Medicaid & Medicare in Assisted Living: Essential Insights
Oct 14, 2024
Navigating the complexity of Medicaid and Medicare can be difficult, particularly in the context of assisted living facilities. In this blog, we will delve into the complexities of these important programs and show how they relate to assisted living. Understanding Medicaid and Medicare is vital for anyone working in this industry since it affects billing, compliance, and overall service delivery.
Medicaid provides an important lifeline for assisted living services by supporting many care components. However, it's crucial to understand that Medicare does not cover assisted living services, which is a widespread misperception that can be confusing. Medicaid is administered differently in each state, with some states managing it directly and others via managed care organizations. To successfully navigate these processes, you need to be completely aware of your state's standards, ensuring you can efficiently handle billing and compliance inside your assisted living facility.
Check out the video, too:
Can You Bill Medicaid for Assisted Living Services?
One of the most common questions is whether assisted living services can be billed through Medicaid. The answer is an emphatic YES. However, the compensation process differs in each state, with different processes and reimbursement rates.
State-Set Reimbursement Rates
Each state uses a budgeting process to calculate Medicaid reimbursement rates for assisted living services. These charges are usually set at a daily rate for each resident based on the care they receive.
Can You Bill Medicare for Assisted Living Services?
Compared to Medicaid, Medicare does not cover long-term care, such as the services provided in an assisted living facility. Medicare is intended for short-term care, including hospital stays (Medicare Part A), outpatient services (Medicare Part B), and prescription medicines (Medicare Part D). As a result, you cannot bill Medicare for long-term care given in assisted living facilities. However, residents in assisted living homes may have Medicare for the other services they need, including visiting their primary care provider, paying for their medications, or going to a rehab facility.
Administration of Medicaid
Understanding who administers Medicaid in your state is important. Generally, there are two main administrators: the state or a Managed Care Organization (MCO).
State Administration
In some states, Medicaid is administered directly by the state government. You will submit your claims directly to the state's Medicaid office, which will process and reimburse you for the services provided.
Managed Care Organizations (MCOs)
In other states, Medicaid is managed by MCOs, which are private corporations (often healthcare payors, like health insurance companies) contracted by the state to provide Medicaid payment processing services. These organizations will receive and process the claims and often provide more efficient services.
Navigating Multiple MCOs
In states with several MCOs, residents select their MCO. Thus, you may need to contract with multiple MCOs to accommodate all residents regardless of their Medicaid carrier. While it may feel intimidating, the initial setup process with these MCOs is the most difficult part. Once registered, everything else becomes much easier and more straightforward.
Key Takeaways
It is important to understand how Medicaid and Medicare work in assisted living. Assisted living services can be billed to Medicaid but not to Medicare. Medicaid administration varies by state and may include direct governmental management or managed care organizations. You must know your state's specific criteria and process to successfully navigate Medicaid in your state.
If you need help creating a solid business plan, don't miss out on our Business Plan Checklist. This checklist is designed to help you create a successful business plan tailored to your assisted living facility. In addition, consider applying to our Assisted Living Investing Mastermind program. This 12-month program is designed to guide you step-by-step toward owning and operating your own assisted living business.
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