Many Skilled Care Providers Still Unaware of New Medicare Rules Permitting Chronic Condition Care

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. 

Coupled with the existing Medicare rules permitting home health care for homebound patients, the ruling means a dramatic improvement in the ability of patients with chronic conditions to receive medical care in their homes under Medicare, rather than more expensive care traditionally performed in skilled nursing facilities requiring private pay (spend-down) and Medicaid.  Of course, if the public and care providers are unaware of these changes, there will be no change to the status quo.   

As part of the implementation of the settlement, the Centers for Medicare and 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. Importantly, consumers are typically unaware of their rights.  The campaign was not aimed at Medicare 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.

Six Questions to Ask Before Making Gifts

Many seniors consider transferring assets for estate and long-term care planning purposes, or just to help out children and grandchildren. Gifts and transfers to a planning trust often make a lot of sense. They can save money in taxes and long-term care expenditures, and they can help out family members in need and serve as expressions of love and caring.

But some gifts can cause problems, for both the generous donor and the recipient. 

Following are a few questions to ask yourself before writing the check:

Why are you making the gift? Is it simply an expression of love on a birthday or big event, such as a graduation or wedding? Or is it for tax planning or long-term care planning purposes? If the latter, make sure that there's really a benefit to the transfer. If the value of your assets totals less than the estate tax threshold in your state, your estate will pay no tax in any case. For federal purposes the threshold is $5.34 million (in 2014). Gifts can also cause up to five years of ineligibility for Medicaid, which you may need to help pay long-term care costs.

You should also check with your own elder law attorney or financial planner to make sure that the objective you are seeking can be (or best be) attained through the gift.  For example, some gifts that lay persons believe will help either don't help, or in fact may worsen the situation.  A home is not a countable asset when applying for Medicaid, for example, meaning that the home and its value are protected for a spouse living in the home.

A gift of the home removes the home from protection for the community spouse, and causes what would have been an unnecessary spend-down of other assets.  Gifts with retained life estates, and gifts held for the benefit of, and used for the support of the senior may not accomplish the objective sought.   

Are you keeping enough money? If you're making small gifts, you might not need to worry about this question. But before making any large gifts, it makes sense to do some budgeting to make sure that you will not run short of funds for your basic needs, activities you enjoy -- whether that's traveling, taking courses or going out to eat -- and emergencies such as the need for care for yourself or to assist someone in financial trouble.

Is it really a gift (part one)? Are you expecting the money to be paid back or for the recipient to perform some task for you? In either case, make sure that the beneficiary of your generosity is on the same page as you. The best way to do this is in writing, with a promissory note in the case of a loan or an agreement if you have an expectation that certain tasks will be performed.

Is it really a gift (part two)? Another way a gift may not really be a gift is if you expect the recipient to hold the funds for you (or for someone else, such as a disabled child) or to let you live in or use a house that you have transferred. These are gifts with strings attached, at least in theory. But if you don't use a trust or, in the case of real estate, a life estate, legally there are no strings attached. Your expectations may not pan out if the recipient doesn't do what you want or runs into circumstances -- bankruptcy, a lawsuit, divorce, illness -- that no one anticipated. If the idea is to make the gifts with strings attached, it's best to attach those strings legally through a trust or life estate.

Is the gift good for the recipient? If the recipient has special needs, the funds could make him or her ineligible for various public benefits, such as Medicaid, Supplemental Security Income or subsidized housing. If you make many gifts to the same person, you may help create a dependency that interferes with the recipient learning to stand on his own two feet. If the recipient has issues with drugs or alcohol, he may use the gifted funds to further the habit. You may need to permit the individual to hit bottom in order to learn to live on his own (i.e., don't be an "enabler").

Do you understand the tax consequences of the gift?  Sometimes there are adverse tax consequences in making a gift.  The most commonly misunderstood of these is the loss of the step-in basis of appreciated property to the fair market value on the date of death.  This -step-up in basis means, in essence, that your heirs can sell your assets in which you have capital gains without incurring a capital gains tax.  Donors can sometimes overlook this benefit.   At a minimum, a short conversation with an elder law attorney or tax professional will make clear the consequences and the options available to best accomplish your objectives. 

If after you've answered all of these questions, you still want to make a gift, please go ahead. Unless the gift is for a nominal amount, however, it is advisable to check with your attorney to make sure you are aware of the Medicaid, tax and other possible implications of your generosity.

