Hospice Patients in SNFs Less Likely to be Visited by Professional Staff the Last Two Days of Life

Medicare patients who received hospice care in a nursing home setting were less likely to be visited by professional staff in the last two days of life, according to a new study.  The study, published online in JAMA Internal Medicine, found that 16.5% of hospice patients in nursing homes had no visits from professional hospice staff in the last two days of life, compared to 10.6% of patients not in nursing homes.  Smaller hospice programs, and those based in nursing homes, were less likely to provide visits in the last two days of life, the study found. 

 Researchers also noted differences in visits based on patient characteristics. Close to 15% of black patients had no visits on their last two days, compared to 12% of white patients. One in five patients who died on a Sunday also did not have a visit from professional hospice staff in their last two days of life.

The authors noted that their study did not take into account the severity of the symptoms of the hospice patients, or family preferences for visits. The results still pinpoint disparities in hospice care, researchers said, which is especially relevant as the Centers for Medicare and  Medicare Services evaluates reforms.

Source: McKnight's.

Beware Social Security Scam

The Social Security Administration posted  a warning on its blog about a scam involving phishing.  According to the post, the scam begins with an email misrepresenting itself as a government-sponsored program "protecting" consumers from identity theft and financial fraud. 

According to the blog:

The subject line says 'Get Protected,' and the email talks about new features from the Social Security Administration (SSA) that can help taxpayers monitor their credit reports, and know about unauthorized use of their Social Security number. It even cites the IRS and the official-sounding 'S.A.F.E Act 2015.' It sounds real, but it’s all made up.

The blog post offers a couple of tips to identify communications a scam. If the email ended up in your junk folder, it could be a scam. Also, the post suggests you mouse over the URL and see if it is really from SSA, or from a .com site instead.

Always remember-if in doubt, don't click on the link and don't provide personal information.

Filial Responsibility Laws Lead to Chaos

Filial responsibility laws often lead family chaos to spill-over into the legal system. A recent Pennsylvania case, involving a claim by one child against his brother and sister illustrates the ensuing chaos, and the case does not involve Medicaid!  

Joseph Eori is the attorney-in-fact for his mother, Dolly Eori, who requires 24-hour care.  Mr. Eori lives with his mother and provides management of her care and resources.  Mr. Eori testified that his mother's medical and caregiving expenses exceeded her income.  Although Ms. Eori had not filed for Medicaid, and apparently did not require Medicaid assistance, and was on no other form of public assistance, Mr. Eori filed a complaint on behalf of his mother seeking filial support from his brother, Joshua Ryan, and from his sister Paulette Rush.  The daughter entered into a consent order to pay her mother $400.00 per month in filial support before trial. 

Mr. Ryan, however, objected to paying anything on behalf of his mother on a number of grounds.  He lost at the trial court, and the Court entered an Order for Filial Support requiring Ryan to pay his mother Dolly Eori $400 per month in support.  Ryan appealed the judgment against him.  

Mr. Ryan first argued that his mother was not legally indigent because she did not have outstanding medical bills.  The court ruled against him, even though her medical and other bills were wholly satisfied.  The court, refusing to resort to receipts and detailed checking account statements as demanded by Mr. Ryan,  relied upon the testimony and documents submitted by the caregiving son.  The court recounted the testimony:

Plaintiff [the caregiving son] testified that his mother is diagnosed with cancer, dementia and Alzheimer's disease and requires twenty-four hour care. During the day, she goes to Senior Life adult day care. For the remaining hours, Plaintiff is responsible for ensuring that someone is available to care for his Mother. There are currently three individuals that provide that care, and he pays each of them in cash. He pays them a total of $1,722 per month for the care. According to Plaintiff's testimony, he has not been able to obtain care for his mother on weekends because she cannot afford it. Therefore, the total amount is not even reflective of the full care that Ms. Eori needs.

In addition to the caregiver costs, Plaintiff estimates that Ms. Eori spends an additional $1,000 per month on hygiene items, cleaning expenses, and diapers. The electric bill is an additional $250 per month and there is a deduction evidenced on her bank statements for Verizon at approximately $95 per month. These basic needs already total more than Ms. Eori's monthly income, and the bank statements submitted by Defendant evidence additional expenses for medical needs, such as a payment of $773 to Prime Medical Group in July 2012 and another $115 payment in September 2012. To further show the disparity between Ms. Eori's income and expenses, Plaintiff admitted a bank statement for January 2014 showing a deposit of $1789 and a withdrawal of $1779.67.

