CHAPTER TWO - LONG-TERM CARE PROVIDERS

Long-term care facilities have come a long ways from the days of the first Long Term Insurance policy when long-term care was nearly synonymous with “nursing home.”  It has expanded into a large number of facilities providing various services to those who need long-term care.  Even the medical community has changed as there are now not just hospitals, but also “sub-acute” care facilities for those recovering from surgery for instance.  Those who do not need 24-hour care can receive services through a residential care facility.  This “evolution” can be seen and illustrated at a modern “total” care facility. 

This concept has been operating for several years and has proven quite successful, mostly for the patients/residents who have sufficient funds, as these places can be quite “pricey.”  The concept is that retired persons (usually) will purchase a “condominium” in the facility that offers more than just living accommodations, by on-site restaurants, shops, etc.  As the resident ages and more personal care is needed, such as someone to help with shopping and condo cleaning, etc., such services are available.  In case of a health emergency, in one section of the facility there is always a doctor and a Registered Nurse in attendance, with the serious health problems treated on-site and then transferred to a hospital if necessary.  For recuperation, the facility will provide caregivers to that the person can stay at home.

If the person needs more nursing care, there is a portion of the facility that is an actual nursing home, properly licensed, etc., but reserved (generally exclusively) for the residents of the facility.  If home health care is needed, then experienced and professional caregivers are available on the premises.  There is usually a physical therapy section to provide those services by trained professionals.

In other words, whatever is needed is provided, either on the premises or by contract with other medical professionals and facilities.  These facilities are very successful, but there is a problem:  they are very expensive.  In fact, a person who can afford to reside in these facilities would usually not be interested in Long Term Care Insurance as they are in the financial position of being able to provide whatever they need when they need it.  But most people cannot afford these facilities. 

TYPES OF CARE

In addition to long-term care, medical care can usually be broken down into either acute or chronic care.  Acute care is typically the medical problems of the young, such as infectious diseases and broken bones, and childbirth by women.  In most cases, the person is able to recover and return to their previous lifestyle, occupation, etc.  On the other hand, the elderly suffer mostly from chronic care whereby they cannot be expected to have full recovery, and usually the condition worsens.

No surprise to anyone who had needed medical care recently, the differences have become rather blurred as medical care is not entirely concentrated on acute care, but now much of our health system is devoted to chronic care, by a variety of providers and in various settings.

Physicians, nurses and other medical professionals choose and deliver the treatment for acute care.  Compare that with long-term care that heavily involves family members who take on the roles of caregivers and decision-makers.³⁰ 

As described earlier, long-term care involves a very wide range of assistance with help with activities of daily living (ADLs), sometimes also help with instrumental activities of daily living (IADLs).  Services include supervisory human assistance and many devices such as canes, walkers, wheelchairs, and newer “high-tech” assistance, i.e. motorized wheelchairs, computerized medication dispensers and emergency alert system.  Other “low tech” services involves wheelchair ramps, grab bars in the home and bath, etc.

“Acute Conditions” can be defined as conditions that require a high level of medical care, monitoring and treatment so as to restore the patient to health or the ability to perform.  In general usage, this refers to medical conditions that would be life threatening without immediate medical care and attention, usually provided in a hospital until such time that they are stable and can be released or transferred to a nursing home. 

“Chronic Conditions,” on the other hand, are those conditions that are long lasting and that require continuing care, as opposed to emergency medical treatment.  These conditions usually require monitoring and some medical treatment, but usually involve non-medical care, such as with ADLs.  Chronic care is usually an evolving situation requiring more care as time passes.  Long-term care is, then, usually provided for chronic conditions instead of acute conditions.

SCHEDULED/ON-DEMAND CARE

Long-term care usually progresses from necessary services such as supporting services and assistance with ADLs and IADLs to more extensive nursing, physical and/or therapeutic services, depending upon the needs of the patient.  Activities of Daily Living eventually fall into either those that can be performed routinely and on a scheduled basis, and those that must be provided when needed—on demand.  Examples are the progression of aid for bathing or eating which would require scheduled care, to assistance with toileting or ambulating, which would require services on demand. 

The reason that this distinction is mentioned here is that it is important to know as the cost of providing long-term care increases when on-demand services are needed as regular and full-time assistance must be provided for on-demand care.  This can mean the difference between receiving appropriate care in a nursing home or other facility, or receiving care at home as at-home care is usually not practical when continuous supervision becomes necessary.  Of those persons who enter nursing home, over half will have a total lifetime use of at least one year, and 21% will have a total lifetime use of five years or more.³¹

LONG TERM CARE PROVIDERS

There area multitude of setting in which long-term care can be provided, from nursing homes to home health care, to community care facilities, to care by friend, neighbors, family, etc.  The term “Caregiver,” defines the person(s) who provide the care that is needed, regardless of the degree or level of care.  Generally, a primary care giver, spouse or child will provide most of the care for example, and other responsibilities being performed by others as secondary caregivers, such as home health care agencies.

LTCI policies carefully define the benefit limits in accordance with how the provider of care is defined.  This is a very important component when comparing policies and benefits.  For some time, LTC was defined according to Medicare’s definitions, but in recent years the policies and programs have expanded to provide a wider range of services provided by a number of providers.  Since the degree of coverage depends upon the specific definitions of covered services in the contract, policy, or program, it is most important that agents become very well versed on covered services—and what is not covered.  A professional agent will not only inform the prospect or policyholder as to what is covered, and as importantly, what is not.

HOME HEALTH CARE

In most situations, home health care is provided when the patient insists on staying at home, but can only do so with assistance from a home health care agency, family members, friends or other caregivers.  Many, if not most, seniors much prefer to live independently outside of any kind of institution and are quite happy with home health care, even when they depend more and more on outside assistance as their physical or mental condition deteriorates.  Home health care can take many forms using a wide variety of medical and personal services in the patient’s home, such as services provided by nurses, therapists and home care aides.  Nursing services, social work, physical and rehabilitative therapy, monitoring of medication and medical equipment, plus personal care assistance such as help with personal hygiene, dressing, bathing, exercising, housekeeping, shopping, meal preparation, etc., etc., can be provided in a home environment.

“Home Health Care” encompasses a wide range of health and social services which can be provided at the patient’s residence if they are recovering from health problems, disabled, chronically or terminally ill, and to those who need medical, nursing, social, or therapeutic treatment and/or assistance with the essential Activities of Daily Living (ADL).

Home health care is usually the result of a doctor’s direction, but there are other ways to arrange for home health care, such as telephoning the local Area Agency on Aging, or other similar organizations.  References from family members or friends are often used, as the elderly in the area will know a good home health care agency.

The advantages to the individual are numerous, and depend upon the individual situation, but it would be safe to say that one of the main advantages is that the person receives care in a familiar environment where they feel safe and comfortable.  Generally they face an uncertain future with dignity if they can still maintain their independence by staying in their home where they know their neighbors and family and friends can come to see them.

It should be noted that if a person is unable to perform household chores or some ADLs, they will still want to remain in their home as long as is possible.  But, for them to continue to live at home, they will need help and assistance from trained professionals can become expensive.  If possible, therefore, family members or friends, leaving the more technical and difficult services to the professionals—such as visiting nurses for medication, therapists, etc.— should perform most of the simpler chores.

The type of home health care provider that can best serve the individual in their home can be health care services provided by professionals, such as nurses and therapists, or social services provided by organizations or agencies who provide homemaker and personal care.  Obviously, the type of care that is needed will determine the type of caregiver that is needed.

Home health care can range from help from family members or close friends, or home health care organizations, or independent caregivers such as personal care attendants.  Care can be provided from “checking” on the individual at specific times, to specialists on a full-time basis.  Services can be usually provided as often as is needed—full-time, part-time, hourly, or on a shift.  Generally home health care services can be available 24 hours a day, 7 days a week.

It has been pointed out and often stressed that home health care can be just as expensive as nursing home care as very little of that expense is covered by Medicare, and as any home health care agency can attest, the Medicare rules keep changing all the time.  Actually, home health care can average about $50,000 in some areas.

HOME HEALTH CARE PROVIDERS

          Starting “from the top,” physicians can provide home health care services by diagnosing and treating illnesses in the same fashion that they would if the patient were in a hospital.  Physicians will interface with home care providers to determine exactly what care and services the patients need and which specialists can perform what is needed in the way of care and services.  They can also determine how often services need to be rendered.  In effect, the Physicians prescribe the medication and services that are needed and provide a plan of care for the patient.  If the patient is covered by Medicare, physicians and home health agency personnel are required to review these plans of care as often as required by the severity of patient medical conditions, and at a minimum, every 62 days.  For hospice patients and their families, the care plans are reviewed at least once a month, but usually they are reviewed more often as the condition of the patients deteriorate.

          Registered nurses (RNs) and licensed practical nurses (LPNs) provide skilled services that cannot be performed by nonprofessional personnel, including injections and intravenous therapy, would care, and dispensing of medication.  RNs can provide case management services but LPNs are only licensed to work under the supervision of RNs.  The severity of the patient’s condition and the treatment that is prescribed determines whether an RN or LPN can provide such treatment.

