If you think the alphabet soup of care facilities is confusing, let’s talk about payment.
Note: Healthcare payments are constantly changing. This article summarizes the status as of September 2018, is geared toward those over 75 and deals with primarily with Medicare. This is not a comprehensive analysis / reporting of private insurance regulation.
(Jump to Acute Care Facility-Hospital)
(Jump to Acute Care Facility – Rehabilitation (IRF))
(Jump to Subacute Care Facility)
(Jump to Skilled Nursing Facility (SNF))
(Jump to Long Term Care Facility (LTC))
(Jump to Long Term Acute Care Facility (LTAC))
(Jump to Outpatient Care)
(Jump to Home Care)
(Jump to Private Insurance)
(Jump to Under what circumstances can and will a care facility refuse a patient?)
Medicare Payments (as of 9.2018)
- The hospital is paid a lump sum for your diagnosis regardless of how long you stay.
- Hospital stays are covered under Medicare A.
- Your loved one’s length of stay is dependent on medical status (For more details read: The Alphabet Soup of Care Facilities)
Acute Care Facility – Rehabilitation (IRF):
- To be discharged to this type of facility, your loved one must be able to tolerate 3 hours of therapy, 5 days a week. The facility only has 72 hours to get the patient up to 3 hours of therapy per day. If your loved one can’t tolerate it, the facility will not get paid. You can understand why they are selective about whom to admit.
- Medicare part A pays for it.
- Length of stay dependent on medical requirements.
- Private insurance will pay, check your policy. Note: private insurance monitors progress very closely. In some cases, they may push for discharge if you are not making progress.
- Payor’s are constantly evaluating the level of medical care the patient needs, sometimes daily. You may feel your loved one should not be discharged because they are not walking, or their home is not set up for them properly. However, not walking is not a skilled nursing need and it doesn’t matter if the ramp has not been installed at home yet. Your loved one WILL be discharged.
- It is critical that the family is on top of the discharge planning process from day one.
Subacute Care Facility:
May be paid for by Medicare A, B, Medicaid or private insurance. The focus of this article is on Medicare.
Medicare A pays if:
- The skilled care of a RN, Occupational Therapist (OT) or Physical Therapist (PT) is needed.
- Upon admission to a Subacute Care Facility, the care team (RN, OT, PT) evaluates your loved one to access the level of care needed, the duration and frequency of therapies. Unlike Acute Care Rehab, there is no minimum therapy required.
- A course of care is established and charged to Medicare. The more minutes in therapy, the higher the Medicare payment for the facility.
Note: If skilled care is required, the patient is usually approved for 21 days. Medicare will pay 100% for the first 20 days as long as skilled nursing or therapy is needed. However, if anywhere in these 21 days you don’t need skilled nursing or rehab, Medicare stops payment and your loved one will be discharged, or you will pay out of pocket for them to stay.
Note: you may have heard of the improvement standard ruling: Jimmo v. Sebelius. This CMS ruling reinforces that Medicare does cover skilled nursing and skilled therapy services needed to maintain a patient’s function or to prevent or slow decline. Improvement or progress is not necessary as long as skilled care is required. PLEASE NOTE YOU MUST STILL REQUIRE SKILLED NURSING CARE. Your loved one may not be able to walk as far as they once did, but this loss of functionality does not require skilled nursing care.
If you don’t feel they are ready to come home, be ready to pay out of pocket, with private insurance or Long-Term Care Insurance. Check your policy for details also, know what you are signing at all times. A facility often requires that a guarantee of payment is signed upon admission by the caregiver.
If skilled care or rehab is still required beyond the initial 21 days and, the facility can continue to care for your loved one, Medicare payment can be extended to 100 days. However, staying beyond day 20 days means you will have to pay 20% of the daily cost for the remaining 80 days. For details read: Medicare 100 Day Rule Impacts Post Hospital Stays.
Medicare B:
- These supplemental policies can also be used in a skilled nursing facility to extend services such as rehab.
- Medicare B is typically used as an outpatient payment. There is a yearly cap on the amount Medicare B will pay for these services.
Note: Traditionally Medicare B services have been capped due to budget restrictions. The current cap is to $2010 per year for OT and $2010 for PT and Speech combined. In January 2018, the Medicare therapy cap was repealed, however how this change will be implemented is unclear as the guidelines have not been written.
Medicare will not pay for care at a facility or home care when:
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- Your loved one has not been admitted to the hospital and has stayed for three mid-nights
- Skilled care (RN, PT, OT) is not needed.
- Benefit of 100-day payment has been exceeded.
Note: The Medicare reimbursement model for Sub-acute Care facilities is changing to Patient Driven Payment Model on October 1, 2019.
Skilled Nursing Facility – SNF:
May be paid for by Medicare A, B, Medicaid or private insurance.
Medicare A pays if:
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- The skilled care of an RN is needed, rehabilitation therapies are typically not needed.
- Upon admission, the care team evaluates your loved one to access the level of care needed.
- A course of care is established and charged to Medicare.