Based on the evidence and testimony presented, the Appellate Court determined that Ms. Eori did in fact satisfy the common law definition of "indigent." The appellate court agreed that "[a]lthough she is not extremely destitute, she has sought financial assistance in the past and does not have sufficient income to provide for her maintenance and support."  The appellate court continued:

...the definition of indigent does not state that outstanding debt is necessary for an individual to qualify as indigent. It just requires an inability to provide for ones [sic] own maintenance and support with the income received. The mere fact that Ms. Eori has been able to remain out of debt does not eliminate her from the definition of an indigent person. One does not have to be "helpless" or in "extreme want." Therefore, the Court did not err in finding Ms. Eori indigent merely because there was no evidence of unpaid or outstanding medical bills or other liabilities.

Ryan next argued that the Trial Court committed error in failing to consider the fact that Plaintiff, as power of attorney for Ms. Eori, claimed her as a dependent on his 2013 Federal Income Tax return. Federal law required the Plaintiff to be responsible for at least fifty percent of Ms. Eori's expenses in order to claim the deduction. The court held that while this may be true for federal income tax purposes, it failed to see how that impacted the determination that Ms. Eori is indigent. The court wrote: "[i]f her son has to provide at least fifty percent of her expenses to maintain her daily needs, then she, on her own, is clearly indigent."  The court failed to determine whether the son, in fact, contributed such sum, and failed to consider the benefit the son derived from the deduction, a fact that will later demonstrate why these matters are so poorly resolved by legal means. 

Ryan next argued that the Trial Court erred in failing to consider the amount Plaintiff contributes to Ms. Eori's support. The court agreed that from 2012 to 2014, Ms. Eori's bank account has never had a negative balance. However, the positive balance was not, according to the Plaintiff, the result of Ms. Eori's income. Plaintiff testified that he used his personal money to maintain a $2800 balance in case of an emergency,  and because there are no burial plans for his Mother.  The court did not, however, consider and recount the actual amounts contributed by the caregiving son, noting simply that his occasional need to support his mother evidenced her legal indigence.

Ryan finally argued that he had been estranged from his mother and that he had an abusive childhood.   Ryan was initially sued as Russell Eori. Although his birth name was Russell Eori, Russell Eori obtained a legal name change to Joshua Ryan.  The record was unclear whether the childhood abuse played any role in his name change.  Pennsylvania's filial responsibility law negates the support obligation if the parent abandoned the child for a 10-year period.  The court ruled that his testimony was legally insufficient to constitute a defense to his support obligation.  The court explained:

The term "abandoned" is not defined in the act itself. However, the Custody Act at 23 Pa. C.S.A. §5402 defines "abandoned" as "left without provision for reasonable and necessary care or supervision." Defendant testified that he did not have the greatest family growing up and he wanted to get away. (N.T. 6/5/14 pg. 66, lines 8-13). He testified that his grandmother cared for him more than his Mother; however, they were never far apart because he testified that his grandmother either lived with Mother or beside Mother. (N.T. 6/5/14 pg. 61, lines 21-25 and pg. 62, lines 1-7). Although he testified that Mother was abusive, left and caused them to move many times, and was either gone or fighting, he never established that she left for a ten year period. He did not provide details or time periods on any of the testimony presented. Therefore, it was not clear from his testimony that Mother ever left for a ten year period without provision for his reasonable and necessary care or supervision. Although it may not have been an ideal childhood, there was no evidence of abandonment to release Defendant from his obligation to support Mother.

The Pennsylvania Superior Court affirmed, holding that Mr. Ryan is required to provide support to his mother. The court agreed with the trial court's decision that the filial responsibility law doesn't require a showing of unpaid bills or liabilities to justify a claim. In addition, the court affirmed the trial court's ruling that while Mr. Ryan may not have had an ideal childhood, there was no evidence that his mother abandoned him.

There was no explanation regarding the $800.00 in ordered support, and whether that bore any equitable relationship to the occasional financial support provided by the caregiving son, or whether any financial support was even necessary under the statute since he performed non-monetary services.  The court did note that the caregiving son might also be responsible for financial support, but failed to address the issue since it was subject of the lawsuit.  The court did not explain whether the caregiving son would, in fact, need to sue himself before the court would consider such an argument, or whether refusing to consider the care giving son's potential liability left the other children responsible for their mom's care. In fact one might conclude, as did Ryan, that the son benefited financially from providing services to his mother (in that he received a tax deduction, a place to live, and meal and transportation opportunities) which benefits were not considered by the court.

One can expect more lawsuits under filial responsibility statutes and laws.  

For the full text of this decision, click here.  

Court Invalidates Pocket Deed As Fraudulent Effort to Defraud the Surviving Spouse

[The following is reprinted from my former newsletter, Your Estate Matters.]

