Liberal Magazine Fires Shot Across the Bow of Cruise Ship Roth IRA

A Roth IRA is an individual retirement account (IRA) that allows qualified withdrawals on a tax-free basis provided certain conditions are satisfied. Established in 1997, it was named after William Roth, a former Delaware Senator.  Roth IRA's are popular investment choices for Americans.

Roth IRAs are similar to traditional IRAs, the biggest distinction between the two being how they are taxed. Roth IRAs are funded with after-tax dollars; the contributions are not tax-deductible. Once you start withdrawing funds, the money is tax-free. Conversely, traditional IRA deposits are generally made with pretax dollars; you usually get a tax deduction on your contribution and pay income tax when you withdraw the money from the account during retirement.

Many people use Roths because account holders don't have to start taking distributions at age 70½ as they do with traditional IRAs. The money can sit untouched and grow tax-free throughout the owner's lifetime—a big plus for those who don't need the assets to live on. And while those who inherit any type of IRA must start taking distributions immediately, they are permitted to stretch out those payments, allowing the bulk of a Roth account to continue growing tax-free.

This and other key differences make Roth IRAs a better choice than traditional IRAs for some retirement savers. They are, at the same time, increasingly unpopular among those who champion government intervention to alleviate wealth disparity.  I have warned investors to consider seriously possible future changes to the laws governing Roth IRA's before investing, and particularly before implementing IRA conversions, i.e., liquidating a traditional IRA, and paying the taxes on the investment, in order to convert the investment to a Roth IRA that permits future tax-free withdrawals of both principal and income. See, "Roth IRAs Dim as Inheritance Vehicles- Beware the Rush to Covert."

Mother Jones Magazine (MJ) recently published an article critical of the government continuing to "support" wealthy individuals in an effort to avoid taxation using Roth IRA's. The article may be the first in a coming onslaught of attacks against the investment option, and may be a bell weather indicating reform. 

Although the article often reads more like a partisan platform or political screed (the article is openly published under the MJ "Politics" section), language choice, narrative, and hyperbole aside, the article explores the uses and misuses of the Roth IRA, particularly as a tool of the ultra-wealthy: 

"For many working Americans, a Roth IRA is a useful, if not particularly interesting, way to save money for retirement. For tech billionaire Peter Thiel, it was a way to accumulate more than $5 billion. The nonprofit journalism shop ProPublica ran an exposé in June revealing how a small number of extremely wealthy folks had ended up with Roths—federally subsidized retirement accounts meant for middle-class savers—worth tens to hundreds of millions of dollars and up. Thiel did so, the article noted, by “stuffing” his Roth IRA with wildly undervalued “founders shares” of pre-IPO startups—potentially an illegal tactic—and then watching as their values rose exponentially, and completely tax-free.

The story prompted congressional leaders to request data from the nonpartisan Joint Committee on Taxation, which reported that, as of 2019, more than 28,000 Americans held combined (Roth and traditional) IRA balances of $5 million or more, and 497 taxpayers had balances of at least $25 million. The latter group had socked away a combined $77 billion in their IRAs—on average, more than $150 million each. 'IRAs were designed to provide retirement security to middle-class families, not allow the super wealthy to avoid paying taxes,' Sen. Ron Wyden (D-Ore.) lamented in a press release.  

But it turns out IRAs are only the tip of the iceberg. The bigger problem, according to Steve Rosenthal, a tax attorney and senior fellow at Urban-Brookings Tax Policy Center, is that, thanks to a series of bipartisan bills Congress has passed over the past quarter-century, the government spends a fortune subsidizing a whole range of retirement plans whose benefits flow overwhelmingly to America’s most affluent. 'It’s unbelievable the amounts of dollars at stake, and how tilted they are to the high end,' Rosenthal told me. 'It’s just staggering.'"

The author acknowledges that reform of the Roth IRA is not likely or particularly popular, right now:

“'The wealth defense industry—the lawyers, accountants, and wealth managers to the super-rich—are paid millions to sequester trillions, stretching the limits of the law and sometimes writing the law themselves,' says Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies and author, most recently, of a book titled The Wealth Hoarders. 'They have fracked every corner of the tax code, especially tax-advantaged retirement programs, to extract benefits for their wealthy clients.'"

The article concludes with a contributing source explaining possible reforms and illustrating the lack of receptiveness there is for reform in Congress: 

"'To prevent stuffing and other kinds of self-dealing, [Steve Rosenthal, a tax attorney and senior fellow at Urban-Brookings Tax Policy Center] continues, Congress should just forbid people from holding non–publicly traded assets—like shares of a pre-IPO startup—in an IRA. Lawmakers also could enact a combined asset limit that covers all types of tax-advantaged retirement plans—as first proposed by the Obama administration. They also could strengthen nondiscrimination rules or consider shoring up Social Security—which appears to be in trouble—instead of further enriching the families who need the least help in their old age. “Congress will struggle to solve the problem they created,' Rosenthal told me in an email. 'But the longer they wait, the harder it will be.'

