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Thousands of elderly, disabled and mentally ill North Carolinians could lose Medicaid benefits that pay for assistance with daily activities such as dressing, bathing, eating and medication management under a plan under development by the NC Department of Health and Human Services, the agency has acknowledged. The loss of benefits means that some of those people, including the most frail and vulnerable, face being pushed out of adult-care homes as state officials scramble to find housing for them. “It’s really going to stretch our resourcefulness to find an accommodation for these people,” said Brad Deen, a spokesman for the department.

“We will find appropriate accommodations. It will require some ingenuity. We’re also going to need the assistance of people’s families and friends. It’s not going to be easy, but it’s going to take a whole lot of us working together.”

The Department of Health and Human Services, or DHHS, plans to tighten eligibility standards for people who receive Medicaid personal care services. Current standards require recipients to demonstrate unmet needs in at least one of five so-called “activities of daily living,” including eating, dressing, bathing, toileting or mobility. Under the new standards, scheduled to take effect on Jan. 1, 2013, recipients would have to demonstrate that they need assistance with at least two of those activities.

State officials maintain they are under pressure to implement the new standards to comply with a federal mandate to create uniformity in billing rates, eligibility criteria and scope of services in the delivery of personal care services to people who live in group homes and in independentliving arrangements. Talking points for a DHHS presentation to a joint legislative committee last week that the agency provided to YES! Weekly indicate that 3,700 to 4,000 Medicaid recipients might not meet the new eligibility requirements under the state’s proposed plan, which is based on a waiver available under the 2010 Affordable Care Act, also known as “Obamacare.”

The changing regulations have created anxiety in particular for the residents and staff at Danby House, a group home in southwest Winston- Salem that held an emergency meeting for family members of residents on April 5. “I have a 106-year-old woman with Alzheimer’s living here who is able to lift herself off the toilet and who is able to lift herself out of bed, but she needs reminders,” said Business Office Manager Alex Dagenhart. “That would not be covered under this new plan.”

Deen said DHHS is working with the federal Centers for Medicare and Medicaid Services to address the needs of Alzehimer’s patients, who need special care units.

“We certainly recognize that,” Deen said. “There are people who need another level of care.”

Several residents, mostly elderly but including one man who is disabled because of high blood pressure and kidney failure, who spoke to YES! Weekly last week said they fear they will lose their Medicaid benefits and be forced to leave the group home under the new rules. Many of them said they do not have family members who would be able to take them in and that they could not afford to live on their own even if they were capable of taking care of themselves.

“If I was to lose my Medicaid, I would be on the street,” said 55-year-old Terry Cochrain, who became disabled after working in construction for 30 years. “I’d be sleeping under a bridge. I couldn’t get to medication. I’d probably be dead within six months.”

Cochrain said he stays active by working in the garden at the group home, pushing elderly women around the facility in their wheelchairs and helping them remember things. His parents, who are also in poor health, pay for some of his medications. He does not have children of his own, so there is no other family to turn to for help.

Gloria Warden, a 75-year-old woman who has lived at Danby House for more than seven years, relies on staff at Danby House every day to help her put on support hose, which improve her circulation. Because of back problems she sometimes needs someone else to make her bed, but is otherwise able to handle most activities of daily living.

“I need Medicaid to help stay here, to pay copays at the doctor and dentist,” she said. “If I lose my Medicaid I wouldn’t have nowhere to live. I wouldn’t have transportation to the doctor. I would have to quit wearing support hose because I would be unable to take them on and off.”

Deen said DHHS might be able to finesse the challenge for residents such as Cochrain and Warden through a new round of eligibility assessments.

“We’re going to contract with a vendor who is going to do assessments,” he said. “It could be that they’re going to get bumped up from one [activity of daily living] to two [activities of daily living],” he said. “If it turns out they really only do need assistance with one ADL and it’s not a profound need, it could very well be that this person does not need to be a resident of an adult-care home. There could be a community-based service that could meet their need.”

That would be unfair, said Nina Warwick-Joyner, an administrator at Danby House.

“These ladies and gentlemen have worked all their lives,” she said. “They’ve paid in to these programs. When they need it, the state is not there for them. It’s heartbreaking.”

Dagenhart said the new eligibility requirements would force many group homes to close their doors. Danby House, operated by Meridian Senior Living, depends on Medicaid for 30 percent of its billing. But Magnolia Creek, another Meridian Senior Living facility in Winston-Salem, receives 90 percent of its revenue from Medicaid. Dagenhart said Meridian Senior Living is the largest provider of assisted living services in the state.

