Thursday, December 5, 2013
Calling it a "matter of first impression," an intermediate appellate court in Pennsylvania has ruled that a woman's renunciation of her interest in a dissolved marital support trust was a transfer "for less than fair consideration," thus triggering ineligibility when she entered a nursing home and applied for Medicaid.
As reported in Schell v. Pa. Department of Public Welfare, decided December 4, 2013 by the Pennsylvania Commonwealth Court, a testamentary trust was dissolved in 2009, leaving approximately $300,000 to be distributed to the settlor's widow. The widow formally renounced her interest in the distribution, permitting the sum to be divided equally between the couple's two children, one of whom was disabled. Two years later, in 2011, the widow entered a nursing home and applied for Medical Assistance.
While DPW accepted the widow's "hardship" argument regarding the half distributed to the disabled daughter, the Court upheld DPW's challenge to the distribution of the other half to the son. The Court rejected the widow's argument that the penalty period could not apply to a trust created more than five years before her nursing home admission, on the ground that the key event was termination of the trust within the Medicaid lookback window:
"Once the trust was dissolved, Petitioner became entitled to any remaining income and principal therein. This income and principal was available for Petitioner to use for her support, but she made an affirmative decision not to receive the same, without any good cause explanation for so doing. . . . Upon Petitioner’s renunciation, the trustee distributed half of the remaining income and principal from the trust, $151,231.76, to her son. Petitioner received nothing in return, and, thus, the [Bureau of Hearings and Appeals] properly concluded that this transfer was for less than fair market value, thereby resulting in the imposition of a penalty period of 582 days."
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!
Sunday, November 17, 2013
I expect this topic will generate considerable discussion.
John B. Payne, long-time practitioner in Michigan and Pennsylvania, addresses a fundamental issue for those working in the law and aging policy arena: whether so-called "Medicaid Planning" is somehow wrong. In doing so, he considers several important perspectives. John starts by identifying six different "constituencies" who are "involved in or affected by planning steps," including legislators, public welfare administrators, nursing home operators, lawyers, judges, and commentators. The article, "Ethical and Public Policy Considerations Related to Medicaid Planning," is the lead in the October 2013 issue of the Pennsylvania Bar Quarterly. The abstract provides:
"This paper discusses moral, ethical, and public-policy issues regarding Medicaid planning -- transferring or converting assets of a long-term care consumer to create Medicaid eligibility. The author argues that it is not unethical to qualify a nursing-home resident for Medicaid by means of asset transfers where the resident will receive the same service under Medicaid as he or she would receive as a private-pay patient. The author further contends that an applicant's lawyer would have an ethical and moral obligation to the client and the client’s family to maximize Medicaid payments for nursing care where it is clear that the client would want Medicaid to cover the cost of care. Finally, the author urges that the state’s or commonwealth’s fiscal concerns should not be given priority by a court above a Medicaid candidate’s legitimate desire to preserve his or her wealth in the face of ruinously expensive nursing home costs."
Friday, November 15, 2013
Think of state-subsidized home care as a form of "outsourcing" -- or at least that is how one state's top investigator reportedly described state payments for home care -- while citing serious concerns from a special audit for the funding system.
Pennsylvania's Auditor General released a Report on November 14 detailing "long-term mismangement" by the state's Department of Public Welfare of home care worker payroll providers, causing financial and emotional strain for care recipients and workers, while also "unnecessarily costing taxpayers millions in Medicaid dollars per year." A press release explained:
“Thousands of people who provide services that help the elderly, and children and adults with disabilities, stay in their home — out of institutional care — went for weeks and months without a paycheck because DPW failed to provide adequate oversight and demand accountability of contracted payroll providers,” DePasquale said about the problematic transition in January from 36 payroll providers to Public Partnerships Limited LLC (Public Partnerships Limited), of Boston, Mass.
“Our audit found that problems with the transition caused so much fear and confusion that at least 1,500 people receiving home care services switched to a more expensive model of care that is unnecessarily costing at least $7 million more per year.”
The special performance audit opened in February 2013, triggered by "calls and complaints from home care participants and their direct care workers across the state."
According to PennLive news, the Public Welfare Secretary who took office this year believes many of the problems have already been fixed and the current system is working better.
