Some Medicaid managed care plans are continuing to fail to make pass-through room-and-board payments to hospices for patients in California nursing homes.
The issue pertains to nursing home residents who are dually eligible for Medicare and Medicaid. Hospices typically cover these patients’ room-and-board costs with the expectation that Medicaid will reimburse them for the expenses.
California’s Medicaid program, Medi-Cal, is among the state programs that have shifted management of public health coverage to managed care plans. Under this model, Medi-Cal pays health plans, which are then responsible for passing payments on to providers.
However, confusion among managed care plans responsible for administering Medicaid benefits has left some hospices without reimbursement for room and board, according to Craig Dresang, CEO of YoloCares. As a result, some hospices have lost thousands — and in some cases, millions — of dollars.
“They’re just not paying. They have a well-oiled machine of delaying, denying, delaying, denying, delaying, denying, and it’s just a game,” Dresang told Hospice News. “We’ve already paid the room-and-board out to skilled nursing facilities, and we just need to get reimbursed for the work we’ve already done, for the bills we’ve already paid.”
Under state law, health plans cannot require prior authorization for room-and-board payments, and hospices do not need to contract with the plans to receive reimbursement, Sheila Clark, president and CEO of the California Hospice and Palliative Care Association (CHAPCA), said. Nevertheless, plans are denying claims for those reasons, among others, according to Clark and Dresang.
CHAPCA Members report repeated processing errors, authorization denials and requests for documents already submitted, Clark indicated. In a CHAPCA survey of its members, 18 responses identified approximately $4.57 million outstanding payments, some dating to 2023. That pattern points to a systemic problem requiring state action, according to Clark. The survey took place over the last two weeks.
“Room-and-board payment is a pass-through. The contract is between the hospice and the long-term care facility,” Clark told Hospice News. “When the plan does not pay, the hospice is left chasing funds intended to reimburse the facility for the resident’s room and board. That payment failure puts pressure on the arrangements supporting the beneficiary’s care.”
Managed care plans owe YoloCares in excess of $300,000, according to Dresang. The hospice is considering legal action against one payer to recoup the funds. The payer did not respond to Hospice News’ inquiries. Other stakeholders, including CHAPCA, are calling on the state to intervene.
Hospice News first reported on the issue last year. In response to providers’ concerns, California’s Department of Managed Health Care issued an All-Plan Letter outlining how room-and-board payments for hospice patients should be handled. Since then, some health plans have stepped up; others have not, Clark and Dresang said.
Beyond the financial impact, the issue raises questions about regulatory compliance. If hospices are not reimbursed for room-and-board payments made to nursing homes, those payments could be viewed by federal regulators as an inducement. Inducement can include kickbacks or other payments to healthcare organizations or physicians in exchange for patient referrals.
“[Providers] are frightened about inducement, and that is a real thing. That’s real because they have a contract with the nursing home saying that they have to be paid within a certain number of days,” Clark said. “It’s a pass-through, and they’re at risk for inducement because they are reimbursing the nursing home and they’re not getting paid. That could be misconstrued as inducement.”
Companies featured in this article:
California Hospice and Palliative Care Association, YoloCares
