Vol. 77, No. 10, October
Issues Affecting Long-Term Care
In response to the articles in August concerning abuse in Wisconsin
long-term care facilities, this article provides additional options for
lawyers who advise elderly clients and provides information about and
context to the problems facing the long-term care provider
by Brian R. Purtell
This morning 36,000 of the most frail and elderly Wisconsin residents
were helped with their morning routine, were dressed, groomed, and fed.
They received compassionate and professional care from thousands of
skilled nurses and nurse aides. Throughout today, these caregivers will
provide countless acts of dedicated service, which won't make headlines
because the media doesn't consider this routine care to be
Despite what you read in newspapers, see on the nightly news, or even
what you might infer from reading the articles on long-term care in the
August Wisconsin Lawyer,1 the vast
majority of this year's 13 million patient days in Wisconsin nursing
homes will not involve allegations of abuse, neglect, or
This week thousands of elderly Wisconsin residents and their families
will have to navigate the long-term care delivery system for the first
time. Elderly patients, having been informed by hospital staff of their
imminent discharge and the need to find an appropriate nursing home,
assisted living facility, or some form of home-based care, will face a
range of questions and concerns including those involving
appropriateness of placement, eligibility and coverage, and quality and
safety. Few will have taken advance steps to address these issues.
The August Wisconsin Lawyer contained a series of articles
focusing on the issue of abuse in Wisconsin long-term care facilities.
Readers may have come away with the impression that the only ways that
Wisconsin lawyers can address concerns as to the quality of care being
provided are to litigate, regulate, and prosecute. This article explores
additional options for lawyers who advise elderly clients, provides
information about and context to the problems facing the long-term care
provider community, and should serve as a wake-up call to lawyers in
their roles as advisors, taxpayers, and likely future consumers of
Issues Affect Lawyers Across Practice Areas
Attorneys who represent long-term care providers know that the vast
majority of providers work tremendously hard - often in the face of
significant obstacles - to provide the highest level of care to the
residents they serve. Individuals familiar with the long-term care
delivery system understand that it is a complicated labyrinth of
programs, is plagued by inadequate funding and stifling regulations, and
is saddled with chronic shortages of qualified caregivers. State and
federal budget deficits, coupled with an impending collision of an
explosion in demand for services and a diminishing supply of workers,
will further compound the obstacles and challenges to providers and
consumers. Persons who are familiar with this system will not make
excuses for any individual or entity engaged in intentional abuse or
neglect of vulnerable individuals. They recognize, however, that such
deplorable behavior is the exception, not the routine.
Lawyers advising elderly clients and their families need to
understand more than simply who and how to sue when problems arise. In
the coming years it will become increasingly important that a wider
sector of the legal community know more about long-term care issues. The
continued demographic shift, with more individuals who will themselves
need or be responsible for another's long-term care needs, will affect
Wisconsin lawyers as practitioners and as potential consumers or
Long-term care issues will not be limited to elder and health
lawyers. For example, long-term care issues will require employment and
business lawyers to address policies for employees needing to alter
their work schedules to tend to their aging parents. Tax and estate
planners will need to keep current on changes that state and federal
authorities propose and implement to address problems in the payment
systems. Municipal and real estate lawyers increasingly will be called
on to address senior housing issues, which present complexities beyond
traditional real estate and zoning questions. Long-term care providers
likely will continue to need the services of bankruptcy practitioners.
More lawyers will be needed to develop and draft documents for powers of
attorney for health care, guardianships, and personal finance matters.
Basic skills related to long-term care, such as understanding the
variety of funding mechanisms, differentiating between the scores of
long-term care providers, understanding eligibility requirements, and at
a minimum, having the knowledge needed to dispel myths and
misconceptions related to providing and funding long-term care, will
become tools-of-the-trade for a wider variety of practitioners.
While it is not reasonable or practical for every Wisconsin lawyer to
become expert in the legal complexities of long-term care issues, a
working understanding of the system will become increasingly invaluable
to more practitioners. It is not possible to discuss the entire range of
issues in a few pages, but the following overview can provide the first
step toward greater understanding.
The Basics of Long-term Care
Who Pays, Who Doesn't. Most Americans mistakenly
believe that they have long-term care "coverage" in place, because they
think (erroneously) that Medicare will take care of their long-term care
needs. While this federal program does pay for some long-term care
services, it covers neither extended nursing home stays nor assisted
living. The vast majority of long-term care funding is provided by
Medicaid. This joint state-federal program dominates the delivery system
and is responsible for the payment of care fees of almost 70 percent of
all nursing home residents. While Medicaid waiver programs, like
Wisconsin's Community Options Program and Family Care pilot projects,
provide some home and community-based services, the former typically
involves lengthy waiting lists and the latter is in its infancy with
future expansion uncertain due to multiple factors. These Medicaid
waiver programs, popular with consumer groups, vie for funding to serve
increasing numbers of individuals; however, as with most of the
long-term care delivery system, these programs continue to battle over
the same pool of money that already is not sufficient to adequately
reimburse provider costs. Recent state and federal budget crises have
accentuated the need to completely overhaul the payment system for
The remainder of long-term care costs are borne primarily by Medicare
supplemental policies, long-term care insurance, or individuals paying
privately for care and housing needs. Given the incorrect assumptions as
to who pays for long-term care services, few people have made adequate
financial preparation efforts. Consequently, each year many individuals
are impoverished by the costs of their needed care and services.