Five Reasons Why Joint Accounts May Be a Poor Estate Plan

Many people, including seniors, view joint ownership of investment and bank accounts as a cheap and easy way to avoid probate since joint property passes automatically to the joint owner at death. Joint ownership can also be an easy way to plan for incapacity since the joint owner of accounts can pay bills and manage investments if the primary owner falls ill or suffers from dementia. These are all benefits of joint ownership, but three potential drawbacks exist as well:

Risk. Joint owners of accounts have complete access and the ability to use the funds for their own purposes. Many elder law attorneys have seen children who are caring for their parents take money in payment without first making sure the amount is accepted by all the children. In addition, the funds are available to the creditors of all joint owners and could be considered as belonging to all joint owners should they apply for public benefits or financial aid.  Many elder attorneys have seen their clients' accounts embroiled in creditor claims and nasty divorces against their clients' children. 

Inequity. If a senior has one or more children on certain accounts, but not all children, at her death some children may end up inheriting more than the others. While the senior may expect that all of the children will share equally, and sometimes they do in such circumstances, but there's no guarantee. People with several children can maintain accounts with each, but they will have to constantly work to make sure the accounts are all at the same level, and there are no guarantees that this constant attention will work, especially if funds need to be drawn down to pay for care.

The Unexpected. A system based on joint accounts can really fail if a child passes away before the parent. Then it may be necessary to seek guardianship to manage the funds or they may ultimately pass to the surviving siblings with nothing or only a small portion going to the deceased child's family. For example, a mother put her house in joint ownership with her son to avoid probate and Medicaid’s estate recovery claim. When the son died unexpectedly, the daughter-in-law was left high and dry despite having devoted the prior six years to caring for her husband's mother.

Disputes. Planning based upon individual accounts really does nothing to inform your family regarding your ultimate wishes.  Do you ultimately want to prefer one family member over another?  If the effect of planning using individual accounts results in an inequality to family members, was it intended or anticipated?  Of course, the resulting ambiguity is the cause of lawsuits, claims, disagreements, and hard feelings.  

Fraud.  Asset transfers late in life are particularly troubling, if they work to defraud your heirs and/or are not a reflection of your wishes.  A plan based upon individual assets and accounts does little to protect your family.  On the other hand, a comprehensive plan involving a trust or well-drafted will can better protect your family from late-in-life transfers by informing your family and authorities of your estate planning objectives.  

Joint accounts do work well in two situations. First, when a senior has just one child and wants everything to go to him or her, joint accounts can be a simple way to provide for succession and asset management. It has some of the risks described above, but for many clients the risks are outweighed by the convenience of joint accounts.

Second, it can be useful to put one or more children on one's checking account to pay customary bills and to have access to funds in the event of incapacity or death. Since these working accounts usually do not consist of the bulk of a client's estate, the risks listed above are relatively minor.

For the rest of a senior's assets, wills, trusts and durable powers of attorney are much better planning tools. They do not put the senior's assets at risk. They provide that the estate will be distributed as the senior wishes without constantly rejiggering account values or in the event of a child's incapacity or death. And they provide for asset management in the event of the senior's incapacity.

For more information review the previous post regarding direct transfer designations, such as Transfers on Death (TOD) and Payable on Death (POD) designations.  Joint ownership, TODs and PODs share many of the same disadvantages.   

Albert Pujols is a Champion for Kids with Special Needs

Los Angeles Angels of Anaheim designated hitter Albert Pujols is one of the greatest sluggers in baseball. In April, he hit home run number 500, putting him in some elite company. And as the 2014 season has progressed, Pujols has kept hitting home runs — climbing the all-time list (he’s currently at number 21 with 515 dingers) and helping his team reach the top of the American League West.

But Pujols’ accomplishments on the field are nothing compared to what he has done off it. His daughter Isabella has Down syndrome, and since his days as a St. Louis Cardinal Pujols has been an active advocate for kids and adults with special needs. He has partnered with the Down Syndrome Association since 2001, and in 2005 he founded his own non-profit organization, the Pujols Family Foundation, with his wife, Deidre. The foundation promotes awareness of special needs issues and helps kids and families living with Down syndrome both in the US and his native Dominican Republic. 

Pujols’ is also helping raise awareness by being the cover model for Toys “R” Us’ 20th annual Toy Guide for Differently-Abled Kids. The guide launched today, and it’s a resource for anyone looking for a great toy for the special needs kid in their life.

To read the full article posted on SIKids.com, go here. 

Hospitals Referring to Fewer SNF's

According to Jeff Terkowitz, senior manager with Avalere, between 2009 and 2012 – the most recent year for which CMS has released comprehensive Medicare data – there was an increase in the average number of SNFs that received a volume of patient referrals from hospitals. However, that trend may be slowing; the .3% increase in average number of SNFs to which hospitals discharged patients in 2012 came after increases of .7% and .9% per year from 2009-2011.