He’s not holding his breath. In July, when the Senate Finance Committee held a hearing titled 'Building on Bipartisan Retirement Legislation: How Can Congress Help?,' Rosenthal and University of Chicago professor Daniel Hemel submitted a statement for the record, but most of the professionals present at the hearing were part of what he calls the retirement-industrial complex: 'The benefits community, the practitioners, the retirement service industry—they testified. Nobody was invited to testify who says the emperor has no clothes.'"

MJ, despite is controversies, and mis-fires, has often been at or near the forefront of a once controversial position moving mainstream.  MJ was, for example, among the first to overtly connect Former President Trump to the alt-Right, although it's effort was roundly criticized, from the Left because its article portrayed a neo-nazi in a "positive" light.   

More importantly, the past few years have demonstrated just how quickly change is possible.  Roth IRA's, like all investment options, should be considered carefully. 

Nursing Homes Create Phony Diagnoses to Sedate Patients with Dangerous Drugs, Doubling Risk of Death

The New York Times (NYT), in a recent front-page Sunday article, "Phony Diagnoses Hide High Rates of Drugging at Nursing Homes," explores and exposes the use of chemical restraints, including antipsychotic medications, to control behavior of  long-term care residents. This blog has previously discussed the use of pointless  and dangerous drugs dispensed to terminally ill dementia patients in nursing homes.  See, "Most Terminal Dementia Patients in Nursing Homes Given Pointless and Potentially Dangerous Drugs."

Antipsychotic drugs have faced criticism for decades as “chemical straitjackets. They are medically unnecessary and dangerous for older people with dementia, nearly doubling their chance of death from heart problems, infections, falls and other ailments. Understaffed nursing homes have, nonetheless, often used the sedatives so they don’t have to hire more staff to handle residents.  

The battle against this pernicious practice is not new.  In 1987, President Ronald Reagan signed a law banning the use of drugs that serve the interest of the nursing home or its staff, not the patient.

But the practice persisted. In the early 2000s, studies found that antipsychotic drugs like Seroquel, Zyprexa and Abilify made older people drowsy and more likely to fall. The drugs were also linked to heart problems in people with dementia. More than a dozen clinical trials concluded that the drugs nearly doubled the risk of death for older dementia patients.

In 2005, the Food and Drug Administration (FDA) required manufacturers to put a label on the drugs warning that they increased the risk of death for patients with dementia.  While FDA advisories generated public awareness, it is well known that prescribers’ compliance with black-box warnings is low. Seven years later, in 2012, with antipsychotics still widely used, nursing homes were required to report to Medicare how many residents were getting the drugs. That data is posted online and becomes part of a facility’s “quality of resident care” score, one of three major categories that contribute to a home’s star rating.

The only catch: antipsychotic prescriptions for residents with any of three uncommon conditions, schizophrenia, Tourette’s syndrome and Huntington’s disease, are not included in a facility’s public tally. The theory was that since the drugs were approved to treat patients with those conditions, nursing homes shouldn’t be penalized.

The loophole was opened. The NYT has discovered that residents are simply  given "new" diagnoses of, for example, schizophrenia, attempting to justify the sedation associated with major antipsychotic medications, such as Haldol, despite the fact that such medications are contraindicated for dementia patients. According to the NYT, since 2012, the share of residents classified as having schizophrenia has risen to 11 percent from less than 7 percent.  The diagnoses rose even as nursing homes reported a decline in behaviors associated with the disorder. The number of residents experiencing delusions, for example, fell to 4 percent from 6 percent.

Today, one in nine residents has received a schizophrenia diagnosis. In the general population, the disorder, which has strong genetic roots, afflicts roughly one in 150 people.  Moreover, Schizophrenia, which often causes delusions, hallucinations and dampened emotions, is almost always diagnosed before the age of 40.

“People don’t just wake up with schizophrenia when they are elderly,”  Dr. Michael Wasserman, a geriatrician and former nursing home executive who has become a critic of the industry told the NYT. “It’s used to skirt the rules.”

Some portion of the rise in schizophrenia diagnoses probably stems from the fact that nursing homes, like prisons, have become a refuge of last resort for people with the disorder, after large psychiatric hospitals closed decades ago.

But unfounded diagnoses are also undoubtedly driving the increase. In May, a report by a federal oversight agency said nearly one-third of long-term nursing home residents with schizophrenia diagnoses in 2018 had no Medicare record of being treated for the condition.  Even for those for which there was some record of treatment, the treatment records, do not provide important details about the drug use (e.g., which antipsychotic drugs were prescribed; at what quantities and strengths; and for what durations).  The lack of treatment records suggest the drugs are not being prescribed to treat a legitimate condition, but are being used for other purpose.

