Morton Legal Blog

Bill Would End Nursing Home Practice of Mandatory Arbitration

Two U.S. senators have introduced legislation that would end the practice of nursing home residents signing away their right to a trial before any actual dispute with the facility has arisen.

Nursing Home Call Girls?

A male resident at the Kildegaarden nursing home in Denmark recently made an indecent sexual proposal to a member of the staff. In a U.S. nursing home, this behavior would have been ignored or rebuked. But at Kildegaarden, the response of the facility's director, Inger Marie Kristensen, was to tell a nurse to telephone for a prostitute.

Deficient Nursing Homes Listed

The federal Centers for Medicare & Medicaid Services (CMS) has released the complete list of U.S. nursing homes that have failed to meet safety and quality standards for care.

The list, which identifies 131 "Special Focus Facilities" that require additional oversight, follows the release in November 2007 of a list of 54 such facilities. At that time, CMS came under intense criticism for making public only a partial list of Special Focus Facilities while sharing the full list with three associations representing the nursing home industry. (See "Feds Publish List of 54 Poorest-Performing Nursing Homes.")

Undue Influence in Trust Amendment Results in Attorneys Fees

The Oklahoma Supreme Court has ruled that the nearly disinherited step-grandchildren of an elderly decedent are entitled to attorneys fees in their action to set aside a trust amendment that was obtained through undue influence. Corr v. Smith (Okla., No. 102687, Feb. 12, 2008).

Mississippi Medicaid Top Legislative Priority

Mississippi's Medicaid program faces a significant shortfall that the legislature must address this legislative session.  A recent article details the problem.  Another attempt at raising the tobacco tax is one option being considered.  Approximately 75% of all Mississippi Medicaid funding comes from the federal government. 

Medicare Coverage for Nursing Homes

Medicare Part A covers up to 100 days of "skilled nursing" care per spell of illness. However, the conditions for obtaining Medicare coverage of a nursing home stay are quite stringent. Here are the main requirements: 

1. The Medicare recipient must enter the nursing home no more than 30 days after a hospital stay that itself lasted for at least three days (not counting the day of discharge);
   
2. The care provided in the nursing home must be for the same condition that caused the hospitalization (or a condition medically related to it); and
   
3. The patient must receive a "skilled" level of care in the nursing facility that cannot be provided at home or on an outpatient basis. In order to be considered "skilled," nursing care must be ordered by a physician and delivered by, or under the supervision of, a professional such as a physical therapist, registered nurse or licensed practical nurse. Moreover, such care must be delivered on a daily basis. (Few nursing home residents receive this level of care.)

Long Term Care Payments Counted as Income

A Florida appeals court finds that long-term care insurance payments that do not reimburse actual medical expenses must be counted as income when determining Medicaid eligibility. Rosenshein v. Florida Department of Children (Fla. Ct. App., 3rd Dist., No. 3D07-989, Oct. 24, 2007).

Power of Attorney ... Or the Powers that Be?

It's likely that you've heard of the Power of Attorney (POA). Most people have. We generally assume it's a way for someone else to take control of our assets if we become incapacitated or, as we often see in the movies, we are ""declared incompetent."" This can be true, but there's a lot more to it than that. The POA is a way for you (the principal) to give some control of your assets or your medical care to another person (the agent or attorney-in-fact).

VA Aid & Attendance Benefit a Well Kept Secret

Tens of Thousands of our Veterans have earned and qualify for a pension benefit of up to $1,800 per month that can be used to pay for assisted living or attendant in-home care, but information about the program appears to be a well kept secret.  Inquiries to local VA offices are often met with denial of any information about this valuable pension benefit.   

Parents of Deceased SNT Beneficiary Must Be Paid for Caregiving Services Before Medicaid

An Indiana appeals court rules that before the state may be reimbursed for its Medicaid payments to an SNT beneficiary, the beneficiary's parents must be paid for the uncompensated care they rendered. State v. Hammans (Ind. Ct. App., No. 55A04-0606-CV-294, Aug. 2, 2007).

