Tuesday, April 15, 2014

Social Security Administrators Announce Cessation of "Old Debt" Collection Intercepts

The Social Security Administration announced on Monday that it is halting its practice of "Treasury Offsets" to recover debts reported to be 10 years or older.  This decision comes just three days after the Washington Post's front page account of intercepts that targeted IRS income tax refunds going to children of alleged debtors. As reported in today's Washington Post: 

“"I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law,' the acting Social Security commissioner, Carolyn Colvin, said in a statement.

 

Colvin said anyone who has received Social Security or Supplemental Security Income benefits and 'believes they have been incorrectly assessed with an overpayment' should contact the agency and 'seek options to resolve the overpayment.'”

The Washington Post reported that after its first article, "many hundreds of taxpayers whose refunds had been intercepted came forward and complained to members of Congress that they had been given no notice of the debts and that the government had not explained why they were being held responsible for debts that their deceased parents may have incurred." 

Hmm.  It seems that it is the intercept notice procedures that may be the focus of reexamination by the SSA, rather than giving up on the authority granted by Congress in 2008 to recover "stale" debts.  Plus, it is unclear whether SSA will  explain its theory for seeking recoveries against children of debtors.  

April 15, 2014 in Federal Cases, Federal Statutes/Regulations, Medicaid, Social Security | Permalink | Comments (0) | TrackBack (0)

Friday, April 11, 2014

Catch-Up Friday: Furor Over Filial Support, Mutual Responsibility & Related Laws

It is Friday and time for a catch-up on recent law review articles.  I posted last month on Memphis Professor Donna Harkness' article on filial support laws, but she is not the only one with recent publications analyzing the seemingly renewed interest in enforcement of such laws around the country and the world.  Here are highlights from recent comments and articles (minus those pesky footnotes):

"The Parent Trap: Health Care & Retirement Corporation of America v. Pittas, How it Reinforced Filial Responsibility Laws and Whether Filial Responsibility Laws Can Really Make you Pay," Comment by Texas-Tech Law Student Mari Park for the Estate Planning & Community Property Law Journal (Summer 2013):

"Texas should join the other twenty-eight states that already have a filial responsibility statute. Placing the duty of support on able family members first is a centuries-old obligation that has managed to survive into the present day despite opposition. While filial responsibility may seem harsh, it is simply making families care for each other. With the number of indigent elderly quickly rising, long-term care costs are likely affecting many families. Instead of ignoring the issue and hoping the government will shoulder this burden, maybe it is time for families to step up and take responsibility." 

"Filial Responsibility: Breaking the Backbone of Today's Modern Long Term Care System," Article by Elder Law Specialist Twyla Sketchley and Florida State Law Student Carter McMillan for the St. Thomas Law Review (Fall 2013): 

"The costs of long term care are staggering  and a solution must be found for this crisis. However, mandatory filial responsibility is not the answer. Enforcement of filial responsibility in the modern long term care system is unsustainable and ineffective. Filial responsibility has been recognized since the Great Depression as ineffective in providing for the needs of elders. Scholars have recognized that families provide care, not out of legal obligation, but personal moral obligation, and do so at great sacrifice. Enforcement of filial responsibility in today's long term care system burdens those who are the least able to shoulder the additional burden. Based on the value and the consistency of the care provided by informal caregivers, informal caregiving is the one piece of the long term care system that is working. Therefore, the solutions to the long term care financing system must encourage and support the informal caregiving system[,] not add additional, unsustainable burdens."

"Intestate Succession for Indigent Parents: A Modest Proposal for Reform," Comment by Toledo Law Student Matthew Boehringer for the University of Toledo Law Review (Fall 2013):

"Filial support statutes have already laid the groundwork and rationale behind adults supporting their dependents and should provide a convenient outlet for a government looking to reduce spending. Society will inevitably find more parents dependent on support from their children. Consequently, more of the elderly population will find that avenue of support estopped should that child die and without a means of familial support.  A modest reform of intestacy laws will address this situation and smooth over inconsistencies between different applications of the same purpose. The burden on the estate should not be excessive because the decedent was already providing for the elderly parent before death. Moreover, probate courts will already know the facts of the case and, thus, are in the best position to provide an equitable treatment for all parties dependent on the decedent. This modest proposal offers little harm but much benefit for some of the weakest of society."

In addition to the above articles addressing obligations that may run from adult child to parent, an article on "Who Pays for the 'Boomerang Generation?' A Legal Perspective on Financial Support For Young Adults," by Rutgers-Camden Law Professor Sally Goldfarb for the Harvard Journal of Law and Gender, analyzes the practical obligations assumed by many single parents, often women, to support adult children who are not yet self-sustaining.  Professor Goldfarb observes that a "financially struggling single mother who provides support for her adult child is at heightened risk of becoming an impoverished elderly woman."  She proposes:

"Instead of urging mothers to 'just say no' to financially dependent adult children, a better approach would be to ensure that the burden of financial support for young adults is distributed more equitably.... Divorced, separated, and never-married mothers of financially dependent young adults are in a position of derivative dependency. If they cut their financial ties to their adult children, they jeopardize the children's financial security. If they don't cut those ties, they jeopardize their own. A solution that safeguards the well-being of both mothers and young adults is urgently needed. In the absence of widely available public programs to meet the needs of young adults, the most obvious solution is to divide the cost of supporting them fairly between both parents...[as she explains in greater detail]."

