AGING AND DISABILITY SERVICES ADMINISTRATION
2008 NH "Dear Administrator" Letters
December 5, 2008
ADSA: NH #2008-006
CHARGING A RESIDENT DIRECTLY OR THROUGH THEIR TRUST FUND ACCOUNT FOR ALTERNATIVE PERSONAL CARE ITEMS
Dear Nursing Home Administrator:
This letter is intended to inform that the department has re-reviewed and modified our position on the question of whether a nursing facility may charge a Medicaid recipient for alternative personal care items. That question was previously the subject of a “Dear Administrator” letter, NH #2006-027. In reviewing the matter, we have looked again at the relevant federal regulations and spoken with staff at the federal Centers for Medicare and Medicaid Services.
We believe that, when proper procedures are followed and documented, under certain circumstances a nursing facility may charge a Medicaid recipient for alternative personal care items requested by the recipient.
Here is a hypothetical example of when a nursing facility may not and/or may charge a Medicaid recipient for alternative personal care items:
A Medicaid-contracted nursing facility provides a standard shampoo for its residents, along with an alternative for residents who for any reason do not like the standard shampoo. If a resident is unable to use the standard shampoos because of a physical problem such as an allergy, the facility will obtain and provide an acceptable alternative at no additional charge to a Medicaid resident. Likewise, if for some reason a different shampoo is ordered by a physician – e.g., for psoriasis of the scalp – the facility will obtain and provide the shampoo to a Medicaid resident without any additional charge. Occasionally, a Medicaid resident will not be satisfied with either the standard or alternative shampoo, and will request some third, more expensive variety – based only on personal preference, not a physician’s order or a physical problem with the normal shampoo.
Based on this scenario, we believe that the facility may charge the Medicaid resident for the difference between the actual cost of the generally provided shampoo and the actual cost of the more expensive alternative that is simply the personal preference of the resident. The facility should not “mark up” the cost of the alternative shampoo, but rather should simply pass through to the resident the cost actually paid by the facility.
However, the resident’s informed consent to this charge must be documented. The documentation must include the resident’s awareness that he or she has the right to the standard shampoos; that the different, more expensive shampoo is being requested solely because of personal preference, and not because of a physician’s order or some physical condition; and that the resident chooses to have and pay for the different, more expensive shampoo.
In this example, the additional cost of the personal preference shampoo is not paid by the nursing facility, and so would not be reported on the Medicaid cost report.
We believe this position is consistent with 42 CFR 483.10(c)(8)(i)(E) and (ii)(D). That section, which has been cited in our previous correspondence, provides in relevant part:
(8) Limitation on charges to personal funds. The facility may not impose a charge against the personal funds of a resident for any item or service for which payment is made under Medicaid or Medicare (except for applicable deductible and coinsurance amounts). The facility may charge the resident for requested services that are more expensive than or in excess of covered services in accordance with Sec. 489.32 of this chapter.
(i) Services included in Medicare or Medicaid payment. During the course of a covered Medicare or Medicaid stay, facilities may not charge a resident for the following categories of items and services:
(E) Routine personal hygiene items and services as required to meet the needs of residents, including, but not limited to, hair hygiene supplies, comb, brush, bath soap, disinfecting soaps or specialized cleansing agents when indicated to treat special skin problems…
(ii) Items and services that may be charged to residents’ funds. Listed below are general categories and examples of items and services that the facility may charge to residents’ funds if they are requested by a resident, if the facility informs the resident that there will be a charge, and if payment is not made by Medicare or Medicaid:
(D) Cosmetic and grooming items and services in excess of those for which payment is made under Medicaid or Medicare.
This position is also consistent with an earlier “Dear Administrator” letter, NH #2003-032, concerning the similar subject of barber and beauty services.
Please call your Medicaid rate analyst or Edward Southon, Nursing Home Rates Section Manager, at (360) 725-2469 if you have any questions about this letter.
Sincerely,
Ken Callaghan, Chief
Office of Rates Management
Cc: Residential Care Services
Nursing Home Rates Section
