Dad’s Private Money Will Run Out After 26 Months. The Nursing Home Will Say Its Medicaid Beds Are Full and Give the Family 30 Days to Move Him. Federal Rules May Not Let It

Picture a father who has spent 26 months in the same bed, by the same window, with the same aide who knows how he takes his coffee. His savings have paid the private rate every month of that time. Now the account is nearly empty, the family has filed his Medicaid application, and the business office drops the news: the Medicaid beds are full, and the family has 30 days to move him somewhere else.

That speech sounds official. But if Dad is already in a Medicaid-certified bed, federal rules sharply limit the facility’s ability to discharge him simply because his payer changes. Switching from private pay to Medicaid is not the same thing as failing to pay.

The scale of the issue is larger than most families realize. As of July 2025, there were 14,742 federally certified nursing facilities in the United States, housing more than 1.2 million people. The vast majority of them, about 94.6%, are dually certified for both Medicare and Medicaid. That means the scenario playing out in this family’s business-office meeting is happening at nearly every nursing home in the country. And it happens often: nearly one in six nursing home residents who were admitted under Medicare or private pay end up enrolling in Medicaid during their stay after depleting their financial assets. After four years in a nursing home, 61.8% of residents who began as private-pay had transitioned to Medicaid.

Two Questions Hiding Inside “Our Medicaid Beds Are Full”

Families tend to hear that line as one fact. It is really two.

First, does the facility take part in Medicaid at all? Second, does Dad’s particular bed sit inside the Medicaid-certified part of the building? Some facilities certify only part of a building, so the answer to both questions matters.

When both answers are yes, the “full” claim mostly falls apart. Dad already sleeps in a certified bed, and a new payer leaves that certification exactly where it was.

Families also mix up the two programs involved. Medicare covers only short skilled nursing stays after a hospital visit for older Americans. For people with limited income and assets, Medicaid pays for long-term custodial care once private money runs out. Once short-term Medicare coverage is over, a stay like Dad’s is generally paid privately or, if he qualifies, through Medicaid. In 2025, Medicaid was the primary payer for 63% of nursing home residents, with another 23% paying privately or through private insurance, and Medicare covering 14%.

Only Six Legal Grounds for Discharge Under 42 CFR 483.15

Federal regulation 42 CFR 483.15 permits a facility to discharge a resident against the family’s wishes for only six reasons. In plain English:

• The move is necessary for Dad’s welfare because his needs exceed what the home can provide.
• His health has improved enough that he no longer needs the facility’s services.
• His clinical or behavioral condition threatens the safety of other residents.
• The health of others in the building would otherwise be at risk.
• He failed to pay after reasonable and appropriate notice.
• The facility shuts down.

Look at what is missing. Nothing on that list covers a resident whose bill moves from a personal checking account to the state. For a resident who becomes eligible for Medicaid after admission, the facility may charge only what Medicaid allows. The home cannot demand the private rate as the price of keeping his room.

States can go further. Federal rules require a facility to maintain identical policies and practices regarding transfer and discharge regardless of payment source, and prohibit discrimination based on payment source. Some states build on that federal floor with even stricter protections. Each state also runs its own appeal hearings, which means deadlines and procedures vary depending on where Dad lives.

When the Facility’s Claim Can Actually Hold Up

The protection does have limits, and three situations change the result.

If a home does not take part in Medicaid, it cannot bill Medicaid for Dad’s care, so once his savings run out, the nonpayment grounds can apply. A bed outside the certified section raises the same problem, since Medicaid pays only for care in a certified bed. And real nonpayment counts too. If the family never completes the Medicaid paperwork, or the state properly denies the application and nobody pays the bill, the facility has a legal basis to discharge him.

The family’s best defense, then, is a complete Medicaid application, filed on time, with every requested document turned in promptly.

What a Legal 30-Day Discharge Notice Must Include

If a discharge notice arrives anyway, its contents matter. Under 42 CFR 483.15(c)(5), the written notice must include the reason for transfer or discharge, the effective date, the location to which the resident will be transferred or discharged, a statement of appeal rights, and contact information for the entity that receives appeals. It must also include details on how to obtain an appeal form and assistance. The facility must send the ombudsman a copy at the same time.

Unless the safety of other individuals in the facility would be endangered, notice must be given at least 30 days prior to the intended transfer or discharge. Once the family files an appeal, Dad generally cannot be discharged while it is pending unless keeping him there would endanger his health or safety or that of someone else. A notice that skips any of these required elements gives the family more grounds to challenge.

The ombudsman is worth calling the same day a notice arrives. In April 2025, CMS updated its guidance on nursing facility regulations, reinforcing the requirement that facilities send all written discharge notices to both the resident and the long-term care ombudsman. Long-term care ombudsman representatives help address serious complaints including involuntary discharge or eviction, and their services are free. Nationally, ombudsman programs resolve or partially resolve about 72% of complaints to the satisfaction of the resident or complainant.

Ask About Medicaid Conversion Before Signing for Month One

The family has the most leverage before Dad ever moves in. Before signing the first private-pay admission agreement, ask whether the facility takes Medicaid, which beds are certified, and what written policy applies when a private-pay resident switches payers. Find out whether a conversion would mean a room change. Federal rules already prevent a facility from requesting or requiring residents or potential residents to waive their rights to Medicare or Medicaid, or to promise they will not apply for Medicaid benefits. Asking these questions in advance carries no risk.

The nursing home may tell him to pack his bags when the money runs out. Federal law may give him the right to stay.

Editor’s note: This article was updated to include July 2025 federal data showing 14,742 CMS-certified nursing facilities with 94.6% dually certified for Medicare and Medicaid, 2025 payer-mix figures showing Medicaid covers 63% of nursing home residents, research finding that 61.8% of private-pay residents transition to Medicaid within four years, and the April 2025 CMS guidance update reinforcing the requirement that all discharge notices be sent to the state long-term care ombudsman.

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