Don't hesitate to write and let me know if I have missed your recent article addressing filial support laws or related concepts.

April 11, 2014 in Ethical Issues, Health Care/Long Term Care, Medicaid, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0) | TrackBack (0)

Monday, April 7, 2014

Causation Proof Needed for Breach of Contract Claims Against "Responsible Parties" in Nursing Home Cases

We have another interesting appellate decision from Connecticut on the question of personal liability of an individual who signed an agreement as a "responsible party" when admitting his parent to a nursing home.  The opinion is in Meadowbrook Center, Inc. v. Buchman, issued by the Connecticut Court of Appeals with a decision date of April 8, 2014. 

The majority of the three judge panel concludes that the son who signed the agreement cannot be held liable, based on the evidence -- or rather lack of evidence -- in the record.  Although the evidence establishes the son failed to provide all information requested by the state Medicaid department following his mother's application for Medicaid, and therefore breached duties he assumed as a "responsible party" under Section IV of the nursing home agreement, the majority concludes he cannot be held liable because there "is no evidence in the record...indicating that, had the defendant [son] complied with his obligations under the agreement, [the nursing home] would have received any Medicaid payments." 

In other words, the nursing home proved breach, but not causation of damages, even though "the parties stipulated...that if the department granted Medicaid benefits to the defendant's mother, the department would have paid the facility $47,561.18."  The ruling focuses on that "if," noting: 

"The testimonial evidence submitted to the court demonstrated, on the one hand, that submitting the proper information to the department merely triggered a review of the resident's eligibility and, on the other hand, the submission of such information was not a guarantee of approval to receive such benefits.... [A]n eligibility services supervisor at the department...testified that the department could not determine whether an applicant qualified for Medicaid absent a review of the applicant's financial information, which was not furnished to the department in the present case. As the defendant notes in his appellate brief, the plaintiff did not ask Leveque 'if, based upon the defendant's testimony regarding the assets maintained by [his mother], he had an opinion regarding whether ... [she] would have qualified for [such] benefits.' In addition, the record before us does not indicate that the plaintiff was prevented from presenting the proper financial documentation, expert testimony, or other evidence that would have otherwise established the resident's likelihood of approval, nor has the plaintiff in this appeal directed our attention to any such evidence."

There is a complicated history to third-party liability issues in nursing home contracts, especially in Connecticut.  As readers of our Blog may recall, last year the Connecticut Supreme Court declined to hold a signing family member liable for costs of the parent's care, where that individual did not have a Power of Attorney or other authority to apply for Medicaid.  See "Nursing Home Contracts Revisited: The Nutmeg State Adds Spice," commenting on Aaron Manor, Inc. v. Irving, 57 A.3d 342 (Conn. 2013).  Further, as we note in that post, Connecticut made significant changes to its Medicaid laws effective in October 2013, as a result of a series of nursing home cases involving third-parties.  In certain circumstances, Connecticut now seeks to impose statutory liability on individuals who are either transferors or transferees, connected to the resident's ineligibility for Medicaid because of disqualifying transfers.

The Meadowbrook decision is also well worth reading for anyone interested in the related but separate concepts of contract law and promissory estoppel. 

Further, in a separate concurring opinion, a third judge concludes that the nursing home agreement should not be construed as imposing liability unless the "responsible party" has been shown to have misappropriated the resident's resources, because without that personal fault, the responsible party agreement becomes a "guaranty," prohibited by federal Medicaid law. The majority, however, "strongly" rejects that analysis.  We'll keep our eyes open to see if the Meadowbrook case goes to the Connecticut Supreme Court.

When I first began analyzing "responsible party" liability in nursing home contracts, I became convinced the contracts drafted by many facilities created a minefield of problems.  In some instances, the providers seem to intentionally blur the lines of responsibility for third-parties.   On the one hand, facilities "need" agents to sign for new residents who are often lacking capacity to contract.  So the admissions office points to the "no personal liability" language in the agreement signed by the third-party.  On the other hand, if something does go wrong with the Medicaid application, that same facility will often be quick to point out that it is the third-party signer's obligation to fix the problem, or face potential personal liability. 

The nursing homes, of course, whether for profit 0r nonprofit, are not in the business of providing free care. 

The last ten years of litigation have only increased the importance for individuals to understand the significance of nursing home agreements.  Individuals may want legal advice from specialists in state Medicaid law before signing the agreement; further they may need to seek legal help again if there is any hiccup in the Medicaid application process. After the Meadowbrook case, I think it is safe to say care facilities will be better prepared to prove causation of damages.     

April 7, 2014 in Health Care/Long Term Care, Housing, Medicaid, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Monday, March 31, 2014

Downstream Consequences of Under-the-Table Pay for Elder Care

A few weeks ago, I posted the account of one family's struggle to find competent care for aging parents.  Eventually they were referred to a team of two women who did provide good care, but who insisted on being paid in cash.  I later learned that one person expected an additional "fee" for "managing" the arrangement.  The family felt trapped, although the crisis was cut short when the parent died. 

