Nursing Home Closing or Leaving Medicaid? What Happens to Residents

When an owner closes a nursing home, residents get at least 60 days' written notice and a State-approved move plan, and the State must see each one relocated first.1,2 If a letter just told you your parent's nursing home is closing, or you've heard it's dropping Medicaid, here's what happens to residents and what they're owed. You have more time and more say than that letter may make it feel like.

In This Guide

• What Happens to Residents When a Nursing Home Is Closing
• Which One Is Happening to Your Parent's Home?
• When an Owner Is Closing the Nursing Home: 60 Days' Notice and a Relocation Plan
• Your Lever: Put Her Preferences in Writing, Early
• When CMS or the State Ends the Home's Medicare or Medicaid Participation
• When the Nursing Home Drops Out of Medicaid but Stays Open
• Who to Call: The Ombudsman and the State Survey Agency
• What to Do This Week
• Frequently Asked Questions
• Learn More

What Happens to Residents When a Nursing Home Is Closing

News that the home itself is changing can feel worse than almost any other kind, because none of it is about your parent and none of it is in her control. The good news is that federal rules don't leave residents to sort this out alone: closure, a loss of certification and a Medicaid withdrawal each come with their own protections.

These rules matter most for long-stay residents. Medicare covers skilled nursing facility care only on a short-term basis after a qualifying hospital stay, up to 100 days per benefit period, and it doesn't pay for long-term custodial care.4 Long stays get paid for some other way: Medicaid for those who qualify, private long-term care insurance, or the family's own money. That's why "the home is dropping Medicaid" lands so hard.4

A nursing home can stop being a place your parent can stay in three different ways:

1. The owner closes it. The home shuts down on a set date.
2. Centers for Medicare & Medicaid Services (CMS) or the State ends its participation. Regulators terminate the home's Medicare or Medicaid provider agreement, often called losing certification.
3. The home leaves Medicaid but keeps operating. It stays open and keeps caring for people, but stops participating in Medicaid.

Each one triggers a different set of duties, owed by different people. The rest of this guide takes them one at a time.

Which One Is Happening to Your Parent's Home?

Start with the letter, or whatever the home has told you in writing. The wording usually tells you which case you're in.

The rules behind each row are below.2,5,3

A termination can also lead to a closure, so a home may be in the first two rows at once. If the letter is unclear, ask the home for the effective date in writing and call the ombudsman. If the letter is from her Medicaid health plan instead, saying the plan will stop paying for her stay, see our guide to when a Medicaid plan stops paying for the nursing home.

When an Owner Is Closing the Nursing Home: 60 Days' Notice and a Relocation Plan

If you've just learned the home is closing, the first thing to know is that federal rules require at least 60 days' notice before an owner closes a nursing home. Under 42 CFR 483.70(k), the home's administrator must send written notice of the closure to the State Survey Agency, the State Long-Term Care Ombudsman, every resident, and each resident's legal representative or other responsible party at least 60 days before the closing date.1 Section 1128I(h) of federal law puts the same duties in statute.1

From the day a closing nursing home sends its closure notice, it may not admit any new residents.1 Your state may add its own closure rules on top of these federal ones; the ombudsman will know what applies where you live.

What the closure notice must include

The nursing home closure notice has to include a relocation plan that the State has approved, for moving residents by a date the State sets before the closure.1 A nursing home's closure relocation plan must include assurances that residents will go to the most appropriate facility or other setting in terms of quality, services and location, taking into account each resident's needs, choice and best interests.1

The home also has a hands-on duty. A nursing home must provide and document enough preparation and orientation to make a resident's transfer safe and orderly.6 Ask the staff what that preparation will look like for your parent: who will share her care records with the new home, and whether her medications and equipment will move with her.

The State, not the home, must make sure she's relocated

You might expect the home to be in charge of the move. Federal law says the State shall ensure that, before a nursing home closes, all of its residents have been successfully relocated to another facility or to a home and community-based setting.2 CMS has described this pre-closure relocation duty as a requirement on States.2

So if the home's staff are the only people you're hearing from, you're allowed to go over their heads. The State has its own duty here, and the ombudsman is a good first call.

What isn't guaranteed: payment until she moves

Under Section 1128I(h)(2)(B) of the same federal law, the Secretary of Health and Human Services may continue payments for residents of a closing nursing home from the day the closure notice is sent until the residents are relocated.2 The statute says the Secretary "may" continue those payments "as the Secretary determines appropriate," so federal law lets payment continue but doesn't require it.2 If the home tells you payment is about to stop, write down who said it and when, and bring it to the ombudsman.

Closure is one of the six reasons a home may discharge a resident

Federal rules let a nursing home discharge a resident for only six reasons, and "the facility ceases to operate" is one of them.6 A closure runs on its own notice rule rather than the usual 30-day discharge notice.6 The other five reasons, the notice a home must give for them and how to appeal are covered in our guide to nursing home discharge rights.

Your Lever: Put Her Preferences in Writing, Early

It's easy to feel like your family has no part in a closure. But there's one place where your parent's voice is written into the rules: the relocation plan has to take each resident's choice into account, along with her needs and best interests.1

Use that. Write down where she'd like to go and why, as early as you can, before the plan hardens around whatever beds happen to be open:

• The two or three homes she'd prefer, and how close each is to the family members who visit.
• What she needs from the next home: memory care, a particular diet, a language spoken by staff, a roommate arrangement.
• Whether she's on Medicaid or applying, so the plan looks for homes that accept it.

