Monday, January 13, 2014
A few years ago, one of the more perplexing cases handled by Penn State's Elder Protection Clinic involved the sale of deferred annuities (specifically, an annuity that would not fully mature for 20 years) to a senior, a widow in her early 80s.
The individual was a ripe target for a manipulative sales pitch, having recently been diagnosed with early stages of dementia, even though at the moment of sale she was still living independently in her home. She was able to talk and communicate; arguably she did not seem impaired. She was told the product would save on taxes -- a pitch alluring to the frugal woman -- except for the fact that she really didn't need to save on taxes.
If one lives long enough or has looming care needs even at an earlier age, an individual's post-death estate planning goals can conflict with pre-death care needs. In the clinic client's case, the woman's annual income was modest, and her total estate was not large enough to trigger other major taxes. The assets used to fund the annuity were virtually her entire savings. Several months later, her daughter learned of the purchase, while exploring care options for her mother. Her mother was facing ineligibility for Medicaid, as the purchase of the deferred annuity would be treated as transfer, while the alternative was a large penalty if she cashed in the annuity "early."
How often does this -- or worse -- happen?
In "Still No Free Lunch: Recent Regulatory Initiatives to Protect Seniors From Fraud in the Sale of Investment Products," 41 Securities Regulation Law Journal 397 (Winter 2013) (paywall protected; available on Westlaw as 41 No 4 SECRLJ Art 2), attorneys Ivan B. Knauer and Michele C. Zarychta address recent efforts to prevent or address fraudulent practices by an array of regulatory bodies. The 2013 piece updates their 2008 article (available at 36 No 4 SECRLJ Art 3). They outline several types of fraud and various financial products often marketed specifically to elders. For example, they observe:
"One of the most pressing concerns of the regulatory entities is the improper -- or at least confusing-- use of 'senior' designations by professionals, implying that a professional has expertise or training in senior-specific issues. FINRA [the Financial Industry Regulatory Authority] 'Rule of Conduct 2210 prohibits brokerage firms and brokers registered with FINRA from referencing nonexistent or self-conferred degrees or designations or referencing legitimate degrees or designations in a misleading manner.' Misleading use of such designations may also violate federal securities laws or state laws."
The authors, who are experienced in representation of investment and financial service companies, recognize that business lawyers can help clients recognize the need to "take measures to ensure that their own policies and procedures protect seniors." "Still No Free Lunch" is a reminder that attorneys who are advisers to companies can and should be a larger part of the solution, rather than be viewed as part of the problem.
In reading the article, which emphasizes regulators' programs to "educate" the public, I am struck by the likelihood that a key tipping point occurs when a senior's susceptibility to a manipulative pitch is outweighed by his or her weakened ability to recognize risk, regardless of any fraud-prevention education. That was true, for example, with our clinic's client. Her life-time frugal nature was still intact; however, her judgment about whether she needed to "save" money on taxes was diminished. More education was not the solution for her, as she had probably lost the ability to appreciate its application. Indeed, a common marketing practice to seniors -- free lunches or dinners disguised as "educational seminars" -- trades upon that very fact, thus giving rise to the "no free lunch" theme in both articles by authors Knauer and Zarychta.
The authors detail stepped up enforcement efforts, including recent measures by the Consumer Financial Protection Bureau, established in 2010.
Hat tip to Penn State Dickinson Law Professor Lance Cole, who shared this interesting article.
January 13, 2014 in Advance Directives/End-of-Life, Cognitive Impairment, Consumer Information, Crimes, Ethical Issues, Federal Statutes/Regulations, Property Management, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)
Friday, January 10, 2014
I can remember when tax-savvy couples might plan their wedding dates according to the tax impact, and thus there was talk in political circles about the "Marriage Tax Penalty."
Recently, one of our Elder Law Prof Blog readers wrote to suggest we post articles about the impact of late-in-life marriage on Medicaid eligibility. Good idea! Many might assume that a well-drafted prenuptial agreement should preserve a split in retirement savings. That assumption could well be dangerous -- in the context of Medicaid. Here are links to a few recent articles, with brief excerpts to whet the appetite for reading more:
Late Life Love (Part II), by Monica Franklin, 49 Tennessee Bar Journal 30 (Feb. 2013):
"When discussing prenuptial agreements and marriage, we need to advise our clients that if one spouse needs Medicaid to pay for long-term care, the assets of both spouses will be considered by the Medicaid agency ([Tennessee] Department of Human Services, DHS). However, if the couple chooses cohabitation, DHS only considers the assets of the disabled partner. This information is crucial for couples considering late-life marriage."