More recently, I read another family's story, where a non-family member provided proper senior care in exchange for "cash," and this time the arrangement lasted for several years.  Eventually, however, the cared-for-individual's savings were exhausted, and her increasing health needs meant a nursing home was inevitable.  But how to apply for Medicaid?  Any review of bank records that accompanies a Medicaid application would show large, regular cash withdrawals from the elder's accounts, totaling more than two hundred thousand dollars.  With no W-2s or other documentation of the use of that cash, would the state agency treat the transactions as gifts creating ineligibility for Medicaid?  Would an affidavit or testimony by a family member be enough to satisfy the agency?

A group of experienced attorneys brainstormed the options in this fact pattern and raised a host of additional practical questions, including why the family had not sought help from an attorney or accountant at the outset of the arrangement. I suspect part of the answer was the family was operating in "survival" mode -- trying to solve a crisis with temporary help -- and failing to realize the potential for it to become long-term.  In the meantime, their loved one bonded with the individual caregiver who either would not or could not be paid on the books.  One lawyer observed that this fact pattern demonstrates why "Elder Law" needs better visibility and understanding by the public, as elder law attorneys can help prevent this legal nightmare from occurring.

During the brainstorming, someone provided a useful link to "Risks of Hiring Caregivers Under the Table: Why It Can Be Dangerous...." by Melanie Haiken from Caring.com.

For more detailed guidance, IRS Publication 926, the Household Employer's Tax Guide, is remarkably straight forward, if still probably intimidating for the average person. 

March 31, 2014 in Current Affairs, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid | Permalink | Comments (1) | TrackBack (0)

Saturday, March 29, 2014

Department of Labor Offers Guidance on FLSA and Shared Living Arrangements

The Department of Labor recently posted a Final Rule that changes how the Fair Labor Standards Act is interpreted for domestic service.  Of special interest is how the Rule impacts shared living programs under Medicaid.

The Department of Labor has also created guidance to assist stakeholders in determining whether an entity paying a direct care worker through a shared living arrangement is required to comply with the FLSA’s minimum wage and overtime requirements. The guidance also describes how certain FLSA principles apply to shared living arrangements. 

These changes become effective January 1, 2015.

March 29, 2014 in Federal Statutes/Regulations, Housing, Medicaid | Permalink | TrackBack (0)

Friday, March 28, 2014

Failure of Consideration and Promises to "Care for Grandma for the Rest of Her Life"

This semester I'm teaching Contracts, which always provides interesting opportunites to introduce "Elder Law" concerns in a traditional course.

This week I offered a not-so-hypothetical fact pattern, where Grandmother deeds house to Grandchild, in exchange for Grandchild's "promise to care for Grandma for the rest of her life."  Whenever I use this hypo, I pick one of a number of reasons the agreement does not work out as planned, such as the individuals don't get along with each other, grandchild gets pregnant or ill, etc.  This week's reason was "Grandma needs more specialized care" but cannot afford it because she's given away her primary resource. Grandchild doesn't want to sell the house, now that it is "hers," and she doesn't want to take out a mortgage. House

I ask the students to brainstorm Grandmother's options.  Almost always, someone suggests Medicaid, and we talk about whether Medicaid will provide adequate assistance and whether there are potential barriers to eligibility for public benefits, such as the five-year look back period. 

Students sometimes suggest Grandmother is subject to "undue influence," which if proven would be grounds for potential rescission.  Good job!  Except that I am usually careful in my hypo not to make Grandchild overtly manipulative.  And in truth, many of these arrangements begin more because of the desires of the aging individual, than because of any greed on the part of the younger person. We also explore "incapacity" and "duress" as possible grounds for rescission.

This week, students also suggested "failure of consideration" as grounds for rescission.  There is an interesting line of cases, perhaps a hybrid of Property and Contract law, that treats "support deeds" as a specific analysis, potentially justifying relief. Examples include:

  • Gilbert v. Rainey, 71 SW. 3d 66 (Ark. Ct. App. 2002), permitting mother to rescind deed for failure of consideration, and admitting mother's parol evidence to show daughter promised life care in exchange for the conveyance of the home, to show that conveyance was not a completed gift;
  • Frasher v. Frasher, 249 S.E. 2d 513 (W.Va. 1978), granting cancellation of deed from grandparents to grandchildren, on the grounds that where discord arises between the parties to a "support deed" between an aged grantor and a younger family member, the property should be restored "if it can be done without injustice" to the younger family member. 

After class was over, some of my students stopped by to chat, offering variations on the hypothetical, sometimes from examples within their own extended families.  In both of the sample cases above, the court attaches special meaning to the concept of "support deeds" going from older to younger generation, but most of the cases along this line are fairly old.  The fact that my students were offering modern variations on the fact pattern suggests there may be good reason to revisit this area of the law. 

Perhaps any resurgence in this topic is another sign of our "aging" times. So, that leads to my question, does your state recognize failure of consideration, tied to "support deeds," as grounds for rescission of a conveyance?

