No "Claw-back" of Large Gifts Made Prior to 2025

For transfer tax purposes, the IRS has released guidance confirming that taxpayers can make large gifts from 2018-2025 (when the expanded $11.4 million-per person transfer tax exemption is in place) without fear of any kind of “clawback” if the client dies in a later year, when the exemption is lower.   This means that taxpayers can use the entire $22.8 million per-married-couple transfer tax exemption between 2019 and 2025 without any fear that they will be subject to transfer tax liability for those gifts in later years.

The 2017 tax act doubled the basic exclusion amount (essentially, the amount that can be transferred free of estate, gift, or generation-skipping transfer taxes) from $5 million to $10 million for transfers made after 2017 and before 2026.  The exclusion amounts are adjusted for inflation and assets exceeding the exclusion amount are subject to up to a 40% estate and gift tax rate. For 2018, the inflation adjusted exclusion amount is $11.18 million and in 2019, it is $11.4 million.The exclusion amount is, however, set to revert to $5 million after 2025. 

Priya Prakash Royal, author of the Bloomberg Estate Tax Blog, correctly observed:

Of course, Congress can change the law at any time and the 2017 tax act is a political hotbed. Many taxpayers will probably wait until late in 2025 to make any drastic decisions on gifting their entire exclusion amount. However, advisers should keep their clients aware of the possible changes that could be made if the House and the Senate are both controlled by the Democrats – especially if the Democrats take over the Presidency in 2020 or 2024. This may hasten the need for clients to take advantage of the increased basic exclusion amount.

IRS Changes EIN Application Policy - Requires an Individual “Responsible Party”

ID 84890539 © Designer491 | Dreamstime.com

The IRS announced on March 27, 2019 that the “responsible party” on applications for an employer identification number (EIN) must now be a natural person.  Individuals named as responsible party must have either a Social Security number (SSN) or an individual taxpayer identification number (ITIN).  The new requirement is intended to enhance security and improve transparency. 

An EIN is the tax identification number assigned to entities such as trusts, estates, retirement plans, LLCs, partnerships, and corporations.  An entity obtains such a number by completing the IRS Form SS-4 or an online application.  One question in the application process asks the applicant to identify the “responsible party,” which the IRS defines as “the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity.”  In cases where more than one person meets that definition, the entity may decide which individual should be the responsible party. In the past, a non-natural person, such as a trust, estate, or business entity (LLC, Corporation, or partnership) could be a "responsible party."  According to the IRS,"[t]he change will prohibit entities from using their own EINs to obtain additional EINs." 

In deciding who to list as the responsible party, the IRS encourages applicants to consider whether the party has “a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the person, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets.”  The Form SS-4 Instructions provide a detailed explanation of who should be the responsible party for various types of entities. Only governmental entities and the military are exempt from this requirement, and may continue to list non-individual entities as the responsible party.

 If there are changes to the responsible party, the entity can change the responsible official designation by completing Form 8822-B, Change of Address or Responsible Party. A Form 8822-B must be filed within 60 days of a change.

This policy will go into effect for all EIN applications submitted on and after May 13, 2019.

More:

To read an article explaining why you should consider retaining a professional to apply for and obtain a an EIN, go here.

If you are confused about what a TIN, ITIN, and/or EIN  is, go here.

Aging in Place Planning - New Geriatrics Research Offers Roadmap for Person-Centered Care

Person-centered care (PCC) is an approach to health care that puts personal values and preferences of the patient at the forefront of decision-making. Improving healthcare safety, quality, and coordination, as well as quality of life, are important aims of caring for older adults with multiple chronic conditions and/or functional limitations. Person‐centered care is an approach to meeting these aims in a way that assures the primacy of individuals’ health and life goals in their care planning and in their actual care.

Person‐centered care means that individuals' values and preferences are elicited and, once expressed, guide all aspects of their health care, supporting their realistic health and life goals. Person‐centered care is achieved through a dynamic relationship among individuals, in and out of the health care system, and others who are important to them, and all relevant providers. The required  collaboration informs decision‐making to the extent that the individual desires. See, "Implementing “Patient‐Centered Care”: A Revolutionary Change in Health Care Delivery." Person-centered care is consistent with, and one could argue, the objective of "supported decision-making," upon which Aging in Place Planning is based.  

