Florida Investigates Nursing Home Reportedly Funneling Vaccines to Rich Donors

The State of Florida is investigating allegations that an upscale West Palm Beach nursing home diverted scarce COVID-19 vaccinations meant for residents and staff to members of the facility’s board of directors and donors.  

Appearing at a press conference in Vero Beach, Governor Ron DeSantis said that the Florida Department of Health was investigating reports that MorseLife Health System chief executive Keith Myers offered vaccinations to some of the long-term care facility’s board members and wealthy donors.  DeSantis said he also directed Florida Inspector General Melinda Miguel to investigate the allegations in stories published this week.

Emily Smith of Page Six reported that real estate moguls Bill and David S. Mack arranged for their “wealthy friends from Manhattan and the ritzy Palm Beach Country Club to get the COVID-19 vaccine at a Florida retirement home.”  The Washington Post reported that MorseLife made the vaccinations “available not just to its residents but to board members and those who made generous donations to the facility, including members of the Palm Beach Country Club, according to multiple people who were offered access, some of whom accepted it.”  DeSantis assured the public that Florida started the investigation “as soon as we found out about it.”

The governor’s remarks came on the heels of U.S. Sen. Rick Scott’s public call for an investigation into the allegation.  "It is absolutely disgusting and immoral that anyone would take vaccines intended for nursing home residents to distribute them to their friends," Scott, a Republican and former Florida governor, said in a statement. "This type of gross mismanagement will not be tolerated, and those responsible must be held accountable."

The federal government inked agreements last year with CVS and Walgreens to provide COVID-19 vaccinations to staff and residents of nursing homes and assisted-living facilities.  Hospital frontline health-care workers and residents of the long-term care facilities were the initial groups of people who qualified for Pfizer Inc. and Moderna vaccinations.

DeSantis on Dec. 23 announced that he was broadening eligibility to include all health care workers as well as people who are 65 or older.  The move led to chaos, resulting in jammed phone lines, overwhelmed websites and, in some instances, lines of seniors camping out over night to be first in line for vaccines.  In other words, it may be that the nursing home was simply providing the vaccine to its donors and others who it thought may have qualified under the broader DeSantis eligibility.  Regardless, the optics couldn't be worse for the nursing home provider.  

DeSantis emphasized Thursday that the vaccinations at the center of the controversy were not supplied by hospitals or county health departments, but were part of the federal arrangement with retail pharmacies.

“The nursing home and long-term care program is for residents and staff of long-term care facilities. That’s who it's for. Look, if you’re not a resident or a member of a long-term care facility but you’re 65 and up, there’s other options for you. We want you to get vaccinated. But to go under that rubric when you are not a resident and you’re not a staff member, that is definitely going outside of what the guidance is and what the program is for,” the governor said.

Potential Miracle Treatment Promoted by Feds for SNFs

COVID-19 monoclonal antibodies are now widely available for use by skilled nursing facilities  — and early results show promise, according to long-term care pharmacy leaders. Kimberly Marselas, writing for McKnight's Long-term Care News outlined the great news in her article, A potential ‘miracle’? Feds push monoclonal antibody treatments toward SNFs.  The following is an annotated reprint of her excellent article.

The Department of Health and Human Services’ (DHS) Project SPEED, or Special Projects for Equitable and Efficient Distribution, aims to get monoclonal treatment to COVID patients in non-hospital settings with priority populations, including nursing homes and assisted living facilities [some links added]. It goes beyond an earlier pilot spearheaded by CVS Health that targeted nursing homes and patients at home in seven cities with rapidly rising COVID rates.

The program is now open to any licensed pharmacy, said Chad Worz, PharmD, CEO and executive director of the American Society of Consultant Pharmacists, during an online update last week. He said LTC pharmacies around the country are beginning to add the therapeutic drugs, which mimic the body’s natural immune response, to their formularies.

As word spreads about availability, Worz expects increasing demand from skilled nursing providers who see antibodies as a way of mitigating COVID symptoms and preventing hospitalizations.

On the same webinar, T.J. Griffin, R.Ph., senior vice president of long-term care operations and chief pharmacy officer at PharMerica, said he is working closely with two nursing homes in Chicago and San Antonio that have used antibodies on a total of 70 patients since the program’s launch.

“The medical directors of both places have called it a miracle,” Griffin said. “So far, none of these patients have gone back to the hospital.”