Thursday, November 14, 2013
Nursing homes, contracts, agents and payment demands. I'm seeing interesting cases and laws coming out of Connecticut. The topic is whether (and when) liability arises for an individual, often a son or daughter, who admits a parent to a nursing home, if a gap arises in payment for that parent's care. Here are a few highlights from the Nutmeg State:
- In early 2013, the Supreme Court of Connecticut upheld a judgment in favor of a defendant/daughter, who was sued for breach of contract by her father's nursing home. The judgment included attorneys' fees for daughter under a state law governing the rights of successful consumers in disputes with commercial parties. The daughter had signed documents at the time of her father's admission, as a condition of admission. The nursing home's contract attempted to establish contractual obligation for the signer as a responsible party "if the responsible party has control or access to the patient/resident's income and/or assets, including but not limited to making prompt payment for care and services...." Under the court's ruling, however, this clause did not bind the daughter to pay for her father's care, as she was neither an appointed agent under a power of attorney, nor a court-appointed guardian. Aaron Manor, Inc. v. Irving, 57 A.3d 342 (Conn. 2013).
- Digging deeper into the Aaron Manor case, I looked to see why there was a payment gap. What wasn't clear from the Aaron Manor decision by the Connecticut Supreme Court, was the potential importance of the role played by another adult, the father's son. As reported in greater detail at the intermediate appellate level, the son (and thus also brother to the daughter/defendant discussed above) did have a power of attorney and control over the father's accounts, had not signed the admissions contract, and had made transfers (including gifts) to himself and his sister from those accounts. Eligibility for Medicaid was not discussed in the intermediate court's case history. My best guess is the son declined to pay the nursing home bills for dad (and the history suggests a gap of a couple of months may have been connected to terms of some private insurance, so perhaps there was a separate insurance coverage dispute), but the son wasn't sued because he hadn't signed that nursing home contract. Connecticut has a filial support law, by the way, but it is not comparable to Pennsylvania's filial law. Aaron Manor, Inc. v. Irving, 12 A.3d 584 (Conn. App. 2011).
- Here is where things get interesting (spicier?) -- at the Legislature. Effective on October 1, 2013, the Connecticut Legislature amended state law to permit a nursing home to collect a debt for unpaid care for a resident from third parties, if that resident has been denied Medicaid because of one or more transfers by or to those parties, causing ineligibility. The Connecticut law provides that nursing home collection suits may be filed against the "transferor" or the "transferee." A successful nursing home may also seek attorneys' fees. Sections 128-130 of Connecticut Public Act 13-234.
It looks like the statutory change is a direct response to the type of facts represented in the Aaron Manor case, and would give nursing homes potent options for the future, as the son was a transferor (and transferee) and the daughter was a transferee. I have written about liability issues arising out of nursing home contracts, including discussion of an earlier Connecticut case, Sunrise Healthcare Corp. v. Azarigian, 821 A.2d 835 (Conn. App. 2003), a case that was distinguished by the courts in analyzing Aaron Manor. (In fact, the last few years I've spent so much time reading contracts and cases connected to financial responsibility for long-term care, that I finally volunteered to add Contract Law to my teaching package.) No secret that I find this area to be a fascinating juncture of substantive concepts, requiring analysis of health care policy, family law, contract law, agency law and elder law (which includes, of course, Medicaid law).
How did the Legislative change come about? According to a report by Wiggin & Dana, a Connecticut law firm representing providers, the changes to Connecticut law "grew out of a multiyear effort by LeadingAge Connecticut to convince the General Assembly to address the need to assist nursing homes facing bad debts. . . . Although the elder law bar and legal services advocates initially opposed the legislation, the Co-Chairs of the General Assembly's Human Services Committee . . . led a successful mediation process resulting in compromise language that received the support of all parties."
In writing about the new Connecticut Law, ElderLawGuy Jeff Marshall comments that this may be part of a "trend to make perceived 'wrongdoers' . . . liable for unpaid nursing home costs." Further he predicts such an approach, which is an alternative to liability under filial support laws, could "spread to other states."
See also the Elder Law Prof Blog's earlier post: "New Hampshire Establishes Liability for Agents Who Fail to File Timely Medicaid Applications."
Feel free to comment below on your views on this potential trend.
Monday, November 11, 2013
In my experience, the Elder Law Bar -- those lawyers who work hard to help older adults and family members through the maze of options in deciding how to handle long-term care needs and end-of-life planning -- are also a warm, generous group of professionals to hang out with. When you need an answer to a tough question on one of your cases, someone always takes that call. When you need a speaker for a meeting, conference, or classroom, someone always volunteers, and then goes above and beyond, to provide a little something extra in terms of value for the audience.
