Biden Administration Targets Nursing Home Quality and Aging in Place Alternatives

President Joe Biden’s second State of the Union (SOTU) address Tuesday night included mention of the Administration's efforts to make nursing homes safer for seniors.  In addition, the White House indicated Monday it intends to put even more more pressure on providers.

“We’re protecting seniors’ life savings by cracking down on nursing homes that commit fraud, endanger patient safety and prescribe drugs that are not needed,” Biden trumpeted during the SOTU. The 12-second mention was in direct reference to the administration’s January 18 announcement that the Centers for Medicare & Medicaid Services (CMS) would soon implement targeted audits to determine whether providers are properly assessing and coding patients with a schizophrenia diagnosis. The reasons for these actions are well explained in the following articles available on this blog:

The agency also announced at that time that it will begin publicly displaying disputed survey citations even before their merit is proven or disproven, which no doubt frustrates the industry.  Advocates welcome the transparency, particularly given the historically poor record of CMS enforcement, and poor relationship between ratings and actual quality of care.  See the following: 

The nursing home declaration Tuesday came 36 minutes into a 73-minute speech before a joint gathering of Congress, Supreme Court justices, military leaders and other top federal figures.  You might remember that in his 2022 State of the Union, President Biden was more explicit about his intention to hold certain elements of the long-term care sector to account:

“Medicare is going to set higher standards for nursing homes and make sure your loved ones get the care they deserve and that they inspect and will get looked at closely.” 

He also then promised accountability for “Wall Street” firms that take over facilities and don’t maintain high standards and quality.  The 19-second SOTU mention was believed to be the "most extensive mention of nursing homes" ever in a State of the Union.  The White House released an expansive 21-point reform plan that, today, remains a work in progress. 

Biden’s 2023 SOTU nursing homes mention was hardly as controversial as his last a year earlier. The centerpiece of the previously announced reform effort was a promised first-ever nursing home staffing mandate. See, "White House Announces Measures to Improve Nursing Home Care Quality. Staffing shortages threaten health, and frustrate seniors in planning quality care.  See, Home Health Care Staff Shortages Threaten Health- Frustrates Aging in Place.

A newly developed detailed proposal, feared by many nursing home operators already struggling with staffing, may be released at any time. Recently, an administration official announced that a study encompassing provider interviews and projected cost implications is now complete and strategies are being considered.

 All administrations are duty-bound to crack down on fraudulent activities conducted by nursing home operators, as well as any committed by other healthcare and non-healthcare entities that accept federal funding.  In addition to several high-profile regulatory actions announced by CMS over the last year, the Department of Justice on Tuesday announced that a record $2.2 billion had been recovered via False Claims Act involving nursing homes, and many others.

The White House also issued a new White House Fact Sheet, including a section labeled “Improving safety and accountability in nursing homes” indicating that more regulatory belt-tightening will be coming for nursing homes:  

“As the President directed in last year’s State of the Union, CMS has taken action to strengthen oversight of the worst performing nursing homes, prevent abuse and Medicare fraud, and improve families’ ability to comparison shop across nursing homes. In the coming days and months, CMS will announce new actions to increase safety and accountability at nursing homes.”

On Tuesday night, Biden also urged lawmakers to adopt his upcoming budget plan to pay for more services for seniors in their homes:

“Pass my plan so we get seniors and people with disabilities the home care and services they need, and support the workers who are doing God’s work. These plans are fully paid for and we can afford to do them.” 

The centerpiece of the Trump Administration's effort to encourage and support aging in place focused on Advantage Plans, and expanding availability of alternatives to institutional care outside of traditional Medicare and Medicaid.  A  shift in focus on Medicare, the mechanism that the vast majority of seniors use to pay for  health care, is positive and welcome.  It is long past time for Medicare to take responsibility financially for providing alternatives to institutional care, and for expanding these alternatives where they do not yet exist.  

Conservatorship and Guardianship Abuse Awareness Day

February 1st is "Conservatorship and Guardianship Abuse Awareness Day," a day to raise awareness about the potential abuses of power that can occur within the guardianship system.