According to an article published in the American Geriatrics Society Newsletter, two new research articles and a corresponding commentary from leaders in the the American Geriatrics Society (AGS) describe ways to make person-centered care more actionable for seniors. The study authors explain that the time is ripe for reform of senior care toward PCC: 

"The U.S. healthcare system is finally at a much anticipated and long‐needed tipping point. For more than half a century, the predominant paradigm for organizing and financing health care in the United States has been based on [two] 2 major factors: care focused on organ systems and reimbursement based on volume rather than quality of service. This system has too rigidly driven what can be done and reimbursed and does not foster care that addresses disorders of multiple organ systems (multimorbidity) and the effect of multimorbidity on overall functional ability, considerations that are critically important in the care of older people. Given recent developments in our healthcare system, the time is ripe for geriatricians to leverage their unique expertise to advocate for a person‐centered approach to healthcare design and delivery that encourages healthcare professionals to organize care around patient priorities, rather than an outdated taxonomy and payment system."

"Making person-centered care a reality for older adults with complex care needs will take time and effort, including significant research to move promising approaches from the lab bench to the clinic,” wrote William B. Applegate, MD, MPH, AGSF, Editor-in-Chief of JAGS and lead author of the editorial addressing the two new studies (DOI: 10.1111/ jgs.15536). “This work is helping test innovative strategies, which will move us toward a broader and more balanced approach to care.”

Though critically important, eliciting and documenting personal values remains uncommon in routine older adult care, particularly for people with multiple health concerns that complicate pinpointing broader health priorities. In “Development of a Clinically Feasible Process for Identifying Patient Health Priorities” a research team describes Patient Priorities Care (PPC), a novel process to identify health goals and care preferences for older people with multiple health conditions. Expertly trained facilitators help older adults and caregivers work through health priorities sensitively, in a process that could be completed across just two sessions totaling 45 minutes or less. According to the research team:

 “Results of this study demonstrate that healthcare professionals can be trained to perform the patient priorities identification process as part of their clinical encounters…[through a process that is] rewarding and enjoyable but requires training and formal feedback.”

A separate team put the PPC processes into practice, reporting their findings in “Feasibility of Implementing Patient Priorities Care for Patients with Multiple Chronic Conditions” Their study involved using Patient Priorities Care among more than 100 patients working with nine primary care providers and five cardiologists in Connecticut. While researchers still hope for improvements in the time needed to complete the process and in avenues for embedding it within practice workflows, they noted that the vast majority of patients returned to their physician with clear goals and care preferences. Follow-up discussions between patients and providers suggest that moving from disease-based to priorities-aligned decisions is “challenging but feasible.”

The foregoing work represents only the latest steps forward for high-quality, person-centered care for older people, and also builds on an even lengthier legacy at  AGS.  Implementation of these strategies for all seniors, even those receiving care outside of institutions, while aging in place, will be a welcome development.  

OIG Finds State Survey Agencies Are Not Verifying Facilities’ Corrections of Deficiencies

State survey agencies ("State agencies") are required to verify that nursing homes have corrected identified deficiencies, such as the failure to provide necessary care and  services, before certifying that the nursing homes are in substantial compliance with Federal participation requirements for Medicare and Medicaid. The Office of the Inspector General (OIG) recently conducted a survey, and its resulting Report says that State Agencies aren’t doing enough to make sure that nursing homes are correcting deficiencies.

Out of nine state agencies that OIG selected for review, seven did not always verify that nursing homes’ had corrected issues, as required. More specifically for 326 of the 700 sampled deficiencies, these State Agencies did not obtain any evidence of nursing homes' correction of deficiencies or maintain sufficient evidence that they had verified correction of deficiencies.  For less serious deficiencies, the practice of six of the seven State agencies was to simply accept a nursing home's correction plan as confirmation of substantial compliance with Federal participation requirements without obtaining from the nursing home any evidence of correction of deficiencies. 

Further, three of the seven State agencies had technical issues with maintaining supporting documentation in the software-based system used to support the survey and certification process; as a result, they did not have sufficient evidence of correction of deficiencies.  The OIG report does not state clearly whether state agencies claimed to have collected any evidence, or if that supporting documentation may not have been available to the OIG. 

The Report offered an example of a serious deficiency where the state survey agency did not follow up and verify the correction of the deficiency:

“A state agency completed a nursing home survey and identified several deficiencies, including a G-rated deficiency related to quality of care (42 CFR § 483.25). The surveyor noted:

• Based on observation, interview and record review, the facility failed to provide the necessary care and services . . . in accordance with the comprehensive assessment and plan of care for 1 of 4 diabetic residents . . . reviewed for medication administration. This failure occurred when the resident received too much diabetic medication and sustained a life threatening event requiring emergency medical intervention.

The state agency conducted the required follow up survey; however, it did not have documentation supporting that it had verified the correction of the deficiency.”

