Does Your Insurance Cover Alzheimer’s Care?

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Senior man sitting on a wheelchair with caregiverOne in eight individuals 65 and older suffers from Alzheimer’s disease –quite a sobering statistic for the growing number of baby boomers rapidly crossing that age threshold. And the costs can be an “overwhelming financial burden,” says Carol Steinberg, executive vice-president of the Alzheimer’s Foundation of America.

Private and government insurance programs may cover some costs. Here’s a primer on your options.

Medicare

Many people are shocked to discover that Medicare does not cover the long-term custodial care that Alzheimer’s patients need. Custodial care is the non-medical care associated with activities of daily living, such as bathing and dressing.

Medicare does cover limited care in a nursing facility or at home. For home care, the patient must require skilled-nursing care or physical or occupational therapy to help with the recovery from an illness or injury — not to help an Alzheimer’s patient with daily-living activities. “One of the most difficult situations is when a loved one needs personal or custodial home care, but Medicare will only cover that if there is some type of skilled-care need,” says Frederic Riccardi, director of programs and outreach for the Medicare Rights Center, an advocacy group.

At-home services in most cases can be provided for fewer than seven days each week or less than eight hours each day over a period of 21 days or less. Limited custodial care could be provided during these visits — perhaps if an Alzheimer’s patient treated by a registered nurse for a broken hip needs help bathing. Medicare pays the cost of a skilled-nursing facility, but only to provide continuing treatment following a hospital stay of at least three days. Skilled care in a facility is limited to 100 days.

While Medicare offers little by way of custodial care, it does provide diagnostic and medical treatment that Alzheimer’s patients need. The new annual wellness physical exam, which is free and part of the health care law, includes testing for cognitive impairment. “This is a critical, yet hardly known, provision,” Steinberg says. Medicare also covers visits to a geriatric assessment clinic.

Alzheimer’s patients and their families need to carefully choose a Medicare Part D prescription-drug plan or private Medicare plan. Alzheimer’s medications are generally covered under Part D, but plans vary regarding co-payments. The Alzheimer’s Association offers a guide about coverage for common Alzheimer’s drugs.

If you choose a Medicare Advantage plan, make sure your neurologist and other physicians you see often are covered as in-network providers. Otherwise, you will pay higher out-of-pocket costs or ask about Medicare supplement plans.

Long-term-care insurance

These policies provide coverage for the custodial care that Alzheimer’s patients usually need. Benefits typically trigger if the patient needs help with at least two activities of daily living or if a doctor provides evidence of cognitive impairment. Because most people with Alzheimer’s receive care in their own homes, look carefully at the policy’s home-care requirements. Typically, a patient must wait 60 or 90 days before benefits begin. But policies differ on when the clock starts ticking, which could be a big headache for caregivers. 

Some long-term care insurance policies start the 60-day waiting period on the day the doctor certifies the cognitive impairment — and benefits trigger 60 days later. But other policies count only the days a patient receives care from a qualified caregiver during the waiting period. If the caregiver visits two days a week, the policy only counts those two visits toward the 60-day waiting period — and benefits will not trigger for 30 weeks. In the meantime, the family has to pick up the tab for the caregiver.

Before you hire a caregiver, check the policy’s fine print on the type of caregiver the insurance company will cover. Some policies pay for any caregiver who is not a family member, while others only pay for licensed caregivers who work for an agency. Some families who hire an unlicensed caregiver later discover that the caregiver doe not qualify under the policy.

Do not expect a policy to pick up round-the-clock home care. Daily coverage is based on the daily benefit. A policy with a $200 daily benefit, for example, will likely cover the cost of eight to ten hours of a home health aide. If a family caregiver cannot fill in the gap, a nursing home may be a better option.

You cannot use more than your daily benefit in a day, but you can stretch your daily benefit over longer periods. Say you choose a benefit period of three years, at $200 a day. If you only use $100 a day, your coverage can last for six years. Some policies cover adult day care, which can cost a lot less than daily caregivers. “Many adult day services specialize in care for those with Alzheimer’s disease and similar disorders,” says Kathy O’Brien, senior gerontologist with the MetLife Mature Market Institute.

