No Good Deed Goes Unpunished? Caregiver Exemption Does Not Apply When Medicaid Recipient Is Receiving Home Care

When describing the anomalous decisions, rules, and results arising from Medicaid law, I often find myself explaining particular outcomes as another illustration of the "no good deed goes unpunished rule."  Of course, there is no such rule, and the characterization is an exaggeration.  Still, there are plenty of examples one can identify of the "rule," among them a new case arising from the State of New Jersey. 

The case has some pretty compelling facts.  G.B. was a senior recipient of 30 hours a week of in-home care through a Medicaid waiver program. G.B.'s daughter, M.B.-M. also lived with G.B. and helped to care for her.  Of course, there was care needed since the in-home care G.B. received from Medicaid constituted less than twenty percent of the weekly time for which care was necessary.  Ostensibly, the daughter M.B.-M. either personally provided or arranged and managed such care.  

G.B. sold her house to M.B.-M. and received a profit of $27,320.29.  Rather than simply gifting the entire home to the daughter, and the daughter receiving all of the proceeds, they entered into a more nuanced transaction benefiting both mother and daughter.  G.B. reduced the net proceeds of the sale she could have received by crediting M.B.-M. $42,000 in equity as a gift. One can assume that the transaction was recommended to free assets for G.B., and to immediately qualify her for Medicaid in the event that institutionalization became necessary.  Perhaps the motivation was, or included intent to compensate M.B-M. for her responsibility.  Regardless, they must have been comfortable in the legality of the transaction given that transfers of a home to a care giving child are specifically permitted by Medicaid.  By permitting transfer of a home to a child caregiver, the law  encourages a family to provide care that will keep a loved one out of a skilled nursing facility, and of course, off of the growing list of Medicaid recipients requiring long term institutional care. Despite the daughter's sacrifice for her mother, and it's benefit to the state, when Medicaid discovered the transfer, it deemed the transfer improper, and imposed an improper transfer penalty, meaning that G.B. was not eligible for benefits for a period of time.

G.B. appealed, arguing that the transfer of the home equity to M.B.-M should be exempt because it was a transfer to a caregiver child. After a hearing, the administrative law judge (ALJ) agreed.  The state, nonetheless, rejected the ALJ's conclusion, ruling that M.B.-M was not a caregiver child because in receiving 30 hours of care per week, G.B. was legally an institutionalized individual.  Yes, that's right; because she received a Medicaid waiver providing care in her home for a quantity of time that would be considered a part-time job, she was legally institutionalized!  Following G.B.’s death, M.B.-M, her executor,  appealed pro se (meaning without the benefit of counsel).

The New Jersey Superior Court, Appellate Division, Estate of G.B. ex rel. M.B.-M. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., A.D., No. A-5086-12T1, Sept. 15, 2015). shockingly affirmed the state's decision, holding that the caregiver exemption does not apply. According to the court, the 30 hours of care a week that G.B. received was the functional equivalent of being an institutionalized individual. The court ruled that "although [M.B.-M] cared for her mother during the relevant time period, the key factor that permitted G.B. to remain in her home until 2009 was the Medicaid assistance she received through the services provided by the [state]."  

 So, an in-home Medicaid waiver recipient's gift of her house to her daughter does not fall under the caregiver exemption because the reason the mother was not in a nursing home was due to the in-home Medicaid benefits she received for care 30 hours a week, and not her daughter's care the other almost 170 hours a week (note, by the way that if she slept 10 hours a day, during which arguably there was no care need, that still left nearly 100 hours a week for which the daughter remained responsible).  No good deed goes unpunished?   At a minimum, the holding will cause families pause when relying upon the caregiver exemption; perhaps that is the intent of the state's position.  

There is a possible explanation for such a narrow reading and application of the caregiver exemption the State of New Jersey.  New Jersey is a  filial responsibility state.  See, e.g., NJ Rev Stat § 44:4-102 (2013).  Only time will tell whether the State is moving to enforce its filial responsibility law in order to force children to pay for the care costs of their indigent parents.  Looking at the case from a "filial responsibility" perspective, the daughter's care was her legal responsibility, meaning that it was only the state that did anything extraordinary by providing home care for thirty hours a week  Such a view would explain the court's dismissiveness of the daughter's care, and the elevation of the state's benefit. 

At any rate, with filial responsibility in play, the transfer of the proceeds from the sale of the house would have remained available to the state in resource recovery.  Collecting the proceeds by imposing an improper transfer penalty was simply a more efficient mechanism for the the state to minimize its cost and expenses. This supposition is, upon first consideration admittedly "far fetched," but we submit is no more "far fetched" than the state's keeping from a caregiving daughter some morsel from the sale of the home to which she would have seemed obviously entitled.  

For the full text of this decision, go here. 

Note: We have added a label for "No Good Deed Goes Unpunished."    

Columbus Dispatch Exposes Abuse and Exploitation of the Disabled

The Columbus Dispatch, in a series of articles culminating in last Sunday's article “Abused and Ignored,” detailed heartbreaking examples of young people being abused and prostituted by family members, and contained shocking statistics about the prevalence of abuse and crime among people with developmental disabilities. Among them:

• About 70 percent of developmentally disabled people report being physically and sexually assaulted, neglected or abused; about 90 percent of them reported multiple occurrences. Yet fewer than 40 percent of people reported this abuse to authorities, and those who did saw an arrest rate of less than 10 percent.

