CMS to Force the Dying to Spend Their Final Days Jumping Through Hoops to Get Needed Medications

To spare Medicare Part D insurance companies the risk of initially paying for prescriptions they don't have to cover, the Centers for Medicare and Medicaid Services (CMS) has designed a protocol that forces dying Medicare beneficiaries to navigate an onerous appeals process just to get medically necessary medications.  “This burden-shifting to the dying patient is illogical and immoral,” concludes the Center for Medicare Advocacy, which broke the story.

The protocol stems from an oversight in how Part D interfaces with Medicare’s hospice benefit.  When a Medicare beneficiary elects the program’s hospice benefit, the hospice provider, not the Medicare Part D insurer, becomes responsible for covering medications related to the patient’s terminal illness.  The Part D insurer continues to cover drugs the patient is taking that are not related to the terminal illness – for example, blood pressure medications to prevent a stroke.

The problem is that when Medicare Part D was created, no process was set up to inform the insurance companies when Medicare beneficiaries elected hospice.  This means that sometimes a Part D insurer could inappropriately pay for a drug that the hospice provider should be covering.

CMS’s solution? According to the agency’s memorandum to Part D Plan Sponsors and Medicare Hospice Providers entitled, "Part D Payment for Drugs for Beneficiaries Enrolled in Hospice – Final 2014 Guidance," all prescribed medications for hospice patients billed to Medicare Part D will initially be denied coverage as of May 1, 2014.  Pharmacies will need to check to make sure that a prescription is related to the patient’s terminal illness, and if it is not, the pharmacist can’t fill it. Instead, hospice patients will have to file a Medicare appeal, triggering a protracted bureaucratic dance, detailed in a recent Alert by the Center for Medicare Advocacy, involving the dying patient and his or her pharmacist and medical provider.  

The Center points out that it is not necessary to force dying patients to jump through bureaucratic hoops just to get necessary medications.  “The insurance companies that administer Medicare Part D plans can easily design a system to retroactively review medications covered for hospice patients,” the Center writes.  “If appropriate, the Part D plans can seek reimbursement from hospice providers.” 

The Center plans a second Alert on the protocol’s implications for beneficiaries.  Keep an eye out for it here.

Many Skilled Care Providers Still Unaware of New Medicare Rules

Even though Medicare is now covering skilled care for beneficiaries who are not improving, many are still being denied coverage, according to Judith Stein, director of the Center for Medicare Advocacy.  Stein told Reuters columnist Mark Miller that despite a nationwide educational campaign mandated by the recent settlement of a lawsuit, many providers don't have information about the settlement or understand the new rules.

Under the settlement agreement in Jimmo v. Sebelius, the federal government agreed to end Medicare’s longstanding practice of requiring that beneficiaries with chronic conditions and disabilities show a likelihood of improvement in order to receive coverage of skilled care and therapy services. The new rules require that Medicare cover skilled care as long as the beneficiary needs skilled care, even if it would simply maintain the beneficiary's current condition or slow further deterioration. 

As part of the implementation of the settlement, the Centers for Medicare & Medicaid Services (CMS) has posted online resources and updated its Medicare manual to reflect the changes. CMS launched an educational campaign in January to explain the settlement and the revised manual provisions to providers, but many providers remain unaware of what is covered or how to bill Medicare for the services. The campaign was not aimed at beneficiaries, so few are aware of the rules and that they can fight a denial of coverage.

Miller focuses on one beneficiary, Robert Kleiber, 78, who receives weekly visits from a physical therapist to alleviate symptoms of his Parkinson’s disease.  Kleiber’s wife recently learned that the treatments should be covered under Medicare’s new rules but so far she has been unable to convince the home health care provider of this.

Stein said she is getting "a lot of inquiries from people who have had problems getting access to care. There’s still a great deal of education that healthcare providers need to get on this. Many of them just aren’t aware of what they need to do to proceed."

For Miller’s column, click here.

For the Center for Medicare Advocacy’s page of self-help packets for improvement standard denials and appeals, click here.

