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How Will a Back Payment From the VA Affect a Nursing Home Resident's Medicaid Benefits?

  • March 7th, 2018
Q
A family member in a nursing home has Medicaid pending. He was clearly qualified, but last week he became eligible for service-connected Agent Orange payments from the Veterans Administration with a back payment (of about $17,000) to June. The check went to his nursing home, and the nursing home deposited the check in his resident trust fund and refuses to release the funds. How will this check affect his Medicaid application? Will he be obliged to pay for the nursing home with this back pay award? Does the nursing home have the right to hold this check? (It was not authorized to manage money.) In the future, will he need to pay for his nursing home stay with his entire monthly benefit or a portion of it? Lastly, will the VA pay for his nursing home stay even though the facility is not one on their list?
A

You pose a lot of good questions. The timing of the payment is a bit unfortunate. If the nursing home resident’s funeral has not yet been prepaid, that may be the best use of the money. But here are some answers to your questions with the caveat that practices may be a bit different in your state, meaning that to be certain you will need to consult with a local elder law attorney. During the calendar month of receipt, the funds are treated as income and must be used to pay the nursing home. After the first of the following month, they are treated as a resource and if the recipient has more than the asset limit in his state, he will be ineligible for benefits until the amount is spent down. He will have to pay for his own costs until the money is spent down. As mentioned above, the best way to spend it down quickly may be to prepay his funeral costs. There may be other ways available and we strongly recommend that the family consult with a local elder law attorney. To find an attorney near you, click here. It is not the nursing home’s money. The patient or his agent should have the right to manage it. It’s unlikely that the VA will pay for the nursing home. But there are exceptions, so it can’t hurt to ask.

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Last Modified: 03/07/2018
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