          Physical therapists (PTs) apply therapy to patients who are limited or disabled because of physical injuries, in an effort to restore their ability to function and to restore the mobility and strength of patients.  In addition to providing exercise and other methods to the patient, they often use specialized equipment to alleviate pain and to help restore injured muscles.  Part of their function is to educate the patients and their caregivers in using special techniques and methods to walking and ambulating.

          Social workers frequently work as case managers when a variety of services are needed.  They provide important information as to available resources within the community, and they also often provide personal counseling. 

          Occupational therapists, language pathologists and dieticians are all professions that can assist with home health care.  The language pathologists, for instance, work with the patient to develop and restore the speech of those with communication disorders, and they may even work with patients who have difficulties in breathing, swallowing and muscle control.  Occupational therapists work with the patients in the use of special rehabilitation techniques and equipment (OTs) help individuals who have physical, developmental, social, or emotional problems that prevent them from performing the general activities of daily living (ADLs).

      Dietitians provide counseling services to individuals who need professional dietary assess­ment and guidance to properly manage an illness or disability.

Homemaker and chore workers perform light household duties such as laundry, meal preparation, general housekeeping, and shopping. Their services are directed at maintaining patient households rather than providing hands-on assistance with personal care.

      Companions provide companionship and comfort to individuals who, for medical and/or safety reasons, may not be left at home alone. Some companions may assist clients with household tasks, but most are limited to providing sitter services.

      Volunteers meet a variety of patient needs. The scope of a volunteer’s services depends on his or her level of training and experience. Volunteer activities include, but are not limited to providing companionship, emotional support, and counseling and helping with personal care, paperwork, and transportation.

 

Services Provided By Home Care Agencies

Home care agencies offer a range of services, from assessing an individual’s needs to putting together and arranging care.  Skilled health care by nurses, therapists, and other licensed health care profes­sionals, may be delivered in the home. Also included is the use of devices, such as crutches, canes, walkers, IV setups, hospital beds, wheelchairs, ostomy supplies, prostheses, and oxygen.  Personal care such as assistance with ADLs and IADLs is available.

Home Care providers deliver a wide variety of health care and supportive services, ranging from pro­fessional nursing and home care aide care to physical, occupational, respiratory, and speech thera­pies. They also may provide social work and nutritional care and laboratory, dental, optical, pharmacy, podiatry, x-ray, and medical equipment and supply services.  An individual’s physician usually prescribes services for the treatment of medical conditions.  Supportive services, however, do not require a physician’s orders.  An individual may receive a single type of care or a combination of ser­vices, depending on the complexity of his or her needs.

HOME CARE vs. HOME HEALTH CARE

Home Health Care

Home health care -home health care provides medically oriented care for acute or chronic illness in the patient’s home, usually as a follow-up to acute or other facility care.

Regulation - Licensed and Medicare and Medi-Cal certified by DHS.

Payment- Funded primarily through Medicare, with limited coverage through Medi-Cal, private insurance and private payments.

Home health care may include part-time skilled nursing care, such as occasional visits by registered nurses or licensed practical nurses. It may include speech, physical or occupational therapy, and part-time services of home health aides. It almost always includes some degree of custodial care, such as assistance with meal preparations, personal hygiene, and taking medications.

Advances in medical science have made the delivery of health-related care to the home much easier. Smaller, portable equipment enables respiratory therapy, drug therapy and chemotherapy to be done in the home rather than in the hospital. In addition, hospital beds, power lift chairs, walkers, wheelchairs and monitoring devices are available for rent so that most people can return home sooner.

Home health care can be found through State or Area Agencies on Aging, social service agencies, public Department of family services, private home care agencies, Red Cross, Visiting Nurses Asso­ciation, public health Department, hospital social services or discharge planning, United Way, and the Yellow Pages.

Home Health Agencies

The term home health agency often indicates that a home care provider is Medicare certified. A Medi­care-certified agency has met federal minimum requirements for patient care and management and therefore can provide Medicare and Medicaid home health services.  Due to regulatory requirements, services provided by these agencies are highly supervised and controlled.  Some agencies deliver a variety of home care services through physicians, nurses, therapists, social workers, homemakers and HCAs, durable medical equipment and supply dealers, and volunteers.  For cases in which an individual requires care from more than one specialist, home health agencies coordinate a caregiving team to administer services that are comprehensive and efficient.  Personnel are assigned according to the needs of each patient.  Home health agencies recruit and supervise their personnel and they assume liability for all care.

Personal Care & Homemaker Services

Personal Care Services - personal care services are provided for people who need assistance with daily living but do not require nursing.

Regulation - No separate license required.

Payment - Primarily funded through In-Home Supportive Services for those eligible. Some Medi—Cal, for those eligible, and private payments.

Personal care means non-medical services to assist older persons with ADLs and/or IADLs provided by a skilled or unskilled person under medical direction.

Homemaker services involve supporting care for the house or environment rather than directly for the care recipient. Services often include yard work, minor household repairs, general maintenance, cleaning or installing ramps or grab bars to make the person’s home more accessible to them.

State or Area Agencies on Aging, social services Departments, religious groups, and service and civic organizations and clubs may provide chore services. The Red Cross, Visiting Nurses Association, home care agencies, or local area agencies on aging may offer homemaker services.

If the patient is receiving “skilled” home health care services, paid for by Medicare, Medicare may cover a portion of the cost of a homemaker/home health aide to help with personal care. The local Social Security office can provide information.  For those with low incomes, Medi-Cal will sometimes help.  Further information can be obtained at the local Medi-Cal office.

Homemaker and Home Care Aide Agencies

Homemaker and HCA agencies employ homemakers or chore workers, HCAs, and companions who support individuals through meal preparation, bathing, dressing, and housekeeping. Personnel are assigned according to the needs and wishes of each client. Some states require these agencies to be licensed and meet minimum standards established by the state. Most homemaker and HCA agencies recruit, train, and supervise their personnel and thus are responsible for the care rendered.

Other Providers of Home Care Services

Staffing and Private-Duty Agencies

Staffing and private-duty agencies generally are nursing agencies that provide individuals with nursing, homemaker, HCA, and companion services. Most states do not require these agencies to be licensed or meet regulatory requirements.  Some staffing and private-duty agencies assign nurses to assess their clients’ needs to ensure that personnel are properly assigned and provide ongoing supervision.  These agencies recruit their own personnel and the responsibility for patient care rests with each agency.

Registries

Registries serve as employment agencies for home care nurses and aides by matching these provid­ers with clients and collecting finder’s fees.  These organizations usually are not licensed or regulated by government.  Registries are not required to screen or background-check the caregivers, but some do so routinely.  In addition, some registries offer procedures for patients to file complaints (which is not legally required).  Clients select and supervise the work of a registry-referred provider, pay the provider directly and must comply with all applicable state and federal labor, health, and safety laws and regulations, including payroll tax and social security withholdings.

Independent Providers

Independent providers are nurses, therapists, aides, homemakers and chore workers, and compan­ions who are privately employed by individuals who need such services. Aides, homemakers, chore workers, and companions are not required to be licensed or to meet government standards except in cases where they receive state funding. In this arrangement, the responsibility for recruiting, hiring, and supervising the provider rests with the client. Finding back-up care in the event that the provider fails to report to work or fulfill job requirements is the responsibility of the client.  Clients also pay the provider di­rectly and must comply with all applicable state and federal labor, health, and safety requirements.

Pharmaceutical and Infusion Therapy Companies

Pharmaceutical and infusion therapy companies specialize in the delivery of drugs, equipment, and professional services for individuals receiving intravenous or nutritional therapies through specially placed tubes and they employ pharmacists who prepare solutions and arrange for delivery to patients.  Nurses also are employed to teach self-administration in patients’ homes. Some pharmaceuti­cal and infusion therapy companies are home health agencies and certified by Medicare.  In some states, these organizations must be licensed.  Each company is responsible for person­nel and the services they provide.

Durable Medical Equipment and Supply Dealers

Durable medical equipment and supply dealers provide home care patients with products ranging from respirators, wheelchairs, and walkers, to catheter and wound care supplies.  These dealers employ staff that deliver and, when necessary, install these products as well as instruct patients on their proper in-home use.  As a general rule, durable medical equipment and supply dealers usually do not provide physical care for patients.

Some dealers offer pharmacy and infusion services, where a nurse administers medication and nutri­tional formulas to patients and teaches them the proper techniques for self-administration. Some com­panies also provide respiratory therapy services to help individuals use breathing equipment. Durable medical equipment and supply dealers that bill the Medicare program are required to meet federal Medicare minimum standards.  These organizations are licensed in some states.  Each dealer is legally liable for its personnel and the services provided to patients.

HOW DOES MEDICARE (MEDIGAP) PARTICIPATE?

Among the large for-profit nursing facility companies, Medicare usually comprises 10-15% of the number of residents and about 25% of revenue.  The revenue has dropped because of the Balanced Budget Act of 1997 and the changes in reimbursements in 1998 (as mentioned above). 