Paying for Long-Term Care in Illinois, by William Siebers and Zach Hasselbaum, 100 Illinois Bar Journal 536 (October 2012), noting that with changes to Medicaid law, effective in Illinois in 2012:
"Eligibility for long-term care assistance will be denied [in Illinois] if the community spouse or institutionalized spouse refuses to disclose assets during the application process. Prior to this change, a community spouse with separately owned assets held for at least five years could decline to have those assets considered in the application process for the institutionalized spouse. This scenario commonly arose in second marriage situations. . . . "
Gray Divorce and Remarriage, by William DaSilva and Steven Eisman, 83 New York State Bar Journal 26 (July/August 2011):
"Another growing trend in the practice of elder law -- relating to both matrimonial law and health care planning -- is the use of so-called 'Medicaid divorces.' In fact, the use of Medicaid gifting and Medicaid planning received judicial sanction from New York's highest court in 2000 in [the case of] In re Shah, [95 NY 2d 148 (2000)]. In this type of divorce, the 'spouse in the community' ... stands to lose a lifetime's worth of savings unless a health care plan is devised that provides care for the ill or incapacitated spouse and simultaneously protects the assets of the spouse in the community so that both spouses do not end up impoverished wards of the state. A prenuptial agreement alone will not defeat a claim of Medicaid."
In my admittedly quick search for articles on the topic of prenuptial agreements and Medicaid, I did not find a comprehensive discussion by academics or law students in an academic law review. Rather, as suggested by the above citations, the articles I found were all state specific, from state bar journals. Perhaps one of our law school colleagues has a work-in-progress or article to share? Or, alternatively, perhaps some of our academic readers are looking for a good, comprehensive research topic for the future.
For our lay readers, this is a good opportunity to remind you this Blog is not intended to be a source of legal advice for specific issues. Of course, we do recommend that you consult with an experienced elder law attorney for state-specific advice!
Tuesday, January 7, 2014
I love book stores, and at the AALS Annual Meeting the next best thing is the book publishers' booths. I always ask representatives about "what's new" in aging. This year the answer was a book I should have read already, especially as it is co-authored by Elder Law Prof Blogger Becky Morgan and her Stetson colleague, Roberta Flowers. It was great to have my new copy with me for my train ride home through the frozen mid-Atlantic corridor.
Their book, Ethics in the Practice of Elder Law, published in 2013 by the American Bar Association, is an important reference book for students and practitioners. It also strikes me as the kind of book that could support an entire day of CLE programming and discussion on professional responsibilities, not just for elder law attorneys but for lawyers in family or corporate practices, where there is a clear potential for questions of conflict of interest. The organization of the book is interesting, too, with short opening fact patterns and highlighted questions introducing each chapter. The topics include:
- Where to Go for Guidance
- Who Is the Client?
- Who Can I Talk To?
- Who Can I Represent?
- Representing Clients Who May Have Diminished Capacity
- Ethical Issues in a Guardianship
- Whom Do I Represent in Complex Fiduciary Representation?
- To Litigate or Not to Litigate - That Is the Question
- Ancillary Services and Marketing
That last chapter is a good example of an important discussion topic for practicing lawyers. One of the trends in U.S. elder practice is the one-stop shop, where a lawyer might also offer ancillary services or products, such as annuities used by families in Medicaid planning. The authors caution that an attorney must be careful to identify and carefully disclose whether the attorney has a "financial interest" in a service or product recommended for a client. Throughout the book, they provide state-specific sources of ethics analysis. For example, they cite and quote from state ethics opinions regarding various ancillary services or marketing practices (and it could be important to expand this topic in future editions).
Roberta and Becky also offer useful checklists and draft letters (including engagement letters); the paper-back text is accompanied by a CD-ROM.
