ACLU Takes On Nursing Homes

McKnight's has published an excellent and illuminating editorial regarding how some seniors who need institutional care are routinely frustrated in seeking and obtaining care by the very institutions themselves.  The editorial explains, using a specific example, how the ACLU has finally involved itself in skilled nursing home placement decisions or refusals.  The editorial reads: 

As in all cases involving a resident who wasn't accepted at a nursing home, each side has a different take on what happened.

According to the Lincoln Star-Journal, Nebraska resident Courtney Shelor says her father wasn't accepted at six nursing homes because he had HIV. A statement from the ACLU followed this week, via a letter to the homes in question reminding them of state and federal law.If you missed the basic tenants around the Americans with Disabilities Act (or Section 504 of the Rehabilitation Act of 1973), it's here.  

Accepting a person with a terminal illness into your nursing home also would hopefully be found within your own moral code.While it was 68 miles away from his family, Shelor was finally accepted at Golden Living Center in Broken Bow. I suspect that administrator or admissions director was simply doing her job, but let me say publicly: Good for you for making his last days good ones. Shelor writes that this facility “welcomed us with open arms!” While the center had never had anyone with HIV, it was able to make it work, including helping the elder Shelor be approved for Medicaid.You can read the rest of the younger Shelor's letter here, in which she talks about her father being her hero. He died at the end of July.

Go here to read the rest of the article.

Bill Offers Tax Credit for Aging In Place Improvements

Making your home more accessible for your long term care needs may soon be incentivized by a $30,000 tax credit.

Rep. Patrick Murphy, D-Fla., recently introduced H.R. 5254, entitled, “Senior Accessible Housing Act,” which would incentivize individuals 60 years of age and older to “age in place” by way of a $30,000 tax credit for home modifications. Potential modifications include the widening of doorways and the installation of ramps, handrails, grab bars and non-slip flooring.

The Congressional Research Service (CRS) summary of the Bill reads as follows:

This bill amends the Internal Revenue Code to create a nonrefundable personal tax credit for senior citizens who modify their residences to enhance their ability to remain living safely, independently, and comfortably in the residences.  

The credit applies to up to $30,000 of the expenses that individuals who are at least 60 years old incur over their lifetime to make modifications to their residences, including: 

•  the installation of entrance and exit ramps;

• the widening of doorways;

• the installation of handrails or grab bars

• the installation of non-slip flooring, and;

• other modifications that the Internal Revenue Service (IRS) includes on a list of modifications that would enhance the ability of the individuals to remain living safely, independently, and comfortably in their residences.

The IRS must establish and maintain the list of acceptable modifications after consulting with the Department of Health and Human Services (HHS) and receiving input from the public. 

The Bill and credit would certainly be more meaningful if current HHS policy was not hostile to home bound health care or home bound hospice care.  For more information regarding HHS policy of actively discouraging use of the Medicare home health care and hospice benefits, go here and here.  Regardless, the Bill currently has 19 co-sponsors.

To follow activity on the bill, go here.

To read the text of the bill, go here. 

HHS Can't Delay Medicare Appeals Backlog Case While Backlog Worsens

The Department of Health and Human Services (HHS) won't be able to push off litigation over its overwhelming backlog of Medicare appeals, a federal court ruled on Monday.  The HHS had asked the Court to stay the litigation, which was filed by the American Hospital Association and three other hospital organizations, until Sept. 30, 2017. HHS asked for the delay to allow the agency to move ahead on administrative and legislative efforts designed to tackle the backlog of more than 700,000 appeals, including implementation of a set of strategies proposed as recently as June.

The U.S. District Court for the District of Columbia's denied HHS' motion to stay the litigation, after describing the agency's proposed fixes as “impressive-sounding action items” that won't do much to curb the backlog as it grows to more than 1 million appeals in fiscal year 2020."  Judge James E. Boasberg wrote:  

“The best medicine can sometimes be hard to swallow,” wrote  “... the backlog and delays have only worsened since [HHS] first sought the Court's help, and the Secretary's proposed solutions are unlikely to turn the tide.”  

In denying the HHS' request, the court nonetheless turned down the hospital groups' request that the Court order the agency to resolve the appeals.     The Court explained that:

“[t]he Court, however, does not possess a magic wand that, when waved, will eliminate the Backlog.  Plaintiffs' suggestion that the Court simply order HHS to resolve each of the pending appeals by the statutorily prescribed  deadlines is extremely wishful thinking."