While state and federal governments participate to some extent in long‑term care costs, a very small percentage of that participation occurs through Medicare.  While many people today are aware that Medicare covers very little of the cost of long‑term care, there are many that are not so informed.  It is important that a summary of the Medicare rules for paying for such care in order be studied so as to advise potential LTC Insurance clients.

Medicare covers nursing home care only when:

1. The individual is admitted to a skilled nursing facility (SNF).
2. The SNF is Medicare ‑ certified.
3. The individual is receiving skilled medical care that can be provided only in the SNF and only by skilled medical personnel.
4. The individual was previously hospitalized for at least three consecutive days.
5. The individual is admitted to the SNF no more than 30 days after discharge from the hospital.
6. Admission to the SNF is to receive care for the same illness or condition for which the individual was previously hospitalized.

All of these requirements must be met in order for Medicare to pay any part of nursing home costs, and then, coverage lasts for 100 days maximum.

Medicare pays the full cost only for the first 20 days.  The individual must pay part of the cost for days 21 through 100.  In the year 2005, the individual’s part is $114 per day.  The individual’s portion changes every year as prescribed by the Social Security Administration.  If more than 100 days of care are required, the individual must pay all costs.

Conversely, what does Medicare not pay? There is no coverage for:

1. Care in an intermediate or custodial care facility or any community‑based residential facility.  About 75% of nursing facilities are this type; only about 25% are skilled.
2. Care in a SNF that Medicare has not approved.  Only about 40% of SNF’s are Medicare ‑ certified.
3. Custodial care, even if it is provided in a Medicare ‑ certified SNF, if that is the primary type of care being provided.
4. Admissions not preceded by three consecutive days in the hospital.
5. Admissions later than 30 days after hospital discharge.

The facts are that most people who require long‑term care (1) do not require the one type of care Medicare pays for—skilled nursing—and (2) are not hospitalized prior to admission to a nursing facility.  One study for the U.S. government found that as many as 95% of people requiring long‑term care need only custodial care‑help with the activities of daily living.

Medicare Supplement regulations do not allow the sale of any insurance policy that duplicates Medicare Supplement coverage; however, a Long-Term Care Insurance policy is now excluded.

Some companies require the insured to sign a statement attesting to the fact that the LTC Insurance policy may not cover all long-term care costs incurred and the insured is requested to review the policy carefully.  Conversely, some companies or General Agencies, require that an applicant for a Medicare Supplement policy, sign a statement that the Medicare Supplement does not cover most types of long-term care and that the agent has explained how such coverage can be obtained.  This accomplishes two things – (1) if a family member would ever accuse the agent of not offering LTCI coverage when the insured becomes unable to take care of themselves, and Medicare does not cover the disability, this will avoid an errors-and-omission suit,

and (2) it forces an agent who is making a (relatively) easy Medicare Supplement sale, to introduce his client to possible new coverages.

HOME CARE

Because so many services are now available in an Individual’s home, from professional nursing care to housekeeping, it is difficult to attach an actual dollar figure.  People are likely to think of home care as being considerably less costly than care in an institution, and in some cases that’s true.  For example, a home health aide, earning $10 an hour in some locales and who helps in the home for two hours a day three times a week does not create a large expense.  However, HIAA estimates that many people receiving help at home with ADL’s alone currently pay as much as $1000 per month ‑ $12,000 annually.  Skilled professionals such as a registered nurse or physical therapist may be paid up to $70 per hour for home visits.

Adult day care is no less expensive than day care for children‑and is often more expensive because of the availability of extra services, particularly those related to health care.  Daily charges can range from $50 to $200 according to the American Association of Retired Persons.

These figures emphasize both the lower and upper extremes.  Recent figures from a state located in one of the average‑cost geographical regions of the U.S. indicate that home care, adult day care, respite care and hospice care costs average $15,000 or less per year.  However, the more frequently the services are provided and/or the more skilled the person providing them, the more costly they will be in any region.

One of the most frequent objections to Long-term Care Insurance by Senior Citizens, especially those who reside in retirement areas, is that Medicare will take care of them in their own home if they should need long-term care.  In the past, there has been some truth to this, but recently there has been a definite tightening of the Medicare rules and the abuse has diminished considerably.

As quoted in the Medicare Guide: “Medicare pays the full cost of medically necessary home health visits by a Medicare-approved home health agency.  A home health agency is a public or private agency that provides skilled nursing care, physical therapy, speech therapy, and other therapeutic services.  A visiting nurse and/or home health aide provides services on an intermittent or part-time basis, not full-time.”

“To qualify for coverage you must:

1. Need intermittent skilled nursing care, physical therapy, or speech therapy,
2. Be confined to your home,
3. Be under a doctor’s care.

A stay in the hospital is not needed to qualify for the home health benefit, and you do not have to pay a deductible or coinsurance for services.  You do have to pay 20 percent of the approved amount for durable medical equipment such as wheelchairs and hospital beds provided under a plan-of-care set up and reviewed periodically by a doctor.”

“You pay:

1. For full-time nursing care and drugs.
2. For meals delivered to your home.
3. Twenty percent of the Medicare-approved amount for durable medical equipment, plus charges in excess of the approved amount on unassigned claims.
4. For homemaker services that are primarily used to assist the individual in meeting personal care or housekeeping needs.”

Note the key requirements:

1. Services must be skilled nursing care, physical therapy, speech therapy or other therapeutic services.  Many Seniors are convinced that they will receive full time care and Medicare or their Medicare Supplemental policy will cover it.
2. The patient must be homebound, confined to the house, and not able to go shopping or visiting with friends and family.
3. The patient is fully responsible for homemaker services to assist them in personal care or housekeeping needs.

In the past, doctors have been very lenient and have continued Medicare home health care even after the patient no longer needed skilled nursing care.  With the recent emphasis on Medicare abuse, these abuses have diminished and ceased almost entirely in most areas.

An important point to remember is that a Medicare Supplement only pays for those costs that are Medicare approved, i.e. as a general rule, if Medicare does not pay, the Supplement will not pay.  (There are some exceptions, such as a physical examination under certain Select policies and some drug benefits under the more expensive Supplemental plans)

ADULT DAY CARE

Adult Day Care has often been considered as a place to drop off a person who is unable to care for himself, at a facility that will “baby-sit” them until they can be picked up on the way home from work.  There actually is a little truth in that matter, but Adult Day Care offers much more.  They are closely regulated and they offer structured, comprehensive programs providing a variety of health, social, and other related support services.  Hours are flexible usually, but they offer less than 24-hour care, usually operating only during normal business hours five days a week, with some offering weekend and holiday services also.  They offer medical monitoring, occupational and physical therapy, counseling, and other services to not only the patient, but also for the families.

Obviously, Adult Day Care centers are designed for the caregiver who must work during the day but who also has a family member to care for.  For many situations where the caregiver is a family member, this may be the only way that they can both work and take care of their parent or disabled family member. And, of importance, the patient must be brought into the decision-making.

TYPES OF ADULT DAY CARE FACILITIES

In the State of California, adult day care services are provided in four categories:³²

ADULT DAY CARE (ADC) centers are community-based programs that provide non-medical care to persons 18 years of age or older in need of personal care services, supervision or assistance essen­tial for sustaining the activities of daily living or for the protection of the individual on less than a 24-hour basis. The State Department of Social Services (DSS) licenses these centers as community care facilities.

ADULT DAY SUPPORT CENTER (ADSC) is a community-based program that provides non-medi­cal care to meet the needs of functionally impaired adults.  Services are provided on a less-than 24-hour basis, according to an individual plan of care in a structured comprehensive program that will provide a variety of social, psychosocial and related support services in a protective setting. DSS licenses these centers as community care facilities.

ADULT DAY HEALTH CARE (ADHC) centers are community-based day-care programs that provide medical, rehabilitative and social services to elderly persons and other adults with functional impairments, either physical or mental, for the purpose of restoring or maintaining optimal capacity for self-care.  These centers provide services through an individual plan of care and target adults who are at the institutional level of care or at risk of institutional placement.  ADHC is a Medi-Cal benefit.  The health, therapeutic and social services are provided to those who are at risk of being placed in a nursing home, and at the present time, there are over 300 ADHCs in California, in both urban and rural areas. 

The Centers are licensed by the California Department of Health Services.  The Department of Aging administers the program and it certifies each center so that the center can qualify for Medi-Cal reimbursement.  The stated primary objectives of the program are;

1. “Restore or maintain optimal capacity for self-care to frail elderly persons and other adults with physical or mental disabilities; and
2. Delay or prevent inappropriate or personally undesirable institutionalization.”

The program works closely with the participant, the family, the physician, and the community in working towards maintaining personal independence.  This program has been successful in some instances of placing formerly institutionalized individuals back into the community with the support and assistance of ADHC.

Each ADHC location is staffed with health professionals of various disciplines who perform a comprehen­sive assessment of each applicant in order to better determine and plan the ADHC services that will meet the individual’s specific health and social needs.  Some of the services offered at the center include medical services; nursing services; physical, occupational and speech therapy; psychiatric and psychological services; social services; planned recreational and social activities; hot meal and nutritional counsel­ing; and transportation to and from the center.

