In Maryland, applications for Medicaid are required to be processed in a timely manner – within 30 days, or, if a determination if disability is required, within 60 days. Federal law requires long-term care applications to be processed with 45 days. However, there are cases where processing of the Medicaid application falls outside of these time frames. In fact, for the time period of June 2016 through July 2017, approximately 54% of Medicaid Applications in Maryland took longer than 45 days to finalize, with nearly 30% taking more than 90 days.
During the time that a Medicaid Application is pending approval, a skilled nursing facility continues to provide services to the resident despite the absence of a payor source. This is a significant financial burden on a skilled nursing facility, especially in instances where there are multiple “Medicaid-pending” residents or where a facility is heavily dependent on cash flow.
Maryland is attempting to address these situations via a new law. The “Nursing Homes – Partial Payment for Services Provided” bill was signed into law by Governor Larry Hogan on May 8, 2018 and takes effect on July 1, 2018. The law requires the Maryland Department of Health (“MDH”) to make a partial, advance payment to a nursing home in specific circumstances where Medicaid has not been approved within a specified time frame, and where such partial payment is requested by the nursing home.
This program is available for those residents who have filed a Medicaid application and for whom services have not be determined within 90 days of the date of application. In these circumstances, the facility can request a partial payment in advance of Medicaid Approval from MDH. The advance partial payment cannot exceed 50% of the estimated amount due for uncompensated services under the Medicaid program. If the Medicaid Application is later approved, MDH must then pay the remaining outstanding balance to the facility.
This goal of this new law is to provide some much-needed relief to nursing facilities awaiting funds from Medicaid by providing a partial payment after 90 days. In addition, the new Asset Verification System purchased by the Department of Human Services (“DHS”) will assist DHS in securing some financial verifications themselves more expeditiously, thereby reducing the number of long term care applications issued a Continuation Notice and extending past the 90thday.
The new law will be most beneficial in instances where eventual Medicaid approval for a resident is highly likely. If the Medicaid Application is ultimately denied, MDH will actually reduce other payments due to the nursing home in order to recover the advanced partial payments made. Therefore, a high probability of eventual Medicaid approval is ideal. This law is in effect for two years, through June 30, 2020, when it will automatically expire unless new legislation is enacted to extend or replace the current law.