is not also paying.  This means that “gap” insurance will not pay for any of your mother’s nursing home care if Medicare refuses to pay either because she does not meet the Medicare requirements for payment, or because she has used up her 100 days of coverage.

“Gap” insurance is not the same as Medicare Part D drug insurance.  Most “gap” insurance policies do not include drug coverage.  (Some policies sold before 2006 do cover drugs.)


5.  Private insurance instead of Medicare.

If your mother has private health insurance or an HMO policy that Medicare has approved as a substitute for Medicare, the insurance company or HMO is not allowed to use a more limited definition of “skilled care” than Medicare uses.  The insurance company or HMO must also cover at least 100 days of nursing home care, with no more limitations than Medicare has. People who have these “Medicare Advantage” insurance policies are not allowed to also have “gap” insurance.


6.  Long-term care insurance.

Your mother may have private long term care insurance.  (This does not mean Medicare, or Medicare Advantage, or “gap” insurance.)  Because long term care policies vary widely in what kind of care they pay for and for how long, the only way you can know what is covered is to get a written description of benefits from the company and read the fine print.  The insurance company will usually also have a phone number you can call to get an explanation of what benefits are covered.

Variations include paying for “skilled care” as Medicare defines it, but for a longer period than Medicare pays for it; paying for a broader range of “skilled care,” than does Medicare, for a limited or unlimited number of days; paying for nursing home care so long as your mother needs help with more than with “activities of daily living,” for a limited or unlimited number of days; paying for all nursing home care for a limited or unlimited number of days; paying for assisted living or home care instead of nursing home care, sometimes at the same rate and sometimes at a lower rate.  The insurance may pay the facility daily rate, or a percentage of it; a rate based on the Medicare daily rate or the average private pay rate in the area; or a flat daily rate.  Many policies have a lifetime payment maximum, or a maximum for each stay.  While some policies start paying the day your mother enters the nursing home, most policies do not start paying until your mother has been in the nursing home for anywhere from one to six months.  Finally, different companies have different policies about whether, and under what circumstances, they pay for hospice care, and for nursing home care if your mother is also getting hospice care.  


7.  Your mother’s Social Security check.

Many nursing homes want residents to have their Social Security checks sent to the nursing home, so they can immediately sign the check over to the nursing home as part of their monthly payment.  This happens most often when the resident gets Medicaid.  Some nursing homes tell Social Security to change the address to which the check is sent without the permission or knowledge of the resident or her family.  Some even arrange to have a facility employee be the resident’s “representative payee,” with authority to endorse the check, again without the permission or knowledge of the resident or her family  

Although it is illegal to interfere with residents’ mail delivery, nursing home staff also often screen the mail for Social Security checks, take the checks, and call the residents down to the office.  There they tell them endorse the checks immediately; residents are given no choice. 

Even if your mother is managing her own financial affairs, It is usually a bad idea to have her Social Security check sent directly to the nursing home.  This is because, if she wants to move out, it may take a while before Social Security changes the address to where she has moved.  Also, if she does not want her check signed over to the nursing home, the best way to avoid being pressured to do so is to have the check sent elsewhere, or deposited directly to a bank account. 

Unless there is nobody else responsible who can do it, a nursing home employee should never be your mother’s representative payee.  Making a nursing home employee her representative payee will prevent her from making choices about what to do with her money. [We discuss this subject in section 13 of this chapter, below.] 

If your mother is able to manage her own financial affairs, or if somebody responsible is doing so for her, it is illegal for the nursing home to interfere with her Social Security by changing the address to which her check is sent, or having someone on the staff made representative payee.  It is also illegal for the nursing home to require your mother to make these changes.  If you learn that the nursing home staff has interfered with your mother’s Social Security check without her or your permission, you can get the changes they have made reversed by calling Social Security.  You may also want to report the nursing home to the Medicare/Medicaid anti-fraud hotline, at 1-800-447-8477.


8.  Applying for Medicaid.

If it seems that your mother’s insurance, income and savings will not be enough to pay for her nursing home care, she can apply for Medicaid from the Illinois Department of Human Services.  She can do this at any time; she does not have to, and should not, wait until her savings are exhausted.  The nursing home staff (usually the social worker or the bookkeeper) should have a copy of an application to give you.  If they are not helpful, you can call the Department of Human Services at 1-800-252-8635 and ask them to send you an application for Medicaid for someone in a nursing home.  Your mother can file the application herself, or you can do it for her.  The nursing home does not have to do this for you. 

