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When Disputing a Bill can Cause You to Lose Medicaid (Part 2)

Last week I was telling you about Sheila’s call.  Her husband Sam needs nursing home care and they have very little to spend down, approximately $33,000.  Sheila would be able to keep the rest, not a whole lot for her to live on.

But, she would need to act quickly and if she makes a wrong move, it could cost her another $11,000 or $22,000, which would come out of her half.  That’s because for each month she doesn’t get Medicaid for Sam she has to pay the facility at their private pay rate of $11,000 per month.  Once she realized she needed our help, I told her to go pay the nursing home through the end of the month and a few other bills and then call me back.

During that second conversation, however, when I asked her to tell me the exact amounts for which she wrote checks, something she said concerned me.  Sheila told me she wrote two checks to the nursing home.  When I asked her why, she said she was disputing $1000 of Sam’s bill and so the facility told her to write a separate check for that amount which they would hold until they looked into the matter.  If they agreed with her then they would return the check to her uncashed.

Well, that was a problem for us in terms of Medicaid.  I certainly could understand Sheila’s concern.  No one should pay for something they didn’t receive.  But, in the bigger picture, if she was right and it turns out she doesn’t owe that amount then she’d be over the $37,000 asset limit I had calculated for her, by about $500.  In essence that $1000 could cost her another $11,000 for every month she remains over $37,000.

I explained to Sheila that we could not then count that $1000 as having been spent down.  I could not take the chance that she “wins” her dispute.  I told her she’d have to spend down that $1000 somewhere else. Applying those funds towards an irrevocable burial for Sam or Sheila would be the easiest way.  And because I learned of this issue on the 28th of the month she had to get this done in the next 2 days before the calendar turned to the next month.

Luckily, we discovered the issue in the nick of time.  I doubt that Sheila would have been able to steer clear to Medicaid without our guidance.  It’s just another example of why it is so difficult to navigate the Medicaid system on your own and why Sheila could not have waited a day longer than she did in deciding she had to prepare for Medicaid without waiting to see if Sam would need it.