Adult guardianship is an intervention, intended to be a tool of last resort, that can transfer most of an adult’s fundamental rights to another person, usually called a guardian or conservator. Courts appoint guardians to protect adults from abuse, neglect, and exploitation when the adult’s cognitive and physical capabilities are impaired by disability or illness. 

In some cases, however, the court process is and guardians themselves are abusive, trampling over a person's rights, and often subjecting that person to the very risks appointment of a guardian is supposed to prevent.  Guardianship abuse (utilizing or threatening to utilize the guardianship system to control or compel a senior) and  abusive guardians (guardians that threaten the physical and financial well-being of a senior) are common villains in stories of helpless seniors institutionalized against their will.  Many of these stories are curated by the National Association to Stop Guardian Abuse (NAGA).  The recent, high-profile case of Britney Spears has served to focus national attention on this type of abuse of power. There are still many other cases, however, particularly involving older adults that go unnoticed, unpublished, and unaccounted for in the modern legal, health care, and social system that struggles with, and sometimes against, reform. 

The National Center on Law and Elder Rights (NCLER) provides legal services and aging and disability communities with the tools and resources to serve older adults with the greatest economic and social needs. A centralized, one-stop shop for legal assistance, NCLER provides Legal Training, Case Consultations, and Technical Assistance on Legal Systems Development. Justice in Aging administers NCLER through a contract with the Administration for Community Living’s Administration on Aging. Lawyers, families, and aging service professionals can utilize NCLER and partner resources to learn more about guardianship abuse, how to spot it, how to avoid unnecessary guardianships in the first place, and how to terminate abusive or unnecessary guardianships as soon as possible.

NCLER has published the following resources and a toolkit.

• NCLER: Legal Basic: Overview of Guardianship and Alternatives to Guardianship (Recording, Chapter Summary, PowerPoint)
• NCLER: When the Guardian is an Abuser (Webcast, Issue Brief and Checklist)
• NCLER: Elder Justice Toolkit
• NCLER: Using Decision Supports to Avoid Guardianship (Recording, Chapter Summary, PowerPoint)
• NCLER: Using Alternatives to Guardianship to Defend Against or Terminate Guardianship (Recording, Chapter Summary, PowerPoint)
• NCLER: Guardianship Termination and Restoration of Rights (Recording, Chapter Summary, PowerPoint)
• National Center on Elder Abuse: Guardianship: Remedy vs. Enabler of Elder Abuse

This blog contains several articles addressing the risk of guardianship in estate planning, including, but not limited to, the following: 

• Guardian Lawfully Refused Family's Request to Remove Ward from Nursing Home Amidst Pandemic;
• Guardianship System Leaves Most Vulnerable Unprotected;
• GAO reports on Guardianship Abuse;
• Hospitals Cause or Facilitate Abusive Guardianships;
• Guardianship Reform Helps, but Planning Shouldn't Wait;
• Contesting Guardianship or Challenging Guardians Is Problematic;
• Estate Plans Should Consider and Attempt to Resolve Guardianship;
• Illinois Permits Guardian Authority to Petition for Termination of a Ward's Marriage;
• Why One Woman Has Spent 5 Years in a San Diego County Jail With No Trial, and Why it Matters.

Guardianship is a risk that is best managed by a modern estate plan.  Most importantly, it is possible, with a revocable trust, to keep the trust assets out of the control of a court-appointed guardian.  Such planning protects your rights, decisions, and decision-making, protects a healthy spouse from abuse, conserves and protects the assets of the estate from plunder, and most importantly serves to disincentive court-appointed fiduciaries like guardians.  If this type of planning interests you, call an estate planning attorney experienced with trusts or an elderlaw attorney.  

 

American Heart Association Updates Recommendations for Age-appropriate Heart Disease Care

As bodies age, heart muscles and arteries can change in ways that increase the risk for heart disease. According to the American Heart Association (AHA), age should be considered in the diagnosis and treatment of heart disease. To that end, the AHA  published a scientific statement in Circulation updating its age-appropriate heart disease care recommendations.