Monday, January 6, 2014
Catching up after a busy weekend at the Association of American Law Schools (AALS) Annual Meeting 2014 in New York City, I'm happy to report the presentations at the Section on Aging and the Law seemed to go smoothly and were well received, with a very engaged audience. While the weather made travel to and from NYC a bit tricky, it also seemed to "encourage" strong attendance at sessions. (I found myself skating even when not visiting the rink at Rockefeller Plaza!)
Section Chair Susan Cancelosi (Wayne State) was snowed out -- but I suspect Susan would be pleased by the reaction to the program she planned. Thank you, Susan, for putting together the theme, securing speakers, making sure we were all on track, and creating a back-up weather plan. We've decided you should be the moderator next year, if you don't mind!
Dick Kaplan (Illinois) led off the panelists, using his best "Dr. Phil" style to walk us through (both literally and metaphorically) the latest changes to Medicare triggered by the Affordable Care Act and other recent legislation. Recognizing that many in our audience do not teach elder law or health care law, Dick offered information useful to all academics who "expect" to retire. For example, recent information from the Employee Benefit Research Institute supported his forecast that a 65-year old person retiring in 2012 would need substantial saving just to cover out-of-pocket medical expenses, in the range of $122,000 -$172,000 for men and between $139,000 - $195,000 for women (with projections also affected by prescription drug usage). Dick reminded us that this figure does NOT include any costs for long-term care.
Next on the panel was Laura Hermer (Hamline), who is new to our Section -- and a very welcome addition. Using her health law background, Laura outlined the maze of programs, including state plan innovations and waiver programs under Medicaid, that may provide "long-term services and supports" (or LTSS -- the latest acronym that seems to be an intentional step away from a "care" model) for older persons. Her presentation emphasized the shift to home or community based care, but Laura made clear that this shift depends heavily on unpaid care by family members.
Incoming Section Chair Mark Bauer (Stetson) made effective use of visual images of 55+ communities in Florida to demonstrate his concern that exemptions from civil rights protections that permit age-restricted communities may not be matched by actual benefits for the older adults targeted as residents. Mark stressed the percentage of housing that is not designed to match predictable needs for an aging population. Examples included multi-story designs without elevators, steps into even ground-level units, and bathrooms without wheel-chair accessibility. Mark's presentation expanded on his recent article in the University of Illinois' Elder Law Journal.
Speaking last, my topic was the latest state law developments tied to federal laws that authorize nursing homes to compel a "responsible party" to sign a prospective resident's nursing home contract. States are creating potential personal liability for costs of care for family members, agents or guardians, or transferors or transferees of resources, if the resident is deemed ineligible for Medicaid. Here are links to a copy of the slides I used for my presentation on "Revisiting Nursing Home Contracts," as well as to a related short article I was invited to write for the Illinois State Bar Association's Trusts & Estates Section in December 2013.
The panel presentations were followed by great questions and observations from the audience, further highlighting the financial challenges of aging. Plus, it was wonderful to see several new members volunteering to join the planning committee for future programs for the Aging and Law Section of AALS. And welcome back to the board to Alison Barnes (Marquette Law).
January 6, 2014 in Consumer Information, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Medicaid, Medicare, Programs/CLEs, Retirement, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)
Wednesday, January 1, 2014
Professor Morgan blogged about this interesting NYT article earlier, but I want to highlight a portion of Jessica Silver-Greenberg's "Winning Veterans' Trust, and Profiting From It." The article is especially critical of "actors" active in representing or promoting VA benefits for aging veterans, including "lawyers, financial advisers and insurance brokers."
"Questionable actors are capitalizing on loose oversight to unlock the V.A. money and enrich themselves, sometimes at veterans’ expense. The V.A. accreditation process is so lax that applicants provide their own background information, including any criminal records. But the V.A. has only four full-time employees evaluating the approximately 5,000 applications that it receives annually. Once people get the V.A.’s stamp of approval, they rarely lose it, even if a customer complains or regulatory actions mount. Last year, the V.A. revoked its accreditation for two of its more than 20,000 advisers."
But it is one thing to question the standards for accreditation for individuals to represent or assist applicants for VA benefits. It strikes me there is an irony to the fact that the VA requires accreditation in order to serve as a paid advisor, yet that very accreditation is, according to the article, apparently part of the problem.
