Saturday, January 31, 2015
It strikes me that a lot of my posts this week about long-term care have been "bad news," especially regarding nursing homes. It is a good time for me to share a much happier view from a daughter who first wrote to me about her fears as an adult daughter -- with health care concerns of her own -- living 3,000 miles away from her father, who at 90+ was in crisis and needed daily help, but was unable to afford it.
Her dad had a local person as an agent, a long-time friend's child who held "power of attorney." But that individual seemed overwhelmed. When the daughter wrote to me, I encouraged her to talk to her father, who still had capacity. Four months later, the daughter wrote back to give the results, including the very good news that her father was happier. She gave me permission to share details here:
"Since last September ... I was able to get my father completely on Medicaid and everything went through well with his application, etc. He got accepted the first time! I hear that can be rare. Additionally, my Dad met with his attorney and revised his POA, making me his agent and allowing me to do many things, even from afar.
Dad's very happy now and quite healthy (at age 91) in his new skilled nursing home environment in Pennsylvania. Even from 3,000 miles away, I am still very connected to him, as well as the wonderful staff at the nursing home. My Dad is now 3rd generation of his family to stay at that same nursing home. Additionally, he now has the company of his youngest sister, my Aunt, who has been at the home for the last 10 years. They are together and enjoying each other's company every day."
A short time later, the daughter wrote again:
"I have such peace of mind, and heart, knowing this is the right place for Dad, plus, he has so much more socialization now and is no long isolated and all alone in his apartment where he was before. (I no longer lay awake every night worried about him with knots in my stomach.) Plus, I forgot to mention the facility has a resident dog on site, a golden retriever named 'Magoo,' and, boy, does he brighten everyone's day."
This daughter's words are an important reminder that the "right" place, including the right nursing home, can make dramatic improvement in the lives of older persons, especially where frailty and isolation are the concerns. Thank you, Patti, for sharing your "happier" news.
Postscript: Patti allowed us to share a photo of her and her father, and the story of their relationship is written in their smiles.
Thursday, January 29, 2015
On Monday, we linked to the front-page New York Times article by Nina Bernstein, "To Collect Debts, Nursing Homes Are Seizing Control Over Patients." Suffice it to say, I've been hearing a lot about the topic, from many sources. In hearing from law professors and lawyers with different perspectives, it appears there are at least three important questions framed by the article. Each may take additional investigation to fully address, whether in New York or other states where similar concerns have been raised.
In one of the cases described by the NYT, a court opinion addresses what appears to be the nursing home's narrow "collection" purpose in seeking a guardianship. The article summarizes:
"Last year Justice [Alexander W.] Hunter did appoint a guardian in response to a petition by Hebrew Home for the Aged at Riverdale, but in his scathing 11-page decision, he directed the guardian to investigate and to consider referring the case for criminal prosecution of financial exploitation.
The decision describes a 94-year-old resident with a bank balance of $240,000 who had been unable to go home after rehabilitative treatment because of a fire in her co-op apartment; her only regular visitors were real estate agents who wanted her to sell. After Hebrew Home’s own doctor evaluated her as incapable of making financial decisions, the decision says, the nursing home collected a $50,000 check from her; it sued her when she refused to continue writing checks, then filed for guardianship. 'It would be an understatement to declare that this court is outraged by the behavior exhibited by the interested parties — parties who were supposed to protect the person, but who have all unabashedly demonstrated through their actions in connection with the person that they are only interested in getting paid,' he wrote.
Jennifer Cona, a lawyer for the nursing home, called the decision 'grossly unfair to Hebrew Home,' but said she could not discuss details because the record was sealed."
Two additional cases raise similar issues and are referenced in the New York Times. Both have opinions by Judge Hunter:
Matter of G. S., 17 Misc.3d 303; 841 N.Y.S. 2d 428 (Sup. Ct., New York County 2007), and
Matter of S.K., 13 Misc.3d 1045; 827 N.Y.S.2d 554 (Sup. Ct. Bronx Cty., 2006).
