What is Nursing Home Level of Care & Its Importance to Medicaid Eligibility

Last updated: May 26, 2020

 

What is “Nursing Home Level of Care” (NFLOC)?

A “nursing home level of care”, also called a nursing facility level of care and abbreviated as NFLOC, is a measure of care needs that must be met for Medicaid nursing home admissions. This level of care is also frequently used as a criteria for one to receive long-term care services and supports from a home and community based services (HCBS) Medicaid waiver. Please note; there is also a care need criteria for personal care assistance or attendant care through a state’s regular Medicaid program (commonly referred to as Aged, Blind and Disabled Medicaid for persons who fall into this category). However, the care need requirement is often lower than a nursing home level of care.

he term “nursing home level of care” is not easily definable, as there is no formal federal definition. Instead, each state and the District of Columbia has the task of defining what this means in their own state. Although the rules are not consistent from one state to the next, the following four areas are commonly considered when a state determines a person’s level of care need. Remember, these are generalizations, which means all states likely do not consider all four areas.

1. Physical Functional Ability
One’s ability (or inability) to complete day to day activities, called activities of daily living (ADLs) are very often taken into account. These are basic activities that a person must complete on a daily basis in order to take care of oneself. These activities include bathing and personal hygiene, putting clothes on and taking them off, using the toilet and cleaning up after oneself, mobility / transferring (walking from one room to another, getting out of bed and into a chair), and eating.  Take an online ADL assessment here.

In addition, instrumental activities of daily living (IADLs) may also be taken into account. These activities do not necessarily need to be done on a daily basis, but are necessary to live independently. Examples include shopping for groceries and other essentials, meal preparation, housecleaning, laundry, medication management, and paying the bills.

2. Health Issues / Medical Needs
One’s health, or medical needs, are also frequently considered when determining if a senior meets a nursing home level of care. Examples includes needing assistance with injections, catheter care, and intravenous (put into a vein) medications.

3. Cognitive Impairment
Cognitive (mental) functioning may also be considered when determining if a senior meets a NFLOC. This area is particularly relevant for persons who have Alzheimer’s disease or a related dementia, such as dementia from Parkinson’s disease or Lewy body dementia. If a senior’s judgement is impaired, he / she may not be able to make appropriate and / or safe decisions, putting himself / herself in danger if living independently without supervision and assistance.

4. Behavioral Problems
Behavioral issues, also commonly seen in persons with dementia, particularly in the mid-late stage of the disease, may also be taken into account when determining if an individual meets a nursing home level of care. Examples of such behaviors may be frequent wandering from the home and becoming lost, impulsiveness, and aggressiveness (physical, sexual, verbal).

 Learn more about Medicaid coverage of nursing home care.

 

How is NFLOC Determined?

States use functional assessment tools in order to determine if a person meets a nursing facility level of care.

These long term care assessments generally consist of a compiled list of questions (usually on paper, but sometimes in a database). The most common functional consideration is one’s ability / inability to perform one’s activities of daily living (bathing, dressing, grooming, etc.). The questions may ask how often (how many times each day / how many days each week), for how long (how many minutes), and what type of assistance (verbal cues, assistive devices / adaptive equipment, hands on assistance, 100% dependent) a person requires.

Questions regarding one’s health, mental functioning, behavior, and family support may also be included. With these questionnaires, a state may set a minimum score (a threshold number) and if the candidate reaches that score, it indicates he / she meets the LOC need. For instance, the requirement of verbal ques to perform an activity might earn 1 point, the physical need for assistance might earn 2 points, troubling behavior such as wandering might earn 3 points, and the need to be constantly supervised to ensure safety might also earn 3 points. Other states may set a minimum number of ADLs in which a senior requires assistance, and if he / she cannot perform the minimum number of ADLs set forth, he / she meets the nursing home level of care requirement. Some states may consider needing assistance with 2 ADLs as sufficient to be labeled as requiring a NFLOC, while other states may require assistance with 4 ADLs. Still, other states set forth specific definitions and rules and the person completing the LOC assessment uses them as a guideline. Regardless of how the state makes its determination, most states look at a combination of factors, as mentioned above.

In addition, some states may require a physician diagnosis of specific medical conditions or a statement that the Medicaid applicant requires the level of care provided in a nursing home.

 Being assessed as requiring Nursing Facility Level of Care in one state does not mean one will automatically receive the same assessment in any other state.

As with the definition of NFLOC, the federal government does not require states to use a specific long term care assessment. This means that a large number of functional assessment tools exist nationwide. In fact, according to MACPAC, more than 120 tools are used, some of which are state-developed. Therefore, there is no consistency between states as to how this determination is made, and because of this, a senior may meet a nursing home level of care in one state, but not in another state.