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Note: Please see the constraints on Medicare payment and skilled care above: Subacute Care Facility – Rehabilitation
Medicare B:
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- Medicare B is typically used as an outpatient payment, but these supplemental policies can be used in a skilled nursing facility, to extend services such as rehab.
- There is a yearly cap on the amount Medicare B will pay for these services.
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Note: Traditionally Medicare B services have been capped due to budget restrictions. The current cap is $2010 per year for OT and $2010 for PT and Speech combined. In January 2018, the Medicare therapy cap was repealed. However, how this change will be implemented is unclear, as the guidelines have not been written.
Private Insurance or Long-Term Care Insurance
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- Check your policy.
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Long Term Care Facility – LTC:
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- Private and LTC insurance can be used. Check the policy to see how much it will pay and when the benefit begins. Many of these types of policies do not start until you have shown you need this level of care for a certain amount of days.
- Some LTC facilities accept Medicaid, many do not. Each facility has a certain number of Medicaid beds. If the beds are filled there is no guarantee that they will take another Medicaid patient or allow a client currently in a skilled nursing bed in their facility to step down.
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Long Term Acute Care Facility – LTAC:
Long Term Acute Care Facility – LTAC
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- Stays are covered under Medicare A hospital insurance.
- Your loved one’s level of care requirements drive reimbursement.
- Discharge to an LTAC requires needing acute care level for at least 25 days. Patients are typically fighting more than one condition or have complicated illnesses.
- Patients with commercial insurance need to get authorization prior to admission.
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- Medicare B is typically used as an outpatient payment to extend services. However, these types of supplemental policies can also be used in a skilled nursing facility.
- There is a currently a yearly cap on the amount Medicare B will pay for outpatient services. In 2018, the cap is to $2010 per year for OT and $2010 for PT and Speech combined. In January 2018, the Medicare therapy cap was repealed, however how this change will be implemented is unclear as the guidelines have not been written.
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Homecare:
Payment for this service can be Medicare A, B, or private pay (insurance).
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- Medicare A only pays for homecare is the client is homebound. So, no going shopping or for a haircut.
- Medicare B can be used for homecare, check your policy. Currently there is a yearly payment cap for outpatient services. In 2018, the cap is to $2010 per year for OT and $2010 for PT and Speech combined. In January 2018, the Medicare therapy cap was repealed, however how this change will be implemented is unclear as the guidelines have not been written.
- Rehab professionals are limited from accepting private pay if the client is eligible for A and B Medicare.
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- A general rule of thumb is “As Medicare goes, so go the insurance companies.”
- Every plan varies, look at rehab coverage carefully before purchasing.
- Remember, private insurance companies ask for frequent updates to ensure you still need skilled nursing.
Under what circumstances can and will a care facility refuse a patient?:
Under what circumstances can/does a care facility refuse a patient
Many factors contribute to a care facility refusing to take a patient.
- They don’t have a bed.
- They don’t have the license for a specialized level of care you need.
- Client’s need exceeds their expertise.
- There is no clear discharge plan (e.g. cannot safely discharge you to home)
- There is no guarantee of payment (article re: drug exceeds payment available)
- Your insurance doesn’t cover the required care
Note: Healthcare payments are constantly changing. Although this article summaries the status as of (9/18), it is important to pay attention to all legislation, many have health care consequences. This article is geared towards those over 75 and deals with primarily with Medicare. However, private insurance companies often follow Medicare. Each plan is different, it is important for you to read and understand your plan benefits. This is not a comprehensive analysis / reporting of private insurance regulation. Be aware that a new payment model (The Patient-Driven Payment Model) is coming to skilled nursing facilities (SNF) on October 1, 2019.
Dr. Claire M. Mulry
Claire M. Mulry, OTD, OTR, CAPS, is an Assistant Professor in the Department of Occupational Therapy at Kean University and co-founder of Independent Domain, LLC an aging in place consulting company. Dr. Mulry has practiced as an occupational therapist for over 21 years. She has experience in aging in place, adult acute care, acute rehabilitation, sub-acute rehabilitation and geriatric home care. Claire specializes aging in place consulting, community programming, community mobility, adult acquired brain injury, environmental modifications and home care. Dr. Mulry is the creator of the Let’s Go Community Mobility program. She received her Certified Aging in Place Specialist (CAPS) certification from the National Association of Home Builders in 2009 and is certified to deliver the evidence-based Skills2Care™ program by Jefferson Elder Care. Claire is a certified CarFit technician and event coordinator by the American Association of Retired Persons, the Automobile Association of America, and the American Occupational Therapy Association. She has presented internationally, nationally and locally. Her peer reviewed articles have been published in the American Journal of Occupational Therapy, Topics in Stroke Rehab, Occupational Therapy in Mental Health, Physical and Occupational Therapy for Geriatrics and OT Practice magazine and Special Interest Section Newsletters.
Disclaimer: The material in this blog is for educational purposes only. It is not intended to replace, nor does it replace, consulting with a physician, lawyer, accountant, financial planner or other qualified professional.