In both cases, Judge Hunter concluded the purpose for which the guardianship petitions were filed by the nursing home as petitioner was "not the legislature’s intended purpose when Article 81 of the Mental Health Law was enacted in 1993.” In each case, the judge assessed fees against the petitioner nursing home. In the 2007 case of G.S., the court observed, "To the extent that the nursing home is seeking to be paid for the care it has rendered to the person, the petitioner must seek a different avenue of redress for that relief as a guardianship application is inappropriate."
Third Circuit: Officers & Directors of Bankrupt Nursing Home Liable for "Deepening Insolvency" But Punitive Damages Not Proven re Directors
We reported in December 2013 about the long saga of the Lemington Home for the Aged, a troubled nursing home that sought bankruptcy court protection in 2010. Now, in a 2015 decision by the Third Circuit Court of Appeals, following an appeal from the March 2013 jury verdict that awarded the Home's unsecured creditors a total of $5.75 million, key issues about that damage award are addressed.
Judge Vanaskie, who had taken the lead on an earlier appellate opinion regarding the officers and directors, provided some relief for the five former directors on the nonprofit organization's board, who faced joint and several liability for more than $3.5 million in punitive damages. The opinion begins with a concise summary of the outcome:
"This lawsuit, which concerns the mismanagement of a Pittsburgh-area nursing home and its ensuing bankruptcy, comes before the Court for a third time on appeal. In the present appeal, the Defendants, two former Officers and fourteen former Directors of the nursing home, present several challenges to the jury's verdict, which found them liable for breach of fiduciary duties and deepening insolvency. The jury also imposed punitive damages against the two Officers and five of the Directors.
We will affirm the jury's liability findings and the punitive damages award imposed against the Administrator and the Chief Financial Officer of the nursing home. We will, however, vacate the jury's award of punitive damages against the Defendants who served on the nursing home's Board of Directors. We conclude that the punitive damages award against those Defendants was not supported by evidence sufficient to establish that they acted with 'malice, vindictiveness and a wholly wanton disregard of the rights of others .' Smith v. Renaut, 387 Pa. Super. 299, 564 A.2d 188, 193 (Pa. Super. Ct. 1989) (citations omitted)."
Wednesday, January 28, 2015
LeadingAge, an senior housing and senior care organization that often takes a prominent advocacy role on behalf of nonprofit Continuing Care Retirement Communities, has a "NameStorm Survey" underway. The survey explores whether another name (and presumably an acronym other than CCRC) would better "resonate with consumers?" Everyone is invited to weigh-in, including current residents at CCRCs.
Here's the link to the reasons for the brainstorming of names, and here is a link to the on-line survey, that takes just a few minutes. The survey window closes on February 15, 2015.
Tuesday, January 27, 2015
Republican chairs of the House Committee on Energy and Commerce and the Senate Finance Committee recently wrote to the head of Center for Medicare and Medicaid Services (CMS), demanding explanation for why 22 states and D,C. are "failing" to implement federal laws about Medicaid eligibility and asset transfer rules for Long Term Services and Supports (LTSS) benefits. They write:
"We are troubled to learn that many states have not implemented all of the eligibility and asset transfer requirements enacted by OBRA and DRA. Information provided to us by the Department of Health and Human Services' Office of Inspector General (OIG) shows that, as of November 2013, only 28 states reported they implemented all of the relevant provisions from these two laws. Thus, although it has been over 20 years since enactment of OBRA and nearly 10 years since DRA, the remaining 22 states and the District of Columbia have yet to comply with federal law. California, which accounts for 12 percent of Medicaid LTSS spending, reported that it has not implemented the majority of the relevant provisions. As a result, federal Medicaid dollars may be paying for care for individuals who are not eligible for coverage under federal law, which puts a strain on resources for those individuals who are eligible and in need."
The Chairmen ask for answers to a list of questions (by February 27), focusing on what action CMS is taking or will take to bring states "into compliance." For example, they ask "How is CMS ensuring that federal Medicaid dollars are not being used to support coverage for individuals ineligible for LTSS under federal law?"
Here is the legislators' full letter, addressed to Marilyn Tavenner at CMS, dated January 23, 2015.
For another perspective on potential disparities among the states in administering Medicaid eligibility rules for LTSS, see AARP's Public Policy Institute Report on "Access to Long-Term Services and Supports: A 50-State Survey of Medicaid Financial Eligibility Standards" released in September 2010.