 

Nursing Home Not Permitted to Recover Attorney's Fees

An Oregon appeals court rules that foreclosing on a lien to recover the costs of a resident's care does not allow a nursing home to also recover attorney’s fees pursuant to a contract with the resident's agent. King City Rehab, LLC v. Clackamas County  (Or. Ct. App., No. CV05020792; A132436, Aug. 1, 2007).

Social Security Retirement Benefits

Social Security was enacted   in 1935 to provide some relief to America's destitute older citizens during   the economic cataclysm known as the Great Depression. A direct descendant of   that more limited effort, today's Social Security program is in fact a group   of related programs, each with its own eligibility and payment rules: retirement,   disability, survivors and dependents benefits.

The best known of these   programs is retirement, known formally as Old-Age and Survivors Insurance (OASI).   Under this program, Social Security provides income to retirees, as well as   benefits to a worker's surviving spouse and to a retired worker's children under   age 18. As of September 2000, the program was issuing benefits to some 32 million   retired workers and their dependents, as well as to nearly 7 million survivors   of deceased workers.

Attorney Liable for Aiding Fiduciary Breach

A Texas appellate court finds that an attorney breached his fiduciary duty to a trust beneficiary when he knowingly aided and abetted the trustees in breaching their fiduciary duty. Parenti v. Moberg (Tex.App. [4th Dist.] 5-30-2007) No. 04-06-00497-CV.

Special Needs Trust Income Available for Child Support

A Pennsylvania appeals court rules that income from a father’s special needs trust is available to pay child support.  Mencer v. Ruch.  (PA.Super 182, 2007) No. 1902 WDA 2006.

Abusive Insurance Sales Tactics Uncovered

A recent New York Times story reports on the misleading credentials and sales tactics of some unscrupulous financial advisors.  http://www.nytimes.com/2007/07/08/business/08advisor.html?pagewanted=1&_r=2.  Mississippi’s own Secretary of State’s office was quoted in the article. 

“If insurers would cut off these companies, this behavior would end tomorrow. Instead, they just close their eyes or say it’s not their fault when a supposedly rogue sales agent misbehaves,” said Jim Nelson, an assistant secretary of state in Mississippi. “It’s scandalous that the insurance companies are working with these marketing organizations.”

VA Benefit

 The VA disability pension program is more commonly known as the “Aid and Attendance” program. It is available to single veterans, to veteran households with one or more dependents, or to the surviving spouse and/or surviving dependent children of a veteran. In order to qualify for the benefit, a veteran must have served 90 days on active duty with at least one day during a wartime, must have been discharged under conditions other than dishonorable, must be permanently and totally disabled or 65 years or older, and must meet the income eligibility requirements.

 While eligibility for the benefits is based on income, the way in which the income is calculated for application purposes allows most veterans to qualify. The VA deducts from income unreimbursed medical expenses which lowers the income amount in order to allow the veteran to qualify for the additional benefits. Assuming that a veteran and/or veteran’s spouse meets the income eligibility requirement, the veteran and/or the veteran’s spouse must also retain no more than $50,000 cash assets if single and no more than $80,000 cash assets if married without penalizing the monthly benefit to which the applicant is entitled.

 Further with the pension plans, there are no penalties for transfers made after the applicant has qualified for the monthly Aid and Attendance pension benefit. The maximum monthly benefit that can be received through the VA is $2,393; however, this amount also depends on how severely disabled the veteran is. Ultimately, the VA will pay the difference between an applicant’s countable family and the yearly income limit which corresponds with the number of dependents in the veteran’s family and the amount of income a veteran receives from other sources.

USA Today's Week-Long Focus on Caring for the Elderly

The USA Today just ended a week-long series of articles dealing with the difficulties of dealing with taking care of one's parents.  As science is able to keep us alive much longer than our bodies' ability to care for itself, a growing number of children are finding themselves in the role of becoming the "parent" to their parents.  Among the advice given is to have a will, power of attorney for health care, and power of attorney for financial matters, in place well before the issue of competency arises. 