Because most clinical data on monoclonal antibodies comes from hospitals, there’s not much evidence about its success in nursing home residents. But Griffin said he is working to gather and report information to HHS, and urged others to document and share patient responses.

Use protected during public health emergency

One pharmacist on the call noted a facility he worked with declined to administer the antibodies, citing liability concerns. But Worz said federal PREP Act protections would apply to skilled facilities that administer them safely and effectively and monitor for anaphylactic shock.

Arnold Clayman, ASCP’s vice president of pharmacy practice and government affairs, said infusion could be handled by staff members with an infusion license where required. Non-skilled facilities, or those without nurses to spare, could also tap into a separate program being led by the National Home Infusion Association in 46 states and Washington, D.C.

To date, only bamlanivimab, widely known as BAM, has been made available to LTC pharmacies. But Worz is also advocating for doses of Regeneron’s version, which requires pharmacists to compound casirivimab and imdevimab.

Both types of monoclonal antibodies received Emergency Use Authorization in mid-November with initial shipments sent to hospitals. But many said they were simply too busy treating severe COVID cases to deliver the outpatient therapy. As of late December, just 20% of the available antibodies had been used.

“That’s the reason they’re pushing it to long-term care, because (HHS) saw stockpiling in hospitals,” Worz said.

Wider use covered by CMS

Pharmacies can order for weekly delivery, or arrange for an emergency shipment in the case of a known outbreak, but Worz said HHS is tracking inventory to ensure the potentially life-saving product doesn’t continue to sit unused.

Medicare and Medicaid coverage of the use of monoclonal antibody therapy for COVID-19 treatments extends to beneficiaries in nursing homes at no cost during the public health emergency.

AMDA — The Society for Post-Acute and Long-Term Care Medicine, which initially expressed skepticism about the efficacy of antibody treatments in nursing homes because of a lack of data, has now partnered with ASCP to assist with Project Speed.

John Redd, M.D., MPH, chief medical officer, Office of the Assistant Secretary for Preparedness and Response at HHS, previously told McKnight’s that medical directors and physicians who care for long-term care patients are “crucial” to expanded delivery of the antibody treatment.

“We intend to engage them with every phase of the rollout,” he said.  “This therapeutic is intended to treat patients with COVID-19 risk factors who are early in their disease, which includes the majority of residents of long-term care facilities.”

Surprise! New Law Bans "Surprise" Medical Billing

A legislative "solution" to surprise billing managed to find it's way into the year-end spending and COVID-19 relief packages.  The heretofore elusive ban on surprise billing, ironically, comes as a surprise, albeit one welcome by consumers and advocates. 

“It seemed like déjà vu,” wrote Modern Healthcare’s Rachel Cohrs, “another mid-December bipartisan compromise on banning surprise medical bills negotiated behind closed doors is announced just days before a crucial end-of-year government funding deadline....[But] [u]nlike their 2019 failure, lawmakers this year succeeded in sealing the deal."  The surprise billing ban takes effect in 2022. 

Surprise bills occur:

 “when an out-of-network provider is unexpectedly involved in a patient’s care. Patients go to a hospital that accepts their insurance, for example, but get treated there by an emergency room physician who doesn’t. Such doctors often bill those patients for large fees, far higher than what health plans typically pay,"

explained Sarah Kliff and Margot Sanger-Katz,  writing for the The New York Times. 

According to Kliff and Sanger-Katz:

Academic researchers have found that millions of Americans receive these types of surprise bills each year, with as many as one in five emergency room visits resulting in such a charge. The bills most commonly come from health providers that patients are not able to select, such as emergency room physicians, anesthesiologists and ambulances. The average surprise charge for an emergency room visit is just above $600, but patients have received bills larger than $100,000 from out-of-network providers they did not select.  

The new law will make those surprise bills illegal. Instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes apply to doctors, hospitals and air ambulances.  The law does not apply to ground ambulances.

The new law requires insurers and medical providers who cannot agree on a payment rate to use an outside arbiter to decide. The arbiter would determine a fair amount based, in part, on what other doctors and hospitals are typically paid for similar services. Patients could be charged the kind of cost sharing they would pay for in-network services, but nothing more. Several states have set up their own arbitration systems, and have found that most price disputes are negotiated before an arbiter is involved. 

By the way, an excellent description of the legislative path for this welcome consumer protection, is provided by Modern Healthcare’s Rachel Cohrs, who has recited the work and effort expended both in support, and in opposition to the bill.  It is an interesting read.  