The revelation should come as no surprise: many facilities have found ways to hide serious problems, like inadequate staffing and haphazard care, from government audits and inspectors.  The problem with misreporting staffing was so outrageous that, in 2019, CMS actually demanded payroll reports to verify nursing home reporting of staff numbers, immediately after which implementing such verification, more than one-third of nursing homes saw their ratings decline. See, this blog's article: "Medicare Ratings Fall for Short-Staffed Nursing Homes- One-Third of Nursing Homes See Ratings Drop."  There were a minority of nursing homes that didn't even have a staff nurse, resulting in home closures. 

The NYT, demonstrating the power of investigative journalism, reports:

According to Medicare’s web page that tracks the effort to reduce the use of antipsychotics, fewer than 15 percent of nursing home residents are on such medications. But that figure excludes patients with schizophrenia diagnoses.

To determine the full number of residents being drugged nationally and at specific homes, The Times obtained unfiltered data that was posted on another, little-known Medicare web page, as well as facility-by-facility data that a patient advocacy group got from Medicare via an open records request and shared with The Times.

The figures showed that at least 21 percent of nursing home residents...are on antipsychotics [link included in original].

That means a full one in five nursing home residents are receiving potentially unnecessary and dangerous medications!  The reasons why this practice continues are obvious: caring for dementia patients is time- and labor-intensive. Workers need to be trained to handle challenging behaviors like wandering and aggression. But many nursing homes are chronically understaffed and do not pay enough to retain a sufficient number of employees, especially the nursing assistants who provide the bulk of residents’ daily care. 

Studies have found that the worse a home’s staffing situation, the greater its use of antipsychotic drugs. That suggests that some homes are using the powerful drugs to subdue and sedate patients to avoid having to hire extra staff, or alternately to relieve already over-worked staff from the burden of caregiving.  According to the NYT analysis of Medicare data, homes with staffing shortages are also the most likely to misrepresent the number of residents on antipsychotics.

Staffing shortages are extreme, and threatening, made worse by a pandemic that has battered the industry. Nursing home employment is down more than 200,000 since early last year and is at its lowest level since 1994.

As staffing dropped, the use of antipsychotics rose.

Recent vaccine mandates further threaten industry staffing. In fact, following an announcement from President Biden that all nursing home staff will be required to be fully vaccinated against COVID-19 in a forthcoming regulation, the nursing home industry warned about the potential impact on the profession’s already challenging workforce situation. Industry leaders are deeply concerned that it may cause a "mass exodus" from the nursing home profession, leaving frail seniors without the caregivers and access to care they need.

In Ohio, only 54.3% of nursing home staff have been vaccinated, according to federal data.  Pete Van Runkle, head of the Ohio Health Care Association, which represents the state's for-profit long-term care facilities, fears additional staffing shortages. A facility in Ohio on average has 19 open positions it can't fill, according to a recent Ohio Health Care Association survey. The mandate could make things worse, Van Runkle has said.

"I'm scared to death of what that's going to look like," he said.

Van Runkle noted there was one large long-term care company that voluntarily mandated vaccines, only to walk it back later after workers threatened to leave.

Staff exodus will only increase the already strong incentives to misuse and abuse drugs as chemical restraints.  According to the NYT, the country’s leading experts on elder care are already "taken aback" by the frequency of false diagnoses and the overuse of antipsychotics.  Barbara Coulter Edwards, a senior Medicaid official in the Obama administration, told the NYT she discovered that her own father was given an incorrect diagnosis of psychosis in the nursing home where he lived even though he had dementia.

“I just was shocked,” Ms. Edwards said. “And the first thing that flashed through my head was this covers a lot of ills for this nursing home if they want to give him drugs.”

In 2019 and again in 2021, Medicare said it planned to conduct targeted inspections to examine the issue of false schizophrenia diagnoses, but those plans were repeatedly put on hold because of the pandemic.

In an analysis of government inspection reports, The NYT found about 5,600 instances of inspectors citing nursing homes for misusing antipsychotic medications. Nursing home officials told inspectors that they were dispensing the powerful drugs to frail patients for reasons that ranged from “health maintenance” to efforts to deal with residents who were “whining” or “asking for help.”  

"Asking for help."  Let that sink in.

Filial Responsibility- Resident’s Son Not Liable for Breach of Contract Because He Did Not Cause His Mother to Be Ineligible for Medicaid

The efforts of nursing homes to create and enforce filial responsibility, even where state legislators have not enacted such legislation, is a frequent topic of articles on this blog.  See, for example, the following: 

• Judge Can Not Impose an ‘Unusual’ Condition on a Reversal of a Default Judgment in a Nursing Home Breach of Contract Lawsuit;
• Tortious Interference With Contractual Relationship Claim Most Recent Possible Remedy Nursing Homes can Employ Against Children of Nursing Home Residents;
• Conservator Owes Duty to Nursing Home to Timely Apply for Medicaid;
• Agent Under Power of Attorney Liable for Damages to Nursing Home for Breach of Contract;
• Conveyance to Son Was Fraudulent, But His Siblings May Also Be Liable Under Filial Support Law;
• Nursing Home May Sue Resident's Daughter for Breach of Contract.