Acute coronary syndrome (ACS) is a group of conditions in which blood flow to the heart is reduced, including angina and heart attacks, or myocardial infarctions.  According to the AHA,  “ACS is more likely to occur without chest pain in older adults, presenting with symptoms such as shortness of breath, fainting or sudden confusion.”

“Management of Acute Coronary Syndrome (ACS) in the Older Adult Population,” highlights normal aging and age-related changes in the heart and blood vessels, and acknowledges that older adults often have multiple medical conditions and medications complicating diagnosis and treatment.  

For example, large arteries and the heart muscle become stiffer with age, and the heart may work harder but pump blood less efficiently. Many normal changes increase the risk of blood clots.

“Age-related changes in metabolism, weight and muscle mass may necessitate different choices in anti-clotting medications to lower bleeding risk,” according to a press release. Kidney function also declines with age. 

One of the issues the authors highlight is that clinical practice guidelines are based on clinical trial research, but older adults are often not included in trials because their health care needs are more complex when compared to younger patients. 

According to said Abdulla A. Damluji, chair of the scientific statement writing committee and an associate professor of medicine at Johns Hopkins School of Medicine in Baltimore, “[o]lder patients have more pronounced anatomical changes and more severe functional impairment, and they are more likely to have additional health conditions not related to heart disease." “These include frailty, other chronic disorders (treated with multiple medications), physical dysfunction, cognitive decline and/or urinary incontinence – and these are not regularly studied in the context of ACS.” 

The authors emphasize the need to look beyond the clinical outcomes for older adults, like bleeding, stroke, and heart attack, and to also focus on quality of life and the ability to live independently and/or return to their previous lifestyle or living environment. 

CMS Releases Spousal Impoverishment Standards, Income Caps, and Home Equity Limits for 2023

The Centers for Medicare and Medicaid Services (CMS) issued revised Spousal Impoverishment Standards, Income Caps, and Home Equity Limits for 2023.  These standards, caps, and limits govern Medicaid eligibility determinations.

Spousal Impoverishment Standards

The spousal impoverishment thresholds will increase 8.2 percent over 2022’s figures.

The official spousal impoverishment allowances for 2023 are as follows:

• Minimum Community Spouse Resource Allowance: $29,724.
• Maximum Community Spouse Resource Allowance: $148,620
• Maximum Monthly Maintenance Needs Allowance: $3,715.50

The Minimum Monthly Maintenance Needs Allowance for the lower 48 states will rise to $2,288.75 ($2,861.25 for Alaska and $2,632.50 for Hawaii) until July 1, 2023.

Income Cap (in applicable states): $2,742

Home Equity Limits:

Minimum: $688,000

• Maximum: $1,033,000

You can access the complete chart of the 2023 SSI and Spousal Impoverishment Standards from CMS.

Ohio Department of Medicaid Changes Treatment of Retirement Plans- Eases Burden of Planning

The Ohio Department of Medicaid (ODM) has finally adopted a change that means retirement accounts will no longer be counted  as resources for determining Medicaid eligibility. This means that Ohio law now comports with existing federal law,"[a]fter six suspenseful years," as one law firm characterized the change,  Understanding the change, and its impact, requires some appreciation of  Medicaid and its role in paying for long-term care.

As most know, Medicare provides no real long-term care benefit. Medicare does not cover the cost of any care in a nursing home when a person requires only custodial care. Custodial care includes the following services:

• bathing
• dressing
• eating
• going to the bathroom

Generally, if the care or services that a person requires can be provided by another person without a degree or certification, Medicare does not cover the service.  There is no licensing required for one person to assist another to bathe, or to dress themselves.  There is, of course, licensing required for dispensing medical care, or providing certain rehabilitative care services such as physical therapy and occupational therapy.  

Further, non-custodial care is not fully covered by Medicare.  The best Medicare will do is pay for acute or rehabilitative care for a short period of time following a three-day hospitalization.  The Medicare benefit provides payment for twenty (20) days of institutional care following hospitalization, and additional payments for necessary care up to a total of one hundred (100) days.  After that one hundred (100) days, if a person needs long-term care (in-home assistance, assisted living, or a nursing home), that care is not paid for by private health insurance or by Medicare. 