Resident health may be compromised.  "If State agencies certify that nursing homes are in substantial compliance without properly verifying the correction of deficiencies and maintaining sufficient documentation to support the verification of deficiency correction, the health and safety of nursing home residents may be placed at risk" reads the OIG Report. 

In addition, the OIG said, the Centers for Medicare & Medicaid Services’ (CMS) guidance to state agencies on such verification “needed to be improved.” Officials laid out several steps that the agency can take to respond, moves with which CMS has concurred.

LeadingAge spokeswoman Lisa Sanders told McKnight's Long-term Care News, that  it agrees with the OIG’s recent findings, urging federal officials to ensure that state agencies have adequate funding to complete their reviews:

“The unevenness of surveyors’ findings and enforcement actions taken by state surveyors is well documented,” she told McKnight’s. “State survey agencies are frequently short-staffed, and turnover at these agencies is often rampant, which means that those responsible for surveying nursing homes may have neither the training nor the experience to know what they are seeing and whether conditions comply with federal standards and requirements.”

The prestigious law firm Hall, Render, Killian, Heath, and Lyman,  which specializes in health-related businesses identified the following "Practical Takeaways" from the Report:

•  Skilled nursing facilities should expect that state survey agencies will pay increased attention and take actions to confirm that the actions and corrections promised in a facility’s plan of correction were implemented.
• Skilled nursing facilities may see changes to the CMS forms related to the survey and certification process, such as the Forms CMS-2567, CMS-2567B and CMS-1539, so that surveyors can explicitly indicate how a state survey agency verified correction of deficiencies and what evidence was reviewed.
• Skilled nursing facilities should review and establish practices and procedures for proactively documenting the corrective actions promised for any deficiency. Facilities should have those records ready, expecting that the state survey agency will more actively confirm that the actions occurred. 

As CMS reinvigorates state agencies' oversight, resident health will find greater protection.  

The "Human Touch" in Aging in Place Planning

ID 117955757 © Patcharin Saenlakon | Dreamstime.com

Laizer Kornwasser, writing for HomeCare Magazine, reminds that although technology can improve health outcomes, human hands are still needed.  In his article entitled, The Importance of the Human Touch, Kornwasser, President and Chief Operating Officer at CareCentrix, a post-acute benefits management company, suggests that "the future of better health care in this country is not people versus machines," it is in fact, "just the opposite."  

Kornwasser concedes that a "future of improved health outcomes and lower health care cost comes when health care providers use technology to not only inform diagnoses, but also to catch early signs of medical problems, create the most effective treatment plans and recommend the most appropriate post-acute care environment for the patient:"  

"One of the latest health care advancements currently being tested is the use of sensors to track the activity of elderly people in their homes and in their cars, as part of an effort to enable them to live longer and more safely in their own homes. The Collaborative Aging (In Place) Research Using Technology (CART) initiative is a national study currently in progress that tracks seniors’ pill consumption, weight, computer use and movement in and around their home and in their vehicles to generate real-time activity and monitor for any health changes, such as cognitive decline or increasing frailty issues, so that intervention can happen earlier to help prevent or shorten a potential hospital stay.

There are a number of commercially available sensor-based products that can monitor individuals at home, but no company has mastered the logistics of installing and configuring the sensors so an alert can be acted upon, as CART is pursuing. Sending up a red flag with no one to interpret what the red flag means and how to best intervene is like creating a computer system without a backup."

The "human touch" necessary involves connectivity, communication and collaboration among providers, patients, payers and caregivers utilizing technology intelligently and humanely:

While a machine can be programmed to perform given tasks more efficiently and extrapolate needed and advanced learnings better than its human counterparts, the artistry is in the execution of the information and in being able to adjust to the subtleties that may be required in a given situation.

The CART study is an excellent example of the exciting new research being conducted in the “technology meets touch” space, but there are many examples where the practice is already in use. Consider the task of getting prescriptions filled at a pharmacy. What was once an onerous paper-based process that was often filled with roadblocks and safety concerns due to lack of information, multiple providers and polypharmacy is now streamlined through electronic health records, real-time benefit checks and e-prescribing capabilities that allow physicians to make better prescribing decisions for a patient at the point of care.

Within the home health industry, technology is consistently opening new paths that deliver improved patient outcomes, while achieving lower overall health care costs. Nowhere is this transformation more evident than in the adoption of artificial intelligence (AI) and machine learning technology, which is quickly changing the face of patient care.