A recent case demonstrates just how aggressive a nursing home can be when protecting its interests.  A New York appeals court ruled, though, that the nursing home resident’s son, who signed an admission agreement agreeing to take all necessary steps to provide documentation for his mother’s Medicaid application, is entitled to summary judgment in a breach of contract claim by the nursing home, because there was no evidence his actions caused her to be ineligible for Medicaid. Wedgewood Care Center, Inc. v. Kravitz (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2017-12681, Aug. 18, 2021).

Eric Kravitz admitted his mother, Beatrice Kravitz, to a nursing home and signed an admission agreement. The admission agreement stated that Mr. Kravitz would be personally liable if he failed to take all necessary steps to provide requested documentation to Medicaid or if his actions contributed to non-payment of fees. The nursing home applied for Medicaid on Ms. Kravitz’s behalf, but the state determined she had excess resources. Ms. Kravitz died owing the nursing home almost $50,000.

The nursing home sued Mr. Kravitz for breach of contract, claiming that he failed to provide documentation to assist with Ms. Kravitz’s Medicaid application and that he had control over some of Ms. Kravitz’s assets. The nursing home argued that Mr. Kravitz was contractually obligated to have Ms. Kravitz sign a release of her financial records and obtain documentation from other entities. Mr. Kravitz filed a motion for summary judgment, arguing that the state did not deny Medicaid coverage because of his actions. The trial court granted the nursing home summary judgment. Mr. Kravitz appealed.

The Supreme Court of New York, Appellate Division, 2nd Department, reversed and granted summary judgment to Mr. Kravitz on the breach of contract claim relating to his failure to cooperate with the Medicaid application. The court ruled that the “admission agreement did not require the defendant to provide documents or information that were not within his possession or control” and that Mr. Kravitz’s actions did not cause Ms. Kravitz to be ineligible for Medicaid. According to the court, “the admission agreement expressly limited the scope of the [Mr. Kravitz’s] liability to circumstances where his own breach of the agreement constituted a proximate cause of the [nursing home’s] damages.” 

The court also ruled that although Mr. Kravitz had control over some of Ms. Kravitz’s assets, the nursing home did not demonstrate that those assets were available to pay for her care. The court remanded the case for further proceedings to consider Mr. Kravitz's duty to use his mother's assets to pay the nursing home.

The case is not over.  The son lost in the trial court, but won on appeal, sending the case back to the trial court for further consideration.  The son may or may not prevail before the trial court upon reconsideration, but one thing is clear- the son has expended and lost what is probably an extraordinary amount in legal expense and time, simply because he was the person responsible for his mom, and that placed him between the nursing home and money.   

Medicare Advantage Plans and Staffing Shortages Slowing Hospitals Discharges to Nursing Homes

Skilled nursing admissions are being slowed by both staffing shortages and Medicare Advantage restrictions.  According to a recent article in Mcknight's Long-term Care News, the delays  are threatening log jams in "hospitals desperate to discharge patients to post-acute care and free up needed beds."  The problem is especially pronounced in states with high COVID-19 case rates. 

Hospital executives and healthcare leaders have complained that the prior authorizations needed to send no-longer acute patients on to post-acute care have always come slowly in states like Florida, Louisiana and Oregon. But the problem is limiting access to care for would-be hospital admits during the ongoing delta surge.

Many Medicare Advantage plans have suspended their restrictions during this stage of the pandemic, but their replacement requirements and expiration dates vary. Humana’s waiver for Louisiana lasts until Sept. 17, while Florida Blue’s is open-ended. 

Some want uniformity directed by state or federal regulation.  “The challenge when it is not being directed by a state or federal agency is you have significant variation from one plan to the next as to how they are providing the flexibility, which creates more confusion at a time when we need to minimize as much confusion as possible,” Mary Mayhew, CEO of the Florida Hospital Association, told Modern Healthcare.

In places where waivers exist, they can be highly effective. AdventHealth in Altamonte Springs, FL, estimated waivers issued by some Medicare Advantage plans cut transitions into post-acute care down to about 24 hours.

“If the waiver goes away, we are concerned hospitals could return to seeing delayed transfers contribute to challenging capacity constraints,” said Lisa Musgrave, vice president of home care administration and post-acute services.

The American Hospital Association has been working with the Centers for Medicare & Medicaid Services (CMS) and Medicare Advantage organizations to “encourage adoption of these waivers.”  For its part, CMS issued a memo that “strongly encouraged” plans to relax prior authorizations “to facilitate the movement of patients from general acute-care hospitals to post-acute care and other clinically-appropriate settings, including skilled nursing facilities.”

Whether skilled nursing facilities could accept patients more quickly if prior authorizations are lifted remains to be seen. Kristen Knapp, spokeswoman for the Florida Health Care Association, said the larger issue “is all about staffing.”

A survey of FHCA members in early August found half had had to reduce admissions in the previous month due to worker shortages.