A recent case from Tennessee illustrates the dangers inherent in using "pocket deeds." Pocket deeds are executed during the owner's life, but recorded after the owner's death.  While they are rarely used by attorneys or serious planners, they still find their way into the plans of individuals who may devise the schemes without legal advice.  

The case concerns the marriage of Ancie Lee Maness  and Jewell Maness,  When they married, he already had three grown sons and a 330-acre farm in Henderson County, Tennessee. He and Jewell both worked outside the farm.  Her income paid for food, utilities and household bills, but his  income was mostly used to pay expenses on the farm.

Mr. Maness ran a small herd of cattle at the farm, and allowed his sons to keep a few head of their own on the property. At different times, Mr. Maness even gave each of his sons an eight-acre parcel on the edge of the farm. It was clear, however, that Mr. Maness operated the farm, with only occasional help from his sons. Until 1992, the farm income, and Mr. Maness’ wages, went to pay off a mortgage on the farm as well.

Shortly after Mr. Maness’ death in 1993, one of the sons informed Mrs. Maness that he had transferred the farm to them nearly ten years earlier. When she investigated, she discovered that Mr. Maness had signed a deed to the property, conveying it to his three sons, and had given the deed to his son Willie. He had instructed Willie and his wife not to tell anyone about the deed, and to hold it in their safe deposit box.  They had removed it and recorded it three days after Mr. Maness’ death, and the title now appeared to be in the sons’ names.

Mrs. Maness sued to set aside the transaction, alleging that it was fraudulent because it had the effect of depriving her of her statutory right to inherit a portion of her husband’s property. In Tennessee, as in most states, a surviving spouse is entitled to at least a share of the deceased spouse’s estate, and Mrs. Maness argued that the transaction deprived her of that right.

Noting the secrecy with which the deed was cloaked, the Tennessee Court of Appeals agreed with Mrs. Maness. The court also noted that even by a conservative estimate the farm constituted nearly two-thirds of the value of Mr. Maness’ estate, and Mr. Maness’ behavior in hiding the transaction from his wife indicated that he had intended to defraud her of her inheritance rights. 

To read the entire case go here: Maness v. Estate of Maness, Tenn. Court of Appeals, November 12, 1997.

Medicare Premiums and Deductibles for 2016

The Centers for Medicare and Medicaid has announced the Medicare premiums, deductibles, and coinsurances for 2016. As expected, for the third year in a row the standard Medicare Part B premium that most recipients pay will hold steady at $104.90 a month.  However, about 30 percent of beneficiaries will see their Part B premium rise to $121.80 a month.  Meanwhile, the Part B deductible will increase for all beneficiaries from the current $147 to $166 in 2016. 

The Part B rise was supposed to be much steeper for the 30 percent of beneficiaries who are not “held harmless” from any increase in premiums when Social Security benefits remain stagnant, as will be the case for 2016.  But the premium rise was blunted by the Bipartisan Budget Act signed into law by President Obama November 2.  Medicare beneficiaries who are unprotected from a premium increase include those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who receive both Medicare and Medicaid benefits. For beneficiaries receiving skilled care in a nursing home, Medicare's coinsurance for days 21-100 will go up from $157.50 to $161.  Medicare coverage ends after day 100.  

Here are all the new Medicare figures:

• Basic Part B premium: $104.90/month (unchanged);
• Part B premium for those not “held harmless”: $121.80;
• Part B deductible: $166 (was $147);
• Part A deductible: $1,288 (was $1,260);
• Co-payment for hospital stay days 61-90: $322/day (was $315);
• Co-payment for hospital stay days 91 and beyond: $644/day (was $630);
• Skilled nursing facility co-payment, days 21-100: $161/day (was $157.50).

Higher-income beneficiaries will pay higher Part B premiums:

• Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $170.50 (was $146.90);
• Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $243.60 (was $209.80);
• Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $316.70 (was $272.70);
• Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $389.80 (was $335.70).

Rates differ for beneficiaries who are married but file a separate tax return from their spouse:

• Those with incomes between $85,000 and $129,000 will pay a monthly premium of $316.70 (was $272.70);
• Those with incomes greater than $129,000 will pay a monthly premium of $389.80 (was $335.70).

The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary's premiums. So the income reported on a beneficiary's 2014 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2016. Income is calculated by taking a beneficiary's adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary's MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium. Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements.  The average Medicare Advantage premium is expected to decrease slightly, from $32.91 on average in 2015 to $32.60 in 2016.  

For Medicare’s press release announcing the new  figures, click here.  

For Medicare's "Medicare costs at a glance," click here. 