ALZHEIMER DAY CARE RESOURCE CENTER (ADCRC) is another community-based program that pro­vides day care for persons in the moderate to severe stages of Alzheimer’s disease or other related dementias, and provides various support and educational services for family caregivers and the com­munity at large.  ADCRCs identify the psychosocial, mental, functional, and cognitive needs of these participants, and assist participants to operate at the highest level possible within individual degrees of mental and physical capacity. Although the law permits ADCRCs to function without a license, the majority of these programs are located in licensed facilities under an established licensee category.  CDA administers the program, and grants state general funds to eligible applicants as authorized by legislation.³³ 

The ADCRCs work with those who have moderate to severe levels of dementia and to provide support and respite for caregivers.  They also provide day care services needed by patients with dementia and they make opportunities for professionals in take care of and treating these patients.  They also have a public service function of increasing public awareness and knowledge about Alzheimer’s and related disorders.  They provide services that support the physical and psychosocial needs of persons with Alzheimer’s disease or related dementia.  Individual care plans are developed for each program participant with activities scheduled in accordance with these plans.  Persons who have been diagnosed as having Alzheimer’s disease or other dementia are eligible to participate, without regard to age or financial resources.  In particular, they target those persons having moderate to severe levels of care needs and behavioral problems which make it difficult for them to participate in other care programs.

In respect to funding, participants are requested to share in the cost of care through fees based on the cost of services and a sliding fee scale that is specific to each site.  Approximately one-third of the sites are administered under Adult Day Health Care licensure and certification, permitting them to accept Medi-Cal eligible persons.

NOTE: Section 14552.2 of the Welfare and Institutions Code states, in part,…"if an adult day health center licensee also provides adult day care, adult day social care, or Alzheimer’s day care resource center services, the adult day health care license shall be the only license required to provide these additional services."

FORMAL LONG-TERM CARE SERVICES AND FACILITIES

NURSING HOMES

A nursing home is defined as a privately operated establishment where maintenance and personal or nursing care are provided for persons (as the aged or chronically ill) who are unable to care for themselves properly.³⁴

Nursing homes are licensed by the state to provide nursing care, personal care (help with things like bathing, dressing, going to the bathroom, and more), and medical services. They also offer different kinds of therapies—physical, occupational, and speech—for their patients when such therapy is medically necessary.  Meals, laundry and housekeeping are furnished. Nursing homes provide various activities for its patients, such as art classes, parties, religious services, etc.

Basically, nursing homes or skilled nursing facilities are designed specifically for those who are in need of 24-hour nursing care.  They are usually beyond the physical and emotional resources of family and friends—and often, monetary resources. 

Nursing homes provide more than close medical supervision from skilled professionals as they offer care from very skilled to custodial care that can be provided by supervised nursing assistants.  Nursing homes are tightly regulated by the states and they continually audit the services and quality of care.

State and federal authorities regulate nursing homes and report that the quality of care has improved over the past few years.  However, nursing homes still suffer in the opinion of the public.  Isolated incidents, such as the elderly patient in a nursing home who died of fire ant bites while immobile in her bed, gather considerable publicity.  The states all license nursing homes and they review the operations of each nursing homes at least once a y ear.  In 1987, the Omnibus Budget Reconciliation Act (OBRA) resulted in national reform of nursing homes. As a result of this act, nursing homes were required to add more and more qualified nursing home staff Key.  Each nursing must have individualized resident care plans and the patients must become involved in the care plan. 

LEVELS OF CARE

There are three categories of care and nursing homes usually provide all three types of service, all involving full-time residence and include room and board, monitoring, personal assistance, nursing and other health care for those who cannot take care of themselves, mentally or physically. (Sub-Acute Care is actually part of the Skilled Care category.)

Long-term care services are usually classified into three categories: Skilled Care, Intermediate Care and Custodial Care.  LTCI policies are not always uniform in describing the care categories; therefore it is very important that the policyholder be fully informed as to the various levels of care and is aware of the coverage descriptions and exclusions in the policies.

California requires all of the following levels of care to be covered under LTCI policies with a nursing facility (nursing home) benefit:

Skilled Nursing Care

Nursing Facilities a.k.a. skilled-nursing facilities, nursing homes or convalescent hospital facilities provide comprehensive nursing care rehabilitation and specialized medical programs for chronically ill or short-term residents of all ages.  They are licensed by the California Department of Health Services, and certified for Medi-cal and/or Medicare.  Fees are usually provided by Medi-Cal, with some funding through Medicare, managed care and individual and private payments.

These skilled nursing care facilities in California provide daily nursing and rehabilitative care performed by or under the supervision of skilled medical professionals or technical personnel. Basic skilled and custodial care for “activities of daily living” are delivered in addition to one or more of the following: specialized rehabilitation pro­grams, respiratory therapy services, ventilator care, tracheotomy care, IV services for hydration/pain management, hospice services, respite care services, Alzheimer’s and dementia units.

Skilled nursing care is available 24 hours a day, must be ordered by a physician and must be performed directly by or under the direct supervision of a registered nurse.  Regulations require that there be a formal medical treatment plan.

Subacute-Care Facilities

Part of Skilled Care, Subacute-Care Facilities many times operate in a separate section of a nursing facility.  They focus on intensive rehabilitation, complex wound care and post-surgical recovery for patients of all ages whom no longer need hospital care.  They are licensed by the state and Medi-Cal and/Medicare certified.  They are funded through Medi-Cal primarily, with some from Medicare, managed care and private payment.

Intermediate Care

Intermediate-Care Facilities provide room and board, medical, nursing, social and rehabilitative services for people not capable of full independent living.  They are licensed by the state and Medi-Cal and/or Medicare certified.  They are funded primarily by Medi-Cal, with some funding by Medicare and private payment.

The Intermediate Care facilities provide assistance needed for stable conditions that require daily, but not 24-hour, nursing supervision and it must be ordered by a physician and supervised by registered nurses.  It does not take the specialized nursing care of a skilled nursing facility, but usually involves personal care for an extended period of time.  The services fall between the skilled nursing care of a hospital or skilled nursing facility, and custodial care.  Physician supervision is needed Care is provided by licensed medical personnel, primarily RNs or LPNs under the direct supervision of an RN.

The typical patient in this setting is relatively independent but may need help with some ADLs, and they do not need continual nursing services or supervision. These are usually lower in cost than the skilled nursing facility.

 

Custodial Care

Custodial care is the “lowest level” of care and is provided simply to allow the patient to function from day to day.  This is an important category as LTCI is designed to provide such services, and such services are not covered under Medicare. 

Basically, custodial care includes assistance in the activities of daily living (ADL).  For the purposes of LTCI, the state may dictate these “activities of daily living” to include each of the following items (See later discussion for ADL requirements for tax-qualified policies.:

(1) Eating.  ) “Eating” means feeding oneself by getting food into the body from a receptacle, feeding tube, or intravenously

(2) Transferring. “Transferring” means moving into or out of a bed, chair, or wheelchair.

(3) Dressing.  “Dressing,” means putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs

(4) Bathing.  “Bathing,” means washing oneself by sponge bath in a tub or shower, including the task of getting into or out of the tub or shower.

(5) Toileting.  “Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

(6) Continence.  “Continence” means the ability to maintain control of bowel and bladder function or when unable to maintain control of bowel or bladder function the ability to perform associated personal hygiene, including care for catheter or colostomy bag.

Custodial Care is the most common type of long-term care and it is provided in a variety of settings, ranging from nursing homes to other facilities, convalescent homes, and the patient’s home.  A nonmedical person can perform these services safely and reason­ably.  This is considered the “lowest level” of care because it does not involve any medical care and unskilled volunteers or family members may provide it.  Custodial care is none­theless essential for a person who cannot be self-sufficient.  On a day-by-day basis, custodial care is the least expen­sive daily cost, however, it can easily become the most expensive level of care because of the length of time-it is needed.

Durations of Nursing Home Stays

How long the average stay in a nursing home is depends on how the statistics are read. In its Annual Report of Long-Term Care Facilities for the 1991 calendar year, the Health and Welfare Agency of the California Office of Statewide Health Planning and Development provides the following figures—DURATION OF NURSING HOME STAYS

 

While it appears that nearly half of all nursing home stays are less than a month, the figures can be misleading because SNFs are increasingly being used for convalescence from acute illnesses and surgeries, plus nursing facility stays are interrupted by brief hospital visits, the return from which is counted as a new admission.

 

ASSISTED LIVING/RESIDENTIAL CARE FACILITIES FOR THE       ELDERLY

Assisted Living/Residential-Care Facilities for the Elderly (RCFE) facilities provide personal care and safe housing for people who may need supervision for medication and assistance with daily living but who do not require 24-hour nursing care.  They are regulated by the Department of Social Services, Community Care Licensing Division.  Primarily they are funded through private payments, with about 30% of the RCFE residents relying on SSI/SSP non-medical out-of-home-grants.

