Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Service Rates

12/01/2003

  • Expansion is very unlikely with current reimbursement rates. The biggest barrier that we have had in this state is the money. In 1994, when we started using the ALE waiver, payment was set at 62 percent of the nursing home rate; now it is 37 percent.

  • A big concern is that there has been only one cost of living adjustment since the waiver started. We had more providers involved, now it is decreasing. They can't afford to be in a program that pays you so far below the industry standard that it becomes impossible to make a living.

  • ALFs that serve people in Assistive Care Services and not the waiver do not get any reimbursement for incontinence supplies.

  • I could get more done if I had Medicaid dollars. I get no money for incontinence supplies, vitamins or preventive services.

One respondent noted that in response to low service rates some providers ask families to contribute to the cost of services. This practice is called either "family supplementation" or "up-charging." Others expressed concerns about the practice.

  • During monitoring visits, state staff sometimes find that residents' families are asked by the provider to contribute to the cost of a service when its cost exceeds the Medicaid cap. For example, the Medicaid cap for incontinence supplies is $125 but the resident may use $300 of supplies each month.

  • There is some confusion about whether family supplemental payments affect Medicaid eligibility. Up-charging is not strictly illegal, it is a stretch of state rules which allow third party supplementation.

  • Some higher pay facilities have contracts that will allow a resident to be in a private room if the family pays a supplement. Nobody is challenging it, and if we throw them off the program the resident will be on the street.

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