Another example of the generosity of the bar occurred this semester in my Elder Law class, when a graduate of our law school, Robert C. Gerhard, Esq. stepped forward to teach a class for me when I was called out of town. The topic was "setting up your own elder law practice," and Bob was full of practical advice, including both encouragement and appropriate warnings. Bob is one of many great practitioners who have shared experiences with our students.
But Bob went above and beyond, providing each of the students in the class with a copy of the latest edition (2013) of his treatise, Pennsylvania Medicaid: Long-Term Care (Bisel Co.)
I had a chance to review the book over the weekend. It is a practical "bonanza," in the sense that it offers both narrative explanations of Medicaid law as practiced in Pennsylvania, and all of the key forms and hard-to-find informal state guidelines about the process. It is the kind of book that is useful both to the public as a "first step" and fellow practitioners who need reminders about the many next steps. Chapters 4, 5 and 6 are golden, using clear language to explain "achieving resource eligibility," the application process, and the ever-more challenging "estate recovery" rules.
I hope all elder law and estate planning professors have alums and colleagues in practice who are both generous AND good writers. Thanks, Bob!
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.
Thursday, October 31, 2013
In Hughes v. McCarthy, decided October 25, 2013, the Sixth Circuit reversed a distict court judgment and approved the right of an Ohio Medicaid applicant to receive coverage for her nursing home care, without penalties tied to her husband's purchase of a single premium annuity. The husband's actuarily sound annuity named himself as the primary beneficiary, using $175,000 from his IRA account.
By the way, in reaching its decision, the Sixth Circuit appellate court cites analysis from National Senior Citizens Law Center's Eric Carlson, pointing to his chapter in Matthew Bender's Long-Term Care Advocacy treatise.
Correct me if I'm wrong, but I think there are now appellate decisions from five circuits approving Medicaid eligibility based on specific facts involving spousal annuities: the 2d Circuit (Lopes case), 3rd Circuit (James case), 6th Circuit (Hughes case), 8th Circuit (Geston case), and 10th Circuit (Morris case). Am I missing any key appellate cases in this fast moving arena?
For links to several of these cases, see my September post on the Geston case.
Friday, October 25, 2013
This weekend I'm heading off to Dallas for a quick visit, to help with a Sunday workshop for the good folks at NACCRA, the National Continuing Care Residents' Association. Then I get to attend part of the LeadingAge Annual Meeting & Expo that runs from October 27-30.
I have to say I've been a bit overwhelmed with the email traffic from participants at the LeadingAge Expo (next time I'll be more careful about what boxes I check on the registration forms). But, it is always good to see an industry from different perspectives and to get outside the "academic" world for a broader view. I'm also looking forward to catching up with friends, including Trisha Cowart, who will be presenting on "Surviving the Medicaid Maze," on Tuesday, October 29, speaking from her experiences the last few years as an attorney representing long-term care providers. Trisha and I co-authored a book on Financial Abuse and Exploitation (Bisel 2011) and she's a cherished former partner from the Penn State Elder Protection Clinic.
I'm also looking forward to seeing some of the high-tech developments in long-term care I've been reading about. More after I return.
Wednesday, October 23, 2013
Following last week's USA Today article exposing thefts by nursing home employees from resident trust accounts, Senator Bill Nelson, chair of the U.S. Senate Special Committee on Aging, has called upon the Inspector General to investigate management and oversight practices and to reommend corrective action by the Centers for Medicare and Medicaid (CMS). CMS has oversight authority over nursing homes.
In a letter dated October 21, Senator Nelson targets the absence of standard protocals for safeguarding such accounts:
"Widespread negligent oversight allowed some of these theft and embezzlements schemes to go on undetected for years, and in some instances the losses totaled more than $100,000. Several of these trust fund culprits were caught merely by accident or due to the suspicions of a co-worker, and not by systematic financial auditing or tight management controls."
If, as the saying goes, no good deed goes unpunished, no bad deed by a nursing home goes uninvestigated by Congress. Stay tuned, but don't hold your breath.
Powers of Attorney (POAs) are a key tool in estate planning and Medicaid planning. A thoughtfully drafted POA can avoid the need for a guardianship, for example, and thus avoid delays, embarrassment and greater expense for a principal who later becomes incapacitated.
Unfortunately, POAs can also be a tool for misuse by agents who can't resist the temptation to help themselves, rather than their principals. For a number of years, states have been struggling to balance utility against risk.