Personal Care Agreement Payments Made by Medicaid Applicant Are Subject to Penalty Period

A New Jersey appeals court holds that transfers made from a Medicaid applicant to her daughter pursuant to a care agreement were not made in exchange for fair market value.P.W. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A-4756-11T3, April 29, 2014).

M.Y. signed a care agreement with her daughter, Paula, in which Paula would provide room and board in return for $2,000 a month, which included $800 for rent and $1,200 for services. The services included preparation of meals, cleaning, and assistance with bathing and dressing. M.Y. lived with Paula for two years. During this period, M.Y. also transferred $16,000 to Paula's daughter.  M.Y. briefly entered an assisted living facility before moving in with her other daughter, Gina, for two years, transfering $46,595 to Gina.

M.Y. entered a nursing home and applied for Medicaid benefits. The state determined the $1,200 monthly payments were transfers for less than market value and imposed a penalty period. When M.Y. appealed, an administrative law judge ordered that the $1,200 payments be excluded from the penalty period, but the state rejected the ALJ's decision. M.Y. appealed to court.

The New Jersey Superior Court, Appellate Division, affirms the imposition of the penalty period, holding there was no evidence M.Y. received fair market value in exchange for the assets transferred to her daughters and granddaughter. The court notes that there was no explanation of how the $1,200 rate was reached and there was no agreement between M.Y. and her granddaughter or Gina. According to the court, "in evaluating whether [M.Y.] had overcome the presumption that assets were transferred to establish Medicaid eligibility, all of the transfers to family members made during the look-back period must be scrutinized."

For the full text of this decision, go to: http://www.judiciary.state.nj.us/opinions/a4756-11.pdf

Nursing Home Sues Resident's Daughter with Impunity Since Admissions Agreement Did Not Give Nursing Home The Right to Sue the Daughter

New Jersey's highest court has ruled that an admissions agreement signed by a nursing home resident's daughter did not violate federal law because it did not require the daughter to use personal funds to pay for her mother's care, notwithstanding that the nursing home actually sued the daughter personally for her mother's nursing home debt.  Manahawkin v. O'Neill (N.J., No. A-17 SEPT.TERM 2012, 071033, March 11, 2014).

Frances O'Neill admitted her mother, Elise Hopkins, to a nursing home. As her mother's agent under a power of attorney, Ms. O'Neill signed the admissions agreement, which named her as the responsible party for the purposes of paying her mother's bills. Ms. O'Neill did not sign the portion of the agreement that required the responsible party to guarantee the resident's costs. She also received a copy of the resident's bill of rights, which stated that she was not required to guarantee payment as a condition of admission.

When Ms. Hopkins died, she left an unpaid balance of $878.20. The nursing home sent Ms. O'Neill a collection action, stating that she, as the responsible party, had the obligation to pay any debts. When Ms. O'Neill didn't pay, the nursing home sued her in her personal capacity. Ms. O'Neill counterclaimed, arguing the nursing home was violating New Jersey’s Nursing Home Act, which incorporates relevant portions of the federal Nursing Home Reform Act, by asking for payment from her directly. The nursing home dropped its claim, but Ms. O'Neill asked for summary judgment on her counterclaim. The trial court denied summary judgment, and the appeals court affirmed. Ms. O'Neill appealed.

The New Jersey Supreme Court affirmed the lower courts rulings, holding that the admissions agreement did not violate the Nursing Home Act.  The Court reasoned that the admissions agreement specifically limited Ms. O'Neill's obligation to that of paying her mother's bills with her mother's assets. The court noted that while the nursing home's collection letter was "inartfully drafted" it "did not attempt to impose on [Ms.] O'Neill an obligation to use her personal assets on her mother's behalf." Similarly, the court ruled that the nursing home's lawsuit was "lacking in detail" and "improperly pled," but it did not violate federal law because it did not allege that Ms. O'Neill was required to use her personal assets.   

