Nursing Home Litigation


Of course, that is income that would otherwise have gone toward current nursing home charges. Medicaid makes up the shortfall, so that the nursing home continues to get full payment under its current Medicaid contract with the added benefit that its old bills – possibly otherwise uncollectible – are being paid. Because the deduction includes nursing home bills


incurred during the “retro” period – the three months before initial eligibility – it protects from involuntary discharge residents who have fallen into arrears. While the right to continued PEME deductions may not technically preclude discharge based on failure to pay a prior bill, it reverses the facility’s incentive to discharge the resident, since with PEME the nursing home gets paid more than the full Medicaid rate. Most nursing home residents who had unpaid bills prior


to Medicaid eligibility during the settlement period, August 1, 2002, through the date of settlement, May 12, 2010, are freed of that liability if their nursing home participated in the $16 million claim fund. Nursing homes that applied to get any unpaid pre-eligibility bills paid under this settlement waived their claim to unpaid pre-eligibility charges of any resident incurred during the settlement period. Tis may come up in current discharge proceedings, as it did in one


recent case, or in claims filed against a deceased resident’s estate (likely arising from the presence of a former home). Te settlement itself resulted in securing the deduction


and making clear its scope. For example, it is also available to individuals getting waiver benefits and applies even if the charges were incurred during the period of a lapsed application. Although the reason for ineligibility is usually being over-scale, the reason for ineligibility is generally irrelevant. One exception: consistent with Federal policy, there is no deduction for expenses incurred during a period of ineligibility by reason of a transfer of assets under 42 U.S.C. § 1396p(c).


A number of issues that have arisen since the settlement


have been resolved. A payment made by a resident or family member during the retro period that is applied to a pre- retro period bill does not reduce the deduction for expenses incurred during the retro period. Te deduction is available for all pre-eligibility medical expenses for the full amount incurred. Ancillary charges for over-the-counter goods that would normally be provided by the nursing facility as part of its service package are deductible. Te Smith v. Colmers settlement resolved an important


issue of federal law and provided significant sums of money to nursing homes for previous uncompensated, pre- eligibility care. In giving certainty to Medicaid recipients and practitioners concerning the deduction of pre-eligibility expenses going forward, it protects Maryland citizens from the vagaries of a Medicaid application process that is unnecessarily complicated and difficult. 


Biography Ron M. Landsman is the principal of Ron M. Landsman,


P.A., focusing on Medicaid, including estate recoveries, supplemental needs trusts, estate and disability planning, and guardianship and conservatorship in Washington, D.C., and Maryland. He received his law degree from the University of Michigan, 1974, clerked in the [old] Fifth Circuit, handled antitrust appeals at the Department of Justice for four years, mostly related to U.S. v. AT&T, and has had his own practice for the past 25 years. He is a Fellow of the National Academy of Elder Law Attorneys, a member of Special Needs Alliance, LLC, and a member of the board of directors of Shared Horizons, Inc., which manages the Wesley Vinner Memorial Trust, a d-4-C trust, in addition to bar activities in D.C. and Maryland. His office is in Rockville and he practices throughout Maryland and D.C.


34 Trial Reporter / Fall 2011


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