March 28, 2014 in Cognitive Impairment, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Medicaid | Permalink | Comments (2) | TrackBack (0)

Tuesday, March 18, 2014

Job Opportunity: Medicaid Policy Analyst at Families USA

Families USA is a national nonprofit, non-partisan organization dedicated to the achievement of quality, affordable health care and coverage for all Americans. We bring the voice of consumers in federal and state health policy debates, with a strong focus on the needs of low-income and vulnerable populations. Families USA is seeking a Medicaid Policy Analyst who will provide strategic input into the development and assist with the implementation of the organization’s work on Medicaid and the Children’s Health Insurance Program. The Medicaid Policy Analyst will report to the Medicaid Program Director. We are looking for someone with a deep understanding of the Medicaid and CHIP programs, the ability to write about technical policy issues in an accessible manner, and excellent analytical skills.

Responsibilities

  • Produce content related to Medicaid and CHIP, including but not limited to: reports, issue briefs, fact sheets, technical analyses, emails, blogs, webinars and other materials.
  • Provide technical assistance and strategic guidance to state and national health care advocates in conjunction with other Families USA staff.
  • Follow and report on emerging policy and political issues on Medicaid and CHIP and recommend appropriate organizational response.
  • Read and analyze federal regulations and guidance and write comments, sometimes in collaboration with other colleagues.
  • Collaborate with colleagues to incorporate health equity into organization’s Medicaid and CHIP work.
  • Help develop messaging, field press calls, and make public presentations on Medicaid and CHIP issues.
  • Represent the organization at national coalition tables on Medicaid and CHIP issues.

An ideal applicant would possess these qualifications

  • At least three to five years experience working on the Medicaid or CHIP program.
  • Strong understanding of Medicaid and CHIP and how the two programs relate to the Affordable Care Act.
  • Strong understanding of federal and state rules governing Medicaid, with a particular focus on eligibility, enrollment, and financing.
  • Excellent analytical skills.
  • Excellent communication skills—both oral and written, including the ability to write about technical policy issues in an accessible manner.
  • Strong organizational skills and an ability to work on multiple projects at the same time.
  • Ability to collaborate with other staff to complete a project.
  • Commitment to social justice.
  • Some travel for presentations, training, and consultations with state and local advocates will be required.

How to Apply 

Send a cover letter and resume by email to careers(at)familiesusa.org and include “Medicaid Policy Analyst” in the subject line. The salary will be commensurate with experience. Families USA offers a generous benefits package, including excellent health insurance, life and long-term disability insurance benefits, and generous vacation, sick leave, and holiday schedules. Families USA is an equal opportunity employer.

March 18, 2014 in Medicaid, Other | Permalink | TrackBack (0)

Professor Donna Harkness: "What Are Families For? Re-evaluating Return to Filial Responsibility Laws"

Donna_HarknessDonna Harkness, clinical professor of law and director of the Elder Law Clinic at the University of Memphis Cecil C. Humphries School of Law, has a new article on filial support laws in the most recent issue of the University of Illinois's Elder Law Journal.  In "What Are Families For? Re-valuating Return to Filial Responsibilities Laws,"  she concludes: 

"Despite their long history, filial responsibility laws have clearly failed to remedy existing needs. The lack of uniformity in filial responsibility laws, the difficulty and cost of enforcement, along with the fact that such laws provide no coverage to those elder Americans that have no adult children to look to for support, render them a limited response at best. In addition, to the extent that filial responsibility laws are enforced, evidence indicates they would be destructive to family ties and have the counterproductive effect of further eroding and destabilizing the network of support available to elders.

 

Furthermore, by focusing solely on economic support, filial responsibility laws do not address the fundamental need that all persons, and most especially the vulnerable elderly, have to be supported by caring relationships. To the extent that the institution of the family, however defined, is the key to ensuring that such relationships exist, it behooves us as a society to strengthen and foster family ties through policy initiatives that reward caring relationships."

 

March 18, 2014 in Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Social Security, State Cases, State Statutes/Regulations | Permalink | Comments (1) | TrackBack (0)

Monday, March 17, 2014

Student Comment on Expansion of Medicaid Estate Recovery

From 3L student Katie L. Summers at my own law school, Penn State Dickinson,  a recently published Penn State Law Review comment titled "Medicaid Estate Recovery: To Expand, or Not to Expand, That is the Question."  Here is a taste, from the abstract:

"To recoup some of the costs of Medicaid, the states are required to implement a Medicaid estate recovery program.  There are certain mandated requirements, but the reach of the recovery program is primarily left to the discretion of the states.  Pennsylvania recently contemplated expanding its Medicaid estate recovery program, but the proposed changes were not enacted.  This Comment provides an overview of Medicaid estate recovery in Pennsylvania by exploring the background of Medicaid, Medicaid estate planning, and Medicaid estate recovery generally.  In addition, this Comment examines the arguments for and against Medicaid estate recovery.  Finally, this Comment recommends the creation of a system that expands Medicaid estate recovery in Pennsylvania, while retaining certain protections for the deceased Medicaid recipient’s heirs."

March 17, 2014 in Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Property Management | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 26, 2014

Follow up--CRS Reports on Medicaid, Medicare, and Related Issues

Following up on Becky's post of Feb. 25 regarding some recent CRS Reports--I'm using a number of CRS reports in a class I am designing for Valparaiso's new health management and policy master's program.  These include:

Medicare, A Primer  Download Medicare Primer CRS

Medigap: A Primer Download Medigap CRS

Medicaid, An Overview (referenced by Becky) Download CRS Medicaid an Overview

Medicaid Coverage of Long Term Services and Supports Download Medicaid LTC CRS

Health Care Fraud and Abuse Laws AffectingMedicare and Medicaid: An Overview Download Fraud and Abuse CRS

Medicare Secondary Payer:Coordination of Benefits Download Fraud and Abuse CRS

Overview of Private Health Insurance Provisions in the Patient Protection and Affordable Care Act (ACA) Download Private Health Insurance ACA CRS

CRS reports aren't generally made available to the public, but I have had great luck over the years in obtaining them simply by contactiing one of the authors and requesting a copy.