This letter presents an interesting juxtaposition with the Armstrong case now pending in the Supreme Court. On the one hand, federal and state governments are arguing in court that there is no private standing to challenge "underfunding" of federally mandated Medicaid programs; on the other hand Congress seems to be demanding that CMS stop any potential for overfunding Medicaid beneficiaries.
Monday, January 26, 2015
In a major investigative report, The New York Times describes findings that nursing homes in counties throughout the state of New York are agressively seeking appointment of non-family members as guardians for residents of their facilities. The trigger? Unpaid nursing home fees.
Reporter Nina Bernstein uses the history of 90-year old Lillian Palermo to illustrate the practice, where a nursing home initiated a guardianship proceeding to displace her husband's authority as agent under a Power of Attorney, when disputes with her husband left unpaid bills, alleged to be "approaching $68,000."
NYT and researchers at Hunter College teamed to analyze the use of guardianships as a bill collection tool by nursing homes:
"Few people are aware that a nursing home can take such a step. Guardianship cases are difficult to gain access to and poorly tracked by New York State courts; cases are often closed from public view for confidentiality. But the Palermo case is no aberration,. Interviews with veterans of the system and a review of guardianship court data conducted by researchers at Hunter College at the request of The New York Times show the practice has become routine, underscoring the growing power nursing homes wield over residents and families amid changes in the financing of long-term care.
In a random, anonymized sample of 700 guardianship cases filed in Manhattan over a decade, Hunter College researchers found more than 12 percent were brought by nursing homes. Some of these may have been prompted by family feuds, suspected embezzlement or just the absence of relatives to help secure Medicaid coverage. But lawyers and others versed in the guardianship process agree that nursing homes primarily use such petitions as a means of bill collection -- a purpose never intended by the Legislature when it enacted the guardianships statute in 1993."
While, according to the NYT, at least one court has ruled such a "tactic by nursing homes is an abuse of the law," the increase of such suits highlights the payment dilemmas faced by facilities and families as Medicaid eligibility rules narrow and as the margin tightens for coverage of costs of care.
New York is not alone in seeing guardianship cases initiated by nursing homes. In Pennsylvania, attorneys retained by families or individuals have also sometimes challenged the practice, focusing on the use of facility-preferred guardians and the amount of fees added to the care bills in dispute.
National Senior Citizens Law Center, an important advocate for low income seniors in the U.S. since its inception in 1972, has announced a new identity, "Justice in Aging." But, don't worry, this change represents a deepening of their long-standing commitment (including a cherished role in training and education of senior advocates, including free webinars). As explained in news releases:
"The new name and accompanying 'look' will more accurately reflect the nature of our work, build on our legacy of impact, and open the door to engage more supporters and partners across the country. And it is a LOT easier to say and remember!
Our new name will be Justice in Aging. Our new tagline will be Fighting Senior Poverty Through Law.... Our new website will be www.justiceinaging.org. We will begin using the new name on March 2, 2015.... While our name is changing, our work will remain the same. As income inequality increases across the nation and the population ages, senior poverty is growing to unprecedented levels.... We still serve serve as a resource for advocates on important programs like Medicare, Medicaid, LTSS, Social Security and SSI."
We wish the hardworking staff of NSCLC -- or now JiA, perhaps? -- all the best as they roll out their new identity, and in their continuing commitment to advocating for seniors across the nation.
Sunday, January 25, 2015
The Federal Register on January 23, 2015 included a proposed rule from the VA on Net Worth, Asset Transfers, and Income Exclusions for Needs-Based Benefits. Here is an excerpt from the executive summary
This proposed rulemaking would amend regulations governing VA's needs-based pension programs to promote consistency in benefit decisions, reduce opportunities for attorneys and financial advisors to take advantage of pension claimants, and preserve the integrity of the pension program. The revised regulations would promote consistent decisions by establishing a bright-line net worth limit and re-defining net worth as the sum of assets and annual income. The revised regulations would also promote consistent decisions by defining in regulations those unreimbursed medical expenses that VA will deduct from a claimant's annual income for purposes of determining a claimant's annual pension payment.