So, a nursing home sues a daughter, personally, for less than a thousand dollars, and when the daughter actually counterclaims, the nursing home dismisses its action, but the daughter does not prevail on her claim since the nursing home technically did not have the right to make the claim that, if the claim actually existed, would have violated federal and state law.  Clearly. 

For the full text of the decision, go here. 

Bankruptcy Court Refuses to Discharge Granddaughter’s Debt to Nursing Home- Lessons for Caregivers

A U.S. bankruptcy court refused to discharge an Ohio woman's debt to a nursing home for the cost of her grandmother's care, finding there exist questions regarding whether the woman knew a gift she had received from her grandmother was an improper transfer of assets for Medicaid purposes and whether the woman intended to defraud the nursing home. In re Donley (Bankr. N.D. Ohio, No. 13-60758, April 17, 2014).

On October 6, 2011, Michele Donley signed an agreement admitting her grandmother, Virginia Carnes, to a nursing home.  She signed a second agreement accepting personal liability for the cost of services provided.  In the admissions agreement, and in two subsequent Medicaid applications, Ms. Donley denied that her grandmother had transferred any assets that might affect her grandmother's eligibility for Medicaid benefits.

Ms. Carnes, however, had gifted $50,000 to Ms. Donley in 2007, which Ms. Donley used as a down payment on a home. The gift  was determined to be an "improper transfer" thereby resulting in a transfer penalty which made Ms. Carnes' ineligible for Medicaid benefits until February 2013. Ms. Donley was unable to keep up with payment for her grandmother's care due to the period of ineligibility, and the nursing home filed an eviction action and later obtained a judgment of $17,441.50 against Ms. Donley for unpaid services.

Ms. Donley filed for bankruptcy protection, and sought to have the debt discharged.  The nursing home opposed the discharge of the judgment ostensibly on the grounds that Ms. Donley acted willfully or maliciously in causing the nursing home's loss.  Section 526 of the Bankruptcy Code excepts from discharge debts that are willfully or fraudulently procured, or resulting from willful or malicious conduct.    

Ms. Donley filed a motion for summary judgment, arguing that the nursing home lacked evidence to establish the elements of a claim, which she argued required a showing of fraud. The nursing home countered that considering Ms. Donley's multiple misrepresentations regarding her grandmother's transfer of assets, questions of fact existed about Ms. Donley's state of mind, making summary judgment inappropriate.

The United States Bankruptcy Court, N.D. Ohio, agreed with the nursing home and denied Ms. Donley's motion for summary judgment. The court determined that there existed a genuine question of fact whether Ms. Donley knew the $50,000 gift from her grandmother was an improper transfer at the time she signed the agreement and whether her misrepresentation was intentional or reckless.

There are several important lessons to take away from the Donley case.  First, Medicaid planning is an important consideration any time that a person wants to make a gift to another.  It is possible, even likely, that Ms. Donley's grandmother did not intend to make her granddaughter financially responsible for her long term care when she made the gift that permitted her granddaughter to purchase her home, but that is exactly the resulting legal and financial consequence.

Second,  caregivers, family members, and/or fiduciaries should have nursing home admission agreements reviewed by counsel before signature.  It is likely that an advising attorney would have explained the consequence of signing a personal guarantee, and absent such a guarantee, the nursing home's case would have been more difficult to prosecute.

Third, When applying for Medicaid, disclosure of all gifts must be made, regardless whether the parties intended the gifts as long-term care planning gifts, or whether the gifts might be overlooked.  The State is quite proficient at discerning improper transfers, and financial transactions, regardless the value, leave a footprint.

Fourth, counsel should be retained by caregivers, family members, and/or fiduciaries prosecuting any application for Medicaid.  Family members often reason that, since there is no value to the applicant's estate, the cost of counsel is unwarranted.  Counsel should be retained for the purpose of advising the person assisting in preparing or otherwise prosecuting the application  in order to protect his or her estate.  It is unclear what options might have been available to Ms. Donley had counsel been fully apprised of the situation (non-institutional care, mortgage, reverse mortgage, establishing residence of the grandmother in daughter's home and qualifying her care as necessary to avoid nursing home care, as examples),  but it is apparent that proceeding without regard for the ultimate possible consequence was an expensive, and possibly financially disastrous strategy.