Veterains Benefits Available

Understanding VA Pension and VA Pension with Aid and Attendance
"Aid and attendance" is a commonly used term for a little-known veterans’ disability income. The official title of this benefit is "Pension." The reason for using "aid and attendance" to refer to Pension is that many veterans or their single surviving spouses can become eligible if they have a regular need for the aid and attendance of a caregiver or if they are housebound. Evidence of this need for care must be certified by VA as a "rating." With a rating, certain veterans or their surviving spouses can now qualify for Pension. Pension is also available to low income veteran households without a rating, but it is a lesser dollar amount.

States May Now Penalize Community Spouse Transfers Post-Qualification

A Center for Medicare and Medicaid Services (CMS) official says that the agency believes states now have the option of imposing a transfer penalty on an institutionalized spouse if the community spouse transfers protected resources after the institutionalized spouse's eligibility has been determined.

Better Protection than Guardianship

A Guardianship is controlled by the Chancery Court. The Court determines whether an individual is competent to handle their own affairs, or needs a guardian. The Court determines who will be the guardian to look after the affairs of the ward. Usually, detiled information about how the ward’s money is spent is periodically provided to the Court through a process called the “annual accounting.” The Court determines what is, and is not, an appropriate expense for the ward, and how aggressively the ward’s money can be invested.

Impact of DRA Uncertain

A new Government Accountability Office (GAO) study concludes that few of the elderly are transferring assets in order to become financially eligible for Medicaid coverage of long-term care, and that of the transfers that are made, the amounts are modest. The study also finds that the impact of the Deficit Reduction Act of 2005 (DRA), which imposed harsh new asset transfer provisions, is uncertain.

Assisted Living Facility Qualifies as Long Term Care

A U.S. District Court in Ohio finds that an assisted living facility is a long-term care facility under the terms of a long-term care insurance policy, even though the facility did not have a nurse on site 24 hours a day. Hoekenga v. Continental Casualty Company (U.S. Dist. Ct., S.D. Ohio, No. 1:06-cv-458, April 18, 2007).

Endowment Contract is Life Insurance

One Medicaid planning strategy available for crisis planning is to purchase an endowment contract.  The purchase should not result in a penalty, since the commercially available contract was purchased for fair market value, and should not be counted as a resource since it has no cash value, and pays a death benefit until endowed.  That result was affirmed by a recent Michigan case.   Mis v. Michigan Department of Human Services (Mich. Cir. Ct., No. 06-23722-AA, March 3, 2007).

Mississippi Medicaid Ranked Among Worst

Public Citizen has recently ranked Mississippi's Medicaid program among the 10 worst in the nation.  For more information see www.citizen.org/medicaid. 

Guardianships

As we age, serious disability is an increasing likelihood. That’s why you should probably plan in advance to have your personal care and financial affairs managed, as you would want should you become disabled. If not, you could find yourself the focus of a Guardianship proceeding ¾ known sometimes as a Conservatorship. In a humiliating public trial in probate court, you’ll be declared legally incompetent and a court-appointed guardian will be granted authority over your care. In some instances, your financial affairs will be managed by one person, while someone else will make decisions regarding your personal care.

The Medicaid Penalty

Under Mississippi and Federal law, transfers of assets by an Medicaid applicant within 60 months prior to a Medicaid application will result in a penalty of ineligibility.   Congress does not want you to move into a nursing home on Monday, give all your money to your children (or whomever) on Tuesday, and qualify for Medicaid on Wednesday. So it has imposed a penalty on people who transfer assets without receiving fair value in return. These restrictions, already severe, have been made even harsher by enactment of the DRA.

This penalty is a period of time during which the person transferring the assets will be ineligible for Medicaid. The penalty period is determined by dividing the amount transferred by what Medicaid determines to be the average private pay cost of a nursing home in your state.  In Mississippi, this divisor is $4,600.

Example: For example, in Mississippi, where the average monthly cost of care has been determined to be $4,600, and you give away property worth $46,000, you will be ineligible for benefits for 10 months ($46,000 ÷ $4,600= 10).

Another way to look at the above example is that for every $4,600 transferred, an applicant would be ineligible for Medicaid nursing home benefits for one month.