It seems to me the history described in the article also suggests the very real importance of VA benefits to individuals, especially those struggling to afford long-term care, such as 86-year-old Henry Schaffer, who seems to be in that gray zone of just enough inome to be "ineligible" for VA benefits, but not enough income to afford to pay privately. Thus, the arguable need for "planning." The article has a mixed message, one that I tend to question, as the article seems to imply that the increased rate of usage of VA benefits is due primarily to improper benefit awards, secured by manipulative "players" rather than experienced consultants working within the rules.
I noticed that the comments to the article are as interesting as the article itself, pointing to the need for better public understanding of VA benefits (including the availability of benefits for spouses of former members of the service). The comments highlight the consequences of close calls on ineligibility, and therefore also emphasize the need for qualified legal or other knowledgeable assistance.
Tuesday, December 31, 2013
My colleagues at Penn State Law have often provided practical fact patterns useful for discussion in my Elder Law class. A number of years ago, one of my colleagues shared the problem of his mother believing that caregivers were stealing from her. It was hard to know whether her worries were real or the product of diminishing capacity -- or perhaps just a variation on her documented obsession with frugality
Along that same line, a New York Times writer tracks how he and his siblings have tried to keep track of their aging father's preference for cash. I'm sure that having cash on hand can be an important component of maintaining personal dignity, even if risky in a larger sense. For more, read Patrick Egan's "Tracking a Thief, Once You Know There Is One," recently published by the New York Times.
Hat Tip to Professor Laurel Terry for the link to this interesting essay.
Monday, December 30, 2013
One of the most memorable pieces I've read was a New York Times essay written a few years ago by Katy Butler. Butler wrote with restrained emotion and honesty about her father's struggle with deepening Alzheimer's, fueled beyond all hope of better days by his pacemaker. She later expanded on the essay with a book published in 2013, "Knocking on Heaven's Door: The Path To a Better Way of Death," where she digs into the background of legal and medical issues about end-of-life, and details her mother's very different path.
Diane Rehm has a fascinating interview with Katy Butler, available on podcast and being re-broadcast today on many public radio stations. Near the end of the hour-long segment, one of the callers is an Elder Law attorney (I didn't catch his location -- I was blogging as I listened!). Here's a link to Diane Rehm's website for details on the interview.
Wednesday, December 18, 2013
Via the American Cancer Society:
A new review says palliative care’s association with end of life has created an “identity problem” that means the majority of patients facing a serious illness do not benefit from treatment of the physical and psychological symptoms that occur throughout their disease. The editorial is co-authored by palliative care experts at Harvard Medical School, Massachusetts General Hospital, the American Cancer Society, and Johns Hopkins University, and appears in the New England Journal of Medicine. The authors say palliative care should be initiated at the same time as standard medical care for patients with serious illnesses, and not brought up only after treatment has failed.
The authors say for palliative care to be used appropriately, clinicians, patients, and the general public must learn the fundamental differences between palliative care and hospice care, a distinction that is not well-known. Seven in ten Americans describe themselves as “not at all knowledgeable” about palliative care, and most health care professionals believe it is synonymous with end-of-life care. While both are intended to relieve suffering, hospice care provides care for people in the last phases of an incurable disease so that they may live as fully and comfortably as possible. Palliative care focuses on helping patients get relief from symptoms caused by serious illness and is appropriate at any age or stage in a serious illness. (For more information, see: "Palliative Care" on cancer.org.)
Adding to that is the fact that debates over “death panels,” physician-assisted suicide, and other factors have made policymakers reluctant to devote resources to initiatives perceived to be associated with death and dying. The authors point to lower levels of government funding for palliative care research compared to funding for other specialties.
A study released in December by the Stanford Center on Longevity addresses one of my frequent concerns. Reports on elder abuse, particularly those on financial abuse and exploitation, routinely include a statement to the effect that "X number of financial fraud cases were examined during the year" but that that more time/money/energy should be devoted to addressing the problem "because X plus Y number of cases exist" but are unreported. There is rarely any explanation for the prediction. While I accept that there is likely to be underreporting, don't we need better measurement tools than intuition?