You can also apply for Medicaid online or download a paper application to fill out and bring, mail or fax to an Illinois Department of Human Services office.  If you fill out the application by yourself, remember to write  the name and other information about the person you are applying for, not your own personal information.  You should also include your name and contact information.  Only fill out the parts of the application that are about medical assistance, not SNAP (food stamps.)  If your mother has no income at all (not even Social Security or Supplemental Security Income,) also fill out the parts about financial assistance.

You can file a Medicaid application for your mother even if you do not know the answers to all the questions on it.  A valid application needs only the name of the person for whom the application is being made, and the signature of the person filling it out.  Often people do not know the answers to all the questions on the application when they first try to fill it out.  You can write in only the answers you know, and write on the application that you will give the Department of Human Services the rest of the information when you get it.  The Department has 60 days  to act on the application and start her Medicaid benefits, so you may want to file an incomplete application to get the process started. 

Assuming your mother is at least 65 years old, or disabled (or expected to be disabled) for at least one year, or blind, whether she is eligible for Medicaid depends on her income and savings.  The amount of savings she can have, and whether she needs to sell her home before she becomes eligible, depends on whether she has a living spouse, a disabled adult child, or a child or sibling who was living with her and taking care of her before she entered the nursing home, and whether she owns her home with another person.  You can get basic information about these eligibility rules, including what are called “spousal impoverishment” rules,  from the Illinois Department of Healthcare and Family Services online.  The information is in the section “Nursing Home Information for Couples,” even though the rules also apply to nursing home residents with other dependent relatives.  

You can get advice about whether the spousal impoverishment rules apply to her situation, if it is in her best interest to use them, and how she can use them, from a lawyer who specializes in this subject.  Your mother should not transfer property of any kind out of her name without first talking to a lawyer.


9.   Your mother’s right to stay in the nursing home when her money runs out.

Most of the time, if your mother’s funds run out, and she goes on Medicaid, her nursing home must let her stay if the home is in the Medicaid program .  This is true even if the nursing home had told her it wanted her to pay privately (at a higher rate than what Medicaid pays) for longer than she has been able to do, and even if the nursing home admitted her thinking she would be able to pay privately for longer than she has been able to do.  This is also true if the nursing home admitted her to a “rehab” or “Medicare” unit for what everyone thought would be a temporary stay.   

If the nursing home is in the Medicaid program, it cannot discharge her because she is now on Medicaid.  If your mother still needs some kind of nursing home care, the nursing home cannot discharge her because she no longer qualifies for the “rehab” unit or for Medicare.

There is one exception to this rule.  Some nursing homes are “distinct part certified.”  Usually, all parts of a nursing home that can be in the Medicaid program — that is, all the parts licensed for “skilled” and “intermediate” care — are in the Medicaid program.  In “distinct part certified” facilities, instead of all the nursing home being in the Medicaid program, only part of it is.  The “distinct part” may be 100 beds or more, or it may be as few as 4 beds.  If your mother’s room is in the “distinct part” when her funds run out, the nursing home must let her stay.  If her room is not in the “distinct part,” , the home can refuse to accept Medicaid payment for her. 

Unless her contract says that it must, the nursing home is not required to make a bed in the “distinct part” available to her.  In fact, some nursing homes with “distinct parts” do their best to make sure that residents whose funds are running out, are not living in the “distinct part,” so they can force them out rather than accept Medicaid payment.

But:  Illinois law says that a “distinct part certified” nursing home must warn your mother in writing, no later than when she moves in, that it is a “distinct part” home, and what that means.  The written warning must be given to and acknowledged in writing by your mother, her representative, and whoever is responsible for paying her bills.  Unless this written notice is given when it is required, the nursing home must let her stay for as long as she needs nursing home care. It does not have to accept Medicaid to pay for her care, but it cannot discharge her for nonpayment, or try to make her or her family pay the private pay rate.   


10.  While the Medicaid application is pending.

So long as her application is pending, the nursing home may not discharge your mother because she has not paid her bill.  If the application is denied and she appeals the denial, it may not discharge her until the appeal is finally decided.

Some nursing homes require a person who is applying for Medicaid to pay for her stay, to pay a “deposit” before she enters the home.  This is legal.  Once the application is approved, the nursing home must return the deposit and bill the state to pay for any part of her stay for which she is eligible for Medicaid.  The nursing home may not require your mother to use the small savings Medicaid allows her to keep, to pay for her care.  It may not require her to pay a “deposit” if she becomes eligible for Medicaid before she enters the nursing home.