Resident Who Transferred Assets and Applied for Medicaid Breached CCRC Contract

A New York appeals court held that a continuing care retirement community (CCRC) resident is required to spend the assets disclosed in the CCRC’s admission agreement on nursing home care before applying for Medicaid. Good Shepard Village at Endwell Inc. v. Yezzi (N.Y. Sup. Ct., App. Div., 3rd Dept., No. 520621, Nov. 5, 2015).  The decision means that CCRC resdidents should proceed cautiously with Medicaid eligibility planning.

Hazel and Peter Yezzi moved into a CCRC after signing an admission agreement that disclosed their assets. The contract with the CCRC provided that that the Yezzis could not transfer their assets for less than fair market value if it would impair their ability to pay their monthly fees. Mrs. Yezzi entered the nursing home, transferred her assets to Mr. Yezzi, and applied for Medicaid. The CCRC refused to accept the Medicaid payments.

The CCRC sued Mr. Yezzi (Mrs. Yezzi died in the nursing home) for breach of contract and fraudulent conveyance, arguing that the Yezzis were obligated to use the funds disclosed in the CCRC admission agreement before applying for Medicaid. The trial court granted the CCRC summary judgment, and Mr. Yezzi appealed.

The New York Supreme Court, Appellate Division, 3rd Dept., affirmed, holding that Mrs. Yezzi's transfer of assets for less than fair market value constituted a breach of contract. According to the court, under federal and state law the CCRC "could require a resident to first spend the resources identified upon admission before applying for Medicaid" because "the essence of the CCRC financial model requires a tradeoff between the resident and the facility, in which the resident must disclose and spend his or her assets for the services provided, while the facility must continue to provide those services for the duration of the resident's lifetime even after private funds are exhausted and Medicaid becomes the only source of payment."

Social Security Claiming Rules Changed to Eliminate Beneficial Strategies

President Obama has signed the Bipartisan Budget Act of 2015 which includes important changes to the Social Security retirement system.  Among these changes are Rules that are designed to close "unintended loopholes" in the Social Security Act. These "loopholes" are the "file and suspend" and "restricted application" claiming strategies. These strategies are used by applicants to provide necessary income, but permit social security benefits to continue to grow, permitting later claiming of benefits at larger benefit amounts.  

Under the new law, some groups of Social Security claimants are wholly unaffected, while others will lose all access to available claiming strategies.  If you are not already implementing a claiming strategy, you may find that the strategy is no longer available to you.  

The new law adversely impacts the following groups:

1. Divorcees who were born in 1954 or later;
2. Couples where the person who was previously planning to claim a spousal benefit first then switch to their own benefit later under a restricted application strategy was born after 1953;
3. Couples who are planning to pursue a file and suspend strategy, but wait more than six months to file and suspend.

Divorcees born after 1953 will be able to claim either a spousal benefit or their own retirement benefit (whichever is larger), but they will not be able to switch from one to the other at a later time.  Claimants born after 1953 will not be able to claim one benefit and then switch to another benefit later under the new law, affecting those who intended to employ a restricted application strategy.

The new law allows people to file and suspend for another 180 days after the law goes into effect. If someone waits more than six months, they will not be able to use this strategy. They will be able to pursue a restricted application strategy if the person who claims the spousal benefit was born in 1953 or earlier.

The new law does not affect claiming strategies for the following groups:

1. Single people;
2. Widowers;
3. Divorcees who were born in 1953 or earlier; and
4. Couples who are already pursuing a restricted application claiming strategy (These are couples where the primary beneficiary has already claimed his/her benefit and the spouse has claimed a spousal benefit. The spouse will still be able to switch to their own benefit at a later date.);
5. Couples who are already pursing a file and suspend strategy (These are couples where the primary beneficiary has already filed and suspended, and the spouse has claimed a spousal benefit. The spouse will still be able to claim their own benefit at a later date. The primary beneficiary will also be able to claim his/her own benefit at a later date.);
6. Couples who are planning to pursue a restricted application strategy and the person who plans to claim a spousal benefit was born in 1953 or earlier (These are couples where the primary beneficiary plans to claim his/her benefit in the future- or has already claimed a benefit- but the spouse has not yet claimed a spousal benefit. As long as the spouse was born in 1953 or earlier, the spouse will be able to claim a spousal benefit after reaching 66 and then claim their own benefit later.);
7.  Couples who plan to pursue a file and suspend strategy before sometime in late April or early May of 2016, and the person who plans to claim a spousal benefit was born in 1953 or earlier (The new law provides a window of 180 days after the law becomes effective where couples can still use the file and claim strategy).

