California’s nursing homes are grappling with a significant financial strain that could jeopardize hospice care access for vulnerable patients. A complex web of Medicaid reimbursement delays and managed care confusion is leaving hospice providers on the hook for millions, raising concerns about sustainability and regulatory compliance.
The core issue revolves around “dually eligible” patients, those covered by both Medicare and Medicaid, who reside in nursing homes. Hospices traditionally cover room and board costs, expecting reimbursement from Medicaid. However, California’s transition to managed care for its Medi-Cal program has created a bottleneck.
“Managed health care plans are saying they’re denying the claims, and they’re tying them up so that they age out. So the due date has passed and we can no longer bill,” Craig Dresang, CEO of YoloCares, told Hospice News. “Because the managed care plans have actually already been paid for all of the care for these patients, they should just simply reimburse us the way Medi-Cal always has, and they’re not. They’re keeping the money and it’s a double whammy for us.”
Financial Strain and Regulatory Concerns
YoloCares alone is facing over $1 million in unpaid room and board expenses, with one health plan owing them more than $500,000. This financial burden is not unique to YoloCares. Robert Love, executive director of Butte Home Health and Hospice, emphasized the widespread impact, stating, “The net effect is that we and many other hospices are owed hundreds of thousands if not millions of dollars in room-and-board payments.”
Adding to the financial woes are regulatory concerns. Sheila Clark, president and CEO of the California Hospice and Palliative Care Association (CHAPCA), highlighted the risk of federal inducement violations. “If hospices are not reimbursed for the money they have given to nursing homes, it could be seen as inducement by the federal government,” she explained, referencing potential kickback implications.
Systemic Issues and Lack of Education
A key factor contributing to the reimbursement delays is the lack of education among health plans regarding hospice care. “Payers don’t know how to handle the room and board, and it’s new to them. They aren’t well educated on it,” Love noted. This knowledge gap has led to confusion and delays in processing claims.
According to a 2023 report by the Kaiser Family Foundation, “Medicaid managed care enrollment has increased substantially in recent years, with over 70% of Medicaid beneficiaries now enrolled in managed care plans.” This shift has amplified the need for clear communication and standardized processes between health plans and hospice providers.
Seeking Solutions and Regulatory Action
California hospices have united to address the crisis, working with CHAPCA to engage with Medi-Cal and health plans. The California Department of Managed Care is set to issue an “All-Plan Letter” to clarify the reimbursement process.
“We had VPs on the phone from both plans, and they’re like, ‘okay, we understand,’” Clark said. “We’re going to roll this through and set up meetings with other plans to make sure that they understand it. We need to get this fixed.”
While some plans have been responsive, others have yet to address the issue. The ultimate concern is the impact on patient care, as the financial strain could force hospices to limit services in nursing home settings.
Looking Ahead
The situation in California underscores the need for better communication and streamlined processes within the managed care system. As the industry navigates these challenges, it is crucial to ensure that vulnerable patients continue to receive the care they need.