These types of facilities have various names in various areas, such as personal care home, adult congregate living facility, home for the aged, etc.  Those who require assistance in their daily activities, but do not require nursing-home care, use these facilities.  Usually these places are structured as condominiums or apartments houses, and the residents can receive assistance with housekeeping, meals and personal care.  For those that need additional help in such as eating, bathing, dressing, etc., these services may be provided.  There are staff members on duty 24 hours a day to assist the residents when needed. 

Assisted living facilities take different forms but usually are part of a retirement community or nursing home.  The appearance and grandeur of the surroundings dictate the cost as much, if not more than, the services that are available.  They can range from a simple apartment-house type of structure, to that of an exclusive country club or hotel.  Such facilities offer a combination of independence and service for individuals where varying levels and intensities of care and supervision, protective supervision, personal care, or health-related ser­vices are provided based upon their varying needs.  Assisted Living/Personal Care may be included with the monthly fee or residents may be charged according to the level of services used.  The fees charged can be based on an hourly rate for different types of services, or according to the level of care provided.

Many facilities now offer specialized Alzheimer’s care and the facilities may be used only for the care of people suffering from dementia.  They offer special activities and programming, and most offer enclosed areas where the residents can walk around safely without injuring themselves or others.

Residential Care Facilities for the Elderly

Residential Care Facilities for the Elderly (RCFE) serve elderly persons age 60 and older.  They provide room, board, housekeeping, supervision, and personal care assistance and usually offer basic activities like personal hygiene, dressing, eating, and walking.  Facilities usually centrally store and distribute medications for residents to self-administer.

They are not medical facilities and so are not required to have nurses, certified nursing assis­tants or doctors on staff.  They may also be called board and room homes, board and care homes, rest homes, assisted living facilities or part of a Continuing Care Retirement Community (CCRC) that provide personal care and supervision.

24-hour supervision and assistance are provided for residents with minor medical problems or who need assistance with such things as bathing, grooming, dressing and meals (ADLs & IADLs). Most of these communities offer private, semi-private rooms, or efficiency apartments with or without kitchen­ettes. They typically provide common living areas (card/games room, library, lounge, social activities, and central dining room), housekeeping, linens (towels and sheets), from one to three meals, and transportation.  These facilities are licensed by the State Department of Social Services, Community Care Licensing Division as Residential Facility for the Elderly (RCFE) and they may also su­pervise and distribute medications to residents.

Not all Assisted Living Facilities are licensed, and therefore, their services may not be covered by the LTCI policies.

California RCFEs

1. RCFEs in California have enjoyed considerable growth over the past 19 years as more than 3,600 new RCFEs opened (145% in­crease) with 90,500 new beds (166% increase).
2.     California has 6,358 licensed RCFEs with the bed capacity to serve 150,454 residents as of May, 2003.
3.   RCFEs of 6 beds or less continue to account for about 75% of RCFE.
4.   RCFEs of 50 beds or more comprise only 11 % of total facilities but account for 70% of the bed Capacity (i.e. capacity to serve over 100,000 residents).
5.      Typical resident is female in late 70s or early 80s: 1 in 4 require assistance with 3 or more activities of daily living and 1 in 3 have moderate to severe cognitive impairment.
6.   Serve residents with greater health and cognitive needs: 68% of RCFEs have non-ambula­tory status, 29% of RCFEs have hospice waiver and 32% have dementia waiver as of May 2003.
7. Average cost for RCFEs is over $80 per day for basic services.
8. Public funding for RCFEs in 2003 (i.e. SSI/SSP) is an embarrassment at $27.16 per day with a declining percentage of RCFEs willing to accept or retain residents on SSI.
9.   Medi-Cal presently does not fund RCFE level care in California although Medicaid does provide some coverage in over 30 other states.
10.   94% of RCFEs are owned by for-profit entities, predominantly individual owners.
11.   Only 4% of RCFEs are owned and operated by non-profits, especially continuing care retirement communities (CCRCs).
12. About 80 CCRCs, 89% operated by non-profits, serve 15,000+ residents throughout the continuum of care (i.e., independent living through nursing home care.

California requires that facilities describing themselves as assisted living and offering personal care and supervi­sion must be licensed as Residential Care Facilities for the Elderly, which is a requirement for LTCI benefits.

RCFEs differ from assisted living facilities as the RCFEs are usually smaller—up to 15 beds—and are locally owned facilities with shared rooms.  “Assisted Living” is often used to describe normal living facilities, such as a residence, apartment, condo, etc., with the addition of services offered as needed.  Usually, these are private apartments in a larger facility owned by an independent company; with up to 100 beds or more, and with different fees depending upon the necessary care.

Senior housing complexes, retirement villages or retirement hotels that provide only housing, housekeeping and meals are not required to be licensed as Residential Care Facilities for the Elderly.

RCFEs can be located by contacting the local District Office of Community Care Licensing who can provide a listing of facilities.  The facility files will contain the annual survey report and any citations for poor care.  Some Ombudsman Programs also have listings, offer pre-placement services, and provide access to licensing reports. For assistance in contacting the licensing office of the Ombudsman program, contact the Senior Information and Referral (I&R) Program (telephone 1-800-510­2020, statewide elder services locator number.³⁵

RCFE Costs

Costs will depend on the type of accommodations (e.g., apartment, private room, or shared room), the range of services needed, and the geographic area.  In California, the average monthly cost in California is from $1,800 to $2,300, ranging from a low of around $900 a month for a resident on Supplemental Security Income (SSI) to over $4,000 a month.

Regulations require that the costs must be stated in the Admission Agreement for all services and for increases in services or levels of care.  While some facilities charge a flat or fixed rate for all services, most facilities com­bine a fixed rate with extra charges for more care or services and/or for changes in care levels.  Charges can be increased if an assessment of the needs of the resident as conducted by the facility, deems such increase necessary.

Facilities generally charge higher rates for specialized dementia care or hospice care, as, obviously, more personal care is needed.  Conversely, if the resident is on Supplemental Security Income (SSI), the SSI rate covers the full charges for all basic services.  Extra charges for a resident on SSI can only be made for special food services or a private room.

Facilities are increasingly charging a variety of non-refundable upfront fees. These fees can range from $250 to $5,000. Generally, facilities are permitted to charge such fees if they are stated in the admission agreement. However, facilities cannot charge a security or damage deposit or a cleaning fee.

A facility may charge an “administrative fee,” “community fee,” or “application fee” as part of the preadmission process. There can be other charges for completing a pre-assessment evaluation, for the admissions packet or for an inventory of the resident’s personal belongings.

RCFE Payments

Residential Care Facilities are not paid by Medi-Cal and SSI will only pay a small limited amount—so limited, in fact, that many facilities will not accept SSI patients.  As an example, SSI rates for Non-Medical Out-of-Home Care for 2004 is $964 a month individually; double that if the couple are both living in the same facility.  Last year (2004) an individual is allowed a personal and incidental needs allowance of $111 individually, $222 for a couple and they are personally liable for paying any remaining income to the care facility.  The facility is allowed to charge $854 for an individual and $1,708 for a couple plus an additional $20.³⁶

Health Status of Those Accepted In RCFE

Since the RCFEs are not medical facilities, certain medical conditions are not accepted by the facilities, such as tube feeding, liquid oxygen or treatment for open (stage 3) bedsores.  Obviously, those who require 24-hour nursing care cannot be accepted by an RCFE.  Whether or not the facility will take (or keep) someone with medical conditions or dementia will depend on the type and severity of the medical condition(s) and whether the facility can obtain permission from the licensing agency.

It is advisable for those entering an RCFE (or responsible for a person entering the facility), to review the license for compliance with requirements to serve persons who need help in leaving the building in case of emergency either by mechanical device such as a wheelchair or walker or by staff assistance (i.e., non-ambulatory).  Also, the facility may have a waiver from the licensing authority allowing them to function as a hospice for persons who are diagnosed with a terminal medi­cal condition (e.g., hospice waiver).

Some medical conditions are not allowed in a Residential Care Facility for the Elderly (i.e., tube feeding, need for liquid oxygen or treatment of open bedsores).  One should check the facilities’ license to see if they have met the requirements to serve persons who need help in leaving the building in case of emergency (i.e., non-ambulatory) or with certain medical conditions (e.g., hospice waiver).

Care of Those with Cognitive Impairments, Dementia or Alzheimer’s

Nursing homes and Assisted living Communities have provided care for those with Alzheimer’s disease and other such memory disorders and dementia, the need for facilities that specialize in providing specialized care for such patients has increased.  The number of these facilities is growing particularly since they specialize in providing an environment that provides more individual assistance in skills and that helps the patients to avoid confusion and agitation.  Activities are provided that are especially designed to help the patients with reality and staffed with professionals with training specifically in handling the behavior of those patients with memory impairments.  Some facilities of this type have color-coded hallways, certain visual points and areas for the patients to move about securely.

Board & Care Homes

As mentioned earlier, these RCFEs are usually small, converted single family homes, but they still must go through the licensing procedures to ensure that those who are not able to live by themselves, but do not require skilled nursing care, can be provided with a home-like atmosphere.  In many instances, an older couple can stay together in one room instead of being separated, and some places even allow family pets.