In 2009, short-term acute care hospitals discharged patients who were admitted on average to just over 37 different SNFs following the hospital stay.  In 2010 and 2011, that number grew, with hospital patients going to just under 38 and just under 39 SNFs, respectively.  By 2012, that number reached 39.14, a slight increase from 2011.

Hospitals, therefore, are still sending patients to many different SNFs, indicating, according to Terkowitz, that referral networks may not be well established.  But, he suspects that even though the total number of SNFs is still going up, there is a higher concentration of patient volume at a smaller number of facilities. He notes, for example, that between 2009 and 2012, there was a slight increase in concentration during which time the average hospital went from having just over nine SNF partners who received 10 or more patients to having 9.54 partners receiving that higher volume. 

He warns that the environment is rapidly changing, though; "there are many examples of hospitals moving towards tighter, more coordinated post-acute care networks." 

Diagnostic Related Group Codes or DRGs

DRGs were first developed at Yale University in 1975 for the purpose of grouping together patients with similar treatments and conditions for comparative studies. On October 1, 1983, DRGs were adopted by Medicare as a basis of payment for inpatient hospital services in order to attempt to control hospital costs. Since then, the original DRG system has been changed and advanced by various companies and agencies.  DRG represents a rather generic term.  

ICD-10 is the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD), a medical classification list by the World Health Organization (WHO). It contains codes for diseases, signs and symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or diseases.   ICD-10-CM contains over 68,000 codes. 

Surprise? Researchers Find that Hospice Use Not Increasing Despite Record Use of Advance Directives

According to an article published in McNight's Long Term Care News, seniors are completing advance directives in record numbers, but this is not having the expected effect of shifting people from hospitals to hospices in their last days, say researchers from the University of Michigan and the Veterans Affairs Ann Arbor Healthcare System. 

About 47% of elderly people had completed a living will as of 2000, and that increased to 72% by 2010, according to data from the Health and Retirement Study, a national survey done by the University of Michigan Institute for Social Research, on behalf of the National Institute of Aging.  During that same period, hospitalization rates increased in the last two years of life, the investigators found. The proportion of people dying in the hospital did decrease from 45% to 35%, but the researchers determined this had little to do with advance directives. This could be because directives focus more on the type of care rather than the setting where it is provided, they surmised.

“These are really devices that ensure people's preferences get respected, not devices that can control whether a person chooses to be hospitalized before death,"  researcher Maria Silveira, M.D., MA, MPH told McNight.

The article reports that among those who have completed a living will, most have both explained their treatment preferences and appointed a surrogate to make care decisions for them, according to the findings in the Journal of the American Geriatrics Society.  Advance directives commonly cover extreme decisions such as use of feeding tubes, but they do not provide much guidance for “gray area” end-of-life choices, such as when to administer antibiotics, another recent study found.

There is, of course, another possible explanation:  hospitals routinely transfer patients from a hospital to a skilled nursing facility at the end of a Medicare benefit, in order to continue Medicare covered treatment. These transfers are often made without advice, or informed consent after exploring alternatives.  Perhaps the disparity is best explained by institutions perpetuating institutional care and treatment.

Empowering Nurse Practitioners Could Reduce Hospitalizations From SNFs

According to an article in McNight's Long Term Care News, granting more authority to nurse practitioners (NPs) can help reduce hospitalization of skilled nursing facility residents.

The article reports the results of studies demonstrating that States that allow NPs to practice to the fullest extent of their training without a supervising physician have lower hospitalization rates across a range of groups in addition to SNF residents. These groups include inpatient rehabilitation patients and dual-eligible Medicare and Medicaid beneficiaries.

The American Association of Nurse Practitioners tracks state laws that allow NPs full, reduced or restricted scope of practice. There were 17 states allowing full practice as of January 2013.

Though there exists a correlation, the findings do not prove that allowing full scope of practice causes SNF hospitalization rates to improve, study authors pointed out. However, previous research also has shown that full scope of practice is associated with fewer hospitalizations, lower healthcare costs and better outcomes, they noted. Their findings contradict the American Medical Association and other physician groups, which have said care quality is likely to decline when a nurse practitioner, rather than a doctor, takes a lead role.

The results of this study should encourage nursing groups and other stakeholders to press for full scope of practice laws, the researchers concluded. They recommended that NPs form coalitions with nursing home associations and other groups to advocate for these policies.