In "The Scope of the Problem: An Overview of Fraud Prevelance Measurement," Stanford researchers address exactly this issue. "'Without accurate and reliable estimates of fraud,' wrote Martha Deevy, director of the Financial Security Division at the Stanford Center on Longevity, 'it is difficult to understand what works or does not work to protect victims from harm.'" The problem may be not just underreporting, but "underadmitting," especially for victims of elder abuse.
The Stanford report illustrates how analysis of recent sources and methodology can explain variations in predictions, thus also helping to design better tools for the future, including better surveys. For example, they point to the 2011 study of elder abuse in New York State by Lachs & Berman, "notable as a comprehensive endeavor that used multiple sources of data and collaboration among community, governmental, and academic partners to get a sense of the 'big picture' problem."
Thanks to my colleague, Laurel Terry, for sharing this report. Laurel and Howard are the justifiably proud parents of a Stanford sophomore.
Tuesday, December 17, 2013
While I'm not sure I buy all of the suggestions in the article by Wall Street Journal article writer Andrea Coombes on "How to Avoid Estate Fights Among Your Heirs," she certainly raises topics worthy of discussion. The final point is particularly interesting, encouraging us to consider writing an "ethical will," as a way to share our values. This is explained as a a non-legally binding way to pass on a life story or a family legacy of values to the next generations.
Hat tip to Dave Pearson in Albuquerque, New Mexico for this link.
Monday, December 16, 2013
Following up on yesterday's post about the aid-in-dying trial recently concluded in New Mexico:
Recent headlines and stories about a poll from The Pew Research Center's Religion & Public Life project missed the real news. The poll showed that a majority or "two-thirds of Americans (66 percent) say there are at least some situations in which a patient should be allowed to die" and concluded "the share [of people] saying they would stop their treatments so they could die has remained about the same over the past 23 years."
Yet, many subsequent headlines and stories about the poll focused on a slight increase in the percentage of Americans who say that doctors should do everything possible to keep patients alive.This latter finding is not surprising given the growing chasm of access to health care between the wealthiest and poorest Americans over the last few decades. It is only natural that many Americans who are medically underserved or marginalized would want more medical care at the end of life when asked that question. In addition, health care has seemed like a luxury to millions of Americans who cannot afford it. But thanks to implementation of the Affordable Care Act starting next month, many will have access to more and better-quality health care.
Equally important is that everyone feels differently about how much medical treatment they want at the end of life based on the specific circumstances they are facing. These critical end-of-life decisions are complex and tightly connected to a variety of factors in a person's life or situation. For example, 57 percent of those polled say they would tell their doctors to stop treatment if they had a disease with no hope of improvement and were suffering. That figure is 52 percent when the same people were asked if they would want to stop receiving treatment if they had an incurable disease and were totally dependent on someone else for their care.
Sunday, December 15, 2013
Compassion & Choices and the ACLU of New Mexico today concluded arguments in a landmark trial seeking to establish that aid in dying is legal in New Mexico. Morris v. New Mexico is a test case, bringing before a court for the first time the claim that ambiguous state laws prohibiting “assisted suicide” do not apply to physicians who write aid-in-dying prescriptions to mentally competent, terminally ill adults.
The court accepted an amicus brief in the case filed by the New Mexico Psychological Association. It concludes that “the practice of good professional psychology in New Mexico requires that the law … recognize that aid in dying is not a form of suicide.” The trial included two days of testimony from patient and physician plaintiffs, and expert witnesses. The judge said she intends to rule on the case within 30 days.
Compassion & Choices Director of Legal Affairs and Advocacy Kathryn Tucker and ACLU of New Mexico Legal Director Laura Schauer Ives jointly represent the plaintiffs. Tucker was counsel in a somewhat similar Montana case in which the right to choose aid in dying was recognized, Baxter v. Montana.
“This case challenges the assumption that vague, antiquated prohibitions of assisted suicide pertain to aid in dying. The assumption is unfounded,” says Tucker. “Such laws are intended to prevent the impulsive act of an otherwise healthy person to end his life, perhaps due to situational depression, causing impaired judgment. The choice of a mentally competent, terminally ill patient to cut short suffering before death, when the patient finds the dying process unbearable, is fundamentally different and not addressed by such laws.”