“The workforce crisis is real, and while we want to be good community partners during the surge, nursing centers right now are doing everything they can to maintain and recruit more staff to support the patients they are currently caring for,” Knapp told McKnight’s Long-Term Care News.

Guardianship Risk: Rick Black from CEAR Addresses the Guardianship Improvement Task Force

Rick Black, addresses the Guardianship Improvement Task Force on August 19, 2021.   Rick is a director of the Center for Estate Administration Reform (CEAR).  CEAR is a not-for-profit advocate with a mission to educate and seek justice for Americans when they are threatened by the growing problem of abusive probate, trust and guardianship fraud.

CEAR’s objective is to become the front line defense against the betrayal of our most vulnerable citizens, and a powerful force that investigates those who pervert the courts and exploit the law for their own gain.

CEAR's website poses the challenge succinctly:

Though many attorneys are honest and work with integrity, in reality, the legal system does not demand honesty, and is uniquely positioned to intercept estate funds either through independent actions or through the probate court system [emphasis added]. The probate system nationwide is fully aware of the system’s shortcomings, and yet it refuses to admit how easily it can be compromised to benefit the predatory legal community — at the expense of the vulnerable public it claims to protect.

The appointment of an unscrupulous guardian can happen to anyone. The practice is fully endorsed by some in the legal community who can mitigate liability or receivables risks by medical institutions, or illegally assume control of an estate. It is a problem in every state, the question being only to the degree by which it occurs.

Effective aging in place planning demands that a senior, the seniors family, and the senior's advisors understand and implement strategies to avoid and prevent abusive guardianship and abusive guardians through comprehensive planning.  Only by confronting the systemic risk of avoidable and unnecessary institutionalization, can a senior hope to control where s/he ages.   

 

IRS Publishes "Dirty Dozen" Tax Scams Targeting Taxpayers

Each year, the Internal Revenue Service (IRS) puts out their “dirty dozen” list. This is a list of scams that are so prevalent that the IRS wants everyone to watch out for. The scams fall into four main categories: pandemic-related scams; scams relating to personal information; schemes focusing on certain victims; and scams that persuade taxpayers into taking crooked actions.  Of course, readers of this blog are aware that Alzheimer's cure scams are currently targeting the elderly and their families. 

Pandemic Scams

Due to the pandemic, the government passed legislation that provided financial help to individuals and businesses. A scam can focus on stealing these payments. The IRS alerts taxpayers to watch out for mailbox theft of stimulus checks. The IRS reiterates that an IRS employee will not initiate contact via phone, email, or text asking for your social security number or other information in order to process stimulus checks.  These scams often target a person's sense of community, need for unity, and commitment to good public health.

Scammers have also stolen identities and filed unemployment claims, the IRS says. These scammers have benefited from the bolstered unemployment benefits but the legitimate taxpayer is the one who may receive a Form 1099-G to report on their income tax return. If you received this form and you didn’t actually receive unemployment benefits, you should contact the appropriate state agency for a corrected form.

Scams Related to Personal Information

Personal information (PI) is information that is used to identify you and thus could lead to a scammer impersonating you. PI includes your social security number, driver’s license number, banking information, passwords, and more.

The first scam related to PI that the IRS warns against is phishing. This involves the scammer sending you a communication that looks like it is from a legitimate source, like a government agency. You think you are dealing with the IRS but you are instead dealing with a ne’er-do-well. The scammer collects your PI and then is able to perpetrate fraud on your accounts. Or the scammer has a virus embedded in the communication that compromises the security of your computer or phone.

Schemes Focusing on Certain Victims

There are also scams related to social media. The scammer may open a social media account and pretend to be friend or family member in order to extract PI from you. Or the con artist could ask you for money due to an “emergency” or for a fake charity contribution.

With the pandemic, fraudsters have set up fake charities or disaster relief companies. Or they create bogus stories on social media about a fake family that has had it particularly rough due to COVID-19. These stories or charities pull at your heart strings. Before you give to a cause, do your research to make sure it is legitimate, and your funds will be used as you intend. Be wary of a charity asking for a donation via gift card or money wire.  Even legitimate news organizations have been bitten by scammers, and have unwittingly facilitated relief scams. 

Scams that Persuade Taxpayers into Taking Crooked Actions

Immigrants are the targets of some scammers. The con artist will impersonate a government employee and threaten deportation or jail if a sum is not paid. The IRS states that a legitimate IRS agent will not make these threats. Similarly, those with limited English-speaking capability are susceptible to phone scams. The Schedule LEP let’s a taxpayer request a change in their language preference so that they can more easily understand official IRS communications.

Scammers may offer big discounts for a “settlement” with the IRS, or say that they will file for certain relief programs, such as an Offer in Compromise. While relief programs do exist with the IRS and can prove very helpful for some taxpayers with IRS debt, you need to make sure you are dealing with a reputable company who will actually do legitimate work on your behalf. Look out for misleading advertising or deals that seem too good to be trust. It might be worth contacting the IRS yourself first to see what options you have. There are many resources on the IRS’ website, including a questionnaire to see if you qualify for an Offer in Compromise. And, of course, the IRS offers its forms online.

