As late-night negotiations on the House Republicans’ budget reconciliation bill pushed an expected vote to Thursday, long-term care providers are hoping for some kind of Hail Mary that would leave the current 90-day retroactive Medicaid eligibility window intact.

They’re liable to be disappointed and see a proposed curtailment to a 30-day window for determining Medicaid eligibility left in play, one veteran policy expert told McKnight’s Long-Term Care News.

“It definitely has a chance of getting through, and the impact will be particularly difficult for people who have sudden illnesses,” said Stephanie Kennan, a senior vice president of McGuireWoods Consulting’s federal public affairs group.

“While it will take a financial toll on operators in assisted living and skilled nursing facilities, it’s a problem for families as well,” she added. “This aligns Medicaid with commercial insurance, but Medicaid is a safety net, not commercial insurance.”

Provider advocates say older adults with sudden health events such as stroke or accidents that leave them unable to apply for Medicaid in advance could be left in the lurch, and also leave nursing homes absorbing large volumes of uncompensated care if admitted residents can’t be enrolled quickly.

The proposed shorter Medicaid eligibility review period is part of a grand House bill that seeks to cut more than $700 billion in annual federal healthcare spending. Medicaid, the number-one payer of US nursing home services, has been targeted on several big fronts so some see the Medicaid coverage review period as a lesser issue that may be relatively overlooked compared to higher-profile topics.

The Office of Management and Budget has estimated the retroactive eligibility proposal would save $6.5 billion over 10 years. 

The Senate could start work on its reconciliation package right after a long Memorial Day break, but a version there is expected to deviate from a final House bill significantly on Medicaid and other issues.

Current law mandates states provide Medicaid coverage for qualified expenses for up to 90 days before the date of application coverage. The one-month proposal would become effective Oct. 1, 2026.

“It would have a huge impact. Easily, 20% to 25% of our Medicaid residents come in under ‘Medicaid pending,’ which is what we call it,” said Deke Cateau, CEO of Atlanta-based long-term care provider A.G. Rhodes. “It would certainly mean us having to re-examine our business model, which is right now very heavy Medicaid because we’re a mission-driven organization. We run really good quality homes that are attractive to other individuals. We would have to look at programs and services that are not mandated but add to the quality of life, and the length of life, and those are the programs that would be jeopardized.”

Restricting the retroactive period would lead to fewer admissions of low-income patients, he said. About 70% of his 418-bed company’s beds are currently filled with Medicaid patients, with one facility reaching 80%. 

“There is a direct outcome of these cuts and one thing would be [more] homelessness,” Cateau said. “Nursing homes are not going to take [patients] if they are not going to be able to be paid for it.”

He added that the old and poor might not be the only groups negatively affected. Patients with certain illnesses or conditions, such as those with dementia, who typically have fewer opportunities to hold jobs or accumulate wealth, also would be disproportionately hurt, he believes.

Kennan said that GOP congressional leaders may have viewed the several dozen waivers that have been granted to states to experiment with shorter retroactive coverage in recent years as a gateway to new national policy.

“In some states, it’s been very difficult” for SNFs, she said, noting that such moves “sadly” save states, albeit at providers’ and patients’ expense.

“Looking at it from the patient perspective, I don’t think there’s a silver lining, and I don’t think for folks who own and operate nursing homes there’s a silver lining, either,” she said.

There had already been 30 demonstration projects approved in 27 states to make changes to retroactive Medicaid eligibility periods as part of Section 1115 waivers as of August 2019, according to the Medicaid and CHIP Payment and Access Commission. At least a handful of states currently have varying periods, with mixed results, stakeholders said.

“Florida currently has a waiver that eliminates retroactive … over a period of time. They seem to have figured it out in the nursing facility space,” acknowledged Georgia Goodman, LeadingAge’s director of Medicaid policy. 

But she quickly cautioned that providers would be on the hook for absorbing costs beyond 30 days if the often complex Medicaid application process is delayed due to a patient’s inability to produce certain documents, data or other requirements. 

“While this would be bad for nursing homes, it would be terrible for hospitals,” Goodman asserted. “For people with a catastrophic event like a stroke, maybe that person is incapacitated and can’t sign. There’s a lot of pressure there.”

It threatens “even more uncompensated care and liability for providers,” she added.

“Nursing facilities are likely not to take residents not eligible for a Medicaid stay, which means those folks will be stuck in the hospital” while social workers scramble to find suitable placements, she said. “The complexities within the processes are pretty significant and curtailing retroactive eligibility at least without a significant implementation timeline could be catastrophic.”

Providers should plan on being more proactive by streamlining their admissions processes and starting them earlier, experts agreed.

“If this [proposal] moves forward, you’ll have to think of ways to amend policies to figure out Medicaid applications for just about anybody coming through the door as soon as possible, and for making conversations with families as early as possible,” Goodman advised providers. “Those applications have to start within 23 to 25 days so if the state seeks more information, you can be responsive and get the application on the books.”

Since July 2019, Arizona’s Medicaid program has restricted retroactive coverage for most patients to the first day of the month in which an application has been filed.

“While the transitions weren’t painless, there hasn’t been a systemic collapse of SNFs or a surge in preventable deaths among seniors,” said David Voepel, CEO and executive director of the Arizona Health Care Association. “Moreover, we’ve adapted by streamlining the intake process, while working to improve eligibility screening, and now SNFs typically work more closely with patients to start Medicaid applications immediately upon admission.”