Things You Need to Know about Nursing Homes

James C. Sherlock

Nursing homes are certified as nursing facilities (NF), skilled nursing facilities (SNF) or both for Medicare and Medicaid participation based on inspections by the state survey agency (Virginia Department of Health). I have italicized skilled nursing facility where it occurs to make it easier to distinguish between those two types of facilities and related care in this article.

The term nursing home is often used in COVID-19-related statistics, reports and opinion pieces. That term and its meaning and implications may be understood at varying levels by caregivers for nursing home patients, but it is not clear that the general public knows much about them. This article is designed to provide a baseline.

Who Pays for Nursing Home Care?

If a citizen is over 65, he or she is qualified for Medicare and may also be qualified for Medicaid. Everyone eligible for Social Security Disability Insurance (SSDI) benefits is also eligible for Medicare after a 24-month qualifying period. The first 24 months of disability benefit entitlement is the waiting period for Medicare coverage.

  • Medicare pays covered dually eligible beneficiaries’ skilled medical services first, because Medicaid is generally the payer of last resort. 
  • Medicaid may cover medical costs Medicare may not cover or partially covers in nursing home care.  

If a patient needs nursing home care, is not eligible for either Medicaid or Medicare, he or she depends upon government insurance (such as Tricare), private insurance or self-pay.

What is Skilled Nursing Care?

Skilled care is nursing and therapy care that can only be safely and effectively performed by, or under the supervision of, professionals or technical personnel. It’s health care given when you need skilled nursing or skilled therapy to treat, manage, and observe your condition, and evaluate your care. Very often a Skilled Nursing Facility (SNF) is co-located with a Nursing Facility (NF) either in a different part of the facility or in swing beds that can accommodate either type of patient. 

Medicare Skilled Nursing Facility (SNF) Services

Medicare pays for skilled nursing services only.  

Medicare-covered services include, but aren’t limited to:

  • Semi-private room (a room you share with other patients)
  • Meals
  • Skilled nursing care
  • Physical therapy (if needed to meet your health goal)
  • Occupational therapy (if needed to meet your health goal)
  • Speech-language pathology services (if they’re needed to meet your health goal)
  • Medical social services
  • Medications
  • Medical supplies and equipment used in the facility
  • Ambulance transportation (when other transportation endangers health) to the nearest supplier of needed services that aren’t available at the SNF
  • Dietary counseling
  • Swing bed services

Medicare Part A (Hospital Insurance) covers skilled nursing care provided in a SNF in certain conditions for a limited time (on a short-term basis) if all of these conditions are met:

  • You have Part A and have days left in your benefit period to use.
  • You have a qualifying hospital stay .
  • Your doctor has decided that you need daily skilled care. It must be given by, or under the supervision of, skilled nursing or therapy staff.
  • You get these skilled services in a SNF that’s certified by CMS based on state inspections.
  • You need these skilled services for a medical condition that’s either:
    • A hospital-related medical condition treated during your qualifying 3-day inpatient hospital stay, even if it wasn’t the reason you were admitted to the hospital.
    • A condition that started while you were getting care in the SNF for a hospital-related medical condition (for example, if you develop an infection that requires IV antibiotics while you’re getting SNF care)

Patient costs in Original Medicare:

  • Days 1–20: $0 for each benefit period .
  • Days 21–100: $176 coinsurance per day of each benefit period.
  • Days 101 and beyond: all costs.

Patients with Medicare Advantage may have extended benefits.

Medicaid Nursing Facility Services

Medicaid will pay for either skilled nursing facility (SNF) or nursing facility (NF) services.  

Medicaid is a joint federal and state program that, together with the Children’s Health Insurance Program (CHIP), provides health coverage to over 72.5 million Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. Medicaid is the single largest source of health coverage in the United States.  

Financial eligibility rules for Medicaid are complex, but eligibility is generally determined by Modified Adjusted Gross Income (MAGI).

Nursing home services are provided by Medicaid certified nursing homes, which primarily provide three types of services:

  • Skilled nursing or medical care and related services
  • Rehabilitation needed due to injury, disability, or illness
  • Long term care —health-related care and services (above the level of room and board) not available in the community, needed regularly due to a mental or physical condition. I have seen estimates that 50% – 70% of nursing home patients are affected to different degrees by dementia.

Federal law requires nursing home services to be provided by state Medicaid programs for individuals age 21 or older who need them. States may not limit access to the service, or make it subject to waiting lists, as they may for home and community based services. Therefore, in some cases nursing home services may be more immediately available than other long-term care options.

Need for nursing home services is defined by states, all of whom have established nursing home level of care criteria, some more specific than others. State level of care requirements must provide access to individuals who meet the coverage criteria defined in federal law and regulation. Individuals with serious mental illness or intellectual disability must also be evaluated by the state’s Preadmission Screening and Resident Review program to determine if nursing home admission is needed and appropriate.