In Pennsylvania, for example, prior to 1999, statutory law governing POAs permitted principals to grant agents the authority to make gifts. Civil case law interpreted such gift-giving authority, unless expressly limited, as permitting agents to make "self-gifts." Even if the agent's self-gifting put the principal in serious financial jeopardy, some prosecutors declined to prosecute. Following a series of troubling reports and cases, in 1999 the Pennsylvania legislature amended state law to declare that all agents appointed under POAs were subject to specific fiduciary duties. The change also imposed a statutory presumption of limited gift authority (tied to annual federal gift tax exclusions) unless the principal expressly granted the agent "unlimited" gift authority.
Concern about misuse of powers of attorney has grown on a nationwide basis,especially after high profile cases such as that of New York heiress Brooke Astor, where her son used a POA to sell off artwork and other valuable property, while reportedly keeping his mother isolated from friends.
Even before the Brooke Astor case came to light, academics, legislators, judges and practitioners worked together in the Uniform Law Commission to propose amendments to statutory authority governing POAs, resulting in the Uniform Power of Attorney Act of 2006 (UPOAA), which superseded prior uniform law proposals. The UPOAA attempts to rebalance risk and power, or as the Commission summarizes:
"The UPOAA seeks to preserve the durable power of attorney as a low-cost, flexible, and private form of surrogate decision making while deterring use of the power of attorney as a tool for financial abuse of incapacitated individuals. It contains provisions that encourage acceptance of powers of attorney by third persons, safeguard incapacitated principals, and provide clearer guidelines for agents."
Adoption of the UPOAA has been fairly slow. As of today, only 13 states plus the U.S. Virgin Islands, have enacted the UPOAA.
In 2013, legislatures in Mississippi (H.B. 468) and Pennsylvania (S.B. 620) are considering adoption. In Pennsylvania, the need for clarification has been heightened by reaction to the Pennsylvania Supreme Court's opinion in Vine v. Commonwealth, 9 A.3d 1150 (Pa. 2010), where a POA was signed by a hospitalized principal, and used by the husband/agent to make self-benefiting changes to his wife's retirement accounts, while his wife was incapacitated.
Court practice and enforcement policies on POAs, guardianships and elder abuse are also under consideration by the Pennsylvania Elder Law Task Force (2013), chaired by Justice Debra Todd of the Pennsylvania Supreme Court.
In Pennsylvania, views on what changes to POA laws are necessary differ in small or large ways among bankers, estate attorneys, elder law attorneys and district attorneys, just to name a few of the interested parties.
The scholarship of law professors has been important to the debate over proper use of POAs, including two articles by Valparaiso Law Professor Linda Whitton, "Durable Powers of Attorney as Alternatives to Guardianship: Lessons We Have Learned" and "The New Power of Attorney Act: Balancing Protection of the Principal, the Agent and Third-Persons."
By the way, when I first drafted this post, I titled it "The Problem(s) with Powers of Attorney." Overnight, I rethought that title, because many POAs are never abused and agents frequently go above and beyond in performing uncompensated services, including financial management, for aging principals. I therefore retitled the post. What law reform movements are attempting to do is reduce the potential for abuse. Human nature being what it is, there is probably no law that can prevent abuse by a wrongly motivated agent. Who to trust with powers granted under a POA will always be an important matter for families to consider and discuss with their legal and financial advisors.
October 23, 2013 in Advance Directives/End-of-Life, Current Affairs, Estates and Trusts, Ethical Issues, Medicaid, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)
Monday, October 14, 2013
When I first began writing about modern enforcement of filial support laws, I was examining what I would now call a "little" Pennsylvania case, Savoy v. Savoy, 641 A.2d 596 (Pa. Super. 1994) where a mother was asking for financial support from her adult son because she was unable to work after a hospital stay. Citing Pennsylvania's filial support law, requiring children "to care for, maintain, or financially assist" an indigent parent, the court ordered the son to pay $125 per month, but the court did not order him to pay her; rather, the court ordered the son to pay his mother's health care providers. The relief granted in that case was probably of little practical value to the plaintiff. Most likely, the mother could have discharged those bills in a no-asset bankruptcy. What she really needed was help in the future. She needed help with daily expenses because she was unable to work and was sliding into poverty. I learned that even a few years after the court case was over, the family relations were still pretty much destroyed. Money had been paid, but that was about all.