Who Provides Long-term Care. The long-term care
delivery system is a wide network of providers across the continuum of
care. Nursing homes dominate the higher acute-care level of this
continuum, providing care to frail and dependent individuals with
complex medical problems. In the past, many individuals with these same
high levels of need would have been cared for in hospitals. There are
two general categories of nursing home residents:
restorative/therapeutic patients and longer-term custodial care
residents, an increasing number of whom suffer from various forms of
dementia. The first category represents a growing number of patients in
today's nursing homes. Patients who have had a hospital stay for an
acute condition and are released to a nursing home for a short-term stay
represent an increasing number of nursing home residents. While overall
annual nursing home patient days continue to decline, admissions
actually have increased dramatically due to the growing reliance on
nursing homes to provide post-hospital restorative care.
Wisconsin currently has about 400 nursing homes. All are licensed by
the state and are subject to the requirements of Wis. Stat. chapter 50
and Wis. Admin. Code chapter HFS 132 regulations. Most also are
certified for Medicare and/or Medicaid,2
requiring compliance with federal statutes and regulations in addition
to state licensing requirements.
What program pays for nursing home care depends on an individual's
eligibility status and the need for being at the facility. Medicare
covers only skilled nursing services rendered to help a beneficiary
recover from an acute illness or injury. Nursing home coverage falls
under Part A of Medicare and is very limited. If the patient is
eligible, Medicare will cover the first 20 days of the nursing home
stay. For days 21-100, the patient must share, or co-pay, for the cost
of care. Part A eligibility requires that: 1) the nursing home be
Medicare-certified; 2) the patient requires daily continuous skilled
nursing or skilled rehabilitation services; 3) the patient be admitted
to the nursing home within 30 days after a three-consecutive-days stay
in a hospital; and 4) a physician certifies that the patient needs
skilled nursing services for the same or related illness for which the
person was hospitalized.
Medicare Part B may help pay for some services provided in a nursing
home. Under Part B, enrollees must pay an annual premium and a
deductible for all Part B services, after which Medicare pays 80 percent
of the reasonable charges for covered services.
Medicaid, referred to as Medical Assistance (MA) in Wisconsin, pays
for a majority of all nursing home stays. Medicaid is a need-based
program, eligibility for which limits the beneficiary to having very
modest assets. To qualify for Medicaid, an individual must satisfy very
specific income-based limitations. In many cases individuals must "spend
down" their nonexempt assets by paying for services out of pocket until
they reach the eligibility level.
Private insurance and managed care programs cover a small percentage
of nursing home patient stays. Medicare supplemental policies help
individuals in paying Medicare copayments. The remainder of nursing home
stays are paid for privately by individuals who do not qualify for
Medicaid or Medicare coverage. To the extent of their resources, private
pay individuals have greater flexibility in choosing a facility and
availing themselves of certain amenities not available to Medicaid or
Medicare recipients, such as private rooms.
Brian R. Purtell, Pittsburgh 1993, is
chair of the State Bar Health Law Section. He practices in Madison as
the director of legal services of the Wisconsin Health Care Association
and as a member of DeWitt Ross & Stevens S.C. In both capacities he
focuses his practice on representing and advising health care providers
and has extensive experience in long-term health care law.
Within the past decade there has been a dramatic increase in the
assisted living facility market. The assisted living community is
comprised of two primary types of licensed entities, community-based
residential facilities (CBRFs)3 and
residential care apartment complexes (RCACs).4 Assisted living facilities are not regulated by
federal authorities; instead they are created and licensed by the state
of Wisconsin. Calls for federal regulation are countered by providers'
objections, based on their concerns about rigid regulations that will
stifle innovation and the ability to meet changing consumer needs and
Individuals served in CBRFs and RCACs tend to have lower nursing and
service needs; however, both types of entities are permitted to provide
limited hours of nursing care. The vast majority of assisted living
services are paid for privately.
