September 15, 2000
NURSING HOME BED RESERVATIONS AND SELF-PAY RESIDENTS
By: Robin Cohen, Principal Analyst
You asked for information on Connecticut nursing homes' practice of charging self-pay residents to reserve their beds when they must be hospitalized. You also wanted to know how other states handle this, including whether any are permitted to charge for the bed hold only when a home has a low vacancy rate.
Connecticut law requires nursing homes to reserve the bed of a self-pay resident who is absent due to hospitalization only when payment is available for the bed, regardless of the home's vacancy rate. But the law does not limit what homes may charge to hold the bed, just as it does not limit what they can charge when they are in the home.
For Medicaid residents the law is different. Nursing homes must hold their beds for at least 15 days, and Medicaid will pay for a maximum of 15 days if certain conditions are met, including a minimum occupancy rate. (Some long-term care insurance policies have bed leave provisions including those from all but two companies participating in the Connecticut Partnership for Long Term Care. These policies pay for anywhere from 14 to 21 days of hospital leave, irrespective of the home's vacancy rate, reports David Guttchen of the Office of Policy and Management.)
We found only one state, Minnesota, that not only limits when homes can charge self-pay residents for bed holds, based on occupancy rates, but also limits what they can charge. These residents can be asked to pay no more than 79% of the Medicaid rate (the self-pay and Medicaid rates are the same in the state) and only when the occupancy rate is 94% or higher. The Medicaid program will likewise pay this amount when a Medicaid resident is hospitalized. Based on our discussions with the nursing home trade associations and a few other states, it appears that the rest of the states let the market dictate what homes can charge self-pay residents.
If Connecticut were to regulate what homes charge self-pay residents to hold their beds there could be unintended consequences. For example, the homes could increase their daily self-pay rate to make up for any revenue loss experienced as a result of any such limits.
CONNECTICUT'S BED RESERVATION LAW
State law does not make distinctions between homes with vacancies and those without when guaranteeing a nursing home bed hold for a self-pay resident. It simply says that a home must hold the bed for the resident when he is hospitalized as long as payment is available for the bed. If payment is not available for the bed during the hospitalization, the home must admit the resident to the next available bed once the hospital discharges him (CGS § 19a-537a). The regulations require that homes inform the self-pay resident and his relatives or other responsible person of this policy when he is admitted to the home.
For Medicaid residents the rules are different. State law requires that Medicaid residents' beds be held for at least 15 days unless the hospital can document objectively that the resident will not return to the home at the same level of care within this period. The Department of Social Services (DSS) (the state Medicaid agency) must reimburse homes at their Medicaid daily rate for up to seven days of care, including the date the resident was hospitalized, if the home
1. can document that it has a vacancy rate of no more than three beds or 3% of licensed capacity, whichever is greater and
2. contacted the hospital and the hospital failed to provide objective information confirming that the resident cannot return to the home at the same skill level within the 15 days.
DSS will reimburse homes for the additional eight days only (1) if on the seventh day the vacancy rate has not increased and (2) during this time the home has contacted the hospital and gets no indication that the resident will not be returning to the home within the 15 days.
Minnesota has a nursing home rate equalization law that is quite unique. Basically, it provides that a home may not receive Medicaid reimbursement if it charges a self-pay resident any more than what Medicaid would pay for the same bed, unless the self-pay resident is in a private room or needs special services that are not included in the home's daily Medicaid rate. These rules extend to the state's bed hold policy.
The Minnesota Rules contain the state's nursing home bed hold policy. Although it appears to be directed only at Medicaid residents, this policy applies to all nursing home residents, says Munna Yasiri of the state's Department of Human Services. The rules permit Medicaid payment for hospitalization if (1) the recipient has been transferred to a hospital, (2) his records document the transfer and return dates, and (3) the leave days are reported on an invoice the home submits. Payment is limited to 18 consecutive days for each separate and distinct episode of “medically necessary hospitalization.” But payment is made only when a facility (with 25 or more beds) has an average monthly occupancy rate of 94% or higher (i.e., a vacancy rate of no more than 6%). According to Yasiri, these provisions extend to self-pay residents as well.