Of course, among the proposed strategies, one will not find a reversal of HHS opposition to lawful home health care and hospice care.  In other words, HHS appears satisfied with strategies designed to reduce the backlog of cases, but unwilling to reverse the positions that cause the backlog of cases in the first place.  For more information regarding the HHS position on home and hospice care, go here.   

Class Action Alleges Medicare Has Policy of Denying Home Health Appeals

A U.S. district court has recently ruled that there is evidence that Medicare has a policy of routinely upholding denials of home health services at the first two levels of review. Sherman v. Burwell (U.S. Dist. Ct., D. Conn., No. 3:15-CV-01468(JAM), Aug. 8, 2016).  The court certified a class and denied a motion to dismiss a claim against the Department of Health and Human Services.

Bradley Olsen-Ecker was a Medicare beneficiary who required home care after a hospitalization. He received care from a Medicare-certified home health agency, including skilled nursing visits and physical therapy. After a few months, Medicare informed him that it would no longer cover home care because unskilled caregivers could meet his needs. Mr. Olsen-Ecker appealed the decision. Medicare denied the appeals at three levels of review. Finally, Mr. Olsen-Ecker's physical therapist submitted a "demand bill" to Medicare, and Medicare reimbursed the physical therapist for its services. Mr. Olsen-Ecker passed away during the appeal process.

The current Medicare appeals process involves four separate levels of review.  First, Medicare beneficiaries who wish to appeal a decision receive a paper review redetermination by the original contractor who made the determination. A "paper review" is a review of the documents alone, without an in-person hearing. If that review fails, the beneficiary requests reconsideration by a separate entity that contracts with HHS (known as the Qualified Independent Contractor, or QIC). If a beneficiary does not obtain relief from the QIC‘s review, he may request a hearing before an Administrative Law Judge (ALJ). Finally, if the claim is denied by the ALJ, a beneficiary may receive a paper review by the Medicare Appeals Council. There is also an expedited process available, of which Olsen-Ecker took advantage of in his appeals process.

The current review process went into effect in 2010. Previously, a Medicare beneficiary who wanted to appeal an initial adverse determination first obtained a paper review by the original contractor. If that appeal was denied, then the beneficiary could either receive a hearing in front of an ALJ or a "carrier hearing" involving a complete review of the record before a hearing officer, depending on the type of Medicare benefits the beneficiary received. Either way, the second level of review under the old review system involved a hearing and not just another paper review. Then, if the beneficiary still wanted to appeal, he either received a paper review by the Medicare Appeals Council, or an ALJ hearing if he had not had one before, and then a paper review by the Medicare Appeals Council.  

Changes in the review  process have resulted in a drastic reduction in the number of appeals that result in a favorable coverage determination for beneficiaries at the first two levels of review, i.e., the redetermination by paper review by the original contractor, and the reconsideration by paper review by the QIC. These two levels of reconsideration have success rates for claimants as low as .61% each year, or as high as 2.2%. The total number of redetermination requests has also increased nearly ten-fold from 13,385 in 2008 to 112,844 in 2012. The change has also placed a great burden on the ALJs, increasing their workload by 184%. In the meantime, the reversal rate by ALJs -resulting in favorable coverage decisions- is about 70% across all of Medicare, and 62% on home health care and hospice decisions, according to HHS.  Simply, despite rhetoric of HHS to the contrary, it appears that HHS is agressively hostile to both home health care, and hospice care. 

Mr. Olsen-Ecker's estate filed a class action lawsuit against the Department of Health and Human Services (HHS) for violating Mr. Olsen-Ecker's constitutional  due process rights, alleging that the agency has a secret policy to deny home health services claims at the first two levels of review. According to the estate, HHS denies up to 99 percent of claims at the first two levels of review and that at the administrative hearing level of review, administrative law judges (ALJs) reverse the lower levels of review 62 percent of the time. HHS filed a motion to dismiss for failure to state a claim.

The U.S. District Court, District of Connecticut, denied the motion to dismiss. The court certified the class and ruled that there is plausible evidence that policies exist that deprive some Medicare beneficiaries of meaningful review.  According to the court, the high number of reversals at the ALJ level of review suggests that "whatever review occurred at the first two levels of review could have plausibly contained defects, because absent some aberration, the first two levels of review should have granted coverage to a far greater proportion of beneficiaries."  Moreover, the Court cited the "somewhat unnerving alleged facts...that his first two levels of review found that tasks like assessing the effectiveness of medication and performing body system assessments could be performed by [Mr.  Olsen-Ecker] or by unskilled care," suggesting to the Court that "it is not implausible to believe that there may have been some policy put in place that, when administered by the care providers and QICs, resulted in improper denials.  Sherman v. Burwell at p. 13.