Previously Recommended Strategies

If you have received a written strategy, plan, or analysis from a professional, you will need to consult with the professional before implementing the plan.  Generally,  however, the following are suggestions for helping to determine whether previous recommendations are valid:

• If a scenario recommends “file and suspend” it is probably no longer a valid recommendation, unless the the claimant can can sensibly file and suspend no later than about May 1, 2016 (The precise cut-off date is 180 days after the law becomes effective, which appears to be 11/2/15.);
• If the scenario recommends a “restricted application” (and no file and suspend strategy is involved), it is almost surely a valid recommendation if the claimant is born in 1953 or earlier. If a claimant is born in 1954 or later, a recommendation to file a restricted application is no longer valid. NOTE: Whether this statement also applies to ex-spouses is presently unclear.

If you have already implemented a strategy, it is best for you to consult with your financial adviser or professional to ensure that future actions pursuing the plan are not foreclosed by the new law.

The bottom line for those who may be retiring is that the government has now made it more difficult for you to comfortably forestall claiming social security at a later age, where the benefit paid to you is higher and more valuable over your life.  The effect will be that millions will continue to claim social security at the first availability, leaving the government responsible for paying less in social security benefits.    

Married Couples Should Reconsider Home Ownership In Trust

A narrowly divided Ohio Supreme Court has ruled that the transfer of a home between spouses prior to Medicaid eligibility is an improper transfer and is subject to the community spouse resource allowance (CSRA) cap.  Estate of Atkinson v. Ohio Department of Job and Family Services (Ohio, No. 2013–1773, Aug. 26, 2015). More particularly, the decision means that home ownership in a revocable trust is not without consequence when applying for Medicaid.  

The facts of the case present what was "garden variety" conduct of a client before applying for Medicaid.  In 2000, Marcella Atkinson and her husband transferred their home into a revocable living trust. In April of 2011, Mrs. Atkinson entered a nursing home and soon applied for Medicaid benefits. In August 2011, following Medicaid’s “snapshot” of the couple’s assets, the home was removed from the trust and placed in Mrs. Atkinson's name. The next day, Mrs. Atkinson transferred the house to her husband. Most attorneys counselled clients regarding such a procedure, and many county caseworkers told applicants of these steps, seemingly necessary to avail the community spouse of the exemption available to the family home.

It is important to know what the "snapshot"  means;  the "snapshot date" is the day on which the ill spouse enters either a hospital or a long-term care facility in which s/he then stays for at least 30 days. This is called the "snapshot" date because Medicaid is taking a picture of the couple's assets as of this date. 

The State in Atkinson, however, determined an improper transfer had occurred and imposed a penalty period.  Mrs. Atkinson passed away, and her estate appealed to court, arguing that under federal and state statutes a spouse is not ineligible from receiving Medicaid for transferring a home to the other spouse, and that an institutionalized spouse may transfer unlimited assets to the community spouse between the date the spouse is institutionalized and the date that the spouse's Medicaid eligibility is determined. The estate lost at both the trial court and the Ohio Court of Appeals, and the estate appealed.  

In a 4-3 decision, the Supreme Court of Ohio ruled that transfers between spouses are not

unlimited after the snapshot date and before Medicaid eligibility and that such transfers are proper only up to the amount that fully funds the CSRA. The snapshot date is the first day of institutionalization The court rejected the estate’s reliance on the Sixth Circuit Court of Appeals’ holding in Hughes v. McCarthy (6th Cir., No. 12-3765, Oct. 25, 2013) that an annuity purchased by a community spouse before a Medicaid eligibility determination is not an improper transfer, finding that the purchase of annuities are subject to special rules and “not applicable under these facts.”  The court remanded the case for review of the penalty imposed because the Medicaid agency may have applied the wrong statute.  “Neither federal nor state law,” the court wrote, “supports the agency's confiscation, after the CSRA has been set, of the entire amount of transferred assets, some or all of which may have already been allocated to the community spouse on the snapshot date.”

A dissent joined by three justices states that “What this family did is and was permitted by state and federal law. . .  the home is explicitly excluded from the definition of 'resources' for purposes of establishing the CSRA.” [emphasis in original].  The dissent reads in part:

It is clear that the law treats the marital home very carefully to prevent spousal impoverishment at the end of life. And that is the public policy we should be embracing. Based on the plain language of the federal statutes and the Ohio Administrative Code, as well as the holding of the United States Court of Appeals for the Sixth Circuit in Hughes v. McCarthy, 734 F.3d 473, I would hold that the transfer of the home between spouses prior to Medicaid eligibility being established is not an improper transfer and is not subject to the CSRA cap.