February 26, 2014 in Legal Practice/Practice Management, Medicaid, Medicare | Permalink | TrackBack (0)

Friday, February 21, 2014

Nonprofit Continuing Care Communities: Exempt from State & Local Taxes?

As introduced in an earlier post, Continuing Care Retirement Communities (CCRCs, also sometimes operating as Life Care Communities or LCCs) are frequently organized and operated as 501(c)(3) entities, exempt from federal income taxes.  However, in several states, authorities have opposed exemption from state or local taxes, especially real estate taxes.  The campuses of high-end CCRCs can be tempting targets for revenue-hungry local governing units.

Pennsylvania has been a hotbed of such challenges, with the latest ruling issued in Albright Care Services v. Union County Board of Assessment, decided by the Commonwealth Court, an intermediate court of appeals, on January 29, 2014.  In Pennsylvania, the question of exemptions from real estate taxes depends on at least two sets of criteria, including (A) proof of operation as an "Institution of Purely Public Charity" or IPPC, and (B) "parcel reviews," to determine whether individual components of property are "actually and regularly used for the identified charitable purposes."  

The irony is an operation can be sufficiently "charitable" in nature to qualify for exemption from federal income taxes (and thus usually state income taxes) but not so "charitable" as to qualify for state exemptions that demand more rigorous proof of allegiance to mission. 

In Albright, the Commonwealth Court affirmed findings that the company, operating two CCRCs, qualified as an IPPC, thus distinguishing recent rulings that denied real estate exemptions for two other nonprofit continuing care operations, Dunwood Village (2012) and Menno Haven (2007). The Court credited testimony by Albright's accountant on the question of whether the company donated a substantial portion of its services to residents, rejecting the county's argument the CCRCs were reaping a Medicaid "windfall."  

The Court also affirmed the finding that several of Albright's real estate parcels was used to support the charitable mission. It called the independent living facilities a "closer question," but ultimately concluded such units were operated as part of a "comprehensive care scheme" that advanced a unified charitable purpose, citing a 2007 Pennsylvania Supreme Court decision in Alliance Home of Carlisle v. Board of Assessment Appeals. It remanded for further findings on whether parcels containing a museum and flood plain properties were used to advance the CCRC's charitable purpose.  

The Albright decision was released as an "unreported panel decision" that may be "cited for its persuasive value, but not as binding precedent." The Albright decision on CCRCs follows a series of Pennsylvania cases arguing state constitutional implications of exemptions for real property, affecting everything from summer camps to hospitals and universities, including the 4-3 ruling by the Pennsylvania Supreme Court in Mesivtah Eitz Chaim of Bobov v. Pike County Board of Assessments (2012).  In some counties, nonprofits may feel under pressure to enter into "PILOTS," or negotiated agreements for "Payments in Lieu of Taxes," to avoid litigation over exemptions.

February 21, 2014 in Health Care/Long Term Care, Housing, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Thursday, February 20, 2014

"Outside" Whistleblower in Senior Care Industry to Receive $5.7 Million

In a previous post, I reported on a senior care whistleblower case, where a court ruled that a former corporate officer, who was also the in-house counsel, cannot participate in a False Claims Act suit, if the information supporting the claim comes from privileged communications received in his role as an attorney.  The two other former executives of the company, non-lawyers, could have participated as qui tam plaintiffs; however the entire case was dismissed by the court as a sanction for improper disclosure of attorney-client privileged information.

Most whistleblowers are insiders, either current or former employees; however, that is not always true.  The "relator" (that's False-Claim-Act-speak for whistleblower) in a suit brought against RehabCare, Rehab Systems, and Health Systems, Inc. was the CEO of a competitor, Health Dimensions Rehabilitation, Inc., who first heard about a successful use of "referral fees" during a public conference call hosted by RehabCare. 

 "Pride goeth before a fall," as our mothers might say.  In this case, the CEO's research into the referral fees resulted in allegations the fees were intended to generate referrals of clients covered by Medicare and Medicaid, thus giving rise to alleged violations of the federal Anti-Kickback Act.  The defendants denied all allegations. 

In the RehabCare case, which settled earlier this year for a reported $30 million, the whistleblower, Health Dimensions Rehabilitation, Inc. is in line to receive about $5.7 million from the settlement, according to the U.S. Justice Department. 

Penn State Dickinson School of Law is hosting a half-day program examining "Whistleblower Laws in the 21st Century," on March 20, 2014Speakers include both academic scholars and experienced attorneys who have advised or represented parties in False Claims Act cases in health care, including "senior care." 

February 20, 2014 in Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Sunday, February 9, 2014

Am I My Brother's (and My Parent's) Keeper, Even If Neither Wants Me?

