DCF: Medicaid paying nursing home bill for wealthy

Published On: Feb 23 2013 03:15:15 PM EST   Updated On: Feb 23 2013 03:19:18 PM EST
MIAMI -

Florida welfare officials are proposing a bill that targets Medicaid fraud among patients who hide their assets with family and friends to get the taxpayer-funded program to pay for their nursing home care.

Patients are allowed to hire a relative or friend to oversee small aspects of their care, such as hair styling or room decorating. But instead of being paid monthly or yearly, some caregivers are paid up front for years of service at a time, which can decrease some patients' assets so they in turn qualify for Medicaid. Spouses also can sign over their patient's financial support to the state, which allows couples with millions of dollars in assets to get Medicaid to foot the bill, Department of Children and Families spokesman Joe Follick said Friday.

A 58-year-old patient submitted a contract last September to pay someone $25 an hour for 10 hours a week over the next 22 years, paying them up front and diverting nearly $300,000. The employee's job description included labeling clothes so they aren't lost, shampooing and brushing the patient's hair, and decorating the patient's room with family photos, according to Medicaid records provided by DCF.

"These are services that most people's loved ones would be providing without compensation, and it causes us to questions what the purpose of these contracts are really for," Follick said.

DCF officials said the loopholes allow patients to unfairly divert assets and are costing the taxpayer-funded Medicaid program millions of dollars a year.

The agency tracked 538 cases over six years and found that Medicaid spent more than $29 million in services for people whose spouses were financially stable but had signed over financial support to the state so Medicaid would pay for the nursing home. Officials could have recovered $24 million from those spouses under federal law, but the state currently lacks a process to do, DCF officials said.

Here's how it works: The healthy spouse legally turns over the patient spouse's financial support to the state. The healthy spouse still lives in the couple's home and is allowed to have assets including personal income, a car and up to roughly $115,000 a year in the bank.

"Taxpayers shouldn't be subsidizing nursing home care for the wealthy. And with Medicaid being expanded in the future, it's more important now than ever that we make sure that every dollar is being spent correctly," Follick said.

DCF is meeting with lawmakers to discuss a bill that would increase oversight and close loopholes.

There are no federal or state policies that prohibit patients from transferring funds and assets to family and friends they hire to fill caregiver roles.

Florida, New York and Connecticut struggle with this problem, likely because they have a strong sector of elder-law experts who advise clients to take advantage of the loophole, welfare officials said.

In New York, Medicaid attorneys have to open a lawsuit before the state supreme court to try to recoup money from a person who has signed over a spouse's financial support to the state. They typically only open cases involving couples with assets of more than $100,000. Connecticut enacted a law that allows people to sign over rights to the state only if the healthy spouse can't be located or can't provide information about the assets. The law is being challenged by elder-law advocacy groups.

Some states have restricted contracts so patients can't pay up front or the services can't duplicate those already provided by a nursing home.

The Florida Bar is looking for clarification on the subject and held a public hearing in Tampa on Friday to discuss whether it's OK for non-lawyers to prepare personal service contracts or give advice about the implementation of Florida law to obtain Medicaid benefits.