“I don’t want to suffer needlessly at the end,” she testified in court.
Patient plaintiff 49-year-old Aja Riggs testified about being diagnosed with advanced uterine cancer and wanting the comfort of knowing the option of aid in dying is available if her suffering in the final stages of her illness becomes unbearable. Thankfully, Aja’s cancer has been in remission for about one year, but she realizes that statistically it is likely to return.
One of the physician witnesses was plaintiff Dr. Katherine Morris. She is a surgical oncologist from Albuquerque who previously practiced in Oregon, where she provided aid in dying to terminally ill patients. Dr. Morris and one of her patients were featured in HBO’s 2011 award-winning documentary, “How to Die in Oregon.” “There are a lot of cruel things cancer can do, especially as they [patients] approach the end,” Dr. Morris testified in court.Read the AP story here.
Saturday, December 14, 2013
New York Times writer Alina Tugend reports on community and state responses to concerns over older drivers in "An Alternative to Giving Up the Car Keys." An excerpt:
"While that is a scary thought for some people, the common perception, that the only real choice is between ignoring the difficulties faced by elderly drivers and taking away the car keys, is wrong. 'We’re evolving in our thinking,' said Jodi Olshevski, a gerontologist and executive director of the Hartford insurance company’s Center for Mature Market Excellence. 'We’re not just looking at the transition from driver to passenger, but how we can empower drivers to extend their driving as long as possible.'”
In November, 3 of my students attended the NALI/NAELA meeting in DC. I asked them to write short blog entries about their experiences. This post is by Desiree Toldt, a 3L:
“Ethical Issues of Communicating with Non-Clients: Red Flags and Best Practices”
I was fortunate to attend the breakout session entitled “Ethical Issues of Communicating with Non-Clients” presented by Professor Mary McNeal and Professor Kimberly O’Leary, both professors and Directors of Elder Law Clinics. The facilitators began with a general overview of case law and issues surrounding the maintenance of confidentiality of elderly clients. The remaining time centered on the professors own development of a 15-step protocol system intended to assist elder law attorneys in maintaining confidentiality of their clients. The four main areas of focus for the protocol were “who is the client,” identification of third parties necessary to representation, evaluating possible abuse, and effective communication regarding third party interactions. The professors, in true academic form, distributed five varying scenarios as the larger group broke into five smaller groups. Each group was then assigned a particular scenario to address using the protocol. Each group evaluated the scenario, identified issues, and shared personal experiences in their own practices within the small groups of four to six members. The groups had the opportunity to provide a sample “role-play” to demonstrate how the individual group addressed the issue.
The open forum style of the session created an open discussion of difficult situations such as how to handle suspected abuse, undue influence, confidentiality exposure and protection of the elderly client. While this high level of interaction created some disagreement amongst attendees, it also facilitated a productive, open and honest discussion about the issues that might not otherwise be discussed at the conference. Each group offered a unique perspective from across varying jurisdictions and showed how the 15-step protocol could be adapted to each individual practitioner. The value in the session was not only learning the 15-step protocol system but also most importantly learning from the experiences of every attendee in the room. I felt this was the most unique and beneficial portion of the 2013 NAELA Conference breakout sessions.
---Desiree Toldt, 3L, William Mitchell College of Law
Friday, December 13, 2013
Pennsylvania's House of Representatives has been holding a series of hearings on elder abuse, in anticipation of potential amendments to the state's Older Adult Protective Services Act. The hearings offer presentations and panel discussions with experts speaking from different perspectives, including administration, law enforcement, providers, and advocates from various organizations.
I was invited to speak at the last panel on the topic of "financial exploitation," as a member of the Pennsylvania Bar Association's Elder Law Section, and because of my experience as the former head of Penn State Dickinson's Elder Protection Clinic. [UPDATE: Here's a link to my written testimony, submitted in advance of hearing.] Other speakers included representatives of the Pennsylvania Bankers Association; community banks; credit unions; and from Area Agencies on Aging that are charged with investigation of reports of suspected abuse. A particularly strong speaker was Linda Mill, a certified financial examiner and former banker, who is now the investigations manager for Temple University's Institute on Protective Services.