I was worried about the implications of the Savoy decision for future cases involving reluctant adult children. What if the reluctant child chose to provide direct care to the ailing parent only because the law imposes such a duty, or because the child is avoiding a court order requiring him or her to pay real dollars for future support? It is great when family members voluntarily provide care, and it is often heroic when they do so even at huge emotional and fiscal cost to themselves. But, doesn't court-ordered "filial support," imposed upon a reluctant family member, pose a real danger to the elder, especially a frail elder?
So, let's look to China. Earlier this year, some were talking about news of China's decision to enforce its filial support laws, and there was speculation that such enforcement could be a better alternative to the rising cost of publically supported long-term care, such as the costs of Medicaid in the U.S.
This is where journalist Kristen Gelineau's latest work is important. Kristen is in Australia, where she writes for The Associated Press. Several months ago she contacted me, asking about Pennsylvania's law, as well as the law of other states and countries. We talked about China. It turns out Kristen went to China to track down exactly what happened in a key case of enforcement, where a Chinese elder was granted relief under China's version of a filial support law. Kristen travelled to a village with a photographer and translators (used to translate the local Chinese dialect to Mandarin, then Mandarin to English).
Kristen's story, In Aging China, Older Woman Sues Children for Care, is powerful and it deserves careful attention. She tracks the misery associated with desperate financial conditions for an entire family, and how such misery can be intensified when "by the book" enforcement of filial support laws takes place. As Kristen told me over the weekend, everyone in Zhang's story is struggling to get by and "no one is happier now than they were before they want to court."
Kristen's story is a vivid reminder that there are reasons why Elizabethan-era Poor Laws were replaced with social insurance and public welfare programs, a reminder that is even more relevant to our aging planet in the 21st Century.
And there is more to come from Kristen Gelineau. Her next piece, to be released later this month, looks at elder neglect in Australia and the wider problem of elder abuse globally.
Friday, October 11, 2013
Today I received another telephone call from a stunned adult child living in another state, trying to make sense of papers he'd received, telling him was being sued because there was money due on his parent's nursing home bill. Another filial support case, filed under Pennsylvania's law. As far as I could hear, the son had not done anything wrong, other than trying to figure out why his mother was so deeply in debt even before she went into the nursing home. But Pennsylvania's filial support law -- and most states' filial support laws (see this week's earlier post about siblings sued for filial support in North Dakota) -- does not require proof of fault in order to trigger liability. Kinship of the right degree is all that's necessary for potential liability.
So, once again it was time for me to get out my list of elder law attorneys, to suggest who might be able to help the son.
Experienced Pennsylvania elder law attorneys probably make more money because of the state's unique history of nursing homes suing for filial support. Families need their expertise to avoid even the slightest problem with nursing homes' admission and billing practices. Plus, there is a minefield of eligibility rules associated with Medicaid applications. So you would not think Pennsylvania's elder law attorneys would have time or interest in repealing filial support laws. Wrong. Pennsylvania elder law attorneys are tired of seeing adult children caught in family tragedies, struggling to figure out how to help their parents, without enough money to go around.
Sure, sometimes the nursing home suit is caused by "bad" children, but I hear from a heck of a lot of folks who fall into Pennsylvania's filial support trap without any affirmative misconduct.
Pennsylvania elder law attorneys -- through PAELA, the Pennsylvania Chapter of the National Academy of Elder Law Attorneys -- have taken a stance. They are urging Pennsylvania legislators to repeal the state's filial support law. Details of PAELA's position are set forth by long-time elder law guru Jeff Marshall on his Elder and Estate Planning Blog. And if you want another way to stay on top of developments, check out ElderLawGuy on Twitter. Yes, Jeff's that "guy," too!
Thursday, October 10, 2013
I have been seeing and hearing a fair number of inquiries about the effect of reverse mortgages on an individual's eligibility for Medicaid, with suggestions the answers differ both by type of reverse mortgage contract and by state. That sparked my curiosity about whether there is emerging scholarship about reverse mortgages as a tool for financing long-term care. Here are some of the articles I found, with a few notes about the substance:
Bradley Schwab, "The Birth of a Real Right: An Overview and Analysis of the Recent Revision of Book III, Title X of the Civil Code," 73 Louisiana Law Review 821 (2013):
The title of this article probably means a lot in Louisiana, but I have to say I would not have realized it was an entire article about annuity contracts, until my research discovered the author's conclusion for why annuity contracts are often "more appropriate than a reverse mortgage for those who eventually need long-term nursing home care." An impressive analysis -- from a recent graduate. Perhaps another example of an Elder Law student who "rocks?"