An alternative and more cost-effective option for long-term care insurance in today’s expensive health care environment is a short-term custodial care policy.

Medicaid

This program, whose costs are shared by federal and state governments, is the primary payer of long-term-care services for the elderly. Unlike Medicare, it provides custodial care for Alzheimer’s patients. Custodial care typically is provided in Medicaid-eligible nursing homes, but many states’ Medicaid programs now pay for home care and sometimes adult day care or care in assisted-living facilities, says O’Brien.

 

The downside: You need to be virtually impoverished to qualify. Many people end up qualifying after spending their retirement savings on care. While state laws differ, generally you cannot have more than $2,000 in countable assets, including investments. A spouse who lives at home can generally keep about $113,000. You’re allowed to keep your home, car and assets in certain kinds of trusts. (Visit www.medicaid.gov to find eligibility requirements in your state.)

To protect more of your assets, you can buy a state-approved long-term-care policy that is “partnership” eligible. The policy would allow you to qualify for Medicaid without having to spend almost all of your money first. For example, if you buy a partnership policy that covers $200,000 of care, you would pay out of pocket until you have $200,000 left and still qualify for Medicaid. Go to the National Clearinghouse for Long Term Care Information to see if your state allows these policies.

 

 

 

 

New Medicare Law for a Patient Loophole

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Long-Term CareLast November, after a bad fall, 85-year old Elizabeth Cannon was taken to a hospital near Philadelphia for seven days of observation, followed by nearly five months in a nursing home for rehabilitation and skilled nursing care. The cost: more than $40,000.  

The hospital insisted that Elizabeth had never been formally admitted there as an inpatient, so under federal rules, Medicare would not pay for her nursing home stay. The money would have to come from her pocket.

The experience of Elizabeth and thousands like her inspired a new Medicare law — in force as of Saturday, August 6, 2016 — that requires hospitals to notify patients they may incur huge out-of-pocket costs if they stay more than 24 hours in the hospital without being formally admitted. Because of the Notice Act, passed by Congress last year [2015] with broad bipartisan support, patients can expect to start receiving the notice in January [2017].

“It was extremely distressful to my mother, who was frugal her whole life,” said Cynthia Morgan, Elizabeth’s daughter. Elizabeth had questioned why Medicare would not pay for her care after she paid into Medicare for so many years. Elizabeth died in April 2016.

Hospitals have been keeping patients like Elizabeth in limbo due to fear of being penalized by Medicare for inappropriate admissions. While under observation, patients can be liable for substantial hospital bills, and Medicare will not pay for subsequent nursing home care unless a person has spent three consecutive days in the hospital as an inpatient.

Time spent under observation does not count toward the three days, even though the patient may spend five or six nights in a hospital bed and receive extensive hospital services, including tests, treatment and medications ordered by a doctor.

Under the new law, the notice must be provided to “each individual who receives observation services as an outpatient” at a hospital for more than 24 hours. Medicare officials estimate that hospitals will have to issue 1.4 million notices a year.

“The financial consequences of observation stays can be devastating for seniors,” said Senator Susan Collins, Republican of Maine and the chairwoman of the Senate Special Committee on Aging.

Senator Benjamin Cardin, Democrat of Maryland, the chief sponsor of the Senate version of the legislation, said it would “save seniors from the sticker shock that comes after they are discharged from the hospital and realize that Medicare will not cover the cost of care in a skilled nursing facility.”

The median cost for a private room in a nursing home is roughly $92,000 a year, according to a survey by Genworth Financial. Medicare covers up to 100 days of skilled nursing home care at a time.

The text of the standard “Medicare outpatient observation notice” is subject to approval by the White House Office of Management and Budget. In its current form, the notice to beneficiaries says: “You are a hospital outpatient receiving observation services. You are not an inpatient.” And it explains that Medicare will cover care in a skilled nursing home only if the beneficiary has had an inpatient hospital stay of at least three days.

