Thursday, November 7, 2013
Effective this year, a new law enacted in New Hampshire declares that under certain circumstances a "fiduciary who possesses or controls the income or assets of a resident and has the authority and duty to file an application for Medicaid. . . shall be liable . . . to the long-term care facility for all costs of care which are not covered by Medicaid due to the fiduciary's negligence in failing to promptly and fully complete and pursue an application for Medicaid benefits for the resident."
A bit of practical background is appropriate to appreciate the significance of this new law.
Older individuals entering a nursing home have essentially three options for how to pay the bills at a facility: Medicare, Medicaid or Private Pay (and by private pay, I'm including the possibility of making a claim under long-term care insurance, family contributions or the resident or couple's income and savings).
For older individuals going directly from a hospital into skilled care or rehabilitative care, Medicare is often the first payment source, for up to 100 days per spell of illness. On a comparative basis, Medicare is relatively easy to negotiate, as the facility usually handles the initial paperwork.
It gets trickier, however, if long-term care is contemplated and Medicaid could be a possibility. Medicaid-eligible facilities prefer the higher pay rates associated with private pay, and therefore may not be highly motivated to talk with residents or families about Medicaid, unless it is the only option. But they often ask family members to pay and thus the burden of figuring out how to pay is on the family. Sometimes that family member is the out-of-town son or daughter. Sometimes that family member is a frail spouse.
As I have discussed in prior scholarship, gaps in payment sources can occur for a variety of reasons. The resident is rarely the cause of the gap as usually the frailty or illness of residents is the reason they are in a care facility to begin with. Rather, some third-party -- or the facility itself --will usually have to handle the paperwork associated with Medicaid applications. And Medicaid applications, typically requiring collection and analysis of the previous five years of the applicant's financial records, can be challenging.
So, who are these fiduciaries facing potential liability? The New Hampshire law says a "fiduciary" is a "person to whom power or property has been formally entrusted for the benefit of another such as an attorney-in-fact, legal guardian, trustee, or representative payee."
There are additional conditions and qualifications in the statute affecting the potential liability of the agent or other fiduciary. ElderLawGuy Jeff Marshall on his Blog has a thoughtful analysis of implications of the new law.
My starting question: So, what about the family member who is named as an agent under a power of attorney, has never taken action under the POA, and for whatever reason (tiredness, lack of understanding, perhaps being overwhelmed by work or other family responsibilities) does not step forward to handle the Medicaid application process. Is having the "authority" to serve as an agent enough -- under this statute -- to trigger a corresponding duty?
By the way, as I discussed in an August post, New Hampshire recently repealled its filial support laws. I am now wondering if there was some horse-trading in the halls of the N.H. legislature whereby nursing home lobbyists agreed to the repeal of filial support laws in exchange for what I might call "fiduciary support" liability? Anyone with insights into the history of this new law?
Feel free to "comment" below.