Scammers are out there waiting to prey on the vulnerable and unsuspecting. The IRS warns to look out for any scam that requests payment via gift cards. Also, be aware that in most circumstances, the IRS will first communicate with you via mail. If the first contact is a phone call, be cautious. And the IRS will almost never send out communications to you via email.

One tactic that may reduce the damage resulting from a variety of scams is a security freeze and increased alert protection on the use of your identity.  There is a free service provided through the federal government.  For more information, read the blog article here. 

The Department of Justice maintains a National Elder Fraud Hotline, which will provide services to seniors who may be victims of financial fraud.  The Hotline is staffed by experienced case managers who can provide personalized support to callers.  Case managers assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed.  When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller.  The Hotline’s toll free number is 833-FRAUD-11 (833-372-8311).

Additional Protection to Help Protect Taxpayers

    IRS makes IP PINs available to all taxpayers – adding additional security

To help taxpayers avoid identity theft, the IRS this year made its Identity Protection PIN (IP PIN) program available to all taxpayers. Previously it was available only to victims of ID theft or taxpayers in certain states. The IP PIN is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayer's personally identifiable information.

Using an IP PIN is, in essence, a way to lock a tax account. The IP PIN serves as the key to opening that account. Electronic returns that do not contain the correct IP PIN will be rejected and paper returns will go through additional scrutiny for fraud.

        Reducing fraud

The IRS and its Security Summit partners in the states and the private-sector tax community have made changes to help reduce identity theft-related refund fraud that are noticeable to the average person filing a return:

• Tax software providers agreed to strengthen password protocols. This is the first line of defense for these companies to make sure their products are secure.
• State tax agencies began asking for taxpayers' driver's license numbers as another way for people to prove their identities.
• The IRS limited the number of tax refunds going to financial accounts or addresses.
• The IRS masked personal information from tax transcripts.

    Multi-factor authentication can help

It is important for taxpayers filing in 2021 to know that online tax software products available to both taxpayers and tax professionals will contain options for multi-factor authentication. Multi-factor authentication allows users to better protect online accounts. One way this is accomplished is by requiring a security code sent to a mobile phone in addition to the username and password used to access the account.

The IRS and its Security Summit partners have formed an information sharing center that allows them to quickly identify emerging scams and react to protect taxpayers. The Identity Theft Tax Refund Fraud Information Sharing and Analysis Center PDF is now operational.

Also, check out our recent A Closer Look column for more on how to be vigilant about tax scams. Visit Identity Theft Central and Tax Fraud Alerts for more information on how to protect against or report identity theft or fraud.

If someone contacts you claiming to be from the IRS, you should call the IRS at 800-829-1040 to see what the facts are before proceeding.

Outbreak of Untreatable, Drug-Resistant Super-Fungus Unnerves Experts in Two Major US Cities

Image Source: Photo 197980721 / Contagion

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As the delta variant of Covid-19 races through populations and consumes government and media resources, the Centers for Disease Control and Prevention (CDC) announced discovery of multiple instances of Candida Auris that appear to be resistant to all medicines in two health institutions in Texas and a long-term care facility in Washington, D.C.  According to researchers, the deadly, difficult-to-treat fungal infection spreading through nursing homes and hospitals across the United States is becoming even more dangerous. For the first time, the fungus, Candida Auris, has proven to be "utterly impervious" to all existing medication in several cases.

C. Auris, is a hardy yeast infection first found in Japan in 2009, and it is spreading rapidly throughout the globe.  During the coronavirus pandemic, federal health officials believe the disease spread more quickly and even farther, with overburdened hospitals and nursing homes unable to keep up with the surveillance and control procedures needed to manage local outbreaks.

According to the CDC's recent study, at least five out of over 120 cases of C. Auris were resistant to therapy.  The CDC did not name the facilities where the novel infections occurred. Still, health officials said there was no apparent link between the outbreaks in Texas at a hospital and a long-term care facility that shared patients and in Washington, D.C. at a single long-term care center. Between January and April, epidemics occurred.

According to the C.D.C., about a third of infected patients died within 30 days, although officials said it was unclear if their deaths were caused by the fungus because they were already "critically ill."

The CDC has discovered more than 2,000 Americans colonized with C. Auris - meaning the fungus was found on their skin - during the last eight years, with most cases centered in New York, New Jersey, Illinois, and California. Approximately 5% to 10% of individuals infected with the virus develop more severe bloodstream infections.

The fungus is difficult to eradicate from healthcare institutions once it has established itself, sticking to cleaning carts, IV poles, and other medical equipment. While the yeast infection is usually innocuous to individuals in good health, it can be fatal to critically ill hospital patients, long-term care facility residents, and others with weaker immune systems.