Using petabytes (1 million gigabytes) of data, clinicians can quickly analyze past results of clinical settings and providers to recommend future paths for better care. For example, a physician can now match the characteristics of an individual in need of a hip replacement to a facility and/or provider with measurable success in caring for patients with similar clinical and socioeconomic characteristics. Matching patients with the right provider at the start of care improves outcomes, increases patient satisfaction and provides cost-saving solutions that can avoid hospital re-admissions.

AI and machine learning, combined with new modes of communication, are making it possible to create smart networks that match the patient’s needs with the best-possible providers. But, it is still the uniquely human ability to deliver on those care needs, once identified, that brings to fruition the highest quality of care, while lowering health care costs.

As technology continues to evolve and predictive analytics advance, we need to challenge the industry to develop products that not only improve the machine learning process, but also seamlessly connect a patient’s clinical care team with real-time medical and pharmacy claims data that will help the team make more informed care decisions.

By teaming technology with the human touch, we will be able to place patients in the center of the care team—whether they are in the hospital, a post-acute care facility or healing at home.

ID 107961566 © Ljupco | Dreamstime.com

Even more tangible than the "Human Touch" about which Mr. Kornwasser writes, is actual physical contact. Research suggests that the physical contact plays a fundamental role in human communication and  physical and emotional health.  Lack of human touch is a real concern for the medically frail elder, leading to feelings of isolation, anxiety, poor trust in caregivers, insecurity and decreased sensory awareness. 

Older adults living with serious conditions are often especially receptive to touch. Unfortunately, they are also among the least likely to receive expressive human touch from health care providers. Nursing students have been shown to experience anxiety about touching older patients. Yet elders report that touch communicates safety, care, reassurance and makes them feel more trust in caregivers.

For individuals with dementia, human touch plays an important role in promoting overall well-being. Since touching the hands is so familiar, hand massage may be gladly accepted by elders living with dementia. Even five-minutes of hand massage have been shown to elicit a physiological relaxation response and decreases cortisol levels. Cortisol is a stress hormone that is produced by the adrenal glands during prolonged stress and is often used as an objective marker of stress. When cortisol levels are lowered it enhances sleep quality and the immune system. Massage has also been shown to increase serotonin levels. Serotonin is a neurochemical that regulates mood; feelings of calm; and subdues anxiety and irritability.

A five or ten-minute hand massage protocol has resulted in:

• Significantly decreased agitation immediately and sustained the decrease for up to one hour;
• Decreased the frequency and intensity of agitated behavior during morning care routines;
• Strengthened the relationship between the person with dementia and their family care partner.

One study evaluated the effects of hand massage on physical and mental function and behavioral and psychological symptoms consistent hand massage protocol. Both aggressive behaviors and stress levels decreased significantly.

ID 104769713 © Katarzyna Bialasiewicz | Dreamstime.com

Slow-stroke back massage (SSBM) uses effleurage, moving the palm of the hand in long, rhythmic, firm strokes. One method applies effleurage in a figure-eight formation on both sides of the back. Massage stimulates production of endorphins which are compounds produced by the body that suppress pain and uplifts mood. Massage also has a generalized effect on the autonomic nervous system, producing a relaxation response.

Three-to-five minute protocols have shown slow-stroke back massage to:

• Help people fall asleep;
• Decrease anxiety;
• Decrease physical expressions of agitation such as pacing, wandering and resisting care;
• Ease pain;
• Decrease blood pressure and heart rate indicating a physiological relaxation response.

One study investigated the effect of SSBM on anxiety and shoulder pain in hospitalized elderly patients who had suffered a stroke. The study compared scores for pain, anxiety, blood pressure and heart rate of two groups of patients. The intervention consisted of 10 minutes of SSBM for seven consecutive evenings. The results revealed that the massage intervention significantly reduced the patients' levels of pain perception and anxiety and blood pressure and heart rate changed positively, again indicating relaxation.

While institutional nursing is employing these techniques in an effort to  to reduce unnecessary use of anti-psychotic medication by replacing or supplementing them with non-medicinal approaches and strategies, home care, too, should incorporate these techniques.  "Touch" initiated by family by hugs, pats, and simple hand holding or affectionate touching,  initiated as greeting and comforting touch by professional caregivers, or scheduled hand, back, or foot massage, can go a long way in comforting an elder, and contributing to positive physical, emotional, and psychological health outcomes.  

"Human Touch," as it refers to both the human component of collaborative information gathering, consideration, decision-making, and implementation, and to human tactile communication and care, is undoubtedly an important component of an Aging in Place plan. 

ID 88477236 © Varandah | Dreamstime.com