Basically, they provide assistance with personal hygiene and grooming and personal care during period of minor or temporary illness and normally care for fewer persons than an Assisted Living Facility.  They usually provide some sort of recreational and social activities in a family-type setting such as:

1. Assistance in Bathing, Dressing, Personal Hygiene and Incontinency Care
2. Supervision of medications
3. Assistance in Transferring and Mobility
4. Providing an Escort when needed
5. Preparation or furnishing of meals
6. Assistance with other ADLs and/or IADLs

Partnership policies will pay for care in a Board and Care facility if it is licensed by the State and the coverage “triggers” are met under the policy.

Continuing Care Retirement Communities

Continuing care retirement communities, or CCRCs, generally provide many different types of services, such as skilled nursing, assisted living, and/or independent living - all in one location.  They are required to offer three levels of care:  Independent, Assisted Living, and Nursing Care.  An example of such a care facility was described earlier where condominiums or apartments offer a limited amount of service or as much as skilled nursing assistance, and the individual need not move from the community/facility, even as their personal needs change.  CCRCs offer a range of services such as nursing and other health services, meals, housekeeping, transportation, emergency help, and personal care as necessary.  CCRCs usually have a considerable amount of activities available on the premises for their residents, both social and educational.

Usually a CCRC offers a contract that binds the CCRC to provide housing and services for the life of the resident—one of the identifying factors is the providing of services for more than one year and up to the lifetime of the resident.  The majority of CCRCs require a one-time entrance fee plus a monthly payment thereafter.  Fees vary greatly, depending upon the amount and quality of care and the area in which they are located.  Some CCRCs’ fees vary by community, depending on the type of housing and services they offer.  A few also operate more on an apartment basis (and not a condominium basis), where there are monthly rental fees, but usually there is no entrance fee.

CCRCs are licensed by the Dept. of Social Services, Continuing Care Contracts Branch.  The skilled nursing level of the care facility is licensed by the Dept. of  Health Services.

CCRCs are paid for by private payments.    

LICENSING REQUIREMENTS

California has the reputation of providing the most oversight of facilities covering long-term care of its citizens, and each category of provider is closely regulated.  The Department of Health Services, The Department of Social Services, The Department of Mental Health and The Department of Developmental Services are each responsible for the licensing and regulation of care providers in their particular area of authority.

Long-term care providers not only must meet state licensing standards, but they are also governed by Federal requirements in the area of skilled care.  In addition, several other Federal, State and Local agencies - including the Federal Health Care Financing Administration, State Departments of Aging, Justice and Consumer Affairs and the Office of the State Fire Marshal are involved in the regulation of long-term care facilities.  State surveyors conduct annual inspections of each facility to guarantee compliance with these standards.

California State Agencies

The California state Health & Human Services Agency has primary responsibility over long-term care providers.  The various Departments under this agency have specific responsibilities:

1. The Department of Health Services is responsible for licensing health facilities, home health agencies and hospices, and for general oversight of the services they provide.
2. The Department of Social Services manages California’s integrated social service and income maintenance programs. 
3. The Department’s Community Care Licensing Division licenses residential care facilities, and its Adult and Family Services Division is responsible for monitoring elder abuse.
4. The Department of Developmental Services is responsible for services to Californians with developmental disabilities such as mental retardation, cerebral palsy, epilepsy and autism.
5. The Department of Mental Health sets overall policy for the delivery of mental health services; establishes priorities, standards and procedures within which mental health ser­vices operate; assists in planning programs; monitors, reviews and evaluates the actual operation of services; and oversees any changes brought about by the evaluation and review process.
6.   The Department of Aging serves as the focus for community-based services to California’s seniors. Its mission is to provide leadership in addressing issues related to aging Califor­nians, and in developing community-based systems of long-term care services throughout the state.
7. The Ombudsman Program advocates for the rights of all residents of 24-hour long-term care facilities and adult day health care centers in the state.

In addition to the Health & Human Services agencies, other state and local agencies, such as State and County Fire Marshals, Cal-OSHA, and the Department of Consumer Affairs also have roles in the oversight of long-term care in California.

Nursing facilities are subject to an extensive set of standards prescribed in state licensing law and federal Medicare/Medicaid certification requirements.  These facilities are inspected each year by professional state inspectors who enforce these regulations of California’s Long-term care facilities.

  Assisted living/RCFE providers are surveyed annually by the Department of Social Services.

Community Care Licensing & Facilities

The Responsibilities of Community Care Licensing are many as determined by law and regulations, and they include:

1. The Approval or Denial of Applications
2. Enforcing Licensing Laws
3. Complaint Investigation
4. The Authority to Revoke licenses and impose fines
5. Maintaining of records on providers

Licensing Requirements of LTC Providers

Representatives of companies offering Long Term Care Insurance policies should be knowledgeable in respect to the licensing and certifications requirements of long-term care facilities and their relationship to coverages in the policies that they offer.  In many situations, benefits will not be paid to a long-term care facility unless they are legally and properly licensed and certified.  There can be wide variances between policies, so care must be taken that the contract provisions be examined in detail so that it can be determined when (and/or how much) benefits can be paid under the policies.  In some policies there are optional benefits, in others they may be considered as part of the standard benefit package, and in other, they may not be offered at all.  Therefore, it is not only necessary to know what the policies cover, under what circumstances, and conversely they must know what policies do not cover.

Most types of LTC facilities are required to be licensed by the state, as discussed above.  It is important to be aware of the differences between the licensed facilities and how the benefits may depend upon the type of facility providing care to the insured.

 

As a reference, the following facilities must be licensed:

1. Skilled nursing facilities
2. Intermediate care nursing facilities
3. Custodial care nursing facilities
4. Congregate living health facilities
5. Hospices
6. Residential Care Facilities
7.   Residential Care Facilities for the Elderly
8. Respite care facilities
9.   Home health care agencies

Informing an individual of the various types of long-term care facilities helps him to understand that a person could easily require different levels of care at different times and under different circumstances.

The intent of the above is to allow lower-cost, unlicensed providers to perform personal care services, thereby maximizing the daily indemnity benefit so as to allow the person to remain at home for the longest period possible.

Also note that the actual delivery of services could occur outside of California, and the policy must cover the services of an unlicensed provider if no licensing requirement for that service exists in the state where it is provided.

Changing Coverages and Providers

It is important to understand that policies have changed and will continue to change, particularly in the services and the providers of care in Long Term Care Insurance policies. Further, one should be familiar with the “new” language and the language used in the older policies.  

There are several good examples of changes:

RCFE facilities are now covered under all policies (with facility coverage).  Until recently, it had been available only as an option.

Adult Day Care formerly restricted benefits to only those facilities that provided Adult Day Health care—a much more restrictive definition.

Older policies covered home care but with the requirement that the services were medically necessary because the person would require institutional care without them.

HOME AND COMMUNITY-BASED SERVICES

Polls and surveys show that overwhelmingly, older people much prefer to stay in their own home, even though they may need help and support to usually want to remain in their own home, but may also need help and support so that they can remain at home.  This is where the home and community-based services can help by providing assistance in personal care and “chores.”  These services can take the form of health care services, social activities, or just a daily “check” on them by phone or by visit if they live alone.  They also provide support and assistance in those cases where a family member or friend is the caregiver.

The availability of these services vary by location, therefore the local Area Agency on Aging can furnish information on such services in their area.

A variety of community-based programs and services are available to assist senior citizens to remain at home. The following descriptions explain the key types of services available and how to contact them for more information.

Contact the Senior Information and Referral (I&R) Program in the local area by calling the state­wide Elder Services Locator Number at 1-800-510-2020 or alternatively one can check the Community Service section of the phone book.  Senior I & R is the key resource to access the most common services and others, if available.  Some of these services are described below.

Coordinating Services

Case management (sometimes referred to as care management or coordination) links persons to needed services through assessment, planning and monitoring.  They provide assistance to the family in finding the help that they may need.  A care manager works with the family so as to determine the needs in their particular situation, and to find what services may be offered.  This requires family input and when the best situation available is determined, the care manager will arrange for the services.

Information and assistance services offer information about services and resources in the area.

There are publicly funded programs available such as the Multipurpose Senior Services Program (MSSP-Medi-Cal eligible persons), Linkages, and the Program for All Inclusive Care (PACE-limited counties).

Home health agencies can offer short-term case management services and there are also fee-for-service private geriatric case managers.

Personal Care Services

Personal care services provide primarily assistance with activities of daily living.  Homemaker or chore services help with different chores around the house, such as cleaning, preparing meals or doing laundry. They also help with harder tasks such as wash­ing floors, windows and walls and shoveling snow.

In Home Supportive Services (IHSS) and Medi-Cal’s Personal Care Services may be available and for their services, one must apply through the county welfare Department.

Home health agencies also provide personal care service for a fee.  Some Centers for Independent Living may be able to provide a list of workers who provide in-home care on a fee-for-service basis from their registry.

Home Health & Hospice

Hospice care provides comfort, nursing care and other services, such as grief counseling, to people who are in the final stages of life (and their families).  Hospice care is provided in the person’s home, in a nursing facility or in a freestanding hospice facility.