Dr. Cornelius J. Clancy, an infectious diseases specialist at the V.A. Pittsburgh Health Care System, told NatureWorldNews, "If you wanted to conjure up a nightmare scenario for a drug-resistant virus, this would be it." "Immunocompromised patients, transplant recipients, and critically sick patients in the I.C.U. would all be at risk from an untreatable fungal infection."

While C. Auris has a reputation for being difficult to treat, researchers discovered five individuals in Texas and Washington, D.C., who had infections that did not respond to any of the three primary antifungal classes. In addition, Panresistance had previously been reported in three C. Auris patients in New York.

Still, health officials said the newly registered panresistant infections occurred in patients who had never received antifungal drugs,  Dr. Meghan Lyman, a medical officer at the CDC specializing in fungal diseases, told the New York Times.

"What's alarming is that the individuals at risk aren't just a tiny group of folks who have infections and are already taking these medications," she added.

The discovery of a panresistant C. Auris is a sobering reminder of the risks presented by antimicrobial resistance, from superbugs like MRSA to antibiotic-resistant salmonella. According to the CDC, such diseases sicken 2.8 million Americans each year and kill 35,000.

Transport Risk Includes Assault, Abandonment, and Identity Theft!

Two senior living caregivers are charged with abuse and exploitation for allegedly stealing a resident’s identity and debit card and then abandoning the resident on the side of the road on a “particularly hot day” in 2019.  Tavetta Lavetta Jones and Tekera Levine, employees of Whispering Pines Assisted Living in Pensacola, FL, were supposed to transfer the resident to sign bond paperwork. 

Florida Attorney General Ashley Moody announced the arrests and charges  following an investigation by the state Medicaid Fraud Control Unit. Reporting suggests that the assisted living facility at which the resident lived was wholly unaware of the fraud, or that the resident had been abandoned:

Kevin Wheatley, owner of Whispering Pines, said he is in “scramble mode” to keep his facility “running safely and smoothly,” adding that he only learned about the incident recently from the local news.  “There is a certain amount of trust you have to put in your staff,” Wheatley told McKnight’s Senior Living. "If that trust is broken, it’s obviously heartbreaking.”

Wheatley reportedly told McKnight's Senior Living that Jones is no longer employed by the community and Levine, “who has a stellar reputation in the caretaking community,” is on administrative leave “until we can figure out what happened.” He said Levine maintains that she was not involved in the incident. 

Jones is charged with exploitation of an elderly person or disabled adult and criminal use of personal identification information. She faces up to 35 years in prison. Levine, a Whispering Pines manager, faces a charge of accessory after the fact and up to five years in prison. Both were arrested last weekend by the Escambia County Sheriff’s Office and released on a $5,000 bond each.  Both are entitled to a presumption of innocence.

According to the attorney general, the resident identified Jones and Levine as the employees who orchestrated the scheme. The resident also identified a black Volkswagen as the vehicle that Jones was driving the day the resident was abandoned on the side of the road.

Levine “gave varying accounts” about the incident and Jones’ involvement. Phone records placed both employees in the county where the resident was abandoned near the time that law enforcement responded to a 911 call from people who found the older adult on the side of the road. Phone records also placed Jones in the vicinity of ATMs where the victim’s debit card and personal identification number were used to access a bank account in August and September 2019.

Court Rejects State Effort to Exploit Power of Appointment in Irrevocable Trust for Medicaid

As a result of a recent holding, the State of Massachusetts was ultimately unsuccessful in its effort to exploit a somewhat common term in irrevocable trusts designed for Medicaid and governments benefits planning, and for broader asset protection planning, in order to make trust assets available for Medicaid.

Emily Misiaszek created an irrevocable trust, placed her house in the trust, and named her daughter, Patricia Fournier, as the trustee. The trust stated that its purpose was to manage Ms. Misiaszek’s assets to allow her to age in place, specifically to live in the community as long as possible. The Trust stated that the principal of the trust "should" be held until the termination of the trust, but it gave Ms. Misiaszek a limited lifetime power of appointment to appoint all or any portion of the trust principal to a nonprofit or charitable organization provided that she had no controlling interest in the charity. 

Ms. Misiaszek entered a nursing home and applied for Medicaid (called MassHealth in Massachusetts). The state denied her benefits, claiming that the assets in the trust were available because the trust permitted Ms. Misiaszek to appoint the trust principal to a charity.  Massachusetts argued that "charity," could include a nonprofit nursing home to pay for her care.  Because federal law  provides "if there are any circumstances under which payment from the trust could be made to or for the benefit of the individual, the portion of the corpus from which, or the income on the corpus from which, payment to the individual could be made shall be considered resources available to the individual," Massachusetts considered the power of appointment a circumstance, thus making the trust assets countable.  See, 42 U.S.C. § 1396p(d)(3)(B)(i).  State law provides that "[t]he effect of the ['any circumstances'] test is that if the trustee is afforded even a 'peppercorn of discretion' to make payment of principal to the applicant, or if the trust allows such payment based on certain conditions, then the entire amount that the applicant could receive under 'any state of affairs' is the amount counted for Medicaid eligibility."