By establishing in regulations a look-back and penalty period for claimants who transfer assets before applying for pension to create the appearance of economic need where it does not exist, the revised rules would reduce opportunities for financial advisors to provide advice for the restructuring of assets that, in many cases, renders the claimant ineligible for other needs-based benefits. Establishing a look-backand penalty period for pre-application transfers of assets would also preserve the integrity of the pension program by ensuring that VA only pays the benefit to those with genuine need.
Comments are due by March 24, 2015.
Thursday, January 22, 2015
If you have a loved one with dementia, particularly if you have watched him or her lose the power to communicate with words, perhaps you have wondered, what are they thinking? What are they hearing when you talk with them? Are they happy? Sad? Is confusion the dominant, or only, feeling?
You sometimes get hints of how they feel, including recognition they may feel profoundly trapped. I knew one man who, when he could not find the words, would shake his head and howl. I knew one woman who, when she was younger, used to have clever catch-phrases. By the time she was in her 80s, she had lost the ability to say a favorite phrase but she would say two words -- "Head up"-- over and over. She wanted you to help her complete the phrase. Her caregivers did not know that she had given hundreds of children horseback riding lessons, and misunderstood her words as a warning, perhaps motivated by paranoia. But, as one of her former students, when I heard her say "Head up" during my visit, I responded -- almost automatically -- with "Heels down." It is an equestrian's mantra for balanced riding. And she smiled as if we had just completed reciting the Gettysburg Address together.
With that background, I was captivated by a recent public radio broadcast, now available on an Invisibilia podcast, about the "Locked-In Man." Following an illness and a coma as a child, Martin Pistorius began to "awaken" during his teens, but for more than 10 additional years he was unable to talk, or even to signal to people caring for him -- or abusing him -- that he was "aware" of what was happening.
Imagine being trapped in front of reruns of "Barney" (television's purple dinosaur) day after day after day, for year after year. I know a senior care facility that seems to have the "King and I" playing on a television around the clock. Could Yul Brynner's singing be just as much torture as Barney's for someone who is unable to say "not again?"
Wednesday, January 21, 2015
Catching up with three new elder law-related articles from SSRN that look very interesting:
"The Universality of Medicaid at Fifty" by University of Kentucky Law Professor Nicole Huberfeld, forthcoming in the Yale Journal of Health Policy Law & Ethics:
"This essay, written for the Yale Law School symposium on The Law of Medicare and Medicaid at 50, explores how the law of Medicaid after the ACA creates a meaningful principle of universalism by shifting from fragmentation and exclusivity to universality and inclusivity. The universality principle provides a new trajectory for all of American health care, one that is not based on individual qualities that are unrelated to medical care but rather grounded in non-judgmental principles of unification and equalization (if not outright solidarity). This essay examines the ACA's legislative reformation, which led to universality, and its quantifiable effects. The essay then assesses and evaluates Medicaid’s new universality across four dimensions - governance, administration, equity, and eligibility. Each reveals a facet of universality that underscores this new principle’s importance for health care into the future."
"This paper analyzes nursing home failures in light of the federal regulatory regime that oversees them. Section II provides a framework for the discussion of nursing homes by describing the choices seniors have for their living arrangements. In order to establish context for the current social and legal space inhabited by nursing homes, Section III traces the historical development of the modern nursing homes, with a particular focus on the landmark laws of the 1960s that paved the way for late-twentieth century proliferation of nursing homes. With this background in mind, Section IV explores the federal regulatory regime that governs nursing homes, and Section V details the bodies and mechanisms that enforce federal rules and regulations. Section VI provides evidence and statistics regarding the prevalence of abuse and neglect in nursing homes and argues that these data evidence a troubled regulatory system. Section VII examines the Patient Protection and Affordable Care Act, which has been heralded as the most significant legislation affecting the healthcare industry in decades, and concludes that the law does not contain provisions that will serve to reduce elder abuse and neglect in any significant way. Section VIII offers recommendations to improve nursing home care in light of the foundation provided by PPACA. Section IX discusses potential blowback that these and other solutions may present and urges reformers to proceed carefully and thoughtfully before enacting any proposed reform."