Recently an individual contacted me with a fact pattern to present on our Blog, a variation on what we've written about in the past.  Here are the basics.  I've assigned some gender roles to make the fact pattern easier to follow: 

The daughter of an older parent wants to know whether she has a legal "duty" to interfere with her brother's role in the life of their parent, where it appears the brother is failing to either apply for Medicaid or otherwise pay the parent's rehabilitation facility.  The parent is not unhappy with the son's actions (or rather, inaction), and in fact declined to give power of attorney to the daughter, even when told of a likely "eviction" for nonpayment of the bill. The parent has mostly recovered from the medical crisis that triggered the need for care -- and just wants to go home. Parent has made it clear to daughter that her help is "unnecessary."

The complication is the size of the unpaid bill, more than $100,000.  Apparently the care facility, approved to receive Medicare and Medicaid, is now demanding that the daughter pay the bill.   Apparently no one applied for Medicaid and it is unclear whether Medicare ever paid.  Daughter doesn't know much about her parent's income, but assumes it is limited and probably the only asset is a house, where the widowed parent lives when not in a hospital or in a care facility, and where the brother also resides.

The rehab facility is in Pennsylvania, home to "filial support" laws that have been enforced against adult children, with or without evidence of fault on the part of the child who is sued. Under Pennsylvania's law, those with statutory standing to pursue a support claim include a "person" who has provided care or maintenance, and that has been interpreted to include residential care facilities.  We've discussed tough filial support decisions before on this Blog, including Health Care & Retirement Corp. of America, v. Pittas, (Pa. Super. Ct. 2012).

Thus, a lawyer is probably going to have to break the bad news to the daughter that the facility arguably has a potentially viable claim under 23 Pa.C.S.A. Section 4603.   Daughter would appear to have some equitable defenses, including laches, but nothing that is expressly provided in the Pennsylvania statute.  But who can afford to defend such a case?  The facility appears to be  using the child's potential liability under filial support laws to insist the daughter take action, either to obtain a guardianship or other order that would permit her (force her?) to apply for Medicaid -- and the threat may work. The longer she waits, the tougher it will be to get sufficient retroactive coverage.  But in this instance, it is not clear whether the parent's capacity is impaired, or whether the parent is simply following a long pattern, even if unwise, of preferring one child's "help" over the other. 

The moral question of "Am I my brother's keeper," becomes a Family Keeper's Dilemma, when you add in the third part of the triangle, a parent in need of care or protection, against their will.  And the moral question becomes a legal liability question, when a filial support law that permits third-party suits is involved. 

For another Family Keeper's Dilemma, see the Washington Court of Appeals' January 14 decision, "published in part," in the case of In re Knight, addressing the level of proof required for one son to obtain a Vulnerable Adult Protection Order, to prevent his brother, with a mental health history and a criminal record, from continuing to live with or near their 83-year-old mother.  The mother opposed the protection order.    

February 9, 2014 in Cognitive Impairment, Elder Abuse/Guardianship/Conservatorship, Health Care/Long Term Care, Housing, Medicaid, State Cases | Permalink | Comments (0) | TrackBack (0)

Friday, February 7, 2014

Whistleblower Claims May Be Big Business, But Certain People Can't Be Plaintiffs

In United States ex rel. Fair Laboratory Practices Associates v. Quest Diagnostics Inc., decided by the Second Circuit on October 25 2013, we see another qui tam suit, where former employees allege the company's participation in a scheme to defraud Medicare and Medicaid, this time by allegedly underpricing certain services in order to stimulate referrals of clients who qualified for higher rates under Medicare or Medicaid coverage.  That allegation triggered the federal Anti-Kickback Statute that applies to federal health care programs. 

If anyone is interested in -- or skeptical about -- making a whistleblower claim part of a "business plan," just read this decision.  The plaintiff, Fair Laboratory Practices Associates, was formed as a partnership by three former employees, who combined their knowledge in an attempt to confront what they believed were fraudulent sales practices.  The federal False Claims Act permits successful whistleblowers to share in any financial recovery for the U.S.   

Just one little problem.  One of the members of the partnership was a former vice president and general counsel for the defendant corporation, and he was disclosing information received in his role as the only in-house lawyer for the company. Indeed, as reported in the opinion, that is exactly why the other two whistleblowers invited him to join their partnership, because his status as a lawyer "would improve our credibility with the government." 

Unfortunately for the plaintiffs' group, it also triggered Rule 1.9 of New York's ethical rules, prohibiting a lawyer from disclosing confidential information of former clients.  While the 2d Circuit credited the attorney's contention that he reasonably believed his employer intended to commit a crime, the court concluded the level of disclosure was "greater than reasonably necessary to prevent any alleged ongoing fraudulent scheme."   The Court rejected the argument that the policies underlying the False Claims Act trumped the state's ethical rules for legal counsel.

More importantly, the court concluded that although the other two non-lawyer partners could have filed the qui tam action based on the information they alone possessed as former executives for the company, once their knowledge became entwined with the attorney's unauthorized disclosures, the partnership as a group was disqualified.  Case dismissed (although the Court does leave the door open for a new relator as plaintiff, or the U.S. on its own). 

Here's more on the case by Joseph Callanan, an associate editor for the American Bar Association's Litigation News.   

Here is useful background on the federal Anti-Kickback law, courtesy of the American Health Care Association.