Wife Had Authority to Transfer Property to Herself Under a Power of Attorney

Planning for spouses is particularly tricky when one is acting one behalf of another and the latter is incompetent.   Transfer of assets to the healthy healthy spouse by the healthy spouse  from the assets of the impaired is troubling, raises the specter of "self-dealing" and often becomes fodder for legal contest.  North Dakota's highest court recently resolved such a case, permitting the transfer. The court ruled that a wife had authority under a power of attorney to transfer property to herself because her husband had an obligation to support her, so the transfers were made for consideration and were not gifts. Estate of Lindvig (N.D., Nos. 20200135 and 20200136, Nov. 19, 2020).

Ralph Lindvig’s Will gave his wife, Dorothy Lindvig, a life interest in his property and, on her death, transferred the property to his brothers. Mrs. Lindvig suffered from mobility issues due to childhood polio. Mr. Lindvig also named Mrs. Lindvig as his agent under a power of attorney. The power of attorney gave the agent the authority to transfer real estate for the purposes of estate planning, including transfers to the agent. It also provided authority to make gifts subject to the approval of a court in order to minimize taxes and maximize the estate for beneficiaries. 

Mr. Lindvig entered a nursing home. To help pay for his care, Mrs. Lindvig sold portions of his property to his brother. She also transferred mineral rights and property to herself. Mr. Lindvig died, and Mrs. Lindvig was the personal representative until her death a year later.

After Mrs. Lindvig’s death, Mr. Lindvig’s estate filed a petition to set aside the transfer of the mineral rights and the property because the transfers diminished the size of Mr. Lindvig’s estate and were not approved by a court. Ms. Lindvig’s estate argued that the transfers were made for consideration in the form of marital contributions and were not gifts. The court determined that the transfers were within Mrs. Lindvig’s authority, and Mr. Lindvig’s estate appealed.

The North Dakota Supreme Court affirmed, holding that the transfers were not gifts because Mrs. Lindvig required support and Mr. Lindvig had an obligation to support her from his property. According to the court, “because the transfers in this case were not gifts, the power of attorney’s gifting provisions do not apply” and Ms. Lindvig “had authority to make the transfers under the power of attorney’s real estate transfer provision.”

A Trustee Has a Duty to Preserve Trust for Beneficiaries, Not to Ensure Payment of Alimony to Grantor’s Ex-Wife

An Iowa appeals court recently ruled that a trustee of his father’s trust is not liable for interference with a contract when he stopped paying his father’s ex-wife alimony because his duty was to preserve the estate for the beneficiaries of the trust, not to ensure that she received alimony. Brownell v. Johnson (Iowa Ct. App., No. 19-0847, Nov. 4, 2020).  The case is an excellent example of the complications that arise in planning, and the complexity of analyzing the legal duties of fiduciaries, in this case a son who acted as both a trustee and an agent under a power of attorney.  

Phillip Johnson and Kathleen Brownell were a married couple when Phillip was diagnosed with cognitive impairment. In anticipation of applying for Medicaid, Phillip transferred all of his assets to a trust with his son, Scott Johnson, as successor trustee. Ms. Brownell filed for divorce, and under the divorce settlement, Ms. Brownell agreed to have no interest in the trust and Phillip agreed to pay her alimony. 

Phillip suffered a farm injury in July 2015, which injury coincided with Phillip’s mental decline.  He transitioned to a nursing home that same month. He continued to live there at the time of the underlying trial in January 2019. Phillip was at first not eligible for nursing home compensation through Medicaid because the Johnson Farm Account Trust had been set up within five years. Phillip became eligible in July 2017—when the five-year lookback period expired. Phillip paid Ms. Brownell alimony until he entered a nursing home, at which point Scott began managing his affairs as agent under a power of attorney.

Ms. Brownell sued Scott for intentional interference with a contract for failing to make the alimony payments. Scott testified that his duty as trustee was to qualify Phillip for Medicaid and preserve the family real estate, not to pay Ms. Brownell who had, as a result of the divorce, become a creditor of Phillip. The parties stipulated that she was owed $25,200 in alimony as of the trial. Kathleen further testified that she borrowed $2500 from a daughter, $4500 from another daughter, and $7698 from her son to live on while she was not receiving her alimony payments. She also testified she incurred about $19,000 in attorney fees and had taken $15,000 in cash value from the life 6 insurance policy to keep the payments up to date on that policy. Kathleen asked for $74,000 in damages. A trial was conducted and the jury found for Ms. Brownell, awarding her damages. 