"This Article explores the impact of federal law on a state fiduciary’s management of digital assets. It focuses on the lessons from the Stored Communications Act ('SCA'), initially enacted in 1986 as one part of the Electronic Communications Privacy Act. Although Congress designed the SCA to respond to concerns that Internet privacy posed new dilemmas with respect to application of the Fourth Amendment’s privacy protections, the drafters did not explicitly consider how the SCA might affect property management and distribution. The resulting uncertainty affects anyone with an email account."
Tuesday, January 20, 2015
The National Senior Citizens Law Center (NSCLC) has sent out the latest news on pending (but delayed) implementation of new rules affecting payment of wages for many home care workers. Here is the helpful update from NSCLC:
"A U.S. federal district court has struck down new rules that would have applied Fair Labor Standards Act standards, like payment of minimum wage and overtime, to most Medicaid home care providers. Historically, many personal care providers and other in-home assistants have been exempted from federal labor laws under the 'companionship services' exemption.
The US Department of Labor is likely to appeal the decision to the D.C. appellate court, so a final decision on the validity of the expanded FLSA regulations will take some time. In the meantime, however, the new regulations, which were supposed to start on January 1, 2015, will not take effect. Unless a state chooses otherwise, home care providers’ wages and hours will stay the same. For more details about the court decisions or the rule, visit http://www.dol.gov/whd/homecare/ or contact Hannah Weinberger-Divack."
Wednesday, January 14, 2015
The New York Times ran an article about the "trend" among states to adopt "right to try" drugs, which allow critically ill patients to try drugs that have not yet been approved by the FDA. Patients Seek 'Right to Try" New Drugs reviews the issues presented by "right to try" laws. These "right to try" laws have been adopted in several states, according to the article, including Arizona, Colorado, Louisiana, Missouri and Michigan. What is truly the goal of "right to try" laws? Get unapproved drugs into the hands of those who need them, or something more?
According to the article, the laws are really about autonomy and control over one's final days.
The laws do not seem to have helped anyone obtain experimental medicine, as the drug companies are not interested in supplying unapproved medications outside the supervision of the F.D.A. But that seems almost beside the point to the Goldwater Institute, the libertarian group behind legislative efforts to pass Right to Try laws. “The goal is for terminally ill patients to have choice when it comes to end-stage disease,” said Craig Handzlik, state policy coordinator for the Goldwater Institute, based in Arizona. “Right to Try is something that will help terminally ill people all over the country.”
According to the article, 10 states are likely to take up "right to try" laws in the 2015 legislative session, with pre-filed bills in a few states so far. The article notes there are critics of such laws. The federal courts have already weighed in on "right to try" laws, with the case, Abigail Alliance for Better Access to Developmental Drugs v. von Eschenbach , 495 F.3d 695 (D.C. Cir. 2007) (cert. denied, 552 U.S. 1159 (2008)). The "right to try laws" do have some limits, which the article describes, using Colorado as an example
The Colorado law, which is similar to ones in other states, permits terminally ill patients who have exhausted their treatment options — including clinical trials — to obtain therapies that have passed at least the first of three F.D.A. investigation phases. The law does not require companies to provide the treatment, nor does it mandate that insurance companies cover it; the law also allows insurance companies to deny coverage to patients while they use drugs under investigation.
For those patients who are terminally ill, there is help under the FDA rules for them to get access to unapproved drugs. "[T]he F.D.A. created a process for granting unapproved therapies to people with exceptional need. Called the “expanded access program” or “compassionate use,” the program ... is [the] way for terminally ill people to request an unapproved therapy after they are rejected from clinical trials." Criticism of the length of the FDA approval process isn't new, and even the "expanded access program" has critics, with an illustration provided in the article.
These "right to try laws" intend to speed up the process by eliminating the FDA involvement. "Once a physician and a patient determine that treatment is the right choice — and that other options have been exhausted — the pair approach the drug company for permission."
So "right to try" laws appear to be one more effort to preserve autonomy and give terminally-ill patients more options for their care; another tool in the tool chest that includes advance directives, POLST, PAD, and DNRs, to name a few.
A 90-year-old resident apparently wanted "out" of her personal care home in Pennsylvania -- but being kicked out probably wasn't the outcome her family wanted to see for their restless matriarch. The personal care home issued a discharge notice on safety grounds, due to her "continued exit-seeking from the building."
