Many California nursing home residents told to find new homes, raising concerns about upcoming shift to managed care

Some of California's most vulnerable nursing home residents, many of whom have nowhere else to go, are receiving letters from their health care plans saying they are no longer eligible for long-term care.

In one notable example, three dozen nursing home residents in San Luis Obispo County were informed on the same day that their Medi-Cal managed care plan was cutting off payment for nursing home care, said Karen Jones, the county's long-term care ombudsman.

The residents included a 68-year-old amputee with diabetes, memory loss and kidney disease who required dialysis three times a week, and an 82-year-old man with congestive heart failure and diabetes who wasn't strong enough to transfer himself from his bed to a wheelchair, Jones said.

"It just felt like we were tossing our seniors and disabled adults," Jones said. " 'Sorry, we're going to save some money here.' That's exactly what it felt like."

The California Department of Health Care Services, which administers Medi-Cal, the state's Medicaid program for low-income people, said the terminations by the managed care plan, CenCal Health, were isolated, perspective some long-term care advocates share. CenCal said it was just following protocol, examining the books to make sure members still met the qualifications for long-term care under Medi-Cal.

But California Healthline interviewed multiple long-term care advocates and legal aid attorneys on the Central Coast and other parts of the state who said they have witnessed an increase in coverage denials for nursing home residents covered by Medi-Cal managed care plans. They worry such denials may soon become more commonplace: Medi-Cal nursing home care in all 58 counties will be placed under managed care beginning in January 2021, the state announced recently -- up from 29 counties currently.

Under managed care, the state pays plans a monthly rate for each recipient to provide all of the medically necessary services that person needs. By comparison, under traditional "fee-for-service" Medi-Cal, the state compensates medical providers directly for each service they render.

California and other states increasingly are moving their Medicaid patients into managed care, arguing that the model saves money and also improves members' health by coordinating care. More than 80% of the 12.8 million Californians on Medi-Cal are covered by managed care.

Long-term care advocates fear that the trend means more frail people will be forced out of nursing homes as managed care plans look to their bottom lines.

"We're looking at multiplying this problem across the state," said Leza Coleman, executive director of the California Long-Term Care Ombudsman Association.

The typical nursing home population in California is about two-thirds Medi-Cal, and many have given up everything -- their apartments or mobile homes, their furniture, their burial insurance -- to qualify, said Lonnie Golick, ombudsman for Shasta, Trinity, Siskiyou, Modoc and Lassen Counties in Northern California. Golick said she's received a number of complaints against Partnership HealthPlan of California about coverage terminations. "They gave up their whole life," she said. "And then they're told, 'It's time to go.' "

Exacerbating the problem, Coleman added, is a shortage of assisted living facilities willing to serve Medi-Cal patients who no longer qualify for nursing home care.

To be eligible for nursing home coverage under Medi-Cal, individuals must have medical needs that require continual, around-the-clock care to prevent significant illness or disability, or alleviate severe pain.

CenCal sent the termination letters to the San Luis Obispo County nursing home residents as part of the process of reviewing their eligibility, said Bob Freeman, CenCal's CEO. Normally that process is spread out over the year, he said, but the plan got "backed up" on evaluations, which is why so many patients were notified at once.

In September, the Department of Health Care Services sent Medi-Cal managed care plans a notice clarifying that federal law allows residents to stay in nursing homes to receive "intermediate care"; in essence, plans should pay for lower levels of care rather than terminating coverage. Freeman said the plan is reconsidering some residents' eligibility, given the clarification.

But residents of other homes -- and in other regions -- are still facing denials.

Tessa Hammer, an attorney from Legal Services of Northern California, said she has worked on seven such cases out of Santa Barbara County, as well as a handful in the state's rural northern counties. She's concerned about residents who don't have family advocating for them.

"I'm not sure where those folks might end up," she said.

Golick said a man in his 80s in Trinity County received a notice from Partnership HealthPlan earlier this year that he was no longer covered for nursing care he'd depended on for a decade. Like many elderly residents, she said, he felt he had no choice but to comply. He told her he might sleep on someone's couch, or in his brother's car.

"Rural areas are really scary," she said. "Where the hell do you go?"

In the meantime, nursing homes find themselves in a difficult situation. They cannot legally discharge residents who don't have a safe place to go, but they are no longer paid to keep them. In some cases, nursing homes have kept residents without pay.

"We're all watching this closely," said Craig Cornett, CEO of the California Association of Health Facilities.

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