Scott appealed. 

It is interesting to note that on appeal, the Iowa Academy of Trust and Estate Counsel sought leave to file an amicus brief, which the Iowa Supreme Court granted.  The amicus’s stated purpose in filing an appellate brief was to “assure that [our] disposition of the appeal does not result in the adoption of a standard that the trustee of a trust owes any duty to the creditor of a beneficiary of a trust when the trustee is making distributions to other beneficiaries of the trust in compliance with terms of the trust.” Brownell at p. 2-3. The Iowa Court of Appeals reversed, holding that Scott cannot be held liable under an interference with contract theory as a matter of law. The court ruled that “Scott, acting as the trustee, had to make decisions that were best for the beneficiaries without concerning himself whether those actions interfered with Phillip’s ability to make his alimony payments.” The court similarly found that Scott’s motives of “preserving assets for his father’s care and upholding the estate plan” were not improper under his role as agent. 

The court wrote that 

"...the trust and trustee owed no duty to Kathleen as a creditor of a trust beneficiary (Phillip). “Persons who may incidentally benefit in some manner from the performance of the trust are not beneficiaries of the trust and cannot enforce it.” Restatement (Third) of Trusts § 48 cmt. a (Am. Law. Inst. Oct. 2020 Update). The Iowa Academy of Trust and Estate Counsel raised this concern. And the amicus implores us to find that Scott had no duty to Phillip’s creditors when he, acting in his capacity as trustee in compliance with the terms of the trust, decided what distributions to make and to whom. The undisputed duty of loyalty of a trustee is to the beneficiaries of the trust, not the creditor of any beneficiary. Restatement (Third) of Trusts § 78(1).

First, both Kathleen and Scott confirmed that the trust purpose was twofold. One purpose was to qualify Phillip for Medicaid benefits, which required Phillip to maintain a limited net worth of $2000 and a limited monthly income. The second purpose was to ensure that Phillip’s sons retained the family real estate. To effectuate this purpose, Kathleen admits in her brief that after all real estate was transferred to the trust she “disclaimed and surrendered any and all interest she may have in the Trust.” Also with those goals in mind, Scott maintains he fulfilled his obligations as trustee in the manner he was supposed to; he stopped making income distributions to Phillip so that his father could remain eligible for Medicaid nursing home coverage. Then after the qualification for Medicaid, he transferred the trust assets to the beneficiaries to preserve their interests in the family real estate. Scott notes that he relied on the advice of several attorneys in taking these actions.

.     .     . 

Kathleen acknowledged the trust goals that Scott followed. But at trial and in her brief, she argues in his role as trustee, his failure to pay her interfered with her contract between herself and Phillip. But Kathleen is not a creditor of the trust. Even the jury found the trust owed her nothing. Thus, Scott, operating as trustee, owed Kathleen no fiduciary duty. See Iowa Code §633A.4202(1) (“A trustee shall administer the trust solely in the interests of the beneficiaries, and shall act with due regard to their respective interests.”).

[Second], drilling down to the specific improper conduct of Scott as agent, Kathleen argues Scott “felt entitled to pick and choose which bills ultimately got paid.” It then follows, under Kathleen’s theme, Scott was not acting on behalf of or in Phillip’s best interest. And Kathleen emphasizes that Scott testified he did not like that his father was ordered to pay alimony because he thought it was unfair. So does refusing to pay the principal’s creditor amount to improper conduct by the agent under an interference-of-contract claim? If we step back from this case, we would plow new ground to hold that an agent acting under a power of attorney must pay all bills of the principal or risk a claim of interference with a contract by a creditor. An agent, acting for the principal, might decide to prioritize which bills to pay, and if a creditor finds the action wrongful, the remedy is breach of contract. The motives of Scott in preserving assets for his father’s care and upholding the estate plan, which all parties acknowledged in this case, is not improper under his role as agent. Scott exercised financial discretion to protect his father’s legal rights, and Kathleen failed to prove his sole motivation was to defeat the alimony contract. [citation omitted, emphasis added]. Thus, the record does not support a finding of wrongful conduct against Scott as an agent for Phillip.     

The court noted that Ms. Brownell still has a breach of contract claim for alimony against Phillip.