Paul Black, "Reverse Mortgages and the Current Financial Crisis," 8 NAELA Journal 87 (2012):
Starts with a detailed outline of the mechanics of reverse mortgages, before moving into analysis of the potential risks to borrowers, including predatory lending tactics, the recent prohibition on "bundling" of reverse mortgages with deferred annuities, and the potential for unintended consequences for Medicaid eligibility. Turns out the author, a 2010-11 Borchard Foundation Fellow, is a fairly recent graduate and this article is actually an expanded version of a paper he first wrote as a law student. Another Elder Law student who "rocks?"
Andrew Hyer et al., "Paying for Long-Term Care in the Gem State," 48 Idaho Law Review 351 (2012):
While surveying financing alternatives for long-term care in Idaho, the co-authors who are academics at Boise State, caution that studies suggesting use of reverse mortgages "saves" the state money on Medicaid. while interesting, could be based on out-of-date information.
It strikes me that I might be missing more recent analyses of reverse mortgages impacting Medicaid. Please don't hesitate to send me links to thoughtful pieces.
Tuesday, October 8, 2013
The alphabet soup for deciphering housing and long term care options can be daunting. ALs, CCRCs, NHs (or my old favorite, SNFs), NORCs. Are the differences real or just part of marketing?
Those bright, hard-working folks at the National Senior Citizens Law Center (NSCLC) know the differences, including what is or isn't eligible for Medicaid coverage from state to state. Even better, they're willing to share their expertise, offering a webinar on the "Pluses and Minuses of Assisted Living, for Policy-Makers and Consumers." I would add "students" to that list of important participants.
Date: Tuesday, October 15 (Yikes -- that is soon!)
Time: 2:00 to 3:00 p.m. (Eastern time)
Details and on-line registration are here. And even though there's no cost for this session, I suspect that if you find yourself appreciating this kind of programming, and want to see more offerings, someone at NSCLC just might accept your (tax deductible) donation!
Thursday, October 3, 2013
A new Harris Interactive/HealthDay Poll finds that "more than two-thirds of Americans are anxious and uncertain about how they'll meet nursing home or home care costs should they need them." Fair enough. Plenty of good reasons for such anxiety.
However, in summarizing the poll results, the Harris folks also conclude:
"Most people were also wrong about how most of these costs are covered under the current system. About half (49 percent) mistakenly thought the bulk of the bill was paid by individuals, while one-third guessed Medicare. Only 19 percent understood that the major funder of long-term care is actually Medicaid, the government agency that covers health services for the poor."
But were those people actually "wrong?" Perhaps it depends on what you mean by "long-term care." If you are viewing that care as provided by paid individuals, whether in the home or in a facility, then the Harris poll's conclusions accurately point to Medicaid's continuing role as a dominant payment source.
But in the US the largest source of elder care is still the family, as documented by AARP Public Policy Institute's 2011 Update. Even though family members are not usually "paid" for the care with dollars per hour, there is a cost associated with that care. For example, famly care-givers are often unable to engage in other paid employment, or take time off from careers to assist with elders. And thus, perhaps interviewees for the Harris poll were correct, because they were thinking about the realities of families assuming the costs of long-term care.
In other countries, a distinction is often made between "health care" and "social care." What we call "long-term care" in the United States tends to lump these concepts together, while the most frequently needed services, such as assistance with bathing, dressing, meals, monitoring for safety or supervision with other activities of daily living, would often be characterized as social care in other countries. Caution is necessary in using labels to characterize the cost of care for older adults (or for any individuals needing assistance).
Thursday, September 26, 2013
HHS Approval of State's Cuts to Medicaid Reimbursement Rate Ruled Arbitrary & Capricious: 3d Circuit
In 2008, as required by federal law, Pennsylvania submitted proposed amendments to its State Medicaid Plan for approval by the U.S. Health and Human Services (HHS). The amendments created an across-the-board 9% reduction in the per diem reimbursement to nursing homes for care of residents eligible for Medicaid. The amendments were approved by HHS.
In 2009, a group of private nursing homes in Pennsylvania filed suit challenging the cuts, arguing the "BAF" method used to calculate the reductions failed to consider the impact of the cuts on quality of care, particularly after several years of cuts. The nursing homes sought declaratory and injunctive relief against officials at the federal HHS and Pennsylvania Department of Public Welfare (DPW), as well as monetary relief.