The hospice must be licensed in order to provide in-home care and a dual license required in a facility setting (both facility and hospice).  Medicare must certify them in order to receive Medicare or Medi-Cal payments.

Medicare, Medi-Cal, private insurance and/or private payments fund these services.  Note that older LTCI policies usually covered only health care while the newer policies cover personal and custodial care also.

Home health care services that are provided in the home can include part-time nursing services; personal care (ADLs, IADLs, etc.) homemaker or chore services, medical supplies or equipment and various types of physical, occupational or speech therapy following an illness or surgery.  Therapy is normally offered as a rehabilitation service.

     Such services are provided by certified home health agencies. Medicare, Medi-Cal and Long Term Care Insurance might pay for such services if prescribed by a doctor and are considered medically necessary. Some home health agencies operate a Nursing Facility (NF) Waiver Program, providing nursing home type care in a person’s home with funding from Medi-Cal.

Assistance to Caregiver-Related Services

Several services are available for family caregivers in the manner of information, counseling, support groups and respite care.

Caregivers need a “break” from time-to-time, and especially family members who are caregivers.  Respite care provides such a break from the constant caring for older persons who are not able to take care of themselves by providing a substitute for the regular caregiver.  When respite care is given, it may be either in the patient’s home or in the caregiver‘s home.

No separate license is required of licensed providers.  The respite caregiver is paid through home and community-based services and the Department of Aging.  For further information, contact the new Family Caregiver Support Program.

     As an alternative, one might consider participating in Adult Social Day Care or Adult Day Health Care that provides a variety of health, social and related support services in a safe setting during the day. 

     Some day care programs are designed especially for people with Alzheimer’s disease and for respite care, one should contact one of the state’s nine regional Caregiver Resource Centers or the local chapter of the Alzheimer’s Association.

Nutrition

     The Congregate Senior Nutrition program offers meals, usually 5-days per week, at a low cost in group settings such as in a senior center or senior housing.

    One of the most successful and best known methods of providing nutrition to those who are home-bound and cannot prepare their own meals, is through the Home-Delivered Meals (Meals-on-Wheels).  

For these services, contact Senior I&R or the Area Agency on Aging (AAA).  There is no fee or cost to the recipient, but there are recommended donation amounts for these services for those who can afford to pay.

Monitoring/Companionship Services

In most communities, there are senior centers that offer a place for older people to come together and offer many different social and recreational services (anyone for Bingo?).  Contact the council of churches or hospitals.

Many churches and some community organizations have volunteers who telephone seniors on a regular basis to “check” on them, and sometimes, just to “visit.”

There are Emergency Response Systems (e.g., Life-Line) who charge a monthly fee.  In many cases, family members are happy to pay this fee to assure them that their loved ones can receive help in case of an emergency.

From different services, many sponsored by churches, visiting or companionship services provide volunteers who will come to the home and talk with the elderly person.

Transportation

Those that live near or around a concentration of seniors appreciate the problems of so many seniors not being able to go places, particularly if they need to be accompanied.  Some retirement or nursing homes provide transportation for their residents such as to stores, doctor’s offices, therapy clinics, senior centers, etc.  Some churches or synagogues provide such transportation on a volunteer basis for their members.  Senior service facilities, such as nutrition centers or Adult Health Care facilities often provide transportation as part of the services.

Communities, particularly those with a large retired population, offer reduced fees public transportation or special taxi services, and some may provide medical-van services or in some communities, they sponsor volunteer transportation programs.

Financial Record keeping Assistance

There are a variety of financial counseling programs who can assist in helping to balance checkbooks, prepare and file taxes, and to pay bills.  They usually also assist with Medicaid, Medicare or other insurance forms.  Bill-paying services are sometimes offered as part of publicly funded case management programs. Some non-profit organizations offer bill paying or representative payee services for a fee.

If a person is unable to perform necessary financial matters because of a cognitive impairment, there are public conservators, such as the Office of the Public Guardian and private conserva­tors available.

Legal/Advocacy Services

There are several methods of protecting senior citizens from abuse, such as if abuse is alleged—whether physical, neglect, financial or other types of abuse—the Adult Protective Services (APS) should be contacted if such abuse occurs in the senior’s home or apartment or in the community.  The APS is normally located in the County Department of Social Services or by the office of the Public Guardian.

If the abuse occurs in a long-term care institution like a Residential Care Facility for the Elderly or a Skilled Nursing Home, contact the Long Term Care Ombudsman Program and CANHR.

Health Insurance Counseling and Advocacy Program (HICAP) handles issues regarding Medicare billing, Medicare supplemental insurance policies, Medicare HMOs, and long-term care insurance.

CANHR’s Lawyer Referral Service provides experts throughout the state who specialize in estate planning, resident’s rights and personal injury and medical malpractice in nursing homes.

California Department of Aging Services and Programs

Adult Day Health Care (ADHC) - A day care program that provides health, therapeutic, and social services to serve the specialized needs of frail elderly as well as adults with functional impairments at risk of institutionalization.

Alzheimer’s Day Care Resource Centers (ADCRCL - Day care for persons with^. Alzheimer’s disease (and other related dementias) and who are often unable to be served by other programs.  The centers provide respite as well as training and support for families and professional caregivers.

Area Agencies on Aging - The Area Agencies on Aging coordinate a wide array of services to seniors and adults with disabilities at the community level and serve as a focal point for local aging concerns.

Brown Bag Program - Volunteers collect and distribute surplus food to low-income seniors.

California Long-Term Care Ombudsman Program - Professional staff and trained volun­teers investigate and resolve complaints made by or on behalf of residents of long term care facilities.

Foster Grandparent Program - Low-income senior volunteers work with children who have exceptional needs.

Health Insurance Counseling and Advocacy Program (HICAP) - Provides both commu­nity education sessions open to the public and individualized one-to-one counseling on Medicare, managed care, and other private health insurance issues.

Information & Assistance - Trained staff provide information as well as assistance and follow-up to link seniors and adults with functional impairments and their families with pro­grams and services in their community.

Legal Assistance - Community programs provide legal information, advice, and counseling, as well as administrative and judicial representation for seniors.

Linkages - Case management services to elderly as well as adults with functional impair­ments, 18 years or older, at risk of institutionalization. Clients do not need to be eligible for Medi-Cal.

Multipurpose Senior Services Program (MSSP) - Provides social and health case management to assist persons aged 65 and over, eligible for Medi-Cal and certifiable for skilled nursing care, to remain safely at home.

Nutrition Services - Congregate Meals: local programs provide seniors with nutritious meals in a group setting; Home Delivered Meals: local programs prepare and deliver nutri­tious meals to homebound seniors.

Respite Program - Provides temporary or periodic services for frail elderly or adults with functional impairments to relieve persons who are providing care, or recruiting and screening of providers and matching respite providers to clients.

Senior Community Service Employment Program (SCSEP) - Provides part-time subsi­dized employment for low-income persons over age 55.

Senior Companion Program—Low-income senior volunteers provide peer support to frail older persons in their local communities.

StayWell Program - The StayWell Program is an outreach program dedicated to seniors, their families, caregivers and community organizations.  The campaign covers a wide realm of topics promoting physical fitness, nutrition, available services, and helpful information.

For long-term care planning, the above services may be used either as alternatives to LTC Insurance, or supplemental services, to help alleviate the costs and supplementing fees paid by private payment or by insurance benefits.

For more details and information, contact the Area Agency on Aging in the local area.

EXPENSES OF LONG TERM CARE

There is a plethora of statistics that clearly indicate that individuals need to address the possibility of requiring long-term care, if for no other reason that the realization that many will spend their retirement years in long-term care facilities.  While one in five may need long-term care sometime within the next year, only 25% —one in four—can afford the expenses of long-term care for a year. 

 

Cost of Nursing Homes (California)

Surveys show that nursing homes in California for the year 2004, averaged $165 a day for just board and room—a monthly rate of nearly $5,000 per month, $60,000 a year.  Other “extras” can often cost $30 a day or more.  When determining a suggested daily benefit for a LTCI policy, this is a good starting point.

True, there are differences—sometimes-substantial differences—in daily rates throughout the country, and even in different cities and communities.  Therefore, a person may indicate that if their health deteriorates, they may want to move to another location so as to be near to relatives or friends and nursing home costs may be less where they move, but in all probability, there will not be that much difference. 

Also, if the individual is presently living in a high-cost area, care must be taken to make sure that they are not underinsured if the coverage is based on a lower-cost area.  Obviously, each individual must be treated differently, even though when discussing LTCI plans, the prospect may be curious as to “what other people do.”

The rising costs of nursing homes are illustrated by the following graph that indicates a 5% annual increase.³⁷ 

It should be noted that nursing home care increases at a rate higher than overall cost-of-living expenditures.³⁸

 

 

Assisted living is a popular and desirable form of long-term care, but unfortunately to many, neither Medicare nor Medi-Cal will pay for this type of care.  Therefore the availability of this coverage by LCT Insurance is an important reason to purchase coverage.  In California, all LTCI policies that have nursing facility benefits will also cover care in a Residential Care Facility (RCF) or Assisted Living Facility.³

 

(See Page 60 for explanation of "70%" shown above.  Basically, the benefit amount for care in a residential care facility must be no less than 70% of the institutional confinement benefit.)