The case has significant implications for routine planning using a revocable trust.  Typically, a marital couple would convey the home to the revocable trust in order to accomplish objectives best accomplished with the trust.  Now, the transfer to the trust is problematic, because the home could not be transferred to a community spouse after a spouse enters an institution.

The ill effect is not necessarilly loss of the home; since the home is illiquid it would not be spent down.  The community spouse's CSRA, however, which represents the maximum amount of resources permitted the community spouse from the countable assets, currently $119,220.00, would be compromised, and possibly lost.  The ill effect would be the community spouse being forced to spend down the liquid assets that would otherwise keep him or her from impoverishment.   

Although the ill effect might be avoided if the need for long term care follows a possible event triggering the need, such as when a person suffers from dementia, there is never a guarantee that a person won't suffer an immediate catastrophic event, such as an automobile accident, stroke, aneurysm, heart attack, adverse drug reaction, complication to a routine medical procedure, fall, or the like.  In these cases a couple may be rendered powerless to improve their situation, and the home value will remain a countable asset.  

Our office is recommending that couples consider preparing a deed transferring the property from the trustees of the trust to the spouses/grantors of the trust, holding the property in a joint tenancy with full rights of survivorship, and employing a Transfer On Death Affidavit conveying the property at the death of the survivor to the trustee of the trust.  This strategy avoids probate, and confers to the home the other benefits of the trust at death (e.g., asset protection planning for your beneficiaries, equitable or proportional distribution of assets, private management, and the like).  

The obvious adverse consequence of this tactic is the home is no longer protected in the same way from guardianship.  A trust avoids guardianship by 1) identifying an alternate decision-maker and thereby eliminating the need for a guardian, 2) removing the incentive for hostile or predatory guardianship by removing assets from the guardianship estate, and 3) setting forth a procedure for appointment of a successor decision-maker with your personal physician empowered to decide issues of competency or capacity rather than reliance upon governmental or judicial determinations.  With the home removed from the protection of the trust, it might remain an incentive for a hostile guardian.

The nature of the home as an asset, and particularly the need of the community spouse to live in the home, however, should make the guardianship risk acceptable; it is unlikely a guardian will be able to obtain permission to sell a home when there is a spouse requiring the home as a residence.  In most cases, the relatively small risk must be balanced against the ill effect of a potential future need for Medicaid. 

Clients and advisers should take this risk seriously because the need for long-term care is inherently unpredictable, and the risk cannot be easily discounted.  The cost, too, of long-term care is unpredictable.  Medicare does not, typically, pay for long-term care.  Only long-term care insurance (preferably a policy that leverages a death benefit for long-term care benefits) or a robust financial plan can buttress your assets in meeting the cost of long-term care. 

To read the article discussing the oral arguments, which took place over a year before the Supreme Court's decision, go here.

For the full text of this decision, click here.

This blog post was originally published here.

Non-Profit Long-Term Care Safer than For-Profit

A Canadian study reported by McKnight's concludes that for-profit long-term care facilities have significantly higher rates of mortality and hospital admissions than their not-for-profit counterparts. The study noted that while there is significant variance in how long-term care faciltities are owned and operated, more than half of facilities in Canada, the United States, and the United Kingdom are managed by for-profit institutions, with the greatest variance being among not-for-profit facilities, which can be managed by private (e.g., religious or lay) or public (e.g, municipal, provincial, or federal) corporations.

According to McKnights, the study,  published in the Journal of Post-Acute and Long-Term Care Medicine  examined admissions at 384 for-profit and 256 not-for-profit long-term care facilities in Ontario, Canada, between January 2010 and March 2012. One year after admission, the for-profit facilities showed an overall mortality rate of 207.5 residents per 1,000 person-years, compared to a rate of 184 for not-for-profit facilities. The hospitalization rate for for-profit facilities at the one year mark was 462.4 per 1,000 person-years, while the rate for not-for-profit facilities was 358.0.

Lead researcher Peter Tanuseputro, M.D., wrote in discussing the results:

“We have shown that residents in for-profit homes consistently and robustly experience higher mortality and hospitalization rates. This occurred in an environment with common funding mechanisms, and a centralized system that leads to largely similar residents being accepted in both types of homes. It has been hypothesized that differences in outcomes may be related to reinvestments that not-for-profit facilities make into patient care that otherwise would be consumed as profit in for-profit facilities.” 

Researchers said the differences could also be due to not-for-profit facilities being more closely associated with acute care facilities, the level of a facility's ties to the community, differences in capital funding and whether a facility is associated with a chain.