On January 9, 2015, the Commonwealth Court of Pennsylvania, an intermediate court, ruled that a core right recognized in state and federal law for residents of "long-term care nursing facilities" -- the right to seek third-party review when the resident or family disagree with a facility's involuntary discharge or transfer decision -- does not apply to "personal care homes" under the state licensing and regulatory system. See Bouman v. Department of Public Welfare, Case No. 1262 C.D. 2014, decided November 14, 2014.
Perhaps a new facility was the best decision, but at age 90, the woman's options for settling into a new place may be very limited. The short opinion does not reveal whether other approaches, including behavioral "distraction" techniques that often are effective for those with dementia, were explored. And without an appeal right, families may have no effective way of advocating for those approaches.
Monday, January 12, 2015
We have blogged on several occasions about the myriad issues regarding caregiving in the U.S. Kaiser Health News ran an interesting story last week about the training (or lack thereof) of caregivers. Lots Of Responsibility For In-Home Care Providers — But No Training Required focuses on the topic of the growing need for in-home caregivers and training them
The need for in-home caregivers is rising as the elderly and disabled population grows. The demand for personal aides – most of whom work in the home — is expected to increase by 37% over the next decade, requiring about 1.3 million new positions, according to research published last year by the New-York based Paraprofessional Healthcare Institute, an advocacy group that also provides training.
Training requirements are left to the states and there is significant variance, according to the story, which used California as an example. California's program "In-Home Supportive Services Program" or IHSS, according to the article is the largest "publicly funded home care program" in the country and has a significant percentage of caregivers related to the elders needing care. Although the caregivers are employed to provide chores around the home and personal care, because so many of the clients are at least 80 or older and have dementia or multiple health problems, the caregivers find themselves in expanded roles where they perform some medical care. When the caregivers are in that situation, they are supposed to be trained and ok'd by a health care professional, but the state doesn't support the training or compensate the caregivers for going through it.
But, as the article notes, the purpose of the California program was to allow the clients to direct their care, which as their health declines, may not remain possible. The state does offer online training for those caregivers who voluntarily seek it. The article goes on to discuss the complex issues in requiring caregiver training
Relatives, who make up nearly three-quarters of paid IHSS caregivers, often say they know what is best for their loved ones. And clients are inclined to trust family members and say they can instruct them on what they need.
Different states are trying variations on training; for example in 2012 Washington State started requiring 75 hours of training for in-home caregivers and under the ACA, California, along with a few other states, has received grants totaling nearly $15 million "to recruit and train qualified caregivers for the elderly and disabled populations."
The article also features an audio version and includes the stories of several caregivers.
Friday, January 9, 2015
Michigan Governor Rick Snyder signed Michigan Senate Bill 886 and related bills (SB 887, 888 and 889) into law on December 30, 2014. The new law is described as "an ongoing effort to continue to support consumer choice and protection while encouraging continued investments into vital care facilities" in the state of Michigan, focusing on continuing care retirement (CCRCs) and life care communities.
The law, titled the Continuing Care Community Disclosure Act, would appear to replace prior law, and thus it will be important to sit down with the new provisions and examine them carefully, especially given the announced reasons for passage. I'm guessing there might be some trade-offs here, with both consumers and providers having interests at stake. According to press releases, some of the "major" provisions of the new law include:
- A limit on amortization of the entrance fee to 1.5 percent for each month of occupancy
- A requirement for any continuing care community to register with the Department of Licensing and Regulatory Affairs (LARA)
- Setting a $250 registration fee and a $100 renewal fee
- Organizations must report if any executive officers or director has been convicted of certain felonies
- A feasibility study with a business plan must be included in each application
- Exemptions from promulgated rules governing different types of facilities could be granted if the rules interfere delivery of care or with moving residents between different facilities
- Regulations on the fees facilities may charge and how refunds are provided to potential and former residents
- A continuing care community could petition for a guardian if a resident became incapacitated and unable to handle his or her personal or financial affairs
The legislation reportedly had the support of LeadingAge in Michigan. I'm curious about the background on this new legislation -- perhaps some of our readers know the history and reasons for new laws here?
