Some assisted living homes to close because of Medicaid waiver denials

In the continuum of care for Homer’s senior population, a group in the middle not sick enough to require full nursing care but not well enough to live independently has fallen victim to what some say is a change in how the Alaska Department of Health and Social Services reviews Medicaid Choice waivers. 

Medicaid Choice allows qualified seniors to get financial assistance that pays for the cost of assisted living homes. For some reason, in the past few months, many seniors in Homer and elsewhere in Alaska getting Medicaid Choice have had help denied after annual assessments show they’re no longer qualified because they’ve shown “material improvement” — the state’s term for getting better.

Main Street Assisted Living Home owner Ruth Babcock said she will be issuing a 90-day closure notice because three of five residents have been denied Medicaid waivers. The trend also threatens two more homes Babcock runs. Other small assisted living centers also face closure. While some seniors have family they can stay with in Homer, others do not have local family and have exhausted most of their income. 

“I think the government wants to save money,” Babcock said. “They want the elders out on an ice floe.”

State regulations on Medicaid Choice waivers haven’t changed and there hasn’t been a change in the assessment process or funding, said Jon Sherwood, DHSS Deputy Commissioner for Medicaid and Health Care Policy, in a phone interview in late November. 

On average, about 30 percent of waivers are denied. People who have had waivers denied can appeal, and don’t lose waivers until a decision on the appeal has been made.

“Before we can take them off the waiver, we have to go through a material improvement process,” Sherwood said. “The burden of proof is on us to prove they don’t meet the level of care.”

Many of Homer’s seniors live independently by themselves or with family. They might need a little extra help with shopping and cleaning, but do fine on their own. 

At the other end are elderly living in the only local home with full 24-hour nursing care, South Peninsula Hospital’s Long Term Care facility. 

In the middle live seniors who need assisted living. They need help with cooking, bathing, taking medications and getting personal care. That kind of assistance doesn’t come cheap, about $5,800 a month at assisted living homes like Friendship Terrace run by Homer Senior Citizens or the three, 5-resident homes owned and operated by Babcock. Most of the cost at her homes is for paying 24-hour caregivers, Babcock said. That rate includes room and board.

One resident of Babcock’s Kachemak Way Assisted Living Home is Gail Sorensen, 89, a retired nurse who wrote “Ah Lee,” a memoir about her work helping set up emergency medical systems in Alaska.

Sitting at a big family table in a large house with an awesome view of Kachemak Bay, you might not think Sorensen lives in an assisted living home. Colorful artwork hangs from the walls. A cat sits by the window. Sorensen, 89, sips a banana smoothie while her son, Kent, visits. Certified nursing assistant Patty Bertsch hangs about to grab a napkin or refill Gail Sorensen’s drink.

“It’s a home, a family. I like the people, the residents, the staff … They run a house that’s a human place, ” Sorensen said.

That’s now. Three years ago, Sorensen lived by herself in a two-story house in Old Town. She’d forget to take medicines. Sometimes she would put a kettle on the stove and go upstairs to practice the drums — Sorensen once was a member of Homer’s community band — and forget the kettle. Her son Chip said she burned a lot of pots that way, but fortunately didn’t burn down the house. Gail Sorensen didn’t eat consistently either. All that spiraled into a medical crisis.

“They clutched her back from the jaws of death. I thought she was done,” Chip Sorensen said. “And then she came to the assisted living home and she improved and improved from there.”

At Kachemak Way, Sorensen gets consistent meals. A caregiver makes sure she takes her six prescription medicines twice a day. She gets help with bathing. Sorensen does crafts to keep her hands working — she has carpal tunnel syndrome — and her mind busy.

That kind of care has put Sorensen in a Catch-22. She couldn’t live at home alone and got better in assisted living, but because she’s gotten better, state Medicaid Choice assessors ruled she no longer qualifies and denied her eligibility. Sorensen has appealed that ruling and has a telephonic hearing with a judge next Tuesday.

That’s the spot Sorensen and other seniors in similar situations on Medicaid Choice find themselves in. 

Babcock and several care coordinators who work with the elderly said an uptick in denials for seniors who previously had waivers started to happen last summer when a new person started doing assessments. Regulations require an annual assessment by an assessor who’s a nurse.

Jeran Marchbanks, a care coordinator with South Peninsula Hospital who said he’s not speaking for the hospital, said that new assessor took a literal interpretation of a “person centered” assessment, meaning the interview was directed at the elder, even if the elder had dementia or other cognitive issues. A good assessor would involve the family or caregivers, he said. That nurse quit doing assessments and a new nurse was assigned to do Medicaid Choice assessments.

Duane Mayes, director of the Alaska Division of Senior and Disabilities Services, said even if assessors changed, the process has been consistent.

“We have put a lot of time in making sure we’re consistent in how we do our assessment and reassessments,” he said.

Sherwood said for seniors to get Medicaid waivers, they have to meet the nursing home level of care to be in an assisted living home, even if the home doesn’t provide that more intensive level of care like what is provided at SPH’s Long Term Care.

DHSS has to be careful because of federal oversight, Mayes said.

“What we don’t want to do is have people we have carelessly made eligible for the waiver program and have the feds do an audit of our system to find the person doesn’t meet the eligibility requirements,” he said.

Because Friendship Terrace requires residents to qualify at the nursing home level of care, that home hasn’t had as many problems with denials of Medicaid waivers, Homer Senior Citizens Executive Director Keren Kelley said in a November interview.

Kelley did have two residents who had waivers denied. Both were reversed on appeal and the residents kept their waivers, she said. Kelley also said some care coordinators didn’t understand the process for doing assessments by following the nursing home level of care rules.

“We’re all learning about Medicaid waivers. Not everybody qualifies,” she said. 

Something changed, though, Marchbanks said. He said he’s been told by the state that there have been more waiver appeals filed in the past six months than there have been in the past six years. 

Chip Sorensen disputed the criteria that a senior with a Medicaid Choice waiver has to meet the higher nursing home care standard. He said that on assessment forms there’s a check box that says the senior does not qualify for nursing level or intermediate level of care, but in the assessment scores the form only looks at nursing level of care.

Sorensen cited a section of Alaska Statute AS 47.07.045 that says an older Alaskan is “materially improved” — i.e., not qualified for a waiver — if the person no longer has a limitation or impairment that requires a nursing home and is able “to demonstrate an ability to function in a home without the need for waiver services.” Sorensen emphasized the “and,” meaning he thought an assessment should be done to see if the elder does not need intermediate services.

Babcock also mentioned another Alaska regulation, 7 AAC 140.510, that says the state will pay for intermediate care if it’s needed to treat a stable condition, a physician signs off on it and it’s provided to a recipient who does not need nursing level care.

If a senior loses a Medicaid Choice waiver and an appeal, he or she can go on general relief, which pays about half the amount as Medicaid. Babcock said she can absorb one or two residents per home on general relief, but that if it goes beyond that her business plan isn’t sustainable.

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Next week: What happens next? The Homer News will explore that issue in the second part of this series.

Michael Armstrong can be reached at