Delayed Payments, Denied Care: The Medicaid Issue Impacting Hospice Patients
Delayed/Denied Medicaid reimbursements for nursing home room and board could threaten access to care for hospice patients in California and possibly other states. Imagine providing compassionate end-of-life care, only to be left footing the bill for essential services—again and again. Across California and beyond, hospices are struggling with a Medicaid reimbursement crisis that threatens patient access, strains resources, and puts providers in financial jeopardy. How did we get here, and what can be done to fix it?
Hospices in California are facing an escalating crisis—one that could determine the future of end-of-life care for some of the state’s most vulnerable patients. At the heart of the issue is a tangled web of Medicaid reimbursements, bureaucratic confusion, and financial strain that threatens to pull the safety net out from under hospice providers.
For years, hospices have relied on Medicaid to reimburse them for room and board costs when caring for dually eligible patients in nursing homes. It was a system that worked—until it didn’t. The shift to managed care organizations was meant to streamline payments, but instead, it has created a financial black hole. According to Craig Dresang, CEO of YoloCares, hospices across the state are watching their claims be denied, delayed, or outright ignored. The result? Thousands of dollars per patient in unpaid room-and-board costs, pushing some providers to the brink of financial collapse.
YoloCares alone is on the hook for more than a million dollars in unreimbursed payments. One health plan alone owes the nonprofit over $500,000. And it’s not just about the money—these delayed payments could have serious legal consequences. Sheila Clark, president and CEO of the California Hospice and Palliative Care Association (CHAPCA), warns that if hospices continue covering these costs without reimbursement, they risk being accused of offering illegal inducements. In other words, what started as a payment issue could quickly escalate into a regulatory nightmare.
Meanwhile, hospice staff are drowning in paperwork, scrambling to dispute denied claims and navigate a system that seems designed to fail them. “Payers don’t know how to handle the room and board, and it’s new to them. They aren’t well educated on it,” said Robert Love, executive director of Butte Home Health and Hospice. That lack of knowledge is costing hospices hundreds of thousands—if not millions—of dollars across the state.
But the real tragedy isn’t just the financial fallout; it’s what this means for patients. If hospices can’t get reimbursed, they may be forced to cut services or even stop accepting nursing home patients entirely. Skilled nursing facilities, which rely on timely payments, may rethink their partnerships with hospices, creating yet another barrier to compassionate end-of-life care.
Faced with this mounting crisis, California hospices have banded together, determined to fight back. They’ve taken their concerns to CHAPCA, which has been working tirelessly to engage Medi-Cal, managed care plans, and state regulators. These efforts have already led to some important clarifications: prior authorization isn’t required for room-and-board payments, and hospices don’t need contracts with health plans to receive reimbursement.
In response, California’s Department of Managed Care is stepping in, preparing an All-Plan Letter that will lay out exactly how these payments should be handled. Some health plans have taken notice and are beginning to cooperate, but others remain silent.
The coming months will be critical. If these efforts succeed, hospice providers may finally get the relief they need. If they don’t, the consequences could be devastating—not just for the hospices struggling to stay afloat, but for the patients who depend on them in their final days. The fight to protect end-of-life care is far from over, and for many, it’s a battle worth waging.
Key Issue:
The problem centers around patients in nursing homes who are dually eligible for Medicare and Medicaid.
Hospices typically cover room and board costs for these patients, expecting reimbursement from Medicaid.
Due to confusion in managed care plans, some hospices are not receiving those reimbursements, leading to significant financial losses.
How the Managed Care System Works:
California’s Medicaid program, Medi-Cal, manages its safety-net health coverage through health plans.
Medi-Cal pays the health plans, which are supposed to reimburse providers.
However, some managed care plans are either denying claims or delaying them until they are no longer billable.
According to Craig Dresang, CEO of YoloCares, this has resulted in millions of dollars in losses for hospices.
Financial & Compliance Implications:
Hospices are being forced to pay out thousands of dollars per patient without reimbursement.
Example: YoloCares is currently owed more than $1 million in room-and-board payments, with one plan alone owing over $500,000.
Regulatory concern: Non-reimbursed payments to nursing homes could be seen as inducement by the federal government, raising compliance issues.
The burden on hospice staff is increasing as they deal with claims denials, billing disputes, and administrative challenges.
Why This Matters for Patient Care:
Financial strain on hospices could lead to reduced services or closure of programs.
Delayed or denied payments may force hospices to reconsider admitting nursing home patients, limiting access to end-of-life care.
Skilled nursing facilities expect timely payment, and hospices struggling with reimbursement may face difficulties maintaining these partnerships.
Root Cause: Lack of Understanding of Hospice Care:
Many health plans are unfamiliar with the unique reimbursement structure for hospice room and board.
According to Robert Love, Executive Director of Butte Home Health and Hospice, some payers are simply uneducated about the process.
The result: Hundreds of thousands, if not millions, of dollars in delayed or denied payments across multiple hospices.
Efforts to Address the Issue:
California hospices have joined forces to advocate for change.
Providers engaged the California Hospice and Palliative Care Association (CHAPCA) to bring attention to the issue.
CHAPCA is working with Medi-Cal, health plans, and other stakeholders to clarify reimbursement procedures.
Key developments:
Meetings and calls between providers, Medi-Cal, and managed care plans to address misunderstandings.
Clarification that prior authorization is NOT required for room-and-board payments.
Assurance that hospices do not need contracts with health plans to receive reimbursement.
Next Steps:
California’s Department of Managed Care will issue an All-Plan Letter outlining the correct process for hospice room-and-board reimbursements.
Some health plans have responded positively, participating in meetings and committing to process improvements.
Future meetings will continue to ensure all plans understand and comply with reimbursement obligations.
Final Thoughts:
If left unresolved, this issue could severely impact hospice access for nursing home patients.
Continued advocacy is crucial to prevent financial instability for hospices and ensure patients receive necessary care.
Stakeholders—including hospices, health plans, and regulators—must work together to create a sustainable solution.
The coming months will be critical in determining whether these efforts lead to lasting change in Medicaid reimbursement for hospice care in nursing homes.