Home and Community Programs
The long-term care continuum is rounded out with such providers as
home health and personal care agencies. These regulated providers cater
to the needs of individuals in their own homes or may contract to
provide services in an assisted living setting or in a senior housing
complex. Adult day care represents a growing service area to assist
families in caring for aging friends and relatives. Limited public
financing is available for home and community programs; however, there
is growing momentum to expand Medicaid services to cover more
Challenges of Long-term Care Providers and Impact on Consumers
Even the most dedicated and well-intended providers face daunting
obstacles in providing the highest quality of care. Inadequate
reimbursement for services for residents with increasingly complex
medical and behavioral needs, staffing shortages, regulatory enforcement
mechanisms, skyrocketing health and liability insurance, and the
increasing threat of civil and criminal actions affect the quality of
Medicaid represents a significant portion of the Wisconsin budget;
however, the Medicaid reimbursement rates paid to nursing homes rarely
cover the actual costs associated with the care of each resident. On
average, a Wisconsin nursing home loses $16.58 per Medicaid patient per
day.5 Annually, the cumulative difference
between cost and reimbursement for all Wisconsin nursing homes exceeds
$148 million.6 Nursing home providers are
dependent therefore on shifting costs to Medicare patients and the
dwindling number of private pay patients to make up for the losses
incurred by care provided to Medicaid recipients. The financial distress
within the nursing home provider community has led to the closure of
more than 35 Wisconsin facilities within the last three years.
Nursing home dependence on Medicaid as a primary reimbursement
mechanism affects the ability to provide high quality care. The
difference between the costs of caring for Medicaid residents and the
reimbursement translates to difficulty attracting and retaining a top
quality workforce, staffing at levels commensurate to reimbursement, and
postponing or canceling significant capital improvements.
The most common complaint heard from critics of long-term care
providers concerns the adequacy of staffing, both in numbers and in
training levels. While Wisconsin has statutory minimum staffing
requirements for nursing home providers,7
addressing staffing concerns is more complex than simply increasing
minimums. First, these minimum staffing levels are usually irrelevant,
because most providers staff in excess of the minimums due to the
increasingly serious health problems of residents and the regulatory and
professional expectations that require facilities to staff sufficiently
to meet the needs of all residents. Second, appropriate staffing levels
depend on a wide variety of factors, including the condition of
residents and a given facility's mix of residents and staff.
Calls to increase minimum staffing requirements fail to acknowledge
that facilities already staff well above these requirements: currently,
the state average for combined nursing services is 3.3 hours per day per
resident, compared to the required 2.5 hours for the skilled nursing
level of care. Notably, Medicaid only reimburses facilities for
nursing-related labor costs up to 2.85 hours/day/resident. Legislative
initiatives to increase minimum staffing quickly die on the legislative
vine when the $100 million-plus price tag associated with such increases
Even assuming the ability to afford large increases in staff, the
available workforce picture is bleak. Throughout the health care system,
the demand for nurses, in particular, is huge. Nursing shortages are
compounded by educational system limitations, because waiting lists for
admission to nursing programs are not uncommon. While efforts are
underway to increase the capacity of nursing programs, retirements
within the aging workforce population will likely negate any increases
in the number of younger workers.
Litigation, Regulation, and Prosecution
While Wisconsin has not experienced the litigation crisis that
ravaged Florida, Texas, and California providers, the insurance rates
for local providers have been affected by dramatic claims in other
states. Liability coverage nationally has jumped annually from $310 per
bed in 1992 to $2,290 per bed in 2003.8 It
is estimated that $6.27 per patient day goes toward covering direct and
indirect costs of litigation. Facilities with no claims history are
being saddled with higher premiums, expending money that otherwise could
go toward care.
Regulations, a natural concomitant of participating in publicly
funded and licensing programs, are intended to protect consumers.
Failure by providers to comply with the multitude of regulations can
result in fines, denial of admissions, conditional licenses, and
revocation or decertification. Theories vary as to the appropriate
methods and levels of enforcement. Some observers argue that the
enforcement system for noncompliance requires greater punitive measures,
while others question the wisdom of imposing primarily monetary
punishments on an already financially struggling system.
In recent years, federal, state, and local prosecutors have paid more
attention to long-term care situations. Several high profile
prosecutions involving quality of care issues have made many long-term
care administrators and nursing directors question why they work in a
field in which they might be enmeshed in a criminal prosecution through
the missteps of others.
The threats of litigation, prosecution, and regulatory enforcement
have resulted in defensive, precautionary recordkeeping that consumes
nursing and administrative staff, taking time away from providing actual
resident service. Daily pressures and constant negative portrayals of
the efforts of dedicated professionals are driving qualified leaders
from the long-term care field.
