black and white image of a Rocking Chair on a porch with dappled shade
Credit: Ava Lowery, Flickr Creative Commons

About 2,600 Alzheimer’s patients have either lost their Medicaid funding, or had it cut drastically. Owners of the facilities where they live say the new rates will be unsustainable.

By Rose Hoban

Several thousand seniors with Alzheimer’s disease are at risk of losing their housing due to changes in the state Medicaid program that will result in deep cuts in payment.

The changes mean that 416 people in “special care units” designed to house people with Alzheimer’s and dementia will completely lose reimbursement for personal care services on Jan 1. The Medicaid dollars cover so-called activities of daily living: bathing, dressing, feeding, toileting and getting around safely.

An additional 2,200 Alzheimer’s patients will see deep cuts to the reimbursements their caregivers receive for delivering personal care in more than 250 special dementia units of adult care homes around the state.

“The real problem here is the limitation on the hours,” said Tom Husvar, an operator of adult care homes with special care units in Raleigh, Fayetteville and Durham.

Last spring, as North Carolina lawmakers were adjusting Medicaid benefits to comply with federal rules, they saved state dollars by reducing the amount given to people eligible for personal care services from a maximum of 120 hours to 80 hours per month.

Husvar said his facilities would lose tens of thousands of dollars per month as a result. Reimbursement for the personal care is due to drop from the current maximum of $2,023 down to $1,241 per resident per month.

“The licensure requirements for special care units have not changed,” said Janet Schanzenbach, head of the state Long Term Care Association. She explained regulations require at least one staff member for every eight Alzheimer’s patients, even as the rates get cut by at least a third.

“That’s where the crisis is: We’re required to staff at that level, but we’re not getting paid for it,” Shanzenbach said.

Fewer hours, more hands-on care

During the last legislative session, lawmakers made big changes to the state’s Medicaid program in response to years of federal prodding (see box left).

As lawmakers were considering the changes, Medicaid managers made a presentation at a hearing in March where they estimated that up to 6,000 additional disabled people living in the community would apply for personal care services if requirements for the benefit were loosened. They also estimated an addition 4,000 adult care home residents could apply for the services.

They told legislators that continuing eligibility at the lower level could cost the state as much as $37 million extra per year.

So, lawmakers made the rules tighter.

Medicaid officials sent out inspectors to evaluate the need of more than 16,000 personal care service recipients in the state; the evaluations have taken months to complete. In the past week, operators of adult care homes and group homes (see story Dec 12) began receiving letters with the results of the evaluations, and details on the amount of care their residents would be eligible for.

Many residents have been denied care altogether, often because a caregiver doesn’t need to actually perform a task for a patient, so much as coach him or her through doing it.

maps show the changing number of people over 65 in each county.
Map progression shows the changing number of people over 65 in each county. Although people under 65 can contract Alzheimer’s’, age is the greatest risk factor for the disease.

“With a lot of the residents, you have to say, ‘here’s your shoe,’ and maybe they can physically put their foot in, maybe not,” said Beth Burrell, who operates adult care homes in WIlson and Kinston. “Everyone is different, but it doesn’t mean we can operate with less staff.”

“We have to follow the regulations,” Burrell continued. “The last thing we’ll do is get in trouble by cutting corners that way.”

Burrell also said she hasn’t gotten letters for all of the Medicaid recipients in her facilities, so she doesn’t know how deep her cuts will be.

“Them getting 80 hours is the best scenario,” Burrell said. “If they only get qualified for 60 hours, or 40 hours or less, we lose more money. The minimum we lose is $782 per resident, per month.

“But honestly, I’d not venture to say that all of the 28 residents in my unit will be approved for 80 hours,” Burrell said.

Federal waiver denied

Medicaid officials told legislators that the new tighter rules could pose a problem for residents in the special care units. So in the late summer state officials applied to CMS for a waiver that would allow residents in the units to get reimbursement for the personal care services under looser criteria.

This week, federal Medicaid officials said no, citing the need to make eligibility criteria for benefits the same whether a patient lives in an institution or at home.

“To be honest, the legislature directed the state to go with the… waiver for Alzheimer’s units, but we knew realistically there was a slim chance that CMS would approve that waiver,” said Schanzenbach from the Long Term Care Association.

“So it was not a good fit. And we knew that,” she said. “And unfortunately the state did not develop an alternative plan, even through we all knew that the plan that was submitted wasn’t going to be approved.”

During a legislative hearing on adult care homes Wednesday, an industry representative asked lawmakers if the special care units could tap into $39 million set aside in the state budget to help adult care homes weather the changes during the first six months of next year.

But lawmakers said no.

“The way the budget law is written is that it’s a denial of service that triggers the ability to tap into that money,” Schanzenbach said. “That money is based on denials, but our people are being reduced, not denied.”

Schanzenbach and adult care home operator Tom Husvar both said the only recourse is for adult care home operators to hope legislators fix the problem when they reconvene in late January.

“People are going to have a cash flow problem coming up Jan 1,” said Husvar. “It could take the legislature until March, April to fix this, and in the meantime, we’re just left hanging there.”

He said he was afraid some homes would close in the meantime, and other operators would discharge people who had lost their way of paying.

“Where are you going to send some of these people if they don’t have the dollars? Who is going to take them?” he said. “The families are not going to take them. That’s why we have them.”

Rocking Chair image courtesy of Ava Lowery, Flickr Creative Commons

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Rose Hoban

Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...