Nursing home care can cost, on average, $8-12,000/month. Most people cannot afford to pay out of pocket such a large amount for long, so many turn to Medicaid to cover these costs.

Medicaid will pay for the cost of a nursing home or assisted living facility, provided that the institution accepts Medicaid reimbursement, but Medicaid benefits are limited to the impoverished.  That means that:

• A single person can have no more than $2000 to their name (in addition to a home and a car);
• A married couple is limited to a maximum of $139,000 and often less if the combined estate is less that $278,000 (the Community Spousal Resource Allowance or CSRA is one-half of the estate up to $139,000 but only one-half whatever the estate is valued at if the estate is less than $278,000).

To qualify, Medicaid applicants must "spend down," a euphemism for impoverishing themselves, especially since the person receiving their benefits may have to contribute their income to their cost of care.

Taxes and Retirement Accounts Under The Old Rules

For many people, retirement accounts (IRAs, 401ks, 403bs, deferred compensations, Roths, etc.), have replaced the home as the most valuable asset in their estate. Retirement accounts are owned by human beings (for example, trusts or LLCs cannot own retirement plans), and cannot be transferred between people except by death or divorce. Except for Roth IRAs, the taxes haven’t been paid on the accounts, so if individuals want to cash it out, they’ll incur significant income tax. 

Safeguarding the home or after-tax investments from spend-down ahead of time under the Medicaid rules is and has been fairly straightforward. Simply, to protect the retirement accounts, the account would be liquidated and the tax  incurred and paid.  In addition to the tax consequence, liquidation often meant losing the future benefits of tax deferred growth.  The options for safeguarding retirement accounts were limited, complex, expensive, and, for most people and advisors, frustrating. 

Many people would simply leave their retirement assets exposed to spend-down risk, choosing to forego the tax incurred and necessary, and protect their home and other assets.  Imagine a senior paying the cost and expense necessary to protect their $200,000 home, only to lose their $500,000 IRA left exposed. Those who chose against protecting the IRA in advance would, in crisis situations, end up with a severe tax consequences liquidating their IRA to either pay for care, or to protect other assets.

Under the old rules, if a couple had $500,000 in retirement assets, that amount counted toward their asset limit. They would have to spend their money until they reached $139,000 in total countable assets, incurring taxes along the way.  Retirement accounts were not treated any differently than checking or brokerage accounts for eligibility purposes.

Taxes and Retirement Accounts Under The New Rules

Starting in 2016, Ohio changed how it takes Medicaid funding from the federal government. As part of that change, it had to align Medicaid with Social Security disability asset rules. Under Social Security rules, retirement accounts are not counted as assets if they pay out regular, periodic payments – those payments are counted as income instead. In other words, as long as you take your required minimum distribution, or set up a recurring distribution that looks like a required minimum distribution, then Medicaid wasn't supposed to consider how much is in that account, just how much those distributions are.

After four years, the Ohio Department of Medicaid finally started talking about making the change. Some counties adopted these rules consistently, others inconsistently, and some not all. Finally, after more than a year of promising guidance, ODM published Medicaid Eligibility Policy Letter 164 on May 26, 2022. This letter clarified how the Social Security rules applied to Ohio and confirmed that retirement account payouts should be treated as income, and the principal should not be counted.

The change means seniors won't be forced to cash out their retirement accounts in order to qualify for Medicaid. It will save taxes and allow more money for the applicant or the healthy spouse. 

Some folks believe, and are being led to believe that the new rules completely protect retirement accounts.  That is not true.  The income is still countable, but estate planning can provide a solution in the form of a Qualified Income if the income is excessive.  Even then, and more fundamentally Medicaid estate recovery still exists.  Medicaid estate recovery permits Ohio to recover money paid in benefits from a Medicaid recipient’s estate.  

Regardless, the change will make planning much comfortable for people with large retirement accounts.