Beginning on Jan. 1, North Carolina implemented new Medicaid rules relating to the reimbursement for personal care services. The new rules were prompted by recent federal legislation, however, each state was left to decide how to comply with the new regulations. Unfortunately, according to Cary elder law attorney, Jackie Bedard, “the way that North Carolina’s legislature chose to comply with these federal regulations will have a devastating impact to many North Carolina seniors.”

North Carolina has opted to comply with the federal rules in such a way that it will result in a significant reduction of payments to group homes that care for Medicaid recipients. To date, the majority of public attention on this issue has been focused on its potential impact on group home care for the mentally ill. But the rule also creates disastrous consequences to seniors suffering from Alzheimer’s disease, dementia and similar disorders.

North Carolina residents with Alzheimer’s, dementia or similar disorders may be eligible for assistance in paying for care at a Special Care Unit at an assisted living facility under a Medicaid program called “Special Assistance.” These Special Care Units are typically special Alzheimer’s and dementia wards that are specifically designed to address the unique needs of individuals with these diseases.

Prior to 2013, assisted living facilities providing such care were reimbursed by North Carolina’s Medicaid program at a rate of $2,082 per month—a rate that was already significantly lower than the average private pay rate at such facilities. As of January 2, 2013, assisted living facilities will be reimbursed as a maximum rate of $1,241 per month, about a 40% decrease. As a result, the care provided to these individuals will be the same as other recipients without dementia or Alzheimer’s disease.

Under North Carolina law, if an assisted living facility cannot provide adequate care to a resident, then the facility is obligated to work towards discharge of the resident. Many facilities have already indicated that under the new rules and reduced payments, they will not be able to provide adequate care to residents with Alzheimer’s and dementia-related disorders.

According to Bedard, “the expected result is that when a resident is discharged from an assisted living facility, his or her physician will have no choice but to designate a skilled nursing facility as the appropriate level of care for the resident.” The State’s Medicaid program sets reimbursement rates for each skilled nursing facility, but on average, most facilities are reimbursed $4,000 to $5,000 per month, or about double the rate that the State previously paid to the assisted living facilities under the old rules.

Many skilled nursing facilities may not be adequately equipped to provide for the unique care needs of patients with Alzheimer’s and dementia. For example, some patients with Alzheimer’s and dementia are prone to wandering. For skilled nursing facilities that do not have the dedicated Alzheimer’s and dementia wards, it creates a concern that more facilities will turn to drugging or strapping down patients to protect against such wandering and similar concerns.

In addition to the above issues, the change to the rules also makes qualifying for the personal care services benefit significantly more difficult. Under the prior rules, in addition to other basic eligibility requirements, residents at such facilities were eligible for the personal care services benefit if they needed at least limited assistance with at least two out of seven qualifying Activities of Daily Living. Under the new rules, residents will need at least limited assistance with three out of now only five qualifying Activities of Daily Living (or in some instances two out of five if the need for one ADL is rated as “extensive” or “full dependency”).

“Under the rating system, because many Alzheimer’s and dementia patients are in relatively good physician health, they generally only rate as needing no assistance or only ‘limited’ assistance with their ADLs, rather than ‘extensive’ or ‘full dependency,’” says Bedard. “As a result, many patients do not meet the new three ADLs requirement and have started receiving loss of benefits notices. We’ve already been contacted by panicked families that have received such notices and are scrambling to figure out how they are going to make sure their loved one gets the appropriate care that is needed.” For residents receiving such loss of benefits notices, the ratings decision and loss of benefit status can be appealed, but must be done in a timely manner so as not to lose benefits in the interim.

“The bottom line,” says Bedard, “is that the decision of the North Carolina legislature as to how to comply with the federal regulations is likely to lead to inferior care for our State’s seniors and ultimately, may double the cost to the State as more residents are moved from assisted living facilities to skilled nursing facilities.”

For more information on North Carolina elder law or Cary attorney, Jackie Bedard, please visit www.carolinafep.com or call 919-443-3035.