The study confirmed the findings of a previous 2009 survey,
which determined that "not-for-profit nursing homes deliver higher quality care than do for-profit nursing homes."  This earlier study focused on quality citations, staffing levels, and incidence of certain adverse health events, such as prevalence of low pressure ulcers, rather than mortality rates and hospitalizations. 

To read the McKnight's article, go here.

To read the full study, go here.

No Increase in Social Security Benefits Next Year

For just the third time in 40 years, millions of Social Security recipients, disabled veterans and federal retirees can expect no increase in benefits next year.  By law, the annual cost-of-living adjustment, "COLA," is based on a government measure of inflation. 

The government is scheduled to announce the COLA — or lack of one — on Thursday, when it releases the Consumer Price Index for September. Inflation has been so low this year that economists say there is little chance the September numbers will produce a benefit increase for next year. Prices actually have dropped from a year ago, according to the inflation measure used for the COLA.

Congress enacted automatic increases for Social Security beneficiaries in 1975, when inflation was high and there was a lot of pressure to regularly raise benefits. Since then, increases have averaged 4 percent a year.  Only twice before, in 2010 and 2011, have there been no increases. 

Almost 60 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,224.  The COLA also affects benefits for about 4 million disabled veterans, 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor. Many people who get SSI also receive Social Security. 

In all, the COLA affects payments to more than 70 million Americans, more than one-fifth of the nation's population. 

Medicare premiums, however, will increase.

Good Care Is the Best Medicine for Alzheimer's

Lou-Ellen Barkan, President and CEO of the New York City Chapter of the Alzheimer’s Association, writing in the Huffington Post Blog, makes a very poignant observation: "in the absence of an effective therapy for [Alzheimer's Disease], effective care remains the best therapy."

She continues:

And providing quality care has never been more important. Today, Alzheimer's disease is the sixth leading cause of death in the United States and the only cause of death among the top 10 that cannot be prevented, cured, or even slowed. Right now, 5.3 million Americans have this deadly disease - more than a quarter of a million right here in New York City. By 2030, without treatments or a cure, nationwide, this number will skyrocket to 13.8 million.

Worldwide, top researchers, scientists, and medical professionals at renowned hospitals, universities, research centers, and pharmaceutical companies are working day-in and day-out to discover the causes, to develop effective treatments, and to find a cure for Alzheimer's and related dementias. Whether they are investigating beta-amyloid plaques, tau protein tangles, genetics, the effect of environment or lifestyle, their dedication is unparalleled. 

And while great strides have been made over the past decade in diagnostics - allowing us to get help earlier to those who need it most - Alzheimer's research remains poorly funded in comparison to other diseases with far fewer patients. For instance, total funding allocated by the National Institutes of Health (NIH) for HIV/AIDS research dwarfed the funding for Alzheimer's in 2014 (almost $2.978 billion vs. $562 million), yet almost five times as many Americans today are living with Alzheimer's than HIV (1.1 million). In the absence of an effective therapy, our focus MUST be on care. 

For more than 30 years the Alzheimer's Organization, nationally, and through Local Chapters like the one headed by Ms. Barkan, have provided compassionate care and life-saving support for hundreds of thousands of  with dementia and their caregivers.  Among these is the groundbreaking wanderer's safety program developed by the Mew York Chapter's own Jed Levine in the early 1990s, which became one of the prototypes for the nationwide MedicAlert® Foundation + Alzheimer's Association Safe Return® program.

Seniors, their families, and caregivers can support and implement these caregiving efforts through good financial and estate planning.   

Nursing Home Resident Disqualified for Transfer of Assets Eligible for Undue Hardship Exception

A New York appeals court recently held that a nursing home is  eligible for the undue hardship exception to a Medicaid penalty period, even though the home had not filed to, or threatened to evict her, because she was insolvent and unable to recover the assets, and because no other nursing home would accept her. Matter of Tarrytown Hall Care Center v. McGuire (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2849/12, April 16, 2014).

Margaret Traino lived at Tarrytown Hall Care Center from June 2008 until her death in April 2011. She was insolvent and subject to a Medicaid penalty period due to a transfer of assets for less than fair market value. The nursing home applied to the state to receive Medicaid reimbursement for the penalty period under the undue hardship exception.

The state denied the nursing home's application, ruling that the facility failed to show that Ms. Traino was unable to receive appropriate medical care without Medicaid because it did not attempt to evict Ms. Traino. The nursing home appealed.

The New York Supreme Court, Appellate Division, set aside the state's decision, holding that there is no requirement that a nursing home commence an eviction proceeding in order to prove undue hardship. According to the court, the nursing home showed that Ms. Traino "was unable to obtain appropriate medical care without the provision of Medicaid by offering proof that the decedent was insolvent and unable to recover transferred assets, and that no nursing facility which could provide her with the necessary level of care would accept her."