Finally, nursing homes do evict residents.  There is a common misconception that nursing homes will always bear the financial burden of an indigent resident.  Nursing homes are not hospitals, many of which are required by federal law to provide care to indigents.  A nursing home will protect itself legally and financially, as it should for its own financial health, and ultimately for the health and safety of its residents.

Nursing homes have excellent lawyers representing their interests.  Likewise, caregivers and fiduciaries should have excellent lawyers representing their interests.  

For a full text of the decision, click here.     

ODI Assists Families Locate Lost Life Insurance Policies

If you suspect a deceased loved one has a life insurance policy that you cannot locate, there is a service through the Ohio Department of Insurance (ODI) that can assist in identifying and locating the policy. ODI’s missing life policy search service is a comprehensive search service that assists Ohio residents, and the families of deceased Ohio residents, in locating lost insurance policies purchased in the state. The search identifies the existence of any life insurance policies or annuity contracts purchased in Ohio and issued on the life of, or owned by, a deceased person.

Since its implementation in September of 2009, the missing life policy search service has had 682 valid search requests, and have matched 442 polices with their rightful owners. Executors, legal representatives, or members of the deceased person’s immediate family may file a search request with the Department. To submit a request, visit the Missing Life Policy Search Service, page of ODI's website.  Go here to print out a request form.  Have the form notarized, attach a copy of the certified death certificate, and mail it to the Department.

The Department forwards the search requests and supporting documentation to all Ohio-licensed life insurance companies within 25 business days of submission. If an insurance company has information about an in-force individual insurance policy on the life of the deceased person or an individual annuity contract where the deceased person is an annuitant, the insurer is required to take action to administer the policy and/or contract according to its terms. If any money is to be paid to a beneficiary, the insurance company will contact the beneficiary directly. In this case, the company has 21 days to notify the consumer after contacting the Department.

Ohioans with questions about life insurance can call the Department's toll-free consumer hotline at 1-800-686-1526. A life insurance informational toolkit is also available on the Department's website. The toolkit provides tip sheets, publications, and links to other helpful web sites.

Using Your Social Security Benefits as an Interest-Free Loan

One little-known Social Security retirement benefits rule is the so-called “do-over rule.” Under this rule, an individual 62 years or older can start collecting benefits but stop the benefits within 12 months of the start, repay the benefits collected, and then still be eligible for their higher benefit amount when they collect at full retirement age or older.

What’s the advantage if the benefits must all be immediately repaid? The strategy can work as a short-term interest fee loan. It makes sense, for example, in cases where an individual has a need for income in the immediate short term, due to an emergency such as a sudden loss of employment, but they anticipate income, i.e. finding a new job or collecting a pension, within the year which would allow for full repayment. For many individuals in the their early 60s, a majority of their assets are tied up in retirement and investment accounts and withdrawals from these accounts would trigger hefty penalties. After “emergency” liquid funds run out, the do-over rule offers a short-term solution. In addition, by drawing on a Social Security “loan” instead of investments, you allow your investments to continue growing.

What if you are unable to pay back the benefits after the 12 months are up? You may still be able to suspend your benefits and increase your ultimate pay-out amount. For example, if you start collecting at 62 but no longer need the income at 66, you could suspend benefits until 70. Then, between the ages of 66 and 70, you would earn delayed retirement credits which would increase the ultimate benefit amount when you collect at age 70.

(Note that up until December 2010, it was possible for you to collect benefits and repay at any time. The law has since changed so that you are limited to a 12-month pay back period. You are also only allowed one “do-over.”)

For more information on how to collect, suspend and pay-back benefits, contact or visit your local Social Security district office. You can click here to find your local office.