During the bankers' presentations, speakers emphasized their institutions' training for all levels of personnel to spot red flags of abuse. This was part of their argument against any need for the state to adopt "mandatory reporting" of suspected abuse by banks and other financial institutions. In contrast, Mills testified that during the last ten years, despite her history of working on the bankers' side, she had come to the personal conclusion that mandatory reporting is necessary in order to provide more timely, effective investigation by public authorities. Mills pointed to Maryland's 2012 adoption of mandatory reporting as precedent.
The interaction between panelists and legislators was robust. For example, Committee Co-Chair Steve Samuelson (in the photo on the right, seated next to Chairman Tim Hennessey) asked whether agents under powers of attorney should be required to file annual reports to facilitate greater accountability. Representative Stephen McCarter asked about the practicality of "bonding" for agents using POAs. Representative Harold English had a detailed list, including the possibility of "payback" to fund investigative services and mandatory "recording" of current documents in order to make it clearer about which POAs are "in effect." He also expressed concern about annuity sales to elders.
Draft legislation updating Pennsylvania's Older Adult Protective Services Act is expected to circulate for comment later this month.
Special thanks to Eric Kovac from the Pennsylvania Bankers Association for sharing copies of his "insider" photos from the hearing.
Thursday, December 12, 2013
Lemington Home for the Aged was a nonprofit nursing home in Pittsburgh with a long history, beginning, as one court described, with its "first incarnation [as] 'The Home for the Aged and Infirm Colored Women,' incorporated and dedicated on July 4 1883." The Home was founded by the daughter of an African-American abolitionist from the area, in recognition of the care needs of "Aunt Peggy," an aging friend and former slave.
Unfortunately, by the late 1980s, the Home's finances were in trouble, triggering attempts to modernize, move to a larger facility, and other steps taken in an effort to get the Home back on sound footing. Some of the Home's financial history is captured in a early dispute over Medicaid with the state department of welfare in the '90s. In 2005, however, the Home filed a "voluntary Chapter 11 petition in the United State Bankruptcy Court for the Western District of Pennsylvania." The court approved closure of the Home and transfer of its residents to other facilities.
In the ongoing bankruptcy case, unsecured creditors initiated an adversary proceeding against several of the Home's former officers and directors. In 2010, the District Court granted the defendants' motion for summary judgment, finding that the "business judgment rule" and the "doctrine of in pari delecto" precluded liability on the facts alleged. The case seemed to be over, resolved by deference often accorded to nonprofit operations, especially as to "volunteer" directors or trustees.
The Third Circuit disagreed, however, and, in a precedential ruling, remanded for trial. The Circuit found that genuine issues of material fact existed as to whether the defendants, by continuing to operate the Home once bankruptcy was recognized as inevitable, breached fiduciary duties. The appellate court focused on allegations the individuals:
- failed to exercise requisite care,
- failed to be reasonably diligent, or
- "fraudulently contributed to the deepening of the debtor's insolvency."
The application of the deepening insolvency theory was a matter of first impression for Pennsylvania.
As reported by TribLive, in March 2013 an 8-person jury awarded the Home's unsecured creditors a total of $5.75 million in damages. The award included compensatory damages in the amount of $2.25 million against 15 of the 17 defendants, plus individual allocations of punitive damages against 2 former officers and 5 of the 13 individual former directors.
In May 2013, the District Court denied the defendants' post-trial motions for judgment as a matter of law, new trial or remittitur. In concluding there was sufficient evidence to support punitive damages against the Board members, the District Court observed in part:
"As to the five Director Defendants against whom punitive damages were levied, all of them were responsible for the Home's oversight. Evidence was presented that they were aware that Defendant Causey [a corporate officer] was not sufficiently performing her job as nursing home administrator but none of the Directors took any action to remove her from that position.... The jury heard testimony that the Board never chose to seek bids on the Home from organizations that specialized in nursing home turnaround and that no due diligence book was ever created for potential buyers.... The Home continued to accrue debts after these actions were taken, which Defendants reasonably should have known would damage the Home's prognosis."
The defendants' latest appeal to the Third Circuit is now pending (Docket No. 13-2707).