Tuesday, January 6, 2015
The New Mexico Court of Appeals recently rejected the claim by El Castillo, a Continuing Care Retirement Community (CCRC), for charitable property tax exemptions. I was particularly interested in this ruling, as I have visited the campus several times over the years, and have come to know many residents, who are some of the most active, socially aware seniors I've encountered. Just trying to keep up with 78-year old friends who are walking, walking, walking (at 7,000 feet) to their meetings can be a challenge. The campus is very pleasant, quite modestly appointed, and fairly compact -- but perhaps most important of all, it has a terrific location. I suspect that is a large part of the reason it is on the tax assessor's radar. The campus is just a few blocks from the heart of beautiful Santa Fe and steps away from Canyon Road's art galleries.
El Castillo has operated as a CCRC since 1971, with a Type A or "Life Care" structure, where residents age 65 and older pay non-refundable entrance fees, plus monthly service fees, with the expectation that all needs, whether in so-called "independent" apartments, assisted living units or nursing care, are provided on the same campus. El Castillo is not associated with a particular faith nor with any fraternal organization, but it has operated since its inception under Section 501(c)(3) of the Internal Revenue Code, and thus is exempt from income taxes based on historical rulings that permit charitable tax exemptions for "homes for the aged." However, as we have discussed in the past in this Blog, a state's standards for charitable property tax exemptions can be quite different than the IRS approach to charitable income tax exemptions.
State and local governing bodies are constantly in search of tax revenues, and CCRC campuses, especially in urban locations, can be a tempting target. Under New Mexico's state constitution, at Article VIII, Section 3, "all property used for educational or charitable purposes shall be exempt from taxation." Prior cases interpreting this provision did not require a facility to be operated "exclusively" for charitable purposes, but the landowner has the burden to show it operates "primarily and substantially for a charitable purpose."
Key to the court's denial of the tax exemption was its observation that El Castillo appeared to operate as a self-sustaining unit funded entirely by fees paid by residents, with little or no "charitable" base. The Court rejected El Castillo's argument that its charitable mission was to provide life-time care for residents who could (and sometimes do) become personally unable to pay, and that such a mission was only possible through "subsidizing" such residents by, in essence, pooling the fees paid by all residents. As demonstrated by contrasting rulings on property tax exemptions in other states, the financial analysis necessary to support a charitable use property tax exemption may require detailed analysis and advanced planning. There is a fine line for any nonprofit to balance costs, sources of revenues and the goal of sustainability. In some instances, I have seen denial of property tax exemptions be the final straw for some nonprofit operators, especially those struggling with rising costs or occupancy rates after the 2008 financial downturn.
In New Mexico, there is both a constitutional basis for seeking a property tax exemption and a statutory basis. The ruling on El Castillo -- which by the way, when translated from Spanish, means "The Castle" (a bit of irony perhaps, given the court's seeming hostility towards the exemption claim, pointing to the lack of "indigent" residents) -- was based only on the state constitution. It appears the tax assessor actually failed to perfect his attempt to appeal a separate portion of the lower court ruling that had granted El Castillo the right to charitable tax exemptions on statutory grounds. Thus, it would appear that El Castillo would not immediately feel the effects of the Court's ruling, at least not for the specific tax years at issue in the multi-year litigation. In a footnote, the Court of Appeals judges acknowedged that their decision on El Castillo creates a "dfferent result" than the same court's 2013 ruling on charitable property tax exemptions for a different life-care community, La Vida Llena, in Albuquerque, N.M. The Court distinguished the La Vida Llena ruling as based only on statutory grounds.
For the complete ruling, including a complex jurisdictional issue, see El Castillo Retirement Residences v. Martinez, Case No. 31, 704, decided December 17, 2014.
Back in November, NPR ran a moving story about two employees of an ALF who stayed to care for residents left behind when the ALF closed, leaving the residents to fend for themselves. The NPR story, 'If We Left, They Wouldn't Have Nobody' tells how the cook and the janitor stayed to care for the residents, even though the rest of the employees left when they were no longer paid. The article notes that the story was the catalyst for legislation, "the Residential Care for the Elderly Reform Act of 2014." The audio of the story is available here.
