Many Skilled Care Providers Still Unaware of New Medicare Rules

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

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

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

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

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

For Miller’s column, click here.

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

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

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

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

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

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

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

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

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

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

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

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

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

For the full text of the decision, go here. 

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

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

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

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

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

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

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

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

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

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

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

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

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

For a full text of the decision, click here.     

ODI Assists Families Locate Lost Life Insurance Policies

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

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

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

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