On September 19, 2013, the Third Circuit granted partial relief to the nursing homes, concluding there was no record by which HHS could make a proper review of the modifed state plan. The Court observed:
"Absent information on how the appropriated amount was determined, or a reasoned explanation for why that amount allows for rates that are 'consistent with' efficiency, economy, quality of care, and adequate access, DPW's description of the BAF methodology provides no insight into whether the [State Plan Amendment] complies with Section 30(A). The state gave no such information, and HHS did not request any. There are no studies or analyses of any kind in the record, and the only 'data' DPW provided was a spreadsheet comparing rates under the proposed SPA with those paid the previous year. HHS therefore had to base its approval decision solely on the proposed methodology itself, a comparison to the previous year's rates, and DPW's unsupported assertion that the new BAF would permit 'payment rate increases sufficient to assure that consumers will continue to have access to medically necessary nursing facility services.'”
While recognizing that state plans approved by federal agencies ordinarily warrant Chevron deference, the Third Circuit concluded deference was inappropriate in this instance. The court could not discern from the record a reasoned basis for the agency's decision and therefore the judges concluded HHS's "approval of the [2008 Amendments] was arbitrary and capricious under the APA."
Cuts to Medicaid reimbursement rates for nursing homes eventually affect residents, of course. Could states that skip key steps in approval for other changes to State Plans also be subject to due process challenges?
For the Third Circuit's detailed and technical decision, including reasons for its denial of monetary relief, see Christ the King Manor, Inc, et al v. Secretary of HHS.
Wednesday, September 11, 2013
In the most recent federal appellate court ruling on spousal annuities as a Medicaid planning tool, the 8th Circuit ruled on September 10, 2013 that under existing Medicaid law, the wife's irrevocable spousal annuity (purchased before the husband's application for Medicaid, using $400,000 of the couple's savings) was not a countable resource, and therefore did not make the applicant-husband ineligible for Medicaid.
The 8th Circuit in Geston v. Anderson cites Lopes v. Department of Social Services, 696 F.3d 180 (2d Cir. 2012) and James v. Richman, 547 F.3d 214 (3d Cir. 2008) as support for the decision that the annuity in question must be treated as the community spouse's unearned income, and thus exempt from treatment as a resource available to the applicant spouse.
Hat tip to Robert Clofine, Esq. for latest news.
Tuesday, September 10, 2013
From a search on SSRN for recent academic articles using the words "Medicaid Planning":
Sean Bleck, Barbara Isenhour & John A. Miller (University of Idaho), "Preserving Wealth and Inheritance Through Medicaid Planning for Long-Term Care," (last revised 3/8/2013)
Gerry W. Beyer (Texas Tech) & Kerri G. Nipp, "Updated Primer on Lady Bird Deeds," (3/1/2012)
Diane Lourdes Dick (Seattle University School of Law), "Tax and Economic Policy Responses to the Medicaid Long-Term Care Financing Crisis: A Behavioral Economics Approach," (11/21/2010)
David Bernstein (U.S. Treasury Department), "A Discussion of Medicaid Eligibility Rules and Potential Reforms," (11/26/2008)
Richard K. Kaplan (University of Illinois), "Retirement Planning's Greatest Gap: Funding Long-Term Care," (6/22/2007)
Marshall B. Kapp (Florida State University), "Medicaid Planning, Estate Recovery, and Alternatives for Long-Term Care Financing: Identifying the Ethical Issues," (12/22/2006)
Certainly many big names, but a bit surprising not to find a larger number of recent articles?
Wednesday, August 28, 2013
Robert L. Kane, Andrea Wysocki, Shriram Parashuram, Tetyana Shippee, and Terry Lum, researchers at the University of Minnesota School of Public Health and the University of Hong Kong, have released their study, "Effect of Long-term Care Use on Medicare and Medicaid Expenditures for Dual Eligible and Non-dual Eligble Elderly Beneficiaries," comparing the effects on costs by level of care and location, including nursing home or community care. The report offers findings that may be surprising for critics of nursing home cost, suggesting that nursing homes may actually be "subsidizing Medicare by reducing hospital use and lowering medical expenditures." The report is published in the peer-reviewed, on-line Medicare & Medicaid Research Review, a publication of CMS, the Centers for Medicare & Medicaid Services.