Can a Nursing Home Demand That a Resident Waive Medicaid as a Condition to Admission

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a New Jersey Appealing Discharge from a Nursing Home Attorney

Every so often I get a call from a prospective client claiming that a facility requires a resident or his or her family to waive the resident’s right to apply for Medicaid assistance. The allegation often made is that the facility either requires a private pay contract financially guaranteed by a family member, or an agreement that the resident will not apply for Medicaid assistance for a minimum number of months to insure private pay for at least a specified period. The question presented is whether such private pay contracts are legal. The answer is a clear no as to a nursing home and most likely also for an assisted living residence, but the answer is less certain.

A variation of the above is the practice of admitting a resident who makes application for New Jersey Medicaid during the month of his or her first admission. The facility will often require private pay while the resident is “Medicaid pending”. If Medicaid is approved two or three months after application retroactive to the month of application, the facility will refund the money. Some facilities may not believe this practice to be a violation of Federal Law, but it is. In instructions to facilities, Medicaid states “a resident cannot be transferred or discharged for non-payment if he or she has submitted to a third party payor all paperwork necessary for the bill to be paid. Non-payment would occur if a third party payor, including Medicare or Medicaid, denies the claim and the resident refuses to pay for his or her stay.” If this is the case, then absolutely the facility has the right to begin the discharge process.

To discuss your nursing home or assisted living matter, please contact me toll-free at (855) 376-5291 or email me at fniemann@hnlawfirm.com/.

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