February 7, 2014 in Ethical Issues, Federal Cases, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 4, 2014

Indiana App. Ct. Rejects Liability for Daughter Signing NH Contract as "Responsible Party"

On January 30, 2014, the Indiana Court of Appeals reversed a ruling in favor of a nursing home, concluding that a daughter who signed the nursing home admission agreement on the line for "responsible party/agent" was not liable for breach of contract where she held no Power of Attorney or other authority to handle her mother's finances. 

In Hutchinson v. Trilogy Health Services LLC, the mother, suffering from cancer and needing constant care after a hospitalization, was admitted to the skilled care facility from November 11, 2011 until February 5, 2012.  She passed away in February 2013.  During the interim, Trilogy sued both the mother and the daughter for breach of contract.  Following a trial, the small claims court entered judgment against the daughter in favor of Trilogy for $2,610 plus court costs.  The amount of the judgment covered costs for "bed hold fees, beauty shop services and respiratory equipment."

In reversing the trial court judgment, the Indiana Court of Appeals cited the lack of any evidence the daughter held power of attorney or that daughter misused her mother's resources, as well as the son-in-law's testimony that a nursing home representative reassured his wife at the time of signing that she was not incurring personal liability for her mother's costs of care.  The Court of Appeals distinguished the facts from those in cases such as Sunrise Healthcare Corp. v. Azarigian, a Connecticut appellate case decided in 2003, where the daughter held Power of Attorney and used it to make transfers that created ineligibility for Medicaid. 

I hope readers will forgive me for a moment of immodesty for mentioning that the Indiana Court of Appeals also cited my law review article analyzing "responsible party" liability issues. When I wrote that article for the University of Michigan's Journal of Law Reform, it was exactly this set of facts I was pointing to with concern, where an "innocent" family member or other person signs a nursing home's document believing that doing so is necessary to authorize admission, with no intent (and sometimes no personal ability to afford) to pay privately, only later to be sued for "breach of contract" or on statutory theories such as "filial support."

February 4, 2014 in Health Care/Long Term Care, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Monday, February 3, 2014

Surprisingly Unlimited Statutes of Limitation and Whistleblower Suits

As readers of this blog will recognize, whistleblower-triggered suits alleging fraud in Medicare and Medicaid are big business. 

The February 2014 issue of The Washington Lawyer, published by the D.C. Bar, has a fascinating article written by Joshua Berman, Glen Donath, and Christopher Jackson, two of whom are former federal prosecutors.  In "A Casualty of War: Reasonable Statute of Limitation Periods in Fraud Cases," they outline modern use -- perhaps misuse -- of the Wartime Suspension of Limitations Act (WSLA), originally enacted in the 1940s. 

Beginning in 2008, the statute, and a more recent tweak under the Wartime Enforcement of Fraud Act (WEFA), has become a key tool of the Department of Justice in pursuing arguably "stale" claims of fraud.  The original provision "tolls" the statute of limitation for such claims until three years after the termination of hostilities for "virtually any kind of fraud in which the United States has been the victim."  The 2008 provision, changing the three-year extension to five-years, also "simultaneously broadened the circumstances in which the WSLA's tolling provision is triggered and narrowed the circumstances in which the 'war' can be said to have ended." The result is potentially unlimited periods within which to file suit.  The authors explain:

"Now, under the post-amendment WSLA, virtually any congressional authorization for the use of military force -- such as that which was approved by Congress prior to the wars in Afghanistan and Iraq and also recently contemplated with regard to Syria -- will trigger the statute. But only a formal proclamation by the president, with notice to Congress, or a concurrent resolution of Congress will suffice to end the 'war' and resume the running of the five-year clock under the original limitations period."  

The authors point out that during World War II, it was "understandable and desirable that the government be given flexibility to bring cases that would otherwise become stale."  But the effect of the WLSA is not limited to fraud claims against war-related industries such as defense contractors.  The authors critique application beyond the original justification of wartime, to Social Security fraud or False Claims Act violations, the latter the basis for most qui tam claims in senior care and health care industries.

February 3, 2014 in Federal Cases, Federal Statutes/Regulations, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 29, 2014

Family Court & Medicaid: Does It Have a Role in Allocating Income Between Community Spouse and Nursing Home?

In R.S. v. Division of Medical Assistance & Health Services, released for publication by the Appellate Division of the Superior Court of New Jersey on January 23, the state's Medicaid agency successfully argued that a Family Court order allocating the institutionalized spouse's income to support for the community spouse was not binding on the agency in determining the Community Spouse Monthly Income Allowance (CSMIA). Thus, in the case before the court, the community spouse who had an annual salary of $22,659 was limited to the CSMIA calculation of $1,514 per month as support from her institutionalized husband, rather than the Family Court's order of $3,460 per month.

The appellate court ruling appears to be strongly influenced by facts suggesting the Family Court award, which was not opposed by the husband, was the result of Medicaid planning advice, rather than a fact-based determination of spousal support among separated or divorcing spouses.  The appellate decision begins by noting the court is "asked once again to address 'the continuing tension between the State's effort to conserve Medicaid resources for the truly needy and the legal ability of institutionalized Medicaid recipients to shelter income for the benefit of their non-institutionalized spouses,'" quoting a previous New Jersey opinion in 2005. 

