Medicaid Program Denying Four Times the Number of Applicants after 2015 State Memo

The memo contained methodological changes for assessors in determining who needs assistance

Medicaid Program Denying Four Times the Number of Applicants after 2015 State Memo
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October 5, 2016

After the state changed how applicants are evaluated, a Medicaid program that used to provide funding for nearly every North Carolinian who applied now denies it for four times as many applicants as before.

Thousands of people across the state who receive Medicaid are now being denied assistance funded by the government with such everyday tasks as eating and bathing. The denial rate increased after assessors began to implement methodological changes requested by the state in 2015. The results are very different determinations about the help the patients need.

Liberty HealthCare Corporation, the company whose job it is to decide which Medicaid patients are eligible for which services, received a memo in April 2015 from the North Carolina Department of Health and Human Services Division of Medical Assistance. The memo detailed new guidelines for determining whether or not a patient needs help with such activities as bathing, dressing, or taking medicine.

Before the state issued that memo, assessors were approving nearly 95 percent of Medicaid beneficiaries to receive services for personal care. After the memo, there was a slow but steady decline in the rate of approvals: nearly eight percent of assessments conducted by the company resulted in denials in May 2015, slightly more than eight percent in June and July 2015, and more than 10 percent—412 people—in August 2015.

Then in September of that year, the state issued another memo to help guide assessors, which led to a drastic increase in the denial rate by November. In October 2015, assessors denied service hours for 11 percent of adult care home residents; in November, that number rose to almost 19 percent.

Lyneka Judkins, executive director of Liberty HealthCare's North Carolina division, wrote in an email that she was "not in a position to comment on PCS and the hour allocation."

The memos detailed numerous examples in which a patient could be denied personal care services based on whether or not the patient was able to perform certain activities related to daily living. Patients are asked during the assessment to simulate various tasks rather than actually do them. If a woman's only difficulty dressing was an inability to fasten her own bra, she could be denied services hours for personal care. People who can reach behind themselves are deemed able to perform hygienic toileting tasks; people who can lift a spoon to their mouth are deemed able to hand tasks related to eating.

When a resident of an assisted living facility who had been approved previously for personal care services hours is later denied those hours on another assessment, it is almost impossible for the facility to discharge them due to state and federal regulations stipulating that discharged residents have to have other options for housing. But many recipients of Medicaid who live in assisted living facilities do not have such options. Providers then have to absorb the cost of take care of those residents even though they have not received any funding to cover them.

The changes to how patients are evaluated were made in June 2015, shortly before the state submitted a Medicaid reform proposal to the federal government. Almost 2 million people, including low-income seniors, children, and people with disabilities, are enrolled in Medicaid in North Carolina. However, according to North Carolina Health News, the proposal did not contain an expansion to Medicaid "to cover low-income working adults, a change that's permitted under the Affordable Care Act."

"Starting with the 2013 budget, the General Assembly knew we needed to start thinking about the reform of the state Department of Health and Human Services," commented Ciara Zachary, policy analyst at the North Carolina Justice Center's Health Advocacy Project.

"There have been a lot of issues in terms of controlling cost and quality of care. The other complicated issue politically is: Can that reform include Medicaid expansion? We haven't done that."

It is likely that a court case settled early in 2016 will play a part in the state's approval of fewer personal care services hours for in-home recipients too, according to Carolina Public Press.

"Pettigrew v. Brajer, filed in 2011 as Pashby v. Wos, was a class-action lawsuit that alleged that the state made it more difficult for Medicaid recipients to receive personal care services in their homes than it was to receive approval for those same services in assisted living facilities because recipients were being assessed under different criteria in each setting," said the news service.

The DHHS Division of Medical Assistance agreed in settling the case to make sure that the criteria used in evaluations were always the same regardless of setting. The state has decided to use the more restrictive criteria, and Liberty will soon evaluate all personal care services applicants according to those guidelines.