Religious Music Aids the Dying

Listening to religious music helps seniors increase their life satisfaction and self-esteem, and decreases anxiety around death, according to new analysis published in the Journal of Gerontology.  Music also helped seniors appreciate a sense of control, according to researchers at Baylor University, University of Texas- San Antonio, Bowling Green State University and Duke University. The research suggests that long-term care residents may benefit from listening to religious music. Responses were collected among more than 1,000 adults, all over age 65, who were either practicing Christians, identified as Christian in their past, or who were unaffiliated with a specific faith.

"Given that religious music is available to most individuals — even those with health problems or physical limitations that might preclude participation in more formal aspects of religious life — it might be a valuable resource for promoting mental health later in the life course,” the authors concluded. Results appeared in The Journal of Gerontology.  

According to McNights Long-term Care News, a  2013 study, also published in the Journal of Gerontology, considering the use of religious songs in helping older African Americans cope with stressful life events, also found that songs evoking themes of thanksgiving, communication with God, and life after death improved the mental health of those studied.  These join a growing amount of research literature that associates various religious factors with positive mental and physical health, and even suggests that aspects of religious involvement may reduce mortality risk. 

Go here for an article discussing the broader Family and Psycho-Social Dimensions of Death and Dying in African Americans.

IRAs Can Affect Medicaid Eligibility

For many Medicaid applicants, individual retirement accounts (IRAs) are one of their biggest assets. If you do not plan properly, IRAs can count as an available asset and affect Medicaid eligibility.

Medicaid applicants can have only a small amount of assets in order to be eligible to receive benefits ($2,000 in most states). Certain assets -- i.e., a house, car, and burial plot -- are exempt from eligibility determinations. Whether your IRA counts as an exempt asset depends on whether it is in "payout status" or not.

At age 70½, individuals must begin taking required minimum distributions from their IRAs, which means the IRA is in payout status. You may also be able to choose to put your IRA in payout status as young as age 59 ½ if you elect to take regular, periodic distributions based on life expectancy tables. If an IRA is in payout status, depending on your state, it may not count as an available asset for the purposes of Medicaid eligibility, but the payments you receive will count as income. Medicaid recipients are allowed to keep a tiny amount of income for personal use and the rest will go to the nursing home.

If the IRA is not in payout status, the IRA is a non-exempt asset, which means the total amount in the IRA will probably be counted as an asset, affecting your Medicaid eligibility. In order to qualify for Medicaid, you will need to cash out your IRA and spend down the assets. Alternatively, you could transfer the money to your spouse or someone else, although there will likely be an income tax penalty for doing this.  

Note that the rules for a Roth IRA may be different. If you have a Roth IRA, depending on the rules in your state, it may not be exempt at all because Roth IRAs do not require minimum distributions.

The rules regarding IRAs and Medicaid are complicated and vary from state to state. You should talk to your attorney about your IRA to determine the best course of action for you. 

For more information on retirement planning, click here.

For more on Medicaid's rules, click here.

CNA's Face Prison for Stealing Nursing Home Residents' Identities and Defrauding Government

Three former nursing home aides face prison time for stealing residents' identities and conning the government. The Georgia women obtained residents' personal identification information from the nursing home where they worked as certified nursing assistants, and they used the information to file fraudulent tax returns, according to court papers and evidence introduced at trial. The DOJ did not name the facility where the women worked.

One of the defendants, Kimberly Banks, was convicted after a one-week trial in January. She received a 192-month prison sentence on Thursday, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

The other two defendants, Donalene Mosely and Arneshia Austin, entered guilty pleas to conspiracy prior to trial, according to the prosecutors. They received 37-month and 21-month prison sentences, respectively. The three former CNAs also have been ordered to pay about $275,000 in restitution.

Of course, repayment may not be forthcpming. The women used refunds from the fraudulent returns to make car and mortgage payments, buy products online, and throw a “red carpet party,” the Department of Justice stated in a news release. They raised more than $600,000 by filing nearly 200 false returns.

This is the second nursing home identification theft case to come out of Georgia recently. In January, Yolando Blount received a 27-year prison sentence for her role in a similar but unrelated scheme.