The cost of long term nursing home care is out of reach for many. Therefore, it’s common for elders who need ongoing residential care to use Arizona State health insurance to help cover the cost.
While this funding method may seem quite simple, this can change if the resident receives a settlement following a case of abuse or neglect.
You may be wondering if Arizona State health insurance can ask for a repayment should a family member receive a settlement. Or if there’s a limit to the amount your health insurance provider can ask for. This article seeks to clarify these answers for you.
Arizona provides state health insurance through a Medicaid program called the Arizona Health Care Cost Containment System (AHCCCS).
AHCCCS offers a wide range of care for individuals in Arizona, including nursing home care. In Arizona, they fund this via the Arizona Long Term Care System (ALTCS).
Individuals who have a limited income or cash reserves may be eligible for health care funding from ALTCS. Funding means nursing home care and community services are offered at no or minimal cost provided the resident receiving the care meets financial and medical criteria.
As determined by Arizona law, care providers must accept the payments from AHCCCS as payment in full.
Financial Limitations for Receiving ALTCS
To qualify for Medicaid, you must have a limited amount of countable resources available to you. In Arizona, this limit is set at $2,000 for Institutional Nursing Home Medicaid and Home and Community-based services. Married couples can have $4,000 of cash reserves.
Medicaid will count the following as ‘countable resources’:
Assets that Medicaid don’t consider in their assessment include:
In addition to your countable resources, you can also have a monthly income of up to $2,349. Medicaid will count the following as income:
From 2020, married couples are permitted a $4,698 monthly income. If you exceed the financial threshold, you can spend down. However, the guidelines on what you can own and still be eligible for Medicaid are complex. Therefore you may benefit from speaking to a lawyer.
A settlement in a negligence claim could impact any Medicaid funding. Negligence occurs when:
One example is if your father is prone to wandering and the home failed to monitor him. If your father suffered a fall while he was wandering and suffered an injury, like a broken hip or ankle, then he could file a personal injury suit.
However, receiving this settlement means that your father may be over the income limits for Medicaid.
To continue to receive Medicaid one approach is to ‘spend down’ the assets. Medicaid permits recipients to spend down through
However, spending down may not always be the best approach. There are other options available if your father wants to hold on to more of his money. These include
Under ALTCS, a special treatment trust may be a possibility. These Trusts allow some people to qualify for Medicaid even though they are over the financial limits. However, when the customer dies, can recover these costs through the trust. There are three types of Trusts:
Each trust has its own set of rules. However, any money taken out of a Special Treatment Trust, must be for the customer’s benefit and in accordance with A.R.S. §36-2934.01.
You can read ALTCS policies for setting up these trusts online.
If your father is legally married to a spouse that still lives at home or outside of a medical facility, then community spouse rules may apply.
If applicable, then this would mean that your father would then qualify for a Community Spouse Resource Deduction (CSRD). The rules allow a married spouse to keep some financial resources for their personal needs. These rules can also let a community spouse keep some of their partner’s income.
An ALTCS Eligibility worker will calculate the CSRD level at application. If your circumstances change because of a settlement, these ALTCS may need to review the calculation.
You can see ALTCS policies for CSRD online. However, as the rules are complex and may or may not apply to your individual case, speak to a lawyer for advice.
If you’ve received medical treatment because of your personal injury while getting Medicaid, they can ask for reimbursement. These costs include:
Medicaid do this by putting a Lien against the settlement.
A lien is:
“the right of a healthcare provider, doctor, or hospital to assert an interest in personal injury recoveries of its patients,”
Medicare and Medicaid liens apply when a patient receives treatment for a personal injury. If the patient later receives a personal injury settlement, the insurance provider can put a lien on the award to reimburse them.
It has been a practice of some Arizona hospitals to bill patients for more money after the patient receives a court settlement, even though the bills have been covered by Medicaid.
As of 2020, this practice, which is called ‘balance billing’ is now unenforceable in Arizona. Arizona State law had allowed this, but the Supreme Court ruled that Federal laws superseded it.
You can read more about the practice of balance billing and medical liens on our blog.
This is a common concern, but when it comes to medical billing, these state-run programs can only take what is owed in medical costs. This was brought into as part of President Trump’s 2018 budget.
As detailed above, Arizona hospitals can no longer use balance billing for medical bills. However, as highlighted throughout this article, a settlement can affect your ongoing eligibility for Medicaid or Medicare nursing home funding. If you have questions about this, speak to your insurance provider, or seek legal advice.
Yes, you should notify Medicaid of any settlement. If you don’t, Medicaid will get automatically notified, anyway. Failure to report a settlement can result in hefty fines, so you should do this as soon as possible.
Federal law means liens are stringent. Therefore, it’s not usually possible to negotiate reductions. However, it may make an exception for lawyer fees, as these will usually come out directly from your settlement.
Medicare allows you to report any settlements online.
You’ll need to provide some personal information, including your Medicaid number. Next, you’ll be asked for details of the accident, such as:
Should your personal injury require future medical treatment, Medicaid can ask for these costs to be reimbursed later.
Just like Medicaid, Medicare will ask for reimbursement of medical care if you receive a settlement.
This varies on the value of the settlement. If the settlement is relatively small ($5,000 or below) they fix the percentage at 25 percent.
Before you do anything else, the first thing you should do is speak to a lawyer. They can help by:
Sometimes, a demand for Medicaid reimbursement is an unwelcome outcome of a settlement in Arizona. If this happens to you, the first thing you should do is talk to a lawyer. They can advise you of the options available to you and how to move forward.
To find out more about how the Thompson Law Firm may be able to limit your liabilities, contact us today.
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