Medicaid-reimbursement shortfalls a dilemma at assisted-living facilities

Lou Jean and John Evans thought they’d found a place to live out the remainder of their days. Instead, the World War II veteran and his wife of 65 years faced an abrupt eviction from an assisted-living facility they thought of as home. “It was really, really emotionally hard on my dad at the time. It was horrible,” said the couple’s daughter, Nancy “Stella” Martin, who filed a lawsuit against the facility on her parents’ behalf. The lawsuit, filed last spring, accuses Northpointe Retirement Community of having a “bait and switch” policy. It claims facility Director Paula Tomlinson rented the couple a unit, promising they could stay when their savings ran dry and Medicaid coverage kicked in. Medicaid picks up long-term care costs for seniors who have limited assets.

When the couple’s money was gone, nine months later, the family said the center changed its tune. Instead of starting the process to enroll the couple in Medicaid so they could stay at Northpointe, the staff refused to return repeated phone calls from the Department of Social and Health Services, Martin said.

“I was absolutely sick to my stomach,” said Martin about the chain of events that displaced her parents.The Evanses quit going to the dining room and isolated themselves in their room, Martin said. A promise of a new life for a couple who’d worked and paid taxes most of their lives became a nightmare. In e-mails to Martin, Tomlinson repeatedly apologized, saying, “When I made the promise I was sincere and I had no notice either that the corporation would turn against my promise.”

Northpointe Retirement Community CEO Stephen Start declined to comment on the lawsuit, but in a letter he summarized the challenges of dealing with low Medicaid reimbursements.

“Escalating costs and insufficient Medicaid rates have put tremendous pressure on assisted living providers and their staff,” Start said in the letter. “In spite of woefully low reimbursement rates, we have consistently strived to allow long-term residents who have spent down their personal funds to convert to Medicaid.”

Spokane has about 50 assisted-living centers, which fill a gap between independent living and skilled-nursing care. They provide a mix of meals, housekeeping, laundry and medication and grooming assistance that enables seniors to maintain their privacy and lifestyle.

Some operate like condos, requiring a buy-in along with monthly fees; others are more like apartments. Charges range from about $1,300 a month for basic accommodations to more than $3,500 a month for upscale complexes with swimming pools, gyms, computer centers and even coffee shops.

Some also carry extra charges for services above and beyond agreed plans.

Advocates for the elderly say many centers do a good job providing the services they promise. When problems arise, it’s often because of understaffing or inadequate staff training, they say.

Elderly consumers are particularly vulnerable, because the living units are expensive. Many people use up their savings to get into a place and then risk becoming homeless when they exhaust their resources.

Jan Young, ombudsman for Aging and Adult Services of North Idaho, has seen people pay as much as $4,000 a month in rent. Paying that type of money quickly depletes most bank accounts.

“Everyone who goes into long-term care runs out of money unless they have a bundle, because it’s very costly,” Young said.

Jonathan Eames, executive director of Washington Health Care Association, a trade group representing over 200 assisted living and 160 skilled nursing homes in Washington, said because of low Medicaid reimbursement rates, the industry is overburdened and under-funded.

Private-pay consumers are bearing the brunt of the Medicaid shortfall through higher rates, he said.

Plus, access to facilities is becoming more limited for seniors who outlive their resources. Some centers only will accept a certain number of Medicaid residents and a small group of homes won’t take any.

“Unfortunately what’s happening in the state right now is they’re shortchanging Medicaid residents in boarding homes,” Eames said.

Last year, assisted-living facilities in Washington state lost $52 million caring for Medicaid residents, he explained. More than half the centers are for-profit businesses that lack the tax advantages and fund-raising opportunities of nonprofits, which also struggle with the low rates.

“If you’re losing $23 a day on a Medicaid resident it doesn’t make good business sense to provide care for those residents, as much as you might want to,” Eames said.

In North Idaho, some facilities are doubling up Medicaid residents, said Young, adding, “It’s a shame that this is happening.”

Linda Petrie is regional ombudsman for Spokane Neighborhood Action Programs. SNAP sends volunteers into skilled-nursing and assisted-living centers to protect resident rights.

Unlike skilled-nursing centers, which are heavily inspected and regulated by the state, assisted-living complexes are licensed as boarding homes and adhere to fewer regulations, she said.

“Even with the regulations, they’re not strong enough to keep people from really being hurt,” Petrie said.

The state Department of Social and Health Services, which keeps records of all complaints, doesn’t specifically track consumer issues.

“They’re like private apartments the way the industry works. It’s almost like a buyer beware kind of thing,” said Sharen Schermer, assistant director of Aging and Longterm Care of Eastern Washington, a state- and federally funded agency that provides services for elderly and disabled adults.”It’s private enterprise, so it’s pretty much like buying a car or buying a condo – you’re entering into a contract,” Schermer said.

Petrie said discharges are a top complaint of assisted-living residents both locally and across Washington state.

In the past two years, her group has received 541 complaints from 62 assisted-living complexes in a five-county area. Of those complaints, 21 dealt with billing issues and 46 with discharges.

Sometimes centers let residents go because their health needs exceed the staff’s ability to provide care, Petrie said. Other times, facilities decline to accept Medicaid or ask people to leave without a required 30-day notice.

She also has concerns about proposed legislation in Washington that could broaden services offered by retirement homes, which don’t even follow the more relaxed regulations imposed on assisted-living facilities.”We have a hard enough time with the ones that do have the regulations,” Petrie said.

Washington was at the forefront of developing a system that allowed for varying levels of care in the stages of old age, Eames said.

But increases in Medicaid funding in the state haven’t kept pace with dramatic increases in the cost of staffing, health insurance and utilities, he said. The system is in jeopardy, Eames said: “There are tremendous access issues for Medicaid residents because the state isn’t holding up their end of the bargain. It’s real bad news.”

For couples like the Evanses, recovering from the loss of their home and security has taken time.

Martin said her parents have struggled for the past 14 months that they’ve lived with her and her husband.

Lou Jean Evans worried about not having a place of her own. John Evans, a former store owner who did business with a handshake, lost faith in others.

Both recalled the director of Northpointe telling them they were family and both vividly recollect the humiliation of being unwelcome when their savings ran dry. “I value people’s word. Anybody that shakes my hand and gives me the OK to do something, then I trust them,” John Evans said. “It’s a terrible situation to be in, it really is.”

A court date has been set for March 12, 2007, and attorneys for both sides are in an information-gathering phase.

Martin said they recently found a place that accepts Medicaid and can provide diabetic care for her father, and the couple is looking forward to moving there. “My mom can finally have her exercise class back and a space she can call home,” Martin said. “It was just a joy to see my mother happy this morning.”