The nursing home may not require any person who is not legally responsible for supporting your mother, to pay for her care or pay a “deposit.”  This means only a husband or wife may be required to use his or her  income or savings to pay for another adult’s nursing home care.  If your mother has a guardian, or someone is managing her finances, this person is required to use your mother’s money to pay for her nursing home care.  No person but her husband is required to use money which does not belong to your mother to pay for her care.  Her husband cannot be required to use funds which are protected by “spousal impoverishment” rules, to pay for her care.  (See Section 8, above)


11.  If your mother is eligible for Medicaid.

Your mother will be sent a notice from the Illinois Department of Human Services when it decides if she is eligible.  If the application is approved, the notice probably will say that she has a monthly “spend-down.”  This means she will get Medicaid every month she has medical bills at least equal to the spend-down amount .  She will be responsible for paying medical bills equal to her spend-down, and the state will pay the balance of her medical bills, at the Medicaid rate, to any medical provider who participates in the Medicaid program.  She will not be responsible for paying the bills for which the state is responsible.  

Most nursing home residents have a “spend-down” that is much higher than their nursing home bill.  The most convenient way for them to meet their “spend-down” is to use the nursing home bill, have the state pay the balance, and then use their Medicaid card to pay for any other care they need.   Because so many people do it this way, the state will assume that this is what your mother will be doing.  Unless she tells them she will be doing it differently, the state will automatically pay your mother’s nursing home bill (at the Medicaid rate), less the amount of her monthly spend-down.


12.  What Medicaid pays the nursing home for.

In addition to nursing care, some of the items included in the Medicaid nursing home payment are a toothbrush, toothpaste, shaving cream, razor, soap, shampoo, linens, a comb and brush, bandages and continence supplies.  If Medicaid is paying for your mother’s nursing home care, you may choose to bring some of these items, but the nursing home may not require you to do so, or charge your mother or you more if you do not.


13.  Making the best use of your mother’s spend-down.

Although it is convenient, your mother does not have to use part of her nursing home bill to meet her “spend-down.”  If she wants to, she can use other medical bills.  And there are likely to be times that she will want to.

For example your mother’s doctor, dentist, or other medical professional may not accept Medicaid.  Instead of finding another doctor, she can use her own funds to pay for her care, and count the bill toward her monthly spend-down.  She can count bills for care she gets while in the nursing home, and bills she pays for care she got before she moved in.  This is important if she wants to keep seeing a medical professional she has seen before who is not in the Medicaid program.  It is also important because in many areas there are relatively few medical professionals in the Medicaid program.  Those that do may have long waiting lists, and rarely visit nursing homes rarely.  Using her “spend-down” to pay them herself gives her quicker access to medical care.

If your mother needs medical care that is not covered under the Medicaid program, such as replacement eyeglasses, most dental care, or a prescription drug, she can also use her own funds and count that bill toward her monthly spend-down.  Or if she needs some kind of medical care for which Public Aid requires “prior approval,” and she does not want to wait for approval, or approval is denied, again she can use her own funds and count the bill toward her monthly spend-down.  This is particularly helpful when she needs expensive equipment such as an adaptive, electric wheelchair.  So long as the equipment is ordered by a doctor or other medical professional, she can use the bill to meet her spend-down. 

If your mother is going to meet her “spend-down” with other medical bills, she needs to tell her Department of Human Services caseworker.  The phone number will be on the notice telling her she is eligible for Medicaid.  If you can, call the caseworker first to tell her what you intend to do.  She will tell you where to send copies of the bills, receipts, or checks so your mother can get credit for them against her “spend-down.”  For any bill or payment which is not obviously a medical expense, you must include documentation of what the bill or payment is for.

Most nursing home staff do not know that residents can meet their spend-down with any medical bills, not just their nursing home bill.  Even if they do know, they will not be pleased, since every dollar your mother spends on other medical care is a dollar the facility must bill the State, and then wait to be paid for.  This is another reason a nursing home employee should never be made your mother’s representative payee.  


14.  Paying for hospice care.

In Chapter 8, we talk about the decision to use the services of a hospice to care for your mother when she is expected to live no more than six months.  The decision to use a hospice has financial implications for your mother.

