Nursing homes say Erie County owes them millions in unpaid Medicaid money

Jul. 10--Erie County government has the worst track record in the state for processing Medicaid payments, holding up millions of dollars that puts resident care at risk, according to a statewide organization that represents hundreds of nursing homes.

"There's instances where nursing home residents have passed away while waiting for their Medicaid applications to be processed by the county," said Stephen Hanse, president and CEO of the New York State Health Facilities Association. "That is not how the system is designed to work."

As of May, the county had 681 Medicaid reimbursement claims pending for at least three months, even though federal law requires claims be processed within 45 days. The late claims are tying up more than $24 million owed to area nursing homes, Hanse said.

Erie County has taken months, even longer than a year to reimburse nursing home Medicaid claims, the association said, even though the nursing homes have filed virtually identical Medicaid applications with other counties and received payment.

The association represents a majority of the three dozen nursing homes in Erie County, and it also represents roughly 450 nursing homes and assisted living facilities in every county across the state. No other county has had so many complaints, Hanse said.

"We're not seeing this anywhere else in the state," he added.

Local leaders say the county has been struggling with a backlog since last year, and they place much of the blame on care providers who are submitting incomplete reimbursement applications.

"It is wrong to suggest that a delayed determination is solely the result of ineffectiveness by the department," Social Services Commissioner Marie Cannon said in a statement. "Due to the onerous documentation requirements, determining eligibility for these cases is a complex process."

Cannon said more than 41% of all nursing home applications submitted to the county are incomplete, with no documentation or verification provided.

"It would be reckless and financially irresponsible to approve such applications without conducting our due diligence," she said.

In addition, the county has struggled with short staffing and a growing volume of cases from year to year.

Nursing homes have long struggled with what they call low reimbursement rates, and now they're paying more for equipment and supplies to address the Covid-19 health crisis, association representatives said. On top of that, nursing homes are seeing fewer admissions due to the crisis. That's creating cash flow problems.

Cornelius D. Murray, the Albany-based lawyer representing the association, sent a letter to the state Department of Health asking for its assistance in breaking through the county's "bureaucratic bottleneck."

He cited one case in which county employees repeatedly demanded that a patient in her 90s provide five years of back tax returns, even though the patient said she didn't file any tax returns during those years because she didn't have any income.

"It's just ridiculous," Murray said. "We've had enough."

Association and local care providers met face-to-face with county officials in November to try and resolve the delays. Many brought specific cases with them to prove that information the county had repeatedly requested had, in fact, already been provided. Another had an unresolved file nearly 1 foot thick.

Some providers also said they would submit their claims to the county and receive no response for months, only to find when they followed up that the county was still waiting on a piece of information, Murray said. In his letter to the state, he also pointed out that some of the information requested by the county was "extraneous and irrelevant" to the reimbursement process.

"We are concerned that governmental entities are not abiding by the law at the very same time facilities are being asked to abide by a number of directives from the Department of Health and executive orders under threat that failure to comply will meet in the revocation of their operating certificates," Murray wrote.

Cannon said almost all nursing homes request extensions beyond 45 days to submit required information to the county because nursing home applications require a five-year look back period regarding a patient's income, resources, property and other assets.

She added that the county has allowed many Medicaid reimbursement cases to remain "pending" despite ongoing failure of nursing homes to provide required documents. In light of the concerns, however, the county is now reviewing all reimbursement claims that have been pending for 90 days or more, issuing a final 10-to-14 day request for the missing information, then denying applications that still lack the needed information.

Murray countered that the county's "unwarranted" requests for additional documentation are being used as excuses for not meeting its legal obligations for processing Medicaid reimbursements. He also referred to a state directive three months ago that allows a relaxation of documentation requirements to process eligibility applications.

"You send in an application. You'll hear nothing for 4 1/2 months," he said. "If the application is incomplete, let us know what it is. Don't wait 4 1/2 months before telling us, 'Oh this is missing, and we've been doing you a favor by not rejecting it as incomplete.' "

Murray said he could point to numerous instances of delayed reimbursement applications where patients and their representatives have been unable to reach the county employees responsible for processing their claims. In other cases, employees have said they were understaffed and overwhelmed by claims.

Both he and Hanse said it goes against logic for the county to suggest that cash-strapped nursing homes and assisted living facilities are dragging their feet in doing whatever is necessary to get paid.

Cannon said the county had made adjustments to speed up the processing of Medicaid reimbursement claims. They include technological upgrades, such as enhanced use of email, improving its application tracking process and other efforts by supervisors to streamline application reviews.

The department has also made some personnel transfers and will be using overtime to help address the backlog. But due to the county's ongoing hiring freeze and existing vacancies in the department, responding to the backlog "presents an ongoing challenge," Cannon said.

Hanse acknowledged that the county has made efforts to try and improve communication, "but for some reason, it's really not working."

He added that the Health Facilities Association has no desire to litigate the matter. It just wants the delays resolved and has offered to provide any assistance it can. The association has also suggested Erie County reach out to other counties where applications are being processed in a more timely manner, including Monroe and Onondaga counties.

Murray said he sent a letter to the state's Medicaid director and copied the letter to 14 other state and county administrators and elected leaders because Erie County seems unable or unwilling to fix its problems on its own.

"We're just going to pound and scream until they do something about it," he said.

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