“Adult-care homes get paid room and board and they also supplement that by providing personal care services to residents,” Deen said. “We have to admit that room and board rates are rather low. That’s one of the things we’re hoping to look at. We’re hoping we can find something to do to help them with that.

“To make a financial go of it, they really need both,” he added. DHHS is also scrambling to find accommodations for more than 1,000 group-home residents with mental illness diagnoses who face displacement because of federal guidelines prohibiting facilities whose patient roster is comprised of more than 51 percent of people with severe mental illness from receiving Medicaid funds.

DHHS has identified 5,792 residents with mental illness diagnoses across the state, with a disproportionately high number residing in the Triad. Guilford County tops the state with 328, Durham and Gaston counties are tied for second with 262, and Forsyth has 258. The state’s two most populous counties, Mecklenburg and Wake, each have fewer than 200 residents with mental illness in group homes.

The state agency is currently assessing 25 homes to determine whether they meet the definition of an institute for mental disease and should be considered ineligible for Medicaid funding.

‘If I was to lose my Medicaid, I would be on the street. I’d be sleeping under a bridge. I couldn’t get to my medication. I’d probably be dead within six months.’

Terry Cochrain

The agency plans to finalize a report by July 1.

A March 2012 DHHS PowerPoint presentation lays out the likely impact on individuals with mental illness in stark terms:

“The 25 homes being assessed have more than 1,000 residents who may be affected in some way by the [institutes of mental disease] determination.

“The [adult-care homes] may decide to discharge those residents for whom Medicaid and Medicare funding will not be provided to avoid being classified as an [institute for mental disease].

“Conversely, [adult-care homes] that are [institutes for mental disease] will no longer be able to rely on Medicaid and Medicare funding for any of their residents.

“There is a lack of adequate housing available to meet the resulting increased demand for community based care based on the CMS requirement.”

Deen said DHHS is working with the affected group homes to help them get their mentally ill populations under 50 percent so they can continue to receive federal funding.

“We’re trying to keep drastic things from happening,” Deen said. “We’re trying to keep disruption to a minimum both for the adult homes and the individuals who reside in them.”

Deen said the state plans to accommodate people with mental illness “in their homes and communities,” but some are burdened by a level of severity that might make them eligible for care in a special-care unit.

“There are people with a level of dementia comparable to a person with Alzheimer’s who might qualify for care in an adult-care home,” Deen said. “There’s a little bit of unknown right now because these are plans on paper and it’s not exactly clear how that’s going to work out…. We are certainly going to find individuals whose needs are not being met under these new regulations. And when we find these people, we’re going to have to address it.”

Complicating matters, the state is under pressure from the US Justice Department to shift disabled residents from group homes to more independent settings. The Justice Department has argued that “reliance on unnecessary institutional settings violates the civil rights of people with disabilities.”

Dagenhart said the network of group homes in North Carolina is among the most robust in the nation, acknowledging that the reliance on such facilities by frail, elderly, disabled and mentally ill residents imposes a cost on state taxpayers when the federal government is unwilling to pick up the tab.

“We have a lot of people who will establish residency in North Carolina for their parents,” he said, speaking to the appeal of group homes.

Deen said group homes have filled a vital niche in care for mentally ill adults, in particular. He said DHHS has been frustrated by federal regulatory roadblocks to the state agency’s attempt to create an intermediate category of care for mentally ill residents that would fall between hospitalization – which is expensive – and community settings.

“Placement in the communities may end up being inadequate for a number of people,” Deen said. “That’s why the adult-care homes for the last 15 years have been a great middle ground. Now, the feds are telling us we can’t do that anymore.”

DHHS estimates that its plan to comply with federal mandates will result in an increase of $15.1 million for personal-care services to group-home residents and $21.9 million for in-home services, a category that currently has higher eligibility standards than group settings.

Senate President Pro Tem Phil Berger, who represents part of Guilford County, indicated last week that he was aware of the potential cost impacts to the state under the plan submitted by DHHS to the federal government, but had not studied the plan closely enough to discuss the situation further.

Sen. Pete Brunstetter, a senior budget writer from Forsyth County, said he believed the plan submitted by DHHS “would allow these services to continue to be funded after Dec. 31,” adding that the matter is “complicated” and he would decline to comment on the potential budget implications for the state.

“We’re really going to have to rely on the families, individuals, nonprofits, churches to really make sure we can find adequate and appropriate accommodations for vulnerable people,” Deen said. “It’s not just government. The alternative to finding adequate and appropriate accommodations for these people is you’re going to see floods of people in emergency rooms, jails and prisons. And, quite frankly, those are the more expensive alternatives.”

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