The Nursing Home Sent Dad a 30-Day Discharge Notice for Nonpayment While His Medicaid Application Sat. Federal Law Says They Can’t. Most Families Don’t Know That

Picture a scenario elder law attorneys describe constantly. Dad’s Medicare rehabilitation coverage runs out after a hip fracture, so he stays in the same Medicaid-certified nursing home for long-term custodial care. His daughter files the program’s long-term care application, hands over every bank statement the county requests, and gets a case number. Three weeks later, a certified letter arrives from the facility’s business office: 30-day notice of discharge for an unpaid private-pay balance.

The letter looks official. In most cases, it isn’t enforceable. Federal regulation 42 CFR 483.15 lists only six lawful grounds to remove a nursing home resident, and CMS  uses “nonpayment” narrowly: it applies when the resident fails to submit the required third-party paperwork, or when Medicare or Medicaid denies the claim and the resident then refuses to pay. A pending Medicaid application is neither. Most families may not know that and can become victims of their own confusion.

Why a Pending Medicaid Claim Blocks a Nonpayment Discharge

Medicare and Medicaid do different jobs, and this is where families get tripped up. Medicare is the federal insurance program that pays for short skilled nursing stays after a hospital admission. Medicaid, jointly funded but state-administered, is what actually pays the long-term custodial bill once a resident spends down to the asset limit. When Medicare runs out and the Medicaid file is still sitting on a caseworker’s desk, the facility is looking at a pending third-party claim, not a refusal to pay.

CMS surveyor guidance in the State Operations Manual, Appendix PP, tells facilities they should help residents complete third-party payment paperwork, not punish them for state processing delays. If the daughter submitted the application and is answering every follow-up request, the facility cannot convert the county’s backlog into this family’s refusal to pay.

Two boundaries matter. First, Dad still owes his required patient-pay amount from Social Security, pension or other income. Skip that contribution and the protection weakens. Second, if Medicaid decides to deny the application and the patient is unable to pay the private-pay balance, the nursing home can discharge for reason of nonpayment. The pending-claim shield holds while the claim is actually pending.

What a Valid 30-Day Notice Has to Say

A valid discharge notice must meet specific federal requirements beyond appearing on letterhead. Under the federal rule, it generally must arrive at least 30 days before the proposed discharge and must state the specific reason, the effective date and the proposed destination. It must explain the resident’s appeal rights and identify the state entity that receives the hearing request, and it must include contact information for the State Long-Term Care (LTC) Ombudsman. The facility is also required to send the ombudsman a copy. Shorter notice is allowed only in certain situations: urgent health needs, danger, sufficient improvement, or a resident who has been there fewer than 30 days.

A notice missing any of those pieces is worth flagging in the appeal.

Ombudsman Helps, Hearing Office Decides

Families often misunderstand who decides the appeal. The formal appeal goes to the state hearing entity named in the notice, and hearing procedures, filing deadlines and even the name of that office vary state by state. The ombudsman can review the notice, call the administrator, help gather records and steer the family toward legal aid, but ordinarily doesn’t decide the case. Once a timely appeal is pending, the facility generally may not transfer or discharge the resident unless keeping him would endanger health or safety, which the facility must document.

What Families Should Put in the Folder Today

Elder law attorneys tell families to assemble one packet and copy it to the administrator, business office, ombudsman and hearing office. Keep originals at home. The packet should include the Medicaid application receipt and case number, copies of every submitted form and supporting document, proof of responses to later information requests, records showing the required patient-pay amount has been paid, and the discharge notice and admission agreement. Written confirmation from the Medicaid agency that the application remains pending is the single most useful page in the stack.

One more line worth knowing: the facility cannot require the daughter to use her own money or personally guarantee Dad’s bill as a condition of his continued stay. And a trip to the emergency room cannot be used to facilitate through the back door what the discharge rules would not allow through the front. If Dad still needs nursing-home care and stays eligible for Medicaid, the home should return him to his previous room if possible or the next available semi-private bed. If the outcome is that he cannot return, the facility must follow the formal discharge process. The county’s pile of unfinished applications didn’t turn Dad into a nonpaying resident. The 30-day letter was a deadline to answer, not permission to put him out.

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