B-232993, Mar 13, 1989

B-232993: Mar 13, 1989

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Alzheimer's disease is not a mental disease for purposes of classifying nursing home as institution for mental diseases. If Alzheimer's disease is defined as a mental or physical disease in federal law or regulation. Equal Access As you are aware. Forced supplementation of Medicaid payments is prohibited by law. Courts have refused to enforce certain discriminatory practices. The displacement of a resident on the basis of a change in source of payment (that is. From private pay to Medicaid) is prohibited in certain circumstances. You are interested strictly in whether federal law or regulation would permit nursing homes to admit private pay patients. A requirement that applicants for admission give assurances that they are not eligible for and will not apply for Medicaid benefits).

B-232993, Mar 13, 1989

MISCELLANEOUS TOPICS - Human Resources - Health care - Nursing homes DIGEST: 1. Federal law and regulation does not prohibit nursing homes from admitting private pay patients while denying admission to Medicaid beneficiaries. 2. Alzheimer's disease is not a mental disease for purposes of classifying nursing home as institution for mental diseases. Access to Nursing Homes for Medicaid Beneficiaries (B-232993; Code l0ll3l).

Group Director, HRD - James Linz:

This responds to your questions regarding access to nursing homes for Medicaid beneficiaries. Specifically, you asked, first, if the federal government, through legislation or regulation, requires equal access between Medicaid beneficiaries and private pay patients seeking admission to nursing homes and, second, if Alzheimer's disease is defined as a mental or physical disease in federal law or regulation.

Equal Access

As you are aware, forced supplementation of Medicaid payments is prohibited by law, and courts have refused to enforce certain discriminatory practices, such as the use private pay duration-of-stay contracts. Moreover, the displacement of a resident on the basis of a change in source of payment (that is, from private pay to Medicaid) is prohibited in certain circumstances, 42 C.F.R. Sec. 442.311(C) (l987), However, you are interested strictly in whether federal law or regulation would permit nursing homes to admit private pay patients, while denying admission to Medicaid beneficiaries.

We did not find a specific federal requirement for equal access between Medicaid beneficiaries and private pay patients seeking admission to nursing homes. /1/ The legislative history of pertinent Medicaid provisions shows no anticipation by Congress that equal access would become an issue or that absolute equality should be required. /2/

Congress has recently taken action to address more comprehensively and directly the issue of access to nursing facilities. Omnibus Budget Reconciliation Act of 1987, Pub.L. No. 100-203, Sec. 4211(a)(2), (3), 101 Stat. 1330, 1330-182 (substituting a new section 1919 of the Social Security Act, to be classified at 42 U.S.C. Sec. l396r). The most relevant provisions prohibit certain admissions practices (for example, a requirement that applicants for admission give assurances that they are not eligible for and will not apply for Medicaid benefits), and explicitly provide that stricter state requirements are not preempted, but stop short of requiring equality of access. Id., at 101 Stat. 1330 193. (These new provisions do not take effect until October 1990.) ld., Sec. 4214(a) at l0l Stat. 1330-219. We found no indication that Congress intended to mandate that nursing homes admit Medicaid beneficiaries and others on a first-come, first-served basis.

It seems significant, in this respect that the law explicitly requires nursing homes to have identical policies regardless of source of payment, for transfer, discharge, and the provision of services, but does not mention admission in this context. The next provision in the same law, which does deal with admission, does not mention equal access. This suggests that the Congress intentionally refrained from requiring equal access, although that is speculation on our part, and no reasons for doing so are given.

However, section 124.603(c) of title 42, Code of Federal Regulations (1987), which is applicable only to facilities receiving funds under Title VI of the public Health Service Act (Hill-Burton), 42 U.S.C. Sec. 291 et seq. (1982), requires participation in Medicaid and prohibits discrimination against Medicaid beneficiaries. As a result, at least one federal district court has held that such facilities may be compelled to comply with their community service and uncompensated care obligations by accepting Medicaid patients at their nursing home facilities on an equal basis with other applicants. Armstrong v. Fairmont Community Hosp. Ass'n., 659 F.Supp. 1524 (D. Minn. 1987). District court decisions in one district are not necessarily binding in another district. Also, although a requirement for equal access based on Hill-Burton may be significant in specific cases, it is our understanding that relatively few nursing homes would be affected by this requirement.

