Investigators at the U.S. Government Accountability Office (GAO) have found that state Medicaid programs are having troubling getting the consumer financial information they need to determine whether residents seeking Medicaid nursing home benefits really are poor enough to qualify for the benefits.

Carolyn Yocum discusses the GAO's findings in a report on state Medicaid long-term care (LTC) asset screening prepared for Sen. Orrin Hatch, R-Utah, and Sen. Tom Coburn, R-Okla., who is a medical doctor.

State Medicaid plans pay for acute health care for the poor. The plans also pay for nursing home care for patients who get through an eligibility screening process. State Medicaid programs accounted for about half of the $263 billion spent on nursing home care in the United States in 2010, Yocum says.

The drafters of the Deficit Reduction Act of 2005 (DRA) tried to hold down growth in Medicaid long-term care (LTC) spending – and respond to allegations that some consumers make themselves artificially poor to qualify for Medicaid nursing home benefits – by requiring each Medicaid plan to look back at how LTC applicants had managed their assets over the previous 60 months.

A DRA provision calls for each state and the District of Columbia to set up electronic asset verification systems to help with efforts to detect “Medicaid planning” efforts.

All states told the GAO that they do try to verify Medicaid LTC benefits applicants' asset information, but no state actually had an electronic verification system in place when the GAO investigators did their research, Yocum says.

Officials in 32 states cited money, staff and time constraints as barriers to setting up the systems.

In addition, “18 states reported that it had been or would be challenging to get financial institutions to participate and provide information,” Yocum says.

“One state reported that it had initially planned to have its [asset verification system (AVS)] implemented by December 2011, but was unable to do so because financial institutions in the state were unwilling to participate in the AVS until state legislation is passed that releases the financial institutions from any liability, ensures they are fairly reimbursed for their services, and makes the process voluntary,” Yocum says. “The state Medicaid program is seeking such legislation during the state's 2012 legislative session.”

Medicaid plan managers are supposed to look at LTC benefits applicants' annuities, life insurance policies, vehicles and home as well as the applicants' bank accounts and securities. All but one jurisdiction ask applicants to provide documentation of promissory notes or loans, and all reported requiring enough documentation of annuities for the states to determine whether an annuity should be classified as a violation of the DRA anti-Medicaid planning rules, Yocum says.

Similarly, all jurisdictions but Louisiana require Medicaid LTC benefits applicants to provide documentation of any life insurance policies that they own, Yocum says.

The GAO investigators found that 45 states require applicants to disclose any interest the applicant or spouse has in an annuity, and 27 warn applicants that the state will become a remainder beneficiary of any annuities, Yocum says.

This article was originally posted at LifeHealthPro.com, a sister site of Credit Union Times.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Allison Bell

Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.