Patients can then consult their doctors and may ask to be reclassified as inpatients.

Hospitals have found themselves in a dilemma. They increased their use of “observation status” in response to close scrutiny of their billing practices by Medicare auditors — private companies hired by the government to review claims. In many cases, these companies challenged decisions by doctors to admit patients to a hospital, saying the services should have been provided on an outpatient basis. The auditors then tried to recover what they described as improper payments.

Doctors and hospitals said the auditors were like bounty hunters because they were allowed to keep a percentage of the funds they recovered.

But patients will now, at least, be better informed. The Senate Finance Committee explained the reason for the law this way:

“The number of Medicare beneficiaries receiving outpatient observation care over the last several years has been steadily increasing. Some beneficiaries are surprised to learn that although having received treatment overnight in a hospital bed, the beneficiary was never formally admitted as an inpatient but was instead a hospital outpatient.”

Federal officials acknowledged that Medicare beneficiaries sometimes had to pay more as outpatients under observation than they would have paid if they had been formally admitted to the hospital and received the same services as inpatients.

The administration issued rules to carry out the new law. The purpose, it said, is “to inform beneficiaries of costs they might not otherwise be aware.”

“Even if staying in a hospital overnight, the status might still be considered outpatient,” the administration said in a publication for beneficiaries.

Consumer advocates and nursing homes support the new requirement.

“Medicare beneficiaries are spending more and more time in the hospital without being formally admitted,” said Joyce Rogers, a senior vice president of AARP, the lobby for older Americans, adding that this “can expose beneficiaries to unexpectedly high out-of-pocket costs amounting to thousands of dollars.”

Mark Parkinson, the president and chief executive of the American Health Care Association, a trade group for nursing homes, said, “Patients often have no idea what their status is in a hospital and observation stays impose a significant financial burden on seniors increasing the likelihood of turning to Medicaid.”  

“The new law is an important first step, but Congress and the administration need to do more to protect beneficiaries,” said Judith Stein, the executive director of the nonprofit Center for Medicare Advocacy.

Under the law, hospitals can still keep Medicare patients in observation status, and some of the patients will be responsible for nursing home costs. Twenty-four senators and more than 120 House members are supporting bipartisan legislation to address that concern. Under that bill, time in a hospital under observation would count toward the three-day inpatient stay required for Medicare coverage of nursing home care.

Why Mom Went Back To Traditional Medicare

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Smiling LadyWhat ultimately changed to consider then convince my mother and me to disenroll her from a Part C Medicare Advantage plan. And why my mom’s story should matter to the thousands of private enrollees and the Medicare baby boomers.

If you’re newly eligible for Medicare or trying to decide whether to switch from traditional Medicare to a Part C Medicare Advantage plan (during the next annual enrollment period Oct 15-Dec 7 2016), you may want to consider this information as told by a daughter.

It might be time to choose an Advantage plan…

If recent history is prologue, one of every three people newly eligible for Medicare will find the siren call of the Medicare Advantage TV commercials irresistible. And for some of you, a Medicare Advantage plan might be the way to go – at least for now. Some of them offer benefits not available through traditional Medicare, like vision and dental coverage, gym memberships and even hearing aids. But there are trade offs you need to be aware of.

I’m writing this while sitting next to my mother, who turned 91 a couple of months ago. I’m happy to report that she is a relatively healthy nonagenarian. The odds are pretty high, though, that Mom would not still be counted among the living had she not switched from a Medicare Advantage plan to traditional Medicare when she was critically ill a few years ago.

But it might be time to disenroll…

Here’s something you might not know: many Medicare Advantage enrollees do exactly what Mom did after a serious illness or injury, and the Medicare Advantage plans they “disenroll” from could not be happier to see them go. When a person goes back to traditional Medicare, the Medicare Advantage plans are off the hook for covering expensive care.