For the full text of this decision, go here.

Nursing Home Residents Twice as Likely to Suffer Fractures

A Canadian survey has revealed that older adults living in long-term care facilities are more than twice as likely as their peers living at home to suffer a fracture.  New guidelines endorsed by the Scientific Advisory Council of Osteoporosis Canada provide guidelines designed to reduce the risk.  The guidelines are similar to those those made by the Society for Post-Acute and Long-Term Care Medicine in the U.S., and those for residential care facilities in Australia.

Go here to read the original article in The Hospitalist.

The "Residents' Bill of Rights" is NOT the Residents'-- Federal Nursing Home Act Creates NO Private Causes of Action

A Federal District Court has ruled that the Federal Nursing Home Reform Act, which among other things requires the provision of certain services to each resident, does not create a private cause of action.  The Act is most widely known for creating the Residents' Bill of Rights, but apparently, the right to seek redress for injury or loss resulting from the failure of a nursing home to enforce these rights is not among them.

The Plaintiff, Joanne Fiers' filed a claim after the death of her brother, Richard Bendel, while he was a resident at Lakeview Health Center in West Salem, Wisconsin. Bendel, suffered from severe dementia and was a known elopement risk; he therefore required increased supervision.  Bendell left the facility unattended, fell and suffered injuries that led to his death in February 2014.  A certified nursing assistant watched Bendel walking toward one of the facilities exits, but failed to do anything to prevent his leaving.  Two other certified nursing assistants allegedly ignored an audible door alarm as Bendel exited the facility. After he exited, Bendel walked across a roadway, tripped on a curb, and fell, sustaining critical injuries from which he would succumb four days later.  

Several days later, the Wisconsin Department of Health and Human Services investigated the "elopement incident."  The facility was cited with an "Immediate Jeapardy Violation."  

In addition to seeking compensatory and punitive damages for pain and suffering as a result of the nursing home's negligence, Fiers also alleged that Lakeview violated Bendel's resident rights under Section 1983, rights set forth in the  Federal Nursing Home Reform Act (which includes but is not limited to the Residents' Bill of Rights).

The U.S. District Court for the Western District of Wisconsin ruled Section 1983 does not create a right of redress because FNHRA does not create private, enforceable rights for residents, and further that Fiers' complaint failed to identify specifically the rights that Lakeview violated. In order to allege a deprivation of rights under the FNHRA, the court ruled that Fiers was required to show that FNHRA was meant to benefit residents in a way that was not  “vague and amorphous."  No penumbra of a right to adequate health care, or a logical extension of rights and remedies, is countenanced by the court's opinion.

The Act, the court explained, was written to describe what a nursing home has to do to receive government funding, not what rights it is required to provide residents. Apparently the "Residents' Bill of Rights," would have more aptly been called, the "Nursing Homes' Obligations For Federal Funding Without Regard to Residents' Rights, Privileges, or Redress."  Yes, that is much clearer.  

The court granted Lakeview's motion to dismiss Fiers'  Section 1983 complaint.

The Plaintiff will, of course, continue to pursue her claims for negligence against the facility, but will have to do so in state, rather than federal court. In some states, citations against a nursing home for violating standards of care are not admissible in court.        

To read the court's opinion, go here.

To read the McKnight's article about the case, go here.

California Elder Abuse Law Protects Only Residents

A California appeals court has ruled that an 85-year-old man is not a protected elder under the state’s financial elder abuse law because he does not reside in California. Galt v. Wells Fargo Bank, N.A., (Cal. Ct. App., 2^nd Dist., No. B261792, Sept. 21, 2015).

Randolph Galt, who is 85 years old, lives in Australia and Washington State. Mr. Galt is one of the income beneficiaries of a trust established by his grandfather in California. Wells Fargo Bank is the trustee. After Mr. Galt delegated investment decisions for the trust to a new investor, the investor was not able to make changes to the trust and the value fell from $26 million to $13 million.

Mr. Galt sued the bank for financial elder abuse under a California state law, arguing that the bank intentionally refused to allow the new investor to make decisions for the trust. The trial court ruled that Mr. Galt did not have standing to pursue the claim because he did not meet the definition of "elder" under the state law. The state law defines an "elder" as anyone 65 years of age or older who is residing in the state. Mr. Galt appealed.

The California Court of Appeals affirmed, holding that Mr. Galt does not have standing to pursue a financial elder abuse claim under state law. According to the court, "by his own admission, [Mr.] Galt does not reside in this state; consequently, under the plain meaning of the statute, he is not an elder."

For the full text of this decision, go here.