In theory, there is no limit on the number of months a person can be ineligible.  However, for transfers made prior to enactment of the DRA on February 8, 2006, state Medicaid officials will look only at transfers made within the 36 months prior to the Medicaid application (or 60 months if the transfer was made to or from certain kinds of trusts). But for transfers made after passage of the DRA the so-called “lookback” period for all transfers is 60 months.

Drafting Errors Can Be Corrected - Sometimes

A recent case demonstrates the potential for reformation of a Trust where a drafting error otherwise made the trust assets available for purposes of qualifying for Medicaid.  The New York surrogate’s court finds clear proof of mistake in the drafting of an irrevocable inter vivos trust and allows reformation to reflect the grantor’s intent that the trustee be expressly precluded from invading the trust's principal. In the Matter of Scheib  (N.Y. Sur. Ct., No. 343541, Jan. 26, 2007).

Medicare Nursing Home Coverage is Limited

Medicare is the federal government’s principal health care insurance program for people 65 years of age and over. In addition, the program covers people of any age who are permanently disabled or who have end-stage renal disease (people with kidney ailments that require dialysis or a kidney transplant). The Medicare program insures 39 million Americans and spends $213 billion a year on their care.

For the most part, Medicare pays only for "acute" care -- care that the program's administrators view as reasonable and necessary to diagnose or treat an illness or injury. In other words, the program does not pay for most preventive or chronic health care. Medicare consists of three major programs: Part A, which covers hospital stays; Part B, which covers physician fees; and the recently-added Part C, which permits Medicare beneficiaries to receive their medical care from among a number of delivery options.

Spousal Impoverishment and Increasing the Minimum Monthly Needs Allowance

Qualification Basics

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $4,000 in "countable" assets. The spouse of a nursing home resident — called the 'community spouse' — is limited to assets up to $99,540 (in 2006) in "countable" assets.  This figure changes each year to reflect inflation, and the 2007 figure has not yet been published. 

All assets are counted against these limits unless the assets fall within the short list of "noncountable" assets. These include:

1. personal possessions, such as clothing, furniture, and jewelry;
2. one motor vehicle;
3. the applicant's principal residence, together with all adjoining real estate, up to $500,000 equity;
4. prepaid funeral plans and a small amount of life insurance; and
5. Assets that are considered "inaccessible" for one reason or another.

Protecting the Home

Nursing home residents do not have to sell their homes in order to qualify for Medicaid, as long as the nursing home resident intends to return home. Additionally, the house may be kept if the Medicaid applicant's spouse or another dependent relative lives there.  However, after a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient's care. This is called "estate recovery."

Medicaid 60 Month Rule

Congress has established a period of ineligibility for Medicaid for those who transfer assets. This period of ineligibility is determined by dividing the amount transferred by what Medicaid determines to be the average private pay cost of a nursing home in your state. However, state Medicaid officials will look only at transfers made within the 36 months for transfers made prior to February 8th, 2006, and 60 months for transfers made on or after this date. Thus, if you can plan ahead and make transfers well in advance of needing Medicaid (up to five years, depending on when you are transferred the money), the transfers will not affect your Medicaid eligibility.

State May Not Recover Medicaid Payments from Estate of Spouse

A Tennessee appeals court rules that the state may not recover Medicaid payments from the estate of a community spouse who received assets from an institutionalized spouse who predeceased him, leaving no estate.In Re: The Estate of James Clifford Smith (Tenn. Ct. App.)

Open Enrollment for Medicare Part D Means More Choices to Make

If you are a Medicare beneficiary, it is time to review your Medicare prescription drug plan options. The Medicare Part D open enrolment period began November 15, 2006, and ends December 31, 2006. During this period you can sign up for a prescription drug plan if you don't have one or you can switch to a different plan if you are unhappy with your current plan. Even if you are happy with your current plan, you should make sure that it isn't changing significantly. In addition, there may be new plans available that have lower premiums or offer more drug options.

Ethical Will Book Published

If you have thought about creating an ethical will but didn't know where or how to begin, this guide can serve as a great starting point. An ethical will is not a legal document -- it is a letter to your descendants that enables you to pass along information. You can use it for many things, including telling your loved ones how important they are, reflecting on your life, or explaining your estate plan.