Elder Law attorney Morris Klein from Bethesda, Maryland shared with us "Why You Shouldn't Count on Your Family Members to Take Care of You When You're Old" from the Washington Post. It begins with contrasting perspectives:
"About 60 percent of adults between 40 and 65 years don't think they'll need long-term care services, according to a new Health Affairs study. That's much less than the 70 percent of people at least 65 years old who will need long-term care services at some point, either in their home or at a facility, according to a widely cited earlier study from the Georgetown University Long-Term Care Financing Project. That includes 20 percent who will need between two to five years of long-term care and 20 percent who'll need more than five years."
The article provides current cost ranges, citing the need for greater realism about the costs of any third-party care. Plus, the author warns that a "major reason people are too optimistic is that they think their families will take care of them.... However, about 37 percent of people will need at least some facility-based care and 42 percent will need some formal care at thome, the earlier Georgetown study found." And the article continues with more sobering statistics....
Thanks, Morris, for sharing this article!
Monday, January 5, 2015
Health Care Decisions for the "Unbefriended" -- a Report from "Aging and Law" Program at 2015 AALS in D.C.
My thanks to Becky Morgan for her words of support regarding the task ahead of me as the incoming chair of the Aging and the Law Section of the American Associations of Law Schools (AALS). AND, more importantly, our thanks to Mark Bauer, from Stetson Law, the outgoing chair on Aging, and Thaddeus Pope, Hamline Law, the chair of the Law, Medicine and Healthcare Section, who worked together to present a great program.
The focus of the 2015 joint program was examination of how health care providers approach the question of medical decisions -- and not just end-of-life treatment decisions -- for a unique, but not rare, group of individuals. We were asked to consider whether current law and practice adequately serve those who have not expressed their views in advance (such as by a written "living will" or other care directive), have not appointed a surrogate decision maker (such as by naming an agent in a written directive, whether in the form of a Power of Attorney or specialized health-care directive), are not able personally to communicate with a doctor or care provider to give direction and consent to treatment, and for whom there is no family member or close individual recognized by formal law or informal practice as having decision-making authority. Sometime this individual is simply someone who has outlived her family and close friends.
The discussion was good, especially with the help of the 50-state legal review from the wonderful Erica Wood of the American Bar Association's Commission on Law and Aging, and key practical perspectives and experiences from Ellen Fox, M.D., who was Chief Officer, Ethics in Health Care, for the Department of Veterans Affairs for 15 years, and who now is the CEO for Integrated Ethics Consulting LLC.
David Orentlicher. J.D., M.D., and the co-director of the Center for Law and Health at Indiana University School of Law provided an intriguing examination of "clear and convincing evidence" standards as used in health-care decision making for "unbefriended" patients. Sharona Hoffman, from Case Western Reserve Law also added good food for thought, including talking about "precedent autonomy," which for me was a new label to consider. This latter concept resonated with me on a personal level, as for many years my father made it very clear how he did not want to live under certain circumstances if he developed certain disabling conditions, but who now seems to have quite a different view -- acceptance of life, perhaps --"with" dementia.
Great discussion, including wise observations from members of the audience about the number of years that society has struggled with these issues of treatment decisions for those who cannot express their personal wishes, and the incremental (and sometimes frustrating) nature of change.
I always hope to come away from AALS programs with new things to read and study, both for myself and my students. So, along that line, here are two takeaways:
- Ellen Fox is a co-author for "Ten Myths About Decision-Making Capacity," including the first "myth that decision-making capacity and competency are the same."
- A paper on "The Concept of Precedent Autonomy" by John K. Davis.
Thursday, January 1, 2015
Just a reminder to those of you who are attending the AALS Annual Meeting in D.C. this weekend. The Section on Aging and the Law and the Section on Law, Medicine and Health Care are hosting a joint program on Saturday, January 3, from 3:30 to 5:15 p.m. The topic is "Unbefriended Elderly: Making Medical Treatment Decisions for Patients Without Surrogates."
Papers from the program are scheduled to be published in Stetson's Journal of International Aging Law & Policy.
As backtround for this program, you might want to re-read the short article by Naomi Karp and Erica Wood from a few years ago and published in the ABA Human Rights journal, "Incapacitated and Alone: Healthcare Decision Making for Unbefriended Older People."
See you there!