• Disabled people nationwide are three times as likely to be raped or sexually assaulted as the general population, with younger people and those with several cognitive disabilities at highest risk. An Ohio reporting system for the developmentally disabled received more than 2,000 reports of sexual abused from 2009 to 2014, but less than 1 in 4 of those cases was substantiated.

Fortunately, the paper discovered that Ohio has among the best reporting systems protecting the disabled, and prosecution success is common.

"Contrast these statistics to those in Summit County," the article reads. "Under Deputy Sheriff Joe Storad, the county tripled the number of police investigations involving disabled victims in the past two years. While the overall numbers are relatively small, it has achieved a 100 percent success rate for prosecutions: 31 out of 31 cases.  In neighboring Stark County, Deputy Sheriff Rocco Ross also pushes for vigorous prosecution of crimes against the disabled.  In just the past nine months, Ross says he has seen 560 potential criminal cases of this type, about half of which will be investigated for potential prosecution.  Ross told The Dispatch that it was a “very eye-opening experience” when he first became involved with investigating these cases. “I had no clue there were this many incidents against disabled individuals,” he said.

To read the Dispatch article, go here.

To read about a national reporting website for abuse against the disabled, go here. 

To read about the results of the reportage, go here.

First National Website Aims to Reduce Abuse of People with Disabilities

The Vera Institute of Justice has launched the first national website aimed at curbing abuse of people with disabilities.

The Vera Institute said people with disabilities are "victimized at alarming rates," and are three times more likely than the average population to experience sexual and violent assaults.

The website was developed by Vera’s Center on Victimization and Safety with funding from the U.S. Department of Justice’s Office of Violence Against Women. It offers an interactive map of people, programs, and projects nationwide.

“For many people with disabilities, their needs aren’t being met when they reach out for help, or their requests are met with skepticism, dismissed, or outright ignored,” said Reynoldsburg resident Nancy Smith, head of the victimization center. “Others may not understand what happened to them or be able to put a name to the pain and abuse they have survived. This website aims to ensure that survivors’ experiences are acknowledged and respected, and their needs are attended to.”

To read the Press Release accompanying the announcement, go here.  

Incorrect Denial of Medicaid Benefits Not a Defense to Nursing Home Claim on Contract

A recent case illustrates that seniors, their families, and caregivers should not rely upon institutions or the state to plan for their care; the results are often unpredictable and damaging. A New York trial court has held that the fact that Medicaid wrongly denied benefits to a nursing home resident is not a defense in a breach-of-contract claim against the resident, who died leaving an unpaid bill. East End Healthcare v. Gegenheimer (N.Y. Sup. Ct., Suffolk Cty., No. 12-21672, June 29, 2015).

Anna Amico entered a nursing home and signed an admission agreement guaranteeing payment for services.  She had a reverse mortgage, and little in the way of resources, so she applied for Medicaid.  Her niece, Joan Gegenheimer, withdrew money from Ms. Amico's reverse mortgage line of credit account shortly after Ms. Amico entered the nursing home.  The proceeds were placed in a joint bank account between Amico and her niece.  The niece withdrew some funds to pay for Ms. Amico's needs at the home.  Substantial funds were turned over to Ms. Amico, who, knowing she was terminal, paid off debts to families and friends.  When Ms. Amico applied for Medicaid benefits, the state assessed a penalty period because of the transfer. Ms. Amico died owing an amount to the nursing home, which, because of the penalty period, was equal to the amount withdrawn.

Ms. Amico died before the Medicaid determination was made, and therefore, no one filed an appeal of the denial.

The nursing home sued the niece, Ms. Gegenheimer in her capacity as executrix of Ms. Amico's estate, for breach of contract and fraudulent conveyance. Ms. Gegenheimer argued that she withdrew the money from Ms. Amico's reverse mortgage account for Ms. Amico and did not keep any of the money. According to Ms. Gegenheimer, Medicaid improperly denied coverage to Ms. Amico because it counted the money in the reverse mortgage line of credit as an available resource.  The nursing home moved for summary judgment.

The New York Supreme Court, Suffolk County, granted the nursing home summary judgment on the breach-of-contract claim, but denied summary judgment on the fraudulent conveyance claim. The court held that any mistake by the state in considering Ms. Amico's reverse mortgage line of credit funds as an asset that led to the denial of Medicaid benefits is not a defense, because Ms. Amico signed a contract expressly agreeing to make private payments. The court also ruled that because there was no evidence introduced that Ms. Gegenheimer kept the money that she withdrew from Ms. Amico's account, or that the nursing home sent Ms. Amico a bill for her services, there remains  triable issues of fact as to whether Ms. Gegenheimer or Ms. Amico believed that the use of funds would make Ms. Amico insolvent.  The case was remanded to trial court for further proceedings.  

For the full text of this decision, go here.

Read Ohio Dad's Tear-Jerking Letter to Newlywed Daughter With Down Syndrome

Just in case you missed it, please go here.