As I learned later, the circumstances that convinced my mother she would be better off in traditional Medicare were shared by hundreds of thousands of other elderly Americans. The evidence that my mother’s reason for switching back to traditional Medicare was far from an isolated case and came from two very credible sources in 2013: a researcher at the Centers for Medicare and Medicaid Services (CMS), and a team of researchers independent of CMS, led by a Harvard Medical School professor, who published their findings in the journal Health Affairs.

The CMS researcher, Gerald Riley, looked at the experiences of more than 240,000 people who switched from Medicare Advantage plans to traditional Medicare and compared them with beneficiaries who had always been in the original program. He found that in the six months after returning to traditional Medicare, the former Medicare Advantage enrollees used an average of $1,021 in medical services each month. Those who had never been in a Medicare Advantage plan cost Medicare just $710 a month.

Desperately seeking ‘unfettered access’…

Similarly, the study published in Health Affairs found that people who had returned to traditional Medicare from a Medicare Advantage plan were far more likely than other beneficiaries to report declining health.  J. Michael McWilliams, the Harvard professor who led the research team, was quoted as surmising that “beneficiaries who developed serious ailments might leave the Medicare Advantage plans to get unfettered access to physicians and treatments through traditional Medicare.”

The term “unfettered access” is especially important. It certainly was to my mother. After being hospitalized for a broken hip, Mom was discharged to a skilled nursing facility for rehabilitation. Her progress, though, was slow, and she was flat on her back much of the time. After several days there, she began to develop bedsores, and the staff at the facility wasn’t making progress treating them.

Before too long, the head nurse took me aside and told me that another nurse – not at the facility but at Mom’s Medicare Advantage plan – had come to the conclusion that the skilled nursing was no longer “medically necessary.” This other nurse – a so-called “utilization management” nurse – had never laid eyes on my mother, much less treated her. But she was able to insert herself between my mother and her treating physician and, for all practical purposes, determine whether or not she would get the care her doctor said she needed.

With my help, Mom appealed the utilization management nurse’s decision. She won a temporary stay of execution in the form of a coverage extension for another week of care. But that was it.

I knew that ending coverage for Mom’s skilled nursing care would be a death sentence, so, with her approval, I started the process of switching her back to traditional Medicare. At the same time, I also made arrangements for Mom to be transferred to a facility that not only had a good reputation for treating patients with bedsores but also, coincidentally, did not work with any Medicare Advantage plans, only traditional Medicare.

The administrators at the facility where I had Mom transferred had decided years before that they could not in good conscience continue working with insurance company utilization management nurses who could – and often did – deny coverage for further care despite the pleas of both patients and their doctors.

Private coverage can fall short for the sick or disabled…

Only in traditional Medicare can a patient count on getting “unfettered access” to doctors and facilities of their choice – and, in many cases, to life-saving care. The Kaiser Health News article that reported the result of those 2013 studies quoted Judith Stein, executive director of the Connecticut-based Center for Medicare Advocacy, a patient advocacy group, as confirming the disparity in access to needed care.

“Private Medicare Advantage plans work for people when they are relatively well, but fall short of traditional Medicare when they are sick or disabled,” she said. “This is particularly true for those with long-term and chronic conditions, many of whom also have low incomes. They are often denied coverage for necessary skilled care, or it is terminated before it should be, while the same coverage would be available in traditional Medicare.”

This article is to provide encouragement to keep all of this in mind as decisions are made during the Medicare annual enrollment periods. Depending on your age and health, it might be better choosing or staying with traditional Medicare and supplementing it with a Medigap private insurance plan.

And, it just might add years to your life.

 

New Regulations: Modernizing Nursing Home Care

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After nearly 30 years, the Obama administration wants to modernize the rules nursing homes must follow to qualify for Medicare and Medicaid payments. There are hundreds of pages of proposed changes that cover everything from meal times to the use of anti-psychotic drugs to staffing.

Some are required by the Affordable Care Act and other recent federal laws, as well as the president’s executive order directing agencies to simplify regulations and minimize the costs of compliance.

