Rehab – When Medicare Stops Paying

Some families don’t know what to do when a parent is suddenly discharged from rehab and Medicare stops paying. The big key in this situation is to be proactive. Ask questions and take action so you are not trapped in a payment gap. In this blog, we have laid out a few helpful actions you can take. But remember, if you are the caregiver child, you are their Advocate. Your parent’s fate is often in your hands. See our blog article entitled, Momma’s in the Nursing Home – Now What on our separate Help Me Help Momma Family Caregiver site.

In the example that we will use here, Momma fell and broke her hip. She also has moderate Alzheimer’s, but the family was managing everything at home before her fall. After a 10 day hospital stay, Mom’s doctor told the family that she would need rehabilitative therapy (rehab) to see if she could improve enough to go back home. Mom then started her therapy in the seperate rehab unit of the hospital where she received her initial care.

Hospital Care vs. Nursing Home Care

As a point of comparison, a hospital rehab unit usually provides more intense therapy (usually 3 hours per day) for a shorter period of time than is offered at a rehab wing of a local Nursing Home. Given Mom’s advanced age and Alzheimer’s diagnosis, she was not able to tolerate therapy at the hospital rehab facility. After a few days, Mom was transferred to her local Nursing Home to receive rehab there.

The therapy given at a Nursing Home is less intense and is given over a longer period of time. Thus, rehab from a Nursing Home is usually tolerated easier by those unable to participate in more intensive therapy. In either case, the course of therapy last for only a short period of time (usually 100 days or less). Then, based on the progress and level of functioning, the medical team makes recommendations as to the next steps for the patient or resident to take.

Let Medicare Pay – THEN See What Happens

When your Loved One is first admitted to rehab, you learn Medicare pays for up to 100 days of care. The staff tells you that during days 1 – 20, Medicare will pay for 100%. For days 21 – 100, Medicare will only pay 80% and the remaining 20% will have to be paid by Mom. However, luckily Mom has a good Medicare supplement policy that pays this 20% co-pay amount. Consequently, the family decides to let Medicare plus the supplement pay. At the end of the 100 days, they will see where they are.

The “wait and see” approach has at least one advantage – no one knows whether or not Mom will progress with her therapy. After the 100 days, she may have progressed with her rehabilitative therapy well with the ability to return home. On the other hand, she may not have made any progress or may have actually declined some. To help our fictional family decide as to whether the “wait and see” approach is a good idea, here are a few frequently misunderstood rehab info-bits that should factor into their decision.

Frequently Misunderstood Rehab Info-Bits

1. Assuming You will Get a 100 Day Free Ride

As we have discussed here before, if a Senior is admitted to a hospital as a patent, has a qualifying 3 night hospital stay and is then discharged to a Nursing Home or rehab facility for rehab, then Medicare will pay up to 100 days for rehabilitative therapy. In general, Medicare will pay for necessary rehabilitative care if skilled care is needed. A beneficiary can receive Medicare if they simply maintain their current condition or further deterioration is slowed.

However, some facilities interpret this policy as reading that “As long as Mom is making progress, we will keep her.” When she stops making progress, she will be discharged. Some resident’s rehab stay is therefore cut much shorter than the full 100 days they thought they would get. For a detailed discussion of what Medicare pays, see our blog post entitled, Does Medicare Pay for Nursing Home Care?

2. Waiting to Apply for Medicaid

Let’s Assume that Medicare does pay the whole 100 days (minus the co-pay amount for 80 of them) – then what? At the end of the 100 days, if your Mom has to continue her stay in the Nursing Home, she will probably have to begin paying out of pocket. She will then pay until broke or until she qualifies to receive Medicaid benefits – whichever comes first. Unfortunately in cases like this, Mom usually pays out of pocket way too long. Usually she (or her family) pays until she is completely broke. Some of the money that was spent down could have been preserved for the family. More importantly, if Dad is the well spouse at home, most of the money could have been saved for him. For more information on this process, read our blog post entitled, How to Get Medicaid to Pay for Momma’s Nursing Home Care.

Maximize Medicare

Sometimes, you could have maximized the Medicare payment portion of the stay by starting the Medicaid qualification process early. If you determine that Mom will have to remain as a resident in the private pay portion of the Nursing Home, it is usually a good idea not to wait until the Medicare reimbursement period is over before you start the Medicaid application process. Meet with your Elder Law Attorney to see if there is a way to start the Medicaid application well before the Medicare reimbursement period is over.

Avoid Penalty Periods

One reason for starting early is to compensate for any potential penalty period. Financial gifts or transfers from 5 years prior may resulted in a penalty period. This is a period of time during which, even though your Loved One is qualified to receive Medicaid benefits, actual receipt of Medicaid benefits may be delayed to offset any prior gifts (or to use Medicaid’s wording, “uncompensated transfer”). Such gifts may result in a penalty period that can, in some cases, be minimized with proper planning.

3. Personal Liability for Medicare Co-Pay Amount

As mentioned above, Medicare will only pay 100% of the rehab care expenses for Days 1 – 20. After day 20, the Medicare reimbursement rate drops to 80% – and the resident is responsible for the remaining 20%. Twenty percent doesn’t sound like a large number, however this amount can exceed the typical private pay daily rate of the nursing home. If the family has to pay this amount out-of-pocket, this can be a huge financial hardship. The lesson to learn here is to make sure that Mom has a good Medicare supplement policy and make sure that it pays the full co-pay amount in the event that rehabilitative therapy is needed.

Click below the to download our Medicare Tip Sheet. It will give you a more detailed look into helping your loved one get the Medicare benefits they deserve.

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Rehab Strategy

After completing rehab, many residents are discharged to their home. This is the goal and the hope of everyone involved with Mom’s care. But what if Mom has to remain in the Nursing Home as a private pay resident? Private pay means that she writes a check out of pocket each month for her care until she qualifies to receive Medicaid assistance. Here are a couple of steps to take while Mom is in rehab to determine your best course of action.

1. Ask her Medical team their professional opinion

For some folks, it is obvious that they are going home directly after a short rehab stay. For others, like the fictional Mom is our above example, it was not as obvious. However, frequent monitoring of Mom’s care, frequent communication with the staff and tracking her progress or decline should give the family a good idea as to the expected outcome of Mom’s rehab stay.

2. Meet with your Elder Law Attorney

It is important to meet with your Elder Law Attorney as soon as your Loved One enters rehab (hopefully you have met with them even prior to this time!). If you do wait to apply for Medicaid, until Medicare has quit paying, there may be a gap in coverage. This means that there will be a period of time when Mom may have to pay out of pocket. The goal is to have no surprises. With proper planning, it is possible to have no gaps and no surprises! With proper planning, even if you have to pay out of pocket for a period of time, at least you saw it coming and knew what to expect.

3. Family Meeting

Have a family meeting to come up with a game plan for “What’s next”. What are the best care options for Momma given her new level of functioning? Is it wise for her to go home? If Dad is the “ well spouse” at home, can he take care of Mom or does he do good just to take care of himself? If Dad needs assistance, are there enough family members to provide all of the care that Mom will now need? Is outside non-medical care needed? Can Mom and Dad afford the necessary outside family caregivers if Mom stays at home? Does Mom need skilled care in a Nursing Home or can she receive care in an Assisted Living Facility?

As you can see, there are a lot of considerations and a lot of decisions to be made. However it is much better if the family starts their discovery process early as opposed to waiting until the day she is discharged from rehab.

Be sure to download our free Medicare Tip Sheet. Best wishes as you work with your parents to help them receive the best rehabilitative care possible during their road to recovery. If you need our assistance, please feel free to call us at (501) 843-9014.