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New Part B Medicare Changes Affect Rehab
Jan L. Warner & Jan Collins

Question: My father had a stroke nearly four months ago that caused him to lose the use of his right side and affected his speech. After several weeks in the hospital, he was discharged to a nursing home where he has been receiving physical, speech, and occupational therapy for rehabilitation. Since he has been making good progress and since he and Mom have a Medicare Supplemental policy, the nursing home has told us that they believe he should be able to receive 100 days of rehabilitation that will be paid for by Medicare. While Mom wants to be able to take him home, we all realize that Dad will require continued rehabilitation and therapy after he leaves the nursing home in order to avoid a decline in his condition. Are we correct in assuming that continued therapy will be available to him through Medicare at home after he is discharged?

Answer: Unfortunately, your father’s progress – not to mention the progress of quality of life of tens of thousands of seniors like him – may well be stymied by Medicare Part B financial limitations on outpatient rehabilitation services that became effective on July 1, 2003. Based on these limitations, your father’s annual outpatient rehabilitation allowance will be $1,590 for both physical therapy and speech therapy, and $1,590 for occupational therapy. But since these figures are before the $100 deductible and 20 percent coinsurance payment, the actual Medicare reimbursement for the year will be $1272 for PT and speech combined and $1272 for OT if the $100 deductible has been met, and $1192 if it has not.

We believe that these limitations – which do have some exceptions -- will result in many folks like your father not having a chance to reach maximum improvement. In turn, this means that staying home in the least restrictive environment may not be an option. Instead, folks like your Dad will find themselves back in the nursing home on Medicaid or in a hospital at a much greater cost.

While this makes absolutely no economic sense to us, maybe the sleight of hand artists in Congress can explain it. And while you are at it, find out if the Congressional health plan contains similar limitations. We bet not. And when they tell you how they are looking out for seniors by giving them a prescription drug program, ask them how much of that money is being diverted from rehabilitation therapy coverage that could have kept your Dad and others like him at home.

Question: My wife and I have been loyal readers of your column for years. We are in our late 40’s. When should we begin planning?

Answer: If you subscribe to the theory that planning should begin at a time when you have the greatest number of options available, then the health care and long-term care planning process should start as early as possible --- especially if: 1) you are over age 40; 2) you have parents who are age 62 or older; 3) you live in one of the 30 states that makes children responsible for their parents' medical care; 4) you have a disabled child; 5) you are divorcing; 6) you are divorced and are paying long-term support to a former spouse; 7) you are over age 45 and are remarrying; or 8) you have a history of Alzheimer's Disease, stroke, or other chronic illness in your family.

What should you do? Understand that the only ways to pay for long-term care are 1) out of your pocket -- an option only available to the most wealthy; 2) Medicaid after you have become impoverished; or 3) long-term care insurance. , And remember that if you remarry and have a premarital agreement that says you are not responsible for your spouse's obligations, this agreement is not binding on third persons -- meaning that if your spouse enters a nursing home, your assets can be tapped for this care. And understand that if you are over age 65, Medicare will only pay for nursing home care in limited circumstances for a limited period of time.

Where should you get help? If your automobile broke down, not many of us would run to the computer to see if we could find a way to fix it. So seek the advice of a qualified attorney in your state who can explain to you the rules of the game and prepare, at a minimum, durable powers of attorney for finances and health and wills that are designed for your specific circumstances. And look into long-term care insurance as a way to either fully or partially fund long-term care.

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