Ms. Misiaszek appealed, arguing that the assets in the trust were not countable. The state affirmed the denial, and Ms. Misiaszek appealed to court. The trial court reversed the state’s decision. The state appealed, arguing again that because the trust did not contain language expressly preventing transfers of principal to benefit Ms. Misiaszek, she could use her limited power of appointment to pay for her care.

The Massachusetts Supreme Judicial Court held that the trust is not an available asset, affirming the lower state court's decision.  Fournier v. Secretary of the Executive Office of Health and Human Services (Mass., No. SJC-13059, July 23, 2021). According to the Court, the trust did not contain any language allowing Ms. Misiaszek to benefit personally from any distribution of trust principal; rather, the trust reflected Ms. Misiaszek’s intent to preserve the principal for her children. The court ruled “that under the terms of her trust, [Ms.] Misiaszek's limited power of appointment does not allow her, in any circumstance, to appoint the trust principal for her benefit, and thus the trust principal is not ‘countable’ for purposes of determining her eligibility for MassHealth benefits.” Fournier, at p. 25.  

The Court noted that:

"'properly structured, [irrevocable] trusts may be used to place assets beyond the settlor's reach and without adverse effect on the settlor's Medicaid eligibility'). In short, for trust principal to be considered countable under the 'any circumstances' test, the terms of the trust must give the applicant a direct path to reach or benefit from the trust principal" [citations omitted].

Fournier, at p. 7.  

A power of appointment such as the one provided in Ms. Misiaszek's trust is often included in order to qualify the trust as a "Grantor Trust," under the Internal Revenue Code.  Why?  A Grantor Trust does not require a separate Taxpayer Identification Number, and is not required to file a separate tax return.  A power of appointment permits the use of an irrevocable trust to obtain an objective, such as shielding assets from creditors or protecting assets from spend down in the event of long term care need, without suffering some of the tax and administrative disadvantages of an irrevocable trust.  Typically,  exercise of the power of appointment is usually considered unlikely and unnecessary; it serves only to make the trust a more acceptable planning vehicle. 

 

Home Health Care Staff Shortages Threaten Health- Frustrates Aging in Place

This Blog has reported the threat staffing shortages pose to the long-term institutional care industry, its residents, and its patients.  Staffing shortages in the home health care industry present similar threats, both to the industry and to actual and prospective customers.  

There is a legal maxim that "Justice Delayed is Justice Denied."  In the long-term care and the health care industry there is no simple maxim that  warns that "freedom delayed is freedom denied," but there should be.  A shortage of home health care workers means that some seniors may be unable to safely return to their homes, and may, instead, be forced into institutional care alternatives otherwise avoidable.  This may seem an anomalous result, but it is real.  Seniors are transferred to institutions that are woefully understaffed every day.  

There is no compromise possible, however, for a family seeking return of their mother or father to a home when they cannot demonstrate adequate and sufficient support services.  The systemic choice is clear; it is unacceptable for a senior to be at risk in their own home, but acceptable if that risk is institutional.  The Trump Administration learned, for example, that there were nursing homes opened and operating, without a nurse.  Medicare did not, and to this day, does not prohibit the transfer of a patient from a hospital to a poorly staffed nursing home or assisted living facility!     

Aging in Place Planning is specifically designed to reduce the risk of unnecessary and avoidable institutional care.  Unfortunately, many seniors may need home health care workers for short periods of time following acute needs or hospitalizations in order to rehabilitate safely at home.  "Freedom," may be denied these seniors if there is no choice but institutional care.   

Kaiser Health News, published a story about the on-going shortage, entitled, "Desperate for Home Care, Seniors Often Wait Months With Workers in Short Supply."  Using Maine as an example, the article explains:

"The Maine home-based care program, which helps....more than 800 in the state, has a waitlist 925 people long; those applicants sometimes lack help for months or years, according to officials in Maine, which has the country’s oldest population. This leaves many people at an increased risk of falls or not getting medical care and other dangers.  The problem is simple: Here and in much of the rest of the country there are too few workers. Yet, the solution is anything but easy."

Katie Smith Sloan , CEO of Leading Age, which represents nonprofit aging services providers, told Kaiser that the workforce shortage is a nationwide dilemma:

 “Millions of older adults are unable to access the affordable care and services that they so desperately need,” she said at a recent press event. State and federal reimbursement rates to elder care agencies are inadequate to cover the cost of quality care and services or to pay a living wage to caregivers."

This shortage was not unexpected.  Kaiser reported that "[f]or at least 20 years, national experts have warned about the dire consequences of a shortage of nursing assistants and home aides as tens of millions of baby boomers hit their senior years." President Biden even included funding for home and community-based care in the infrastructure bill ("human infrastructure").

And here we are. 

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