Role of Wisconsin Attorneys
Wisconsin's long-term care professionals strive to provide needed
care to the most frail elderly and disabled individuals in this state,
while further attempting to call attention to the inherent problems
within the system. Wisconsin lawyers have a place in addressing the
future of long-term care, both on behalf of their clients and in their
leadership capacity within their communities. Knowledgeable, informed,
and reasoned voices are needed to resolve these important issues. If
serious attempts at reform are not made, the current challenges facing
the system will pale in comparison to those looming as the baby-boom
population begins to enter the long-term care delivery system. There is
plenty of talk about the importance of saving Medicare and Social
Security, but only recently have there been serious efforts on the
federal and state level to comprehensively address this complex problem.
The analytical skills and reason-based thinking of lawyers can add to
the legitimate dialog and help to separate sound analysis from
In addition to adding their voices and expertise for the future,
lawyers can take practical steps now to advise and protect elderly
clients. While representing a client, lawyers may be in a position to
assist before care and treatment problems escalate. Rather than advising
family members to maintain a paper trail to document damages with an eye
toward a lawsuit, bringing concerns to the attention of the facility
administrator may be the most effective and responsible action.
Requesting a meeting with the appropriate supervisor is the most direct
way to effectuate change.
For individuals in the community at risk for physical and financial
exploitation, initiating a guardianship may be needed. Any interested
person can petition for a guardianship.9
Further, if a person is concerned whether a guardian or health care
agent is acting in the best interests of the ward or principal, an
interested party can take steps to intervene.10
Subtle forms of financial exploitation of elderly people can come
from within the family. Lawyers should be wary of the motives and
possible implications of certain requests for their services on behalf
of an elderly person. Transferring title of a nursing home resident's
home, often at the request of an adult child, may trigger an illegal
divestment, rendering the resident ineligible for MA for several months,
depending on the home's value. This may leave no source of payment for
the nursing home stay. The facility is not expected to provide care for
free and is entitled to initiate the drastic measure of an involuntary
discharge for nonpayment, leaving the vulnerable person without needed
care and services.
Before advising a client on qualifying for Medicaid, the attorney
should help the client appreciate the ramifications, the most important
being the limitation of options available once a person is on Medicaid.
Because Medicaid does not cover most home- and community-based programs,
successful divestment to qualify for Medicaid may result in the client
having to choose either admission to a nursing home or being placed on a
waiting list for a Medicaid waiver program. Further, the choice of
available facilities and level of amenities may be limited by virtue of
Medicaid status. Once presented with these realities, some clients may
reconsider the importance of preserving their estate for their heirs.
Additionally, it often is the case, the children of the elderly person
that are seeking Medicaid estate planning for their parents. In such
situations, advisors should clarify who is their client to ensure that
the true client's interests are protected.
Attorneys representing long-term care providers continue to encounter
health care power of attorney documents that do not comply with the
requirements of Wisconsin statutes. While a technically flawed document
could be useful for discerning an individual's expressed wishes, in the
regulated long-term care setting, providers often must inform residents
and family members that their document is insufficient out of concern
that a regulator will spot a glaring, albeit technical, defect. The most
common omission on such documents is the required introductory language
or certification by the attorney (found in Wis. Stat. section
155.30(2)). Attempts to create a single hybrid power of attorney for
health care and finances document under chapters 155 and 243 is the
second most common problem. While such a document arguably can be
created, the explicit language within the respective statutes as to
content and execution requirements too often results in technical
inadequacies. Counsel should thoroughly review these statutes before
drafting such documents for clients.
The most significant advice attorneys can provide their clients is to
prepare in advance for their future needs. Effective preparation for
possible long-term care, whether it is discussions about long term-care
insurance while an individual is young enough to afford it, or
establishing a fiscal plan to allow the individual choices and options,
requires thought and planning well in advance of needs.
1Jason T. Studinski, Abuse
and Neglect in Long-term Care Facilities: The Civil Justice System's
Response, 77 Wis. Law. 8 (Aug. 2004); Linda Dawson, Preventing
Abuse and Neglect in Health Care Settings: The Regulatory Agency's
Responsibility, id. at 12; William E.
Justice in Death's Waiting Room: Barriers to Effectively Prosecuting
Crime in Long-term Care Facilities, id. at 16.
2Medicare-certified nursing homes
are designated as Skilled Nursing Facilities (SNF). Medicaid-only
facilities are designated as Nursing Facilities (NF).
3CBRFs are licensed under Wis.
Stat. chapter 50 and Wis. Admin. Code chapter HFS 83.
4RCACs are licensed or registered
under Wis. Stat. chapter 50 and Wis. Admin. Code chapter HFS 89.
5A Report on
Shortfalls in Medicaid Funding for Nursing Home Care 80 KB, BDO Seidman LLP (December 2003).
7Wis. Stat. § 50.04(2)(d).
Care General Liability and Professional Liability 204 Actuarial
Analysis, Aon Risk Consultants Inc. (June 2004).
9See Wis. Stat. ch.
10Id.; Wis. Stat. §