 

Why It’s Important to Medicaid Eligibility

One’s level of care need is crucial to being eligible for nursing home Medicaid, as the program will not pay for nursing home care if an applicant does not require a level of care that is consistent to that which is provided in skilled nursing facilities.

This is significant in that many families are in the position that their loved one requires more care than they can provide at home, but they do not require a high enough level of care to be admitted to a nursing home. The in-between level of care is typically provided in assisted living. However, assisted living is only covered by Medicaid in a very limited capacity.

Many Medicaid waivers also use a nursing home level of care as a criteria to receive long-term services and supports in the home and community, which may include home care, adult day care, and adult foster care. (Remember, Medicaid also has income and asset requirements as well. State specific eligibility information can be found here).

Again, Medicaid determination of a nursing home level of care in one state does not mean that the same individual will meet this level of care in another state. For instance, say an elderly individual is currently receiving long-term care Medicaid in California, but wishes to relocate to Florida. It cannot automatically be assumed that the senior will meet the NFLOC in Florida.

 

How Medicaid Determines NFLOC (the Functional Assessment Process)

Like the criteria to meet a nursing home level of care, the functional assessment process for long-term care Medicaid eligibility also differs based on the state (and potentially the Medicaid program for which one is applying). While the focus of this article is on NFLOC, it is important to mention that regardless of the Medicaid program providing long-term services and supports, be it nursing home Medicaid, home and community based services via a Medicaid waiver, or personal care assistance via the regular state Medicaid plan, a functional assessment is a vital process in determining Medicaid eligibility.

Some states require a Medicaid applicant to fill out and submit a functional assessment intake form, essentially an initial screening, prior to undergoing a long term care assessment. This functional screening often inquires about one’s current living situation (i.e., alone, with spouse / others, an adult foster care home, nursing home, etc.) and the areas in which one has issues and concerns. For example, is the individual unable to perform activities of daily living, such as bathing, mobility, and eating, without assistance? Is the individual having behavioral or cognitive issues? Are there signs pointing to a potential mental illness?

Consent must be given by the Medicaid applicant, or his / her legal guardian, in order for a functional needs assessment to be completed. Furthermore, a release of information form may be necessary, as the collection of other information, such as medical records, may be part of the functional assessment process. That said, information obtained via the functional assessment is considered confidential.

In most cases, it is required that the functional needs assessment be done face-to-face. This may occur in one’s home, a hospital, an assisted living residence, a nursing home, or in another setting. That said, one’s primary residence is the best setting in which to conduct the functional assessment, as this enables the screener to observe the Medicaid applicant in his / her natural living environment.

In addition to the Medicaid applicant being questioned as part of the functional needs assessment, nonverbal cues, such as facial expressions and body language, may be taken into account. The individual might also be observed performing day to day activities in his / her home. Furthermore, persons who are familiar with the Medicaid applicant may be asked to provide additional information. Often, it is the spouse, an adult child, or a healthcare provider that provides supporting evidence of functional need.

It is difficult to say how long the actual long term care assessment takes, given different functional tools are used based on the state and Medicaid program in which one is applying. That said, it is thought that the administration of the assessment should take no longer than a few hours.

Not only do functional needs assessments help to determine if a program applicant meets the program’s functional eligibility requirement, but they sometimes also serve as the tool to create a care plan (service plan) for the Medicaid applicant. (Some states use a separate tool, a more extensive needs assessment, for this purpose). With the creation of a service plan, the specific types of care and the amount of care that is required is established. For instance, a service plan for a senior with early stage Parkinson’s disease dementia might indicate he / she requires 20 hours of personal care assistance and homemaker services, as well as home modifications to continue to safely live at home.

 

When in the Application Process Is the Functional Assessment?

A long term care assessment to determine a NFLOC is key in determining if a Medicaid applicant meets the functional criteria for long term care Medicaid. This part of the application process is as crucial as determining financial eligibility. Without a functional need, a Medicaid applicant will be denied long term care, and without a financial need, a Medicaid applicant will also be denied coverage. Therefore, these two components of eligibility are equally important and are considered early in the application process.

While the average length of time it takes for a functional needs assessment to be scheduled is unknown, it is thought that the process proceeds rather quickly. On average, it generally takes 45-90 days from the date of application to approve or deny one’s Medicaid application, and the functional assessment must have been done prior to a Medicaid determination.

 

Who Pays for the Determination?

Since the functional assessment to determine level of care need is part of the Medicaid application process, Medicaid pays for the assessment. Said differently, the person who is in need of long-term care Medicaid does not pay for the assessment.

 

Is Redetermination of Functional Need Required?

Aside from the initial functional needs assessment to determine a nursing home level of care, subsequent functional needs assessments are required at a minimum of every 12-months to ensure the program participant continues to meet the functional need. In other words, a redetermination of functional need is required.

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