Federal requirements specify that each nursing home must provide, (and residents may not be charged for), at least:

  • Nursing and related services
  • Specialized rehabilitative services (treatment and services required by residents with mental illness or intellectual disability, not provided or arranged for by the state)
  • Medically-related social services
  • Pharmaceutical services (with assurance of accurate acquiring, receiving, dispensing, and administering of drugs and biologicals)
  • Dietary services individualized to the needs of each resident
  • Professionally directed program of activities to meet the interests and needs for well being of each resident
  • Emergency dental services (and routine dental services to the extent covered under the state plan)
  • Room and bed maintenance services
  • Routine personal hygiene items and services

Inspections and Certification for Medicare and Medicaid

For those nursing homes seeking certification for Medicare and Medicaid, which is nearly all of them, the Centers for Medicare/Medicaid Services (CMS) sets standards of care at every level of their disabilities.

Skilled nursing facilities (SNFs) and nursing facilities (NFs) are required to be in compliance with the requirements in 42 CFR Part 483, Subpart B, to receive payment under the Medicare or Medicaid programs.

The State has the responsibility for inspecting and certifying a nursing home’s compliance or noncompliance, except in the case of State-operated facilities.  

However, the State’s certification for a skilled nursing facility is subject to CMS’ approval.  “Certification of compliance” means that a facility’s compliance with Federal participation requirements is ascertained.  

In addition to certifying a facility’s compliance or noncompliance, the State recommends appropriate enforcement actions to the State Medicaid agency (Department of Medical Assistance Services in Virginia) for Medicaid and to the regional office for Medicare.

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12 responses to “Things You Need to Know about Nursing Homes

  1. Jim – this is excellent… have to go back and read again.. but thanks.

    So a question. If a nursing home costs 5-7K a month – and they do – then
    I assume that Medicaid is capped and does not pay all of that.


    So how is the difference between what Medicaid pays and the Nursing home charges made up or does Medicaid just cover it all if the patient cannot pay?

    Can Medicaid require a patient to sell their home or give up assets to pay?

  2. Medicaid nursing home payments are set by each state. No nursing home, even if it is Medicaid-certified, must accept a Medicaid patient. If they do, they the Medicaid payment is all they get for listed services.
    Eligibility for Medicaid is a complex topic and needs to be explored with a counselor by each individual applying. All states require asset stripping if an applicant has too many resources to qualify. An applicant likely won’t have to sell his or her home in order to qualify for Medicaid, but Medicaid can make a claim against the estate after your death to recover funds it expended on your behalf. This process is called estate recovery.

  3. The state Medicaid Agency

  4. re: ” If they do, they the Medicaid payment is all they get for listed services.”

    I see this:

    Lexington Court Rehabilitation & Health Care Ctr Price
    Facility Private Room Monthly Cost Non-private Room Monthly Cost
    Lexington Court Rehabilitation & Health Care Ctr* $6,052 $5,596
    State Average Cost $7,422 $6,714

    On Medicaid it may be possible to to have the full cost of care covered, less the income of the individual receiving care.

    It seems inconceivable that Medicaid would pay anything near $6,000 yet this nursing home has quite a few Medicaid patients.

    what does this mean: “On Medicaid it may be possible to to have the full cost of care covered, less the income of the individual receiving care.”

    do they take the social security/pension income of the patient then Medicaid pays the difference?

    Is this how some patients end up 3 to a room?

  5. In Virginia, if you are living in a nursing home on Medicaid, you must spend all of your income except $40 a month to pay the bill and then Medicaid pays the rest. The total reimbursement to the nursing home is represented by the Medicaid rate for that location in Virginia.

  6. Good write up. Very informative. Bleak, but informative. So much easier when Dr. Kevorkian was around.

    Those of us born 1946 to 1956 had best be prepared. It has been often reported that a growing percentage of the boomers are moving to retirement in Central America, and other tropical places, fully aware that, while medical care is good and affordable, an emergency is an all but guarantee that it ends there.

  7. I highly recommend that anyone who has not been to visit a nursing home – do so – not because you’ll like it but because you need to understand what the reality is so that when you read or hear others, you can check that with your own experience.

    It’s not a place that I ever want to be. In fact, it’s not a life that I would knowingly choose. It’s a terrible way to end one’s life – all things considered.

  8. My 100 year old uncle John just passed away in a full care facility nursing home in New York from Covid-19. We had visited him there in 2018. While he received adequate care, including decent food and compassionate handling and interaction from the staff, it was not a place that anyone would necessarily chose to live in and thrive in. As a moderately priced facility in the New York suburbs, it was adequate under normal conditions. Under the threat of coronavirus infection, it would have been almost impossible to keep patients completely safe with the need for testing, medical masks, supplies, and comprehensive sanitation protocols to ensure safety in this wide spread pandemic. My uncle had a full life and got along quite well at the nursing home up and until the pandemic hit. Thanks to all for the information re: nursing homes here in VA.

  9. Awesome work. I’m creating a permanent bookmark for this piece. Many thanks.

  10. I second that. Thank you Jim!

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