Give a copy to the administrator, and send one to the State Long-Term Care Ombudsman and the State Survey Agency, both of which receive the closure notice.1 A written preference doesn't guarantee a particular bed, but it puts her choice on the record that the plan has to weigh. Our guides to choosing a nursing home and what star ratings really mean can help you vet the options quickly.

When CMS or the State Ends the Home's Medicare or Medicaid Participation

Sometimes the home isn't choosing to close. Regulators can terminate a nursing home's Medicare or Medicaid provider agreement, which families often hear described as the home losing its certification. That can be frightening news to get secondhand.

Here, too, the State has a duty to residents. Under 42 CFR 488.426, when the State or CMS terminates a nursing home's provider agreement, the State will arrange for the safe and orderly transfer of all Medicare and Medicaid residents to another facility.5 In plain terms, if your parent is on Medicare or Medicaid, arranging her safe move to another home is the State's job.

Medicaid law says much the same. Under Section 1919(h)(5) of the federal Medicaid statute, when a Medicaid nursing facility's failures immediately jeopardize residents' health or safety and its participation is terminated, the State shall provide for the safe and orderly transfer of the residents eligible under the State's Medicaid plan, consistent with their transfer and discharge rights.5 So if she's on Medicaid, her transfer and discharge rights still govern how that move is done.

Watch who each rule names. When a nursing home's provider agreement is terminated, the 42 CFR 488.426 transfer duty covers Medicare and Medicaid residents, and the Section 1919(h)(5) duty covers residents eligible under the State's Medicaid plan.5 If your parent pays privately, ask the ombudsman early what help the State will give her.

Under 42 CFR 488.426(a), in an emergency the State has the authority to transfer a nursing home's Medicaid and Medicare residents to another facility, or to close the facility and transfer them.5 When CMS or a State terminates a nursing home's Medicare or Medicaid participation, the administrator's closure notice is due not later than the date the Secretary determines appropriate, instead of at least 60 days before closing.1 For your family, that means the warning may be much shorter than 60 days. Call the ombudsman as soon as you hear a termination is coming, without waiting for a formal letter.

When the Nursing Home Drops Out of Medicaid but Stays Open

If you've heard the home is "getting out of Medicaid," take a breath. For people already living there, federal law doesn't let the withdrawal itself be used to push them out.

Who stays protected: the move-in date decides

Under Section 1919(c)(2)(F) of the same Medicaid statute, when a nursing facility voluntarily withdraws from Medicaid but keeps providing nursing facility care, the withdrawal is not an acceptable basis for transferring or discharging residents who were living there on the day before the withdrawal's effective date.3 When a nursing home voluntarily withdraws from Medicaid, that protection against withdrawal-based discharge also covers residents living there the day before the effective date who weren't on Medicaid yet, so a parent who was still paying privately is protected.3

For residents living in a nursing home the day before its Medicaid withdrawal took effect, the federal nursing facility protections keep applying until the date of their discharge, and the home's Medicaid participation agreement is treated as continuing for purposes of Medicaid payments for their care, compliance with the federal requirements, and survey, certification and enforcement.3 CMS guidance calls this provision self-implementing, with no separate regulations needed.3

The Medicaid-withdrawal protections don't apply to people who begin living in the nursing home on or after the withdrawal's effective date.3 So the move-in date is the line: find the date she was admitted and compare it with the withdrawal's effective date.

If she moved in after the withdrawal: check the admission packet

Someone who begins living in a nursing home after its Medicaid withdrawal took effect must be told, orally and in writing on a separate page, that the home isn't participating in Medicaid for them and may transfer or discharge them when they can't pay its charges, even if they've become eligible for Medicaid.3 A nursing home that has withdrawn from Medicaid must also get each new resident's signed written acknowledgment of that notice, separate from the other documents they sign.3

If your parent moved in around the time of a withdrawal, go through the admission packet for that separate notice and acknowledgment. Whether it's there, and what date is on it, is the first thing the ombudsman will want to see.

Who to Call: The Ombudsman and the State Survey Agency

You don't have to work through any of this alone. A closing nursing home must send its closure notice to your State Long-Term Care Ombudsman, and the ombudsman program's job is to advocate for residents.1,7

To find yours, the federal Administration for Community Living points people to the National Consumer Voice for Quality Long-Term Care's state directory on its Long-Term Care Ombudsman Program page.7 Consumer Voice describes ombudsman programs as advocating for nursing home residents and trained to resolve problems.7 Our ombudsman guide explains how the program works.

You may already have the contact details. A nursing home must post the names, addresses and phone numbers of pertinent State agencies and advocacy groups, including the State Survey Agency and the State Long-Term Care Ombudsman program, along with a statement that a resident may file a complaint with the State Survey Agency about suspected violations of state or federal nursing home rules.8 A nursing home must give an ombudsman representative immediate access to any resident, and it may not discourage a resident from talking with the ombudsman.8

What to Do This Week

1. Get the facts in writing. Ask the home for the closure date, or the Medicaid withdrawal's effective date, and a copy of the relocation plan.1
2. Find her admission date. In a Medicaid withdrawal, it decides whether she's protected.3
3. Call the ombudsman. Use the posted contact list or the Consumer Voice state directory.7
4. Write down her preferences and send them to the administrator, the ombudsman and the State Survey Agency.
5. Start looking at homes yourself. Check whether each accepts Medicaid, if she has it or may need it; our Medicaid nursing home coverage by state guide can help.
6. Keep a log. Note every conversation, especially any warning that payment or care is about to change.

Learn More

Find personalized help finding your parent's next nursing home, including a Medicaid bed, at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.