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Nursing Home Litigation


Smith v. Colmers Expands Medicaid Protection for Nursing Home Residents


Ron M. Landsman he settlement


T of the “PEME” (Pre Eligibility


Medical Expenses) class action suit against Maryland Medicaid, Smith v. Colmers, Balt. City


Cir. Ct., No. 24-C-05-007421, has important implications for all nursing home residents and in particular for those who still have unpaid nursing home bills from prior to May 12, 2010. It significantly expands the protection for nursing home residents who may have trouble paying their bills and limited familial support. Before this case was resolved, a nursing home resident


who ran out of funds but could not qualify for Medicaid immediately could find themselves in arrears and exposed to discharge for non-payment. Under these old rules, the person who was not eligible in January, but had a little too much to qualify for Medicaid, might qualify in February, but would have only $71 per month available to pay the old bill, and thus was at risk for discharge. Although Medicaid will provide up to three months of retroactive coverage, that coverage is only available for a month if the person was also technically eligible on the first day of that month. Te suit successfully got Maryland to follow a more


generous rule. Now, even if the resident were not eligible in the previous three months, Medicaid must comply with Federal law and allow the resident to use their current income to pay the old bill. In the meantime, Medicaid pays 100% of


the current nursing home bill. Te mechanism is a medical expense deduction: Medicaid deducts from current income an applicant’s medical expenses incurred before eligibility and unpaid at the time of initial eligibility. In the settlement, the Department of Health and Mental hygiene (DHMH) agreed to implement the Federal requirement going forward, and also agreed to pay $16 million to nursing homes for past uncompensated, pre-eligibility care. Tat $16 million was paid in two tranches, the first in August 2010 and the second earlier this year. In exchange for their share of this settlement fund,


participating nursing homes waived all of their claims for pre-eligibility expenses owed by residents for the period August 1, 2002, through May 12, 2010. For the future, there are three important implications for nursing home residents and their families. Te pre-eligibility medical expense (PEME) deduction


is now fully available. It is spelled out in the Eligibility Manual, pp. 1000-1035. Any medical or remedial expense that the resident incurred, but which is not paid at the time of initial eligibility, can be paid out of post-eligibility income.


Trial Reporter / Fall 2011 33


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