Ronald Morton's Elder Law Blog

If Malpractice Reform is Answer to Runaway Costs, Why Havn't My Premiums Gone Down?

The other curious thing about the healthcare debate as it relates to Mississippi is the claim by Republicans that malpractice reform will play a significant roll in reducing healthcare costs.  Mississippi enacted significant malpractice reforms about 5 years ago under the argument that high malpractice premiums were driving doctors out of the state.  The reforms have basically assured that victims of malpractice cannot be adequately compensated for their physical loss/pain & suffering.  In fact, they cannot even afford to bring suit unless their lose is extremely severe due to the practical costs of litigation and the caps on recovery. As a result, very few malpractice suits are now filed in the state, which, if you follow the logic of Republican leaders like our state's own Haley Barbour, should also mean that healthcare costs have been dramatically reduced (i.e. doctors no longer have to practice "defensive medicine").  But, I have not seen any reduction in my healthcare premiums, and to to contrary, have seen increases nearly double the rate of inflation, and consistent with increases throughout the rest of the country that did not enact malpractice reform.  Barbour talks on the national circuit about malpractice reform being the answer to runaway healthcare costs, yet he can't even show how it has reduced costs in his own state.  Curious.

Hospitals Increase Lien Filings in Effort of Increase Revenue

The Shelby County Health Care Corp., known locally as The MED, has dramatically increased its lien filings in Tennessee Circuit Court, relying on a state law giving hospitals the right to perfect their lien within 120 days of a hospital discharge.  Lien filings increased from a number so small it was unreported in 3rd Quarter of 2008, to 531 in 3rd Quarter 2009.  No doubt, this more aggressive stance is indicative of the budget constraints that hospitals everywhere are under, and the need to find money anywhere they can.  Hospitals have always been among the most diligent of creditors of an estate to probate a claim so this trend is merely expanding the hospital's practice of lien enforcement.  While I have not seen any statistics for Mississippi, I suspect that similar increases are being seen in Mississippi courts in search of additional sources of revenue.  One trend that has been seen in Mississippi is the pursuit of liens by third party intermediaries such as MedPay Assurance.  These liens are asserted in both personal injury cases and estates, and seek reimbursement for the entire "retail" value of whatever procedure was performed, rather than the price that the hospital agreed to accept from the insurer such as BC/BS.  This can be as high as 300% of the price that the hospital had originally agreed to accept for the procedure, and illustrates the aggressive stance that many hospitals are taking with regard to money owed to them.

Curiously, despite the high levels of uninsured's, reaching in excess of 19% in Mississippi, hospitals have not been enthusiastic supporters of healthcare reform and a public option which would dramatically decrease the number of uninsured in the state and insure payment to these hospitals for their services.  I suspect that this is because hospitals have calculated that they will make more money under the existing system that only pays them for some of their patients at a high rate, than a system that will pay them for all of their patients at a government negotiated or set rate. 

New Potential Heir in McNair Estate

There is a potential new heir to the Steve McNair estate. In papers filed Friday, Clover Lee claims that McNair is the father of her 17 year old daughter.  If that is proven to be correct by DNA testing, the 60% of the football millionaire's estate set aside for his children will be divided 5 ways instead of 4.  Also, the judge has ruled that McNair's restaurant can be sold by the estate, despite the objection of its co-owner. 

McNair's estate is a lesson in the benefit of planning.  Had he created a will or trust that named his heirs and defined the portion each was to receive, the appearance of unknown heirs would not be an issue.  Likewise, had he and his business partner planned for the treatment of his restaurant or other business interests, the disposition of those assets would not be left up to the discretion of a probate judge, but would be determined by the agreement of the parties themselves.  If you think that your planning is incomplete, feel free to call my office and set up a complementary phone or office appointment. 

Mississippi Ranks 51st in Quality of Health

An update of a 2007 survey of health in America again ranks Mississippi last among all states and the District of Columbia in quality of health.  Among the reasons cited were poverty in the Mississippi delta and Mississippi's high rate of obesity, which ranks Mississippi as the nation's fattest state.  Among other interesting facts, the article reports that Mississippi pays physicians that participate in the Medicaid program 90% of the Medicare rate. 

McNair Business Partner Seeks to Block Sale

The Clarion Ledger report that a business partner of former NFL quarterback Steve McNair has asked the court to block the sale of McNair's interest in the restaurant that the two were partners in, and to instead shut it down.  

Raymond White filed a motion Monday in probate court to stop attorneys for McNair's estate from trying to sell his interest in the restaurant, called Gridiron 9, to a third party. White's motion argues he wants to dissolve the corporation set up to run the restaurant near Tennessee State University. It was open 10 days before McNair's death and hasn't been open since.

The filing illustrates not only the importance of having one's estate in order, but business affairs as well.  If the partners had in place a buy-sell agreement, issues of buyout, right of first refusal, and even value, could have been determined without necessitating expensive court involvement.

Mayo Clinic Eliminates Medicare and Medicaid

Citing low reimbursement rates, Mayo Clinic has announced that effective January 1, 2010, it will no longer accept Medicare and Medicaid patients.  Story.  That is interesting, given that Mayo is one of the models pointed to by the administration for results-based treatment.  It will not have any impact on Mississippi Medicaid recipients, since Mayo does not have an agreement with Mississippi Medicaid.  However, it will likely effect seniors who rely on Medicare, who may now loose the ability to travel to Mayo for a second opinion. 

Disclaimers Should Not Be Forgotten

In meeting with a probate client, I am reminded how important it is in planning an estate not to forget the flexibility of a disclaimer.  In this case, the decedent's Will provided for a family bypass trust -- a technique used to utilize the decedent's federal estate tax exemption equivalent in order to avoid paying estate taxes on the spouse's later death.  Unfortunately, in this case the decedent's estate was limited, because he owned everything jointly with his spouse as joint tenants with rights of survivorship.  With nothing more, the family bypass trust would have gone unfunded, because nothing passed through the decedent's estate.  However, because this estate may well be taxable at the death of the decedent's spouse if the estate tax exemption equivalent falls back to $1 million as scheduled in 1011.  The solution is the use of a disclaimer by the surviving spouse, who can disclaim half of the joint tenancy property, which will then fall into the bypass trust.  This move may wind up saving the ultimate heirs of this estate in excess of $400,000. Care must be taken to exercise this option timely.  The qualified disclaimer expires 9 months after death. 

Example of Poor Planning

While