“Today’s measures set high standards for quality and safety in nursing homes and long-term care facilities,” said Health and Human Services Secretary Sylvia M. Burwell. “When a family makes the decision for a loved one to be placed in a nursing home or long-term care facility, they need to know that their loved one’s health and safety are priorities.”

Officials announced the update at the recent White House Conference on Aging.  The once-a-decade [10 years ago] conclave set the agenda for meeting the diverse needs of older Americans, including long-term care options. July 30, 2015, also marked the 50th anniversary of the Medicare and Medicaid programs, which cover almost 125 million older, disabled or low-income Americans. Medicare and Medicaid beneficiaries make up the majority of residents in the country’s more than 15,000 long-term care facilities.

“The existing regulations do not even conceive of electronic communications the way they exist today,” said Dr. Shari Ling, Medicare’s deputy chief medical officer. “Also there have been significant advances in the science and delivery of health care that just weren’t imagined at the time the rules were originally written. For example, the risks of anti-psychotic medications and overuse of antibiotics are now clearly known, when previously they were thought to be harmless.

The proposed regulations include a section on electronic health records and measures to better ensure that patients or their families are involved in care planning and in the discharge process. The rules would also strengthen infection control, minimize the use of antibiotic and anti-psychotic drugs and reduce hospital re-admissions.

Revised rules would also promote more individualized care and help make nursing homes feel more like home.  For example, facilities would be required to provide “suitable and nourishing alternative meals and snacks for residents who want to eat at non-traditional times or outside of scheduled meal times.”

Residents should also be able to choose their roommates.  “Nursing facilities not only provide medical care, but may also serve as a resident’s home,” the proposed rules say. “Our proposed provision would provide for a rooming arrangement that could include a same-sex couple, siblings, other relatives, long term friends or any other combination” [as long as nursing home administrators] “can reasonably accommodate the arrangement.”

Consumer advocates are likely to be disappointed that officials are not including recommendations to set a federal nurse-to-resident ratio.

However, the proposed changes would require that nurses be trained in dementia care and preventing elder abuse to better meet residents’ needs.

“We believe that the focus should be on the skill sets and specific competencies of assigned staff,” officials wrote in the proposed rules, “to provide the nursing care a resident needs rather than a static number of staff or hours of nursing care that does not consider resident characteristics.”

Nursing homes will be required to report staffing levels, which Medicare officials said they will review for adequacy.

“It’s a competency approach that goes beyond a game of numbers,” said Ling. “If residents appear agitated, figure out why, get at the cause of the problem,” she said, instead of resorting to drugs to sedate residents.

Advocates for nursing home residents argue that because of inadequate staffing, residents with dementia are often inappropriately given anti-psychotic drugs, even though that can be dangerous for them. The new rules would help control the use of these drugs by requiring the facility’s pharmacist to monitor drugs that are prescribed for excessive periods of time or other irregularities and require the resident’s physician to address the problem or explain in the resident’s medical record why the medication is necessary.

“We don’t have enough nursing staff,” Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy, said before the rules were released.  Federal law requires only one registered nurse on the day shift for a 20-bed facility or for a 500-bed facility, licensed practical nurses around the clock and sufficient staff to meet residents’ needs, she said.

“We don’t look at the specific staffing positions per se,” said Greg Crist, a spokesman for the American Health Care Association, which represents 11,000 skilled nursing facilities. “We look at the needs of the individuals when determining staff levels, and that is best addressed in the resident’s care plan.”

Although there are also no provisions addressing enforcement in the proposed rule, Ling said  it “will permit detection of violations to enable enforcement by lessening the noise.”

“The biggest problem is that the rules we have now are not enforced,” said Edelman.  “We have a very weak and timid enforcement system that does everything it can to cajole facilities into compliance instead of imposing penalties for noncompliance.”

A report by the Center for Medicare Advocacy found last year that often some serious violations were not penalized.

“Once the new rules are finalized, they will be added to the items nursing home inspectors check,” Ling said.