Despite statutory grounds under Medicaid law to "protect" community spouses against "impoverishment" when their husband or wife goes into a nursing home, this ruling permits state calculations of Medicaid allowances to control just how much (or rather, how little) "protection" is available, at least where the allocation occurs at or near the time of nursing home admission.   

January 29, 2014 in Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, State Cases | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 28, 2014

"Whistleblower Laws in the 21st Century" - Penn State Dickinson Program on March 20

Senior Care -- in all of its guises -- is Big Business.  And much of that big business involves government contracts and government funding, and therefore the opportunity for whistleblower claims alleging mismanagement (or worse) of public dollars.  For example, in recent weeks, we've reported here on Elder Law Prof on the $30 million dollar settlement of a whistleblower case arising out of nursing home referrals for therapy; a $3 million dollar settlement of a whistleblower case in hospice care; and a $2.2 billion dollar settlement of a whistleblower case for off-prescription marketing of drugs, including drugs sold to patients with dementia

While the filing of charges in whistleblower cases often makes headlines, such as the recent front page coverage in the New York Times about the 8 separate whistleblower lawsuits against Health Management Associates in six states regarding treatment of patients covered by Medicare or Medicaid, the complexity of the issues can trigger investigations that last for years, impacting all parties regardless of the outcome, including the companies, their shareholders, their patients, and the whistleblowers, with the latter often cast into employment limbo.

Penn State Dickinson School of Law is hosting a program examining the impact of "Whistleblower Laws in the 21st Century: Greater Rewards, Heightened Risks, Increased Complexity" on March 20, 2014 in Carlisle, Pennsylvania. Trickett Hall, Penn State Dickinson School of Law, Carlisle

The speakers include Kathleen Clark, John S. Lehman Research Professor at Washington University Law  in St. Louis;  Claudia Williams, Associate General Counsel, The Hershey Company; Jeb White, Esq., with Nolan Auerbach & White; Scott Amey, General Counsel for the Project on Government Oversight (POGO); and Stanley Brand, Esq., Distinguished Fellow in Law and Government, Penn State Dickinson School of Law.    

Stay tuned for registration details, including availability of CLE credits.

January 28, 2014 in Crimes, Current Affairs, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)

Monday, January 20, 2014

Potpourri: Interesting Case Discussions in Elder Law Practitioners' Posts

I've been catching up on reading of practitioners' blogs.  I quickly came across interesting discussions of potentially cutting edge decisions in recent law and aging cases.  Here's a selection:

  • From Tucson, Arizona, Robert Fleming's Legal Issues Newsletter reports on the background of the Arizona Court of Appeals decision on  January 2, 2014 in Savittieri v. Williams, affirming the post-death annulment of a woman's marriage for lack of capacity. 

 

  • From Dearborn Michigan and Pittsburgh, Pennsylvania, John Payne's Off the Top O' My Head, comments on recent decisions within the Third Circuit that address the use of spousal annuities or trusts in Medicaid planning.  For example, he discusses the January 14, 2014 ruling in the United States District Court, Western District of Pennsylvania in Zahner v. Mackereth, that makes fact-specific rulings in three consolidated cases involving annuities and which also, surprising, revisits the dormant "Granny's Lawyer Goes to Jail" provision of federal Medicaid law.  Fortunately for attorneys, the court agrees with former Attorney General Janet Reno that application of the law to legal advice is unconstitutional. Nonethless, I think it is safe to say that the Pennsylvania Department of Public Welfare's attempt to push the law is an indication of the battle lines being drawn over use of annuities.

 

January 20, 2014 in Cognitive Impairment, Dementia/Alzheimer’s, Estates and Trusts, Federal Cases, Medicaid, State Cases | Permalink | Comments (0) | TrackBack (0)

Friday, January 17, 2014

Analyzing the Circuit Split on Supplemental Needs Trusts & Medicaid

"Missing the Forest for the Trees: Why Supplemental Needs Trusts Should be Exempt from Medicaid Determinations," written by Jeffrey R. Grimsyer as a law student for the Chicago Kent Law Review in 2014, is a thoughtful analysis of the relationship between Medicaid eligibiltiy and supplemental needs trusts, also sometimes called special needs trusts or SNTs. 

"[T]he trust provisions have confused federal courts, causing a recent circuit split about whether assets contained within SNTs can be counted by state Medicaid agencies when they determine the trust beneficiaries' Medicaid eligibility and benefits.  On one hand, one can read [Section] 1396p(d)(4) as being mandatory, which would require all states to exempt assets in SNTs when determining Medicaid eligibility.  This would allow the beneficiaries to continue using SNTs and remain eligible for Medicaid, but would force the states, as payors, to cover more citizens under Medicaid.  On the other hand, one can interpret [Section] 1396p(d)(4) as being optional, which would permit each state to enact laws that disqualify beneficiaries of SNTs from receiving Medicaid.  This would enable states to save some of their limited resources, but would cause beneficiaries to lose their Medicaid benefits if they use SNTs."

Grimeyer argues the Medicaid section in question is "best read as being mandatory on the states based on the applicable statutory interpretation tools." 

January 17, 2014 in Estates and Trusts, Federal Cases, Federal Statutes/Regulations, Medicaid | Permalink | Comments (0) | TrackBack (0)