Attorneys from the Center for Medicare Advocacy represented the estate. “We hope,” said Judith Stein, the Center’s Executive Director, “that this case will eventually result in Medicare beneficiaries’ receiving fair and accurate appeal decisions, without having to present their case at a hearing.”  

For information what Medicare's homebound or home health care benefits "should" be, go here.

For the Center’s news alerts on the decision, click here.

DOL Conflict of Interest Rule Impede Management of Retirement Funds

The $7.3 trillion IRA market is the largest and fastest-growing segment of the U.S. retirement market.  The Department of Labor’s (DOL) new conflict of interest rule will, however, impose greater scrutiny and complexity on the rollover market and potentially disrupt proper management of these assets.  These are the conclusions of global analytics firm Cerulli Associates in a new survey, “U.S. Evolution of the Retirement Investor 2016: Regulation and investor addressability.” The report explores the future of the IRA rollover market following implementation of the DOL’s fiduciary rule.

Jessica Sclafani, associate director at Cerulli, explained:

“There is general consensus in the retirement industry that more assets will remain in employer-sponsored DC [defined contribution] plans because of the rule.  While Cerulli generally agrees with this statement, there are additional considerations, such as the influence of existing advisor relationships, which is the greatest driver of IRA rollover assets, in addition to DC-plan-specific considerations, such as current DC plan design and lack of in-plan retirement income solutions, that may continue to support the migration of DC plan assets to the retail IRA market.”

Using Cerulli’s proprietary IRA rollover model, their research seeks to quantify the degree to which assets traditionally pegged as headed toward the IRA market may now be “at risk” and more likely to remain in employer-sponsored DC plans.  Cerulli’s IRA-focused research also examines how IRA providers that are also retirement plan providers will negotiate this new landscape in which it will be more challenging to direct DC plan participants to move assets from a low-cost account with institutional pricing to a higher-cost retail account.

Common wisdom has long held that most investors benefit from rolling over an employer-sponsored 401(k) to a self-directed IRA when permissible.  CPA Ed Slott, author of "The Retirement Savings Time Bomb ... and How to Defuse It,"  told Bankrate.com  that IRAs offer "more choice, more control" for consumers than company-sponsored 401(k) plans. "In most cases, a rollover is better," says Slott, author of "The Retirement Savings Time Bomb ... and How to Defuse It." But, he admits, there are some issues -- like holding company stock, early retirement, or threats of law suits, that in specific situations mitigate against roll-over.  Of course, for the consumer, the important take-away is that the consumer needs to get good advice.

Unfortunately, the new conflict of interest rules mean, if the study is correct, that consumers are less likely to get that advice, and therefore, are less likely to make the proper investment and management choices.

The reasons are myriad and complex.  One example identified in the study is the heavy reliance by consumers accustomed to dealing with institutional employer-sponsored defined contribution plans on call centers for advice and counsel.  According to industry reports,  the most frequently cited reasons for participants to contact their 401(k) plan call center are to change investments (47%).  Plan participants may fear making a mistake online or they may want reassurance throughout the process, so they turn to the 401(k) call center. The topic of investments, whether transactional or informational, can be a precarious one for call centers, especially with the recent regulations passed down from the Department of Labor (DOL). Just because call center representatives are registered does not necessarily mean they can provide investment advice to 401(k) plan participants. As a result, consumer's are left with bad advice, or refusal to give proper advise due to threatened or potential liability for suggesting better alternatives.

Another example is in naming beneficiaries.  Even competent investment advisors have difficulty advising plan participants properly, particularly when they are unaware of the specifics of an investor's estate plan.  Should a trust be a beneficiary of a qualified plan?  As most clients getting proper estate planning advice know, the answer to that question depends upon a variety of factors, including the objectives of the investor, the type of trust, and the availability of other options.  The new rules only make it more likely that an investor will be advised to "stay the course," potentially assuring the investor in improper management and investment decisions.

Obviously, the solution for the consumer is to build a team of professional financial and legal advisors working together, and sharing information regarding goals, philosophies, tools, and alternatives.  In that way, both the consumer and the participating professionals can be assured that their clients are receiving and implementing proper management and investment decisions.

For more information, go here.