The outcome of In Re Unsecured Creditors of the Lemington Home for the Aged would appear to have potentially interesting implications for other sectors of the long-term care industry. For example, elderly residents of CCRCs, who have often paid large fees to cover future care or have paid "refundable" entrance fees, are usually unsecured creditors. The question of "deepening insolvency" and fiduciary duties to creditors might, therefore, affect the interests of a group that could appear particularly sympathetic to a jury.
This is an interesting case that bears watching for the outcome on appeal.
Monday, December 2, 2013
At the heart of comparative research is the opportunity to rethink your own system. I was reminded of this point last week when meeting Claire Keatinge, the Commissioner for Older People in Northern Ireland (COPNI). Commissioner Keatinge is -- in a word -- dynamic, and it is impossible not to be impressed with her dedication to meeting the needs of older persons in her country. She is a leader, both actually and symbolically, for a hard-working team tackling a number of issues in ageing policy.
It is clear to me that "independence" is at the core of the role for the COPNI. What do I mean by independence? The COPNI is funded with public dollars, but the job includes making an independent evaluation of the needs and interests of the demographic, and then reporting and advocating for appropriate response by the government or other sectors. By comparison, I wonder whether state officers or offices charged with policy and laws in the U.S.are more likely to be serving a governmental agenda, and trying to sell that agenda to voters. This strikes me as a potentially important, if subtle, difference in systems.
A small example of the importance of independence: One of the COPNI's several goals is to identify and improve "uptake" of benefits available to older persons in the country. In Northern Ireland, and elsewhere in the U.K., there are official statistics on the dollars (whoops, I mean pounds) left on the table by individuals who fail to seek available public benefits or services. In N.I., there is a known gap. By comparison, I would be surprised to learn that we keep similar statistics on either the state or federal level in the U.S., much less have a policy of trying to reduce any gap.
Claire Keatinge also stressed that an individual assessment of need for health care, social care and security, should be exactly that, and not simply an assessment of what services are available. Helping individuals or their family members access services in the public, private and voluntary sectors is part of the COPNI plan of action, but, it strikes me that the emphasis on evidence-based policies may result in development of new services or better funding for existing programs.
Wednesday, November 27, 2013
Thursday, November 21, 2013
I sometimes try to hold a provocative or interesting case until the last session of an Elder Class. This semester I asked the students to read:
- John Payne's recent article on "Ethical and Public Policy Considerations Related to Medicaid Planning," and
- Aaron Manor, Inc. v. Irving, 57 A.3d 342 (Conn. 2012)
The combo seemed to work well, giving students a chance to revisit a number of issues from the semester. For, example, we talked about the role of an attorney in advising family members. In the Irving case, did either the daughter or the son have legal advice (the same lawyer?) regarding the roles they took when their mother was admitted to the nursing home? If anyone would like my outline of questions for students on these two documents, feel free to email me.
And if any of you have a great way to end the semester in either Elder Law or Wills, Trusts & Estates, please share!
Tuesday, November 19, 2013
This semester in Penn State's Elder Law class, I encouraged students to write one of their two required short papers on some aspect of the "future of elder law," in the largest sense of that phrase. Several students examined technology and aging, including use of video technology to monitor care or provide tracking of medication or movement. One student's paper is about due process implications of monitoring for staff and family members.
The future is now, of course, in the world of video technology, especially in a CCTV world of almost constant surveillance. The New York Times reports another dramatic example of abuse as caught on "granny cams" used in a nursing home. In "Watchful Eye in Nursing Homes," writer Jan Hoffman details examples of abuse bordering on torture caught on video at an Oklahoma nursing home.
The article points to the trend in state legislation or regulations expressly authorizing video monitoring, laws that attempt to strike a balance between potential rights of privacy and safety:
"On Nov. 1, propelled by the outcry over the Mayberry case, Oklahoma became the third state — along with New Mexico and Texas — to explicitly permit residents in long-term care facilities to maintain surveillance cameras in their rooms. In the last two years, at least five states have considered similar legislation. Although some states have administrative guidelines for electronic monitoring, most legislative efforts have stalled because of questions about liability and, in particular, privacy rights, raised by facility owners, unions, elder care lawyers and families."
Our friend and colleague, Nina Kohn, elder law professor extraordinaire at Syracuse Law, is quoted in the article on the need for caution in implementing surveillance.