This blog post is dedicated to a client NP who only recently provided me a solution to a persistent eye condition that defied treatment by two other physicians.

   

Ohio Ranks Poorly on Long-Term Care Services Scorecard

A new report ranks states on the quality and accessibility of their long-term care services and concludes there is a lot of room for improvement. The 2014 State Long-Term Services and Supports Scorecard finds that quality of care varies enormously across the states, but affordability is a big issue nationally.

The scorecard, a collaboration between the AARP, The Commonwealth Fund, and The SCAN Foundation, measured states’ long-term care system performance in five areas: affordability and access, choice of setting and provider, quality of life and quality of care, support for family caregivers, and effective transitions between care settings. Minnesota, Washington, Oregon, and Colorado ranked the highest while Kentucky, Alabama, Mississippi, and Tennessee ranked the lowest. The groups conducted a similar study in 2011.

According to the report, even in the highest-ranking states the cost of long-term care is unaffordable for middle-income families. The report notes that "on average, nursing home costs would consume 246 percent of the median annual household income of older adults."

States with a Medicaid system that functioned as an adequate safety net – reaching those with low and moderate incomes -- ranked higher on the scorecard, indicating that state public policy is important to improving care overall. The scorecard concludes that while some progress is being made, it is not enough to meet the needs of the growing elderly population.

The state of Ohio ranked 44th overall, ranking 42nd in affordability and access, but faring slightly better, 39th, in quality of life and quality of care.  Given these poor rankings, it is fortunate, perhaps, that Ohio's highest ranking came in securing effective transitions, which in part, considers the effectiveness of the state in avoiding unnecessary institutionalization.  

To see where each state ranks, click here.

5 Tips on Deciding Whether to Buy Long-Term Care Insurance

Alliance for Health Reform

One of the most difficult decisions in long-term care planning is whether to purchase long-term care insurance (LTCI) and which of the wide variety of products to purchase.

On the one hand LTCI premiums are high, they may be raised in the future, and  if you are purchasing policies in your 50s and 60s, the need is probably many decades in the future. Traditional LTCI also pays nothing to your family if you pass away without needing long term care, and may not even be there when needed if future price increases make keeping the policy impossible. On the other, many are saved by their LTCI, able to choose their own care setting rather than rely on what is covered by Medicaid in their state, more comfortable hiring necessary help if doing so doesn't mean dipping in to their savings, and able to protect an inheritance for their children and grandchildren.

Here are a few tips that should help you make the decision whether to purchase LTCI and what products to consider:

1. Can you afford LTCI? Can you "self-insure"? There are a few rules of thumb that can help determine whether you are in the target market for LTCI. You need to have enough savings and income to afford the premiums but not so much that you can easily pay your costs of care. If you are a couple whose net worth is more than $1 million but less than $3 million, or a single person with half these amounts, you are a candidate for LTCI. (Some LTCI brokers will tell you that there's no upper limit since even wealthy people may prefer to use LTCI rather than dip into their savings.) You could also look at this from the point of view of income. If you can pay the premiums without affecting your style of living or dipping into savings, then you can afford LTCI.
2. Decide now once and for all. Unless your financial situation is likely to change in the future, the best time to purchase LTCI is now. Every year you wait, you will face higher premiums and run the risk that a health care event will make you ineligible for LTCI.
3. Assess your own feelings. First, if you or your spouse were to need care at home, would you be reasonably comfortable using up some of your savings to pay for care? Or would you exhaust yourself providing the care yourself instead, whether due to fear of running out of funds or wanting to leave an inheritance? If you can do this thought experiment, in the end, would you feel worse having paid premiums over the years for insurance you did not use or paying out-of-pocket for care that could have been covered by insurance?
4. Use an LTCI specialist. LTCI is one of the most complicated insurance products available, with policies offering a variety of benefit levels and conditions for payment. Some insurance companies have raised premium rates on existing policies while others have not. Some honor claims readily and others have put up difficult roadblocks. And there is a proliferation of hybrid policies that merge LTCI with life insurance. You need someone who specializes in the field to guide you through all of these options.
5. Read up. You may have noticed that this article hasn't addressed actual insurance policies and benefit choices. In part this is because, as noted above, you need an expert. But before meeting with the expert, do a little of your own research. Start with ElderLawAnswers' collection of articles on LTCI, such as "Questions to Ask Before Buying Long-Term Care Insurance" and "How Much Long-Term Care Insurance Should You Purchase?" 

While these tips won't completely eliminate the difficult decision that all baby boomers are facing, we hope that this framework will help focus its consideration.