A practice of granting higher priority to the admission of private pay patients over Medicaid beneficiaries may violate Title VI of the Civil Rights Act, 42 U.S.C. Sec. 2000d (1982), if it results in a disparate adverse impact on minorities.

This argument has been raised in at least one federal case. At an early stage in the litigation, a federal magistrate found that Tennessee's limited bed certification policy, which had an adverse impact on black Medicaid recipients, violated Title Vl. Linton v. Comm'r of Health and Env't Dept, No. 3:87-0941 (M.D. Tenn., March 18, 1988) (magistrate's report and recommendation for preliminary injunction). Although the magistrate's recommendation for a preliminary injunction was rejected, this argument has not been foreclosed and was raised when the case was argued in the Federal District Court for the Middle District of Tennessee on January 27, 1989. Because the court has not yet issued a decision, it remains unclear whether granting higher priority to the admission of private pay patients over Medicaid beneficiaries violates Title VI.

Alzheimer's Disease

We understand that your question regarding whether federal law or regulations define Alxheimer's disease as a mental or physical disease is related to concerns on the part of some nursing homes that accepting Alzheimer's patients could somehow jeopardize the homes' eligibility to receive Medicaid payments.

Medicaid benefits generally cannot be paid for skilled nursing facility services provided in "institutions for mental diseases" (IMDs), except for patients over 64 years old. 42 U.S.C. Sec. 1396d(a)(4) and (14) (1982). The Health Care Financing Administration (HCFA) defines an IMD as "an institution that is primarily engaged in providing diagnosis, treatment or care of persons with mental diseases. ...." 42 C.F.R. Sec. 435.1009(e)(2) (1987).

Nursing homes that fit within this definition can be classified as IMDs, and therefore, partially ineligible Medicaid patients. Connecticut Dept. of Income Maintenance v. Heckler, 471 U.S. 524 (1985). Under HCFA regulations; a critical criterion for ascertaining if an establishment fits within this definition is whether more than 50 percent of the patients have mental diseases that require in-patient treatment. Dept. of Health and Human Services (HHS), HCFA, State Medicaid Manual, Sec. 4390).

As a result, there has been some concern that, if Alzheimer's disease is viewed by HCFA as a mental disease, admitting patients with Alzheimer's disease could cause a nursing home to be classified as an IMD, and thus to be ineligible for most Medicaid payments.

HCFA officials say that, for purposes of determining whether 50 percent of an institution's patients have a "mental disease," they consider that term to include only diseases listed as "mental disorders" in The International Classification of Diseases, 9th Revision-Clinical Modifications (ICD-9-CM). Since the ICD-9-CM, which is published by HHS, lists Alzheimer's disease as a disease of the "nervous system and sensory organs" rather than as a mental disorder, the number of patients with Alzheimer's disease is not relevant to a determination of whether an establishment is an IMD.

Consequently, there is no reason for nursing homes to turn away Medicaid beneficiaries with Alzheimer's disease out of fear that accepting such patients will jeopardize their Medicaid payments. In fact, according to HHS, such action may establish a prima facie case of illegal discrimination based on handicap. See Gurley v. Covington Manor Nursing Home, Policy Interpretation, Nov. 18, 1980.

/1/ Some states do specifically prohibit such discrimination. E.g., Conn. Gen. Stat. Ann. Sec. l9a-533 (1986); Wash. Rev. Code Ann. Sec. 74.42:055 (1987).

/2/ H.R. No. 213, 89th Cong., 1st Sess. (1965); S. Rep. No. 404, 89th Cong., 1st Sess. (1965); H.R. Rep. No. 682, 89th Cong., 1st Sess. (1965) (Conference Report).