Most hospice providers are certified to participate in the Medicare and Medicaid programs.  This means that if your mother receives Medicare or Medicaid, one or both of these programs will pay for the service.  Unless your mother can afford to pay for hospice care out of her own funds, you should make sure that the hospice provider she chooses accepts Medicare or (if necessary) Medicaid.

Medicare will not pay for skilled nursing home care for your mother if she chooses to get hospice care. If Medicare is paying for her skilled care when she chooses hospice, or if she is eligible for Medicare skilled care coverage when she enters the nursing home, she (or her health-care agent) will have to sign a form giving up her right to have Medicare pay for skilled care, and instead pay for hospice care.  Your mother can change her mind about this decision; it is not irrevocable.

Unless your mother is in the very last stage of dying, however, Medicare pays for hospice care only to supplement her nursing home care.  This means that your mother will be required to pay for her nursing home care out of her own funds (unless she has some kind of insurance coverage that includes paying for nursing home care under these circumstances.)  The hospice care would include getting medication by paying only a small fee.  If she is otherwise eligible, Medicaid will pay for your mother’s nursing home care while Medicare pays for her hospice care.  

If your mother is not eligible for Medicare, but she is eligible for Medicaid, Medicaid will pay for her hospice care.  The hospice will be required to pay the nursing home out of its Medicaid payment, while your mother would be responsible for paying only her “spend-down.”.

The payment rules change for somebody who is in the last stages of dying.  This period typically lasts only a few days.  It is what is sometimes called “actively dying,” when the individual can breathe only with great difficulty, for example, is not responsive to sound or touch, or is agitated in a way associated with dying.  This is when Medicare pays for “inpatient” hospice care, instead of paying only for hospice care that supplements nursing home care.  When Medicare pays for inpatient hospice care in the nursing home, the hospice is required to pay the nursing home for the services it is providing.  Your mother is not required to pay the nursing home.


15.  Getting other help paying for your mother’s medical care.

Your mother may find the Illinois Rx Buying Club  provides reduced prices for the drugs she needs.  Participating in the buying club costs $25 / year.  You can find out more about this program by calling 1-866-215-3462.

Medicare has collected information about drug discount programs offered by various drug manufacturers. Discount information is listed alphabetically, by the name of the drug. 


16.  What if you sign or “co-sign” your mother’s nursing home contract. 

Many nursing home contracts ask for someone other than the resident to sign as “guarantor,” “co-signer,” “second payor,” or some other designation.  The contract says that this person is required to use his or her own funds to pay for the resident’s care.

This provision is illegal and unenforceable for all nursing homes in the Medicare and Medicaid programs. The husband or wife of an adult nursing home resident is the only person who may have any duty to use his or her  own funds to pay for that resident’s care.  

The nursing home contract does not change this rule. Regardless of what you may have signed, you cannot be required to use your own funds to pay for your mother’s care.  In fact, if the facility is in the Medicaid program, it cannot even accept your money to pay for her care, much less ask for it.  If you re your mother’s guardian, or have control over your mother’s money, you must use her money to pay for her care.  You are not required to use your own funds.  


17.  When your mother moves out of the nursing home.

When your mother leaves the nursing home because she is “compelled by a change in physical or mental health,” her duty to pay for her care ends with 7 days notice.  So if she gives 7 days advance notice, she will not owe any money for care she does not receive.  To avoid problems, put the notice in writing, and either send it registered mail, return receipt requested, or get a written receipt from the administrator.  

Unless your mother is leaving to enter a hospital, if she leaves because of her health, it is a good ideal to get a letter from her doctor saying that it is necessary for her to leave because of a change in her health.   This includes if she is getting sicker because the nursing home staff is not taking proper care of her.  Give a copy of this letter to the administrator.

If she is not leaving for a reason related to her health, your mother must give 30 days advance notice.  This does not mean she cannot leave for 30 days.  It means she will have to pay for 30 days of care after she gives notice.

If Medicaid is paying for your mother’s nursing home care, she cannot owe more than her “spend-down” in any month.  So if she leaves late in the month, after the period of care her “spend-down” covers, she will owe nothing regardless of how much notice she gives.


18.  Your mother’s right to move out of the nursing home.

The nursing home does not own your mother.  Unless there is a court order limiting their right to choose for themselves, all nursing home residents have the right to choose another nursing home, or another place to live, and move out of the nursing home.  This includes residents whose care is being paid for by Medicaid.