 

 

 

Home Health Care vs. Nursing Home Care Expenditures

Statistics show that for the period of 1990 – 1998, home health care expenditures increased by 124% as compared to nursing home expenditures for the same period of time of 72%.  These statistics indicate that nursing home care is more popular, for various reasons.⁴⁰

 

 

 

 

 

 

 

 

 

SOURCES OF LONG-TERM CARE PAYORS

These graphs indicate payment on a National basis.

      Over half of all care, both facility and home, is paid for by the individual or their family, with most of the remainder paid by Medicaid (Medi-Cal).  While 70% of persons receiving long-term care in California nursing homes are receiving assistance from Medi-Cal, it still only represents about half of the total cost because Medi-Cal payments are not sufficient to pay the total.  Also, note the very small amount paid for LTC by Medicare.

PAYORS

      Simply put, long-term care expenses may be paid for from four sources:  Personal Assets, Medicare, Medicaid or Long Term Care Insurance.

Personal Assets

Individuals and their families pay for about one-third of all nursing home costs from personal assets   except in some rare instances (such as a person being injured by another party and then being confined in a nursing home, etc., as a result of another’s negligence, etc.) 

Most long-term care is provided at home at no or greatly reduced cost by family or friends.  Regardless, home health care is often needed and can provide the best long-term care for the individual.  Statistics of home health costs in 1998 showed that private payment accounted for about 21% of those costs, compared to 32.5% of nursing home costs paid by the patients or families.  In contrast, the patients or families paid about 75% of assisted living facility costs during the same period.  In 1998 private pay accounted for 20.6% of home health costs.  Adult day care cost is borne by the family but may be subsidized by private, state and county welfare programs.  Except in very rare circumstances, government pays hospice services.

Insurance experts estimate that about one-third of all long-term care services are paid for by individu­als out of their own savings or investments, such as from pension plans, employee stock ownership plans, single premium annuities, the cash value of life insurance or savings.⁴¹

Medicare pays eight percent of the total long-term care costs; the remainder (92%) is the largest unfounded liability of our government as it is paid by personal assets or by Medicaid (Med-Cal).⁴²

LONG TERM CARE PAYMENT BY MEDICARE & MEDI-CAL

Medicare was not designed to pay for long-term care expenses, whereas Medicaid (Med-Cal) will pay for long-term care but only under very strict conditions.  This should be explained carefully when discussing the cost of long-term care.

Note:  What Medicare and Medicaid/Medi-Cal provides for long-term care is be explored in more detail elsewhere in this text.  The following is the “heart” of the distinctions.

MEDICARE

Within the state of California, each consumer who is solicited for Long Term Care Insurance must be provided with the brochure, “Taking Care of Tomorrow, A Consumer’s Guide to Long-Term Care,” produced by the California Department of Aging, which explains the long-term care provided under Medicare:

“Most long-term care is furnished in nursing homes to people with chronic, long-term illnesses or disabilities. The care they receive is personal care, often called custodial care. Medicare does not pay for custodial care. Medicare pays less than 10% of all nursing home costs. To qualify for the Medicare nursing home benefit, you must spend three full days in an acute care hospital within 30 days of your admission to a nursing home. You must also need skilled nursing care seven days a week, and/or rehabilitation services at least five days a week. Medicare will not pay for your stay if you need skilled nursing or rehabilitation therapy only once a week.

The longest nursing home stay that Medicare will pay for completely is 20 days. After the first 20 days, if you still require skilled care, Medicare will pay only a part of the nursing home bill. You will have to pay a co-payment for each day (note: $115 for year 2005) of the next 80 days if Medicare continues to pay for your stay.”

“Medicare will pay for care in the home, but only if you meet certain requirements of the Medicare program… You must be homebound and require skilled nursing or rehabilitation services. The ser­vices you receive must be from a home health care agency that participates in Medicare. You may also receive some personal care services along with the skilled services.

However, Medicare does not pay for general household services such as laundry, shopping or other home care services that are needed primarily to assist people in meeting their personal care needs...”

MEDI-CAL

 

Medi-Cal, California’s Medicaid program is funded by both federal and state tax dollars and provides health care coverage for approximately six million eligible beneficiaries.  Medi-Cal is designed as a welfare program to provide services for people with low incomes and few assets, particularly health care services to those on public assistance and who cannot pay for their health care.

Medi-Cal pays for hospital, medical, prescription drug, and “medically necessary” nursing home care.  In determining eligibility for Medi-Cal, the state does not take into consideration a person’s impairment in their ability to perform Activities of Daily Living. 

Medi-Cal provides choreworker and personal care services (assistance with activities of daily living and personal safety) at home through the Personal Care Services Program (PCSP).  The counties through their own In-Home Supportive Services program administer PCSP based on guidelines issued by the State.  There can be some difference from county to county, generally in the area of timely access to those services.

Centers for Medicare and Medicaid (CMS)

      The CMS (Centers for Medicare & Medicaid) is the Federal Agency responsible for the administration of both programs.  This was formerly known as HCFA.

MISCELLANEOUS PAYORS OF LTC EXPENSES

PACE

      “PACE” is an option under both Medicare and Medicaid that offers elderly individuals comprehen­sive medical and social services, permitting them to continue living at home.  PACE programs coordi­nate and provide all needed preventative, primary, acute, and long-term care services for its participants through about 40 PACE programs in the United States, including California.⁴³

Supplemental Security Income/State Supplementary Programs (SSI/ SSP)

      SSI is a federal cash benefit program for those over 65-years of age and the blind and disabled.  SSI is the only government source of payment for RCFE/assisted living residents, as Medi-Cal does not pay for these services.  SSI is supplemented by the State of California to assist in paying for RCFE services as SSI may provide the total monthly income or it may supplement a low income.  In California, approximately 30 percent of the RCFE residents are recipients of SSI.

Third Party Payers

      “Third-party payers” include includes individual insurance plans other than Medicare or Medi-Cal such as Veteran’s Benefits; Municipal Assistance benefits; and Long Term Care Insurance policies. These sources account for about 9 percent of long term care payment.

 

STUDY QUESTIONS
1. Medical care is usually broken down into
A. cognitive and mental.
B. acute or chronic care.
C. long-term or short-term.
D. psychological or physical.

2. Betty has several small strokes and needs assistance in taking care of herself. Her niece Hazel, who is not married and has no formal medical training, moves in with her in order to take care of her daily needs. Hazel would be
A. a nurse’s aid.
B. required to become a Certified Nurse’s Aid by law.
C. a secondary caregiver, a visiting nurse would be the primary caregiver.
D. the primary caregiver.

3. Usually Home Health Care can be provided
A. at the direction of a doctor.
B. entirely by Medicare.
C. only by a Long Term Care Insurance policy.
D. upon the instructions of the local coroner.

4. An agency that is called a “home health agency” is usually
A. an agency ran and operated by a hospital.
B. an assisted living facility located in a person’s home.
C. an indication that their home care providers are Medicare certified.
D. a non-accredited organizations of nurse’s aides.

5. If a person takes care of an invalid in their home, but the care is restricted to supporting care for the house or environment, such as yard work, cleaning, etc., they are performing
A. Personal Care services.
B. Home Health Care.
C. duties of a Therapist.
D. Homemaker services.

6. Among the large for-profit nursing facility companies, Medicare is usually comprised of
A. 50% of the residents.
B. 75% of the residents.
C. 10-15% of the residents.
D. about 82% of their revenue.

6. Medicare will cover nursing home care when, among other requirements,
A. the patient is in an assisted living facility.
B. the individual was hospitalized previously for at least three consecutive days.
C. the patient needs custodial and intermediate care.
D. the patient was admitted to a nursing home without prior hospitalization.

7. A facility that provides personal care and safe housing for people who need supervision for medication and assistance with daily living, but who do not require 24-hour a day care, is
A. an Assisted Living/Residential-Care Facility.
B. a nursing home.
C. a Community Care facility.
D. an Adult Day Care facility.

8. In California, the agency or department that has primary responsibility over long-term care providers is
A. the Department of Insurance.
B. the state Health and Human Services Agency.
C. the Department of Social Services.
D. the Welfare and Benefits Department.

9. Older people that become incapacitated to the point that they need assistance
A. would much rather go to a local nursing home.
B. want to go to a nursing home away from their relatives so that they will not be burden to
them.
C. automatically go on Medi-Cal.
D. would much rather stay in their own home, even if they need assistance there.

10. Home care for those who need it is primarily paid for by ____________, while for nursing homes, the primary payor is _____________ .
A. Medicare – Medicare.
B. families (Private funds)– Medicaid.
C. Medicare – Medicaid.
D. Medicaid – Private funds (families).

 

 

ANSWERS TO STUDY QUESTIONS

1B     2D     3A     4C     5D     6B     7A     8B     9D     10B