Nursing Home admin implied my mother-in-law may be discharged because of a balance rendered before Medicaid was effective. What can I do?

It may be wise to contact the Long-Term Care Ombudsman's office.

http://www.wvseniorservices.gov/StayingSafe/LongTermCareOmbudsmanProgram/tabid/81/Default.aspx

Explain the situation and I'm sure they will help.

You need to review the contract for admission into the NH. It probably reads that for residents accepted "Medicaid Pending", that the resident or whoever is their financially responsible designate will have to pay whatever costs (at either their private pay day rate or if they are nice, at Medicaid reimbursement rate) are not paid by Medicaid should they be denied or penalized. It sounds like state Medicaid program did not to a retro to Day 1, so therefore she was private pay for whatever day or services were in that "window" with no Medicaid. Personally, if you like the facility and mom is happy there, I'd just work out a payment plan for the balance of the $ 1,300.00 that you and your hubby pay. Moving mom will be alot of work and many other NH will not easily accept a new resident who has an outstanding balance at another NH.

"It tooks months to qualify": is is possible there was a cash value life ins policy or excess funds above the limit during that time? even $1.00 over the limit will
frustrate the medicaid app.
I wonder if there are any burial funds set aside for her, so that you don't end up being the ones having to pay that as well.
A funeral trust (not purchased at a funeral home, so it is not controlled by them),
can be purchased the day before applying for medicaid, and prevents those funds from being claimed (Medicaid Exempt)

You might want to talk to the dss worker as to why the medicaid did not go back to the date of entry to the facility. Also in California RP's cannot be held to pay out of pocket to someone elses bill. Even Relative. You are responsible to pay the bill from the residents (Patients) income not yours. We even have a form that is signed during admissions process that states this. I would continue to asked why?

contact your state representative's office and ask them for some help on your behalf. A lot of times they work hard to keep their constituents happy. We have utilized ours a number of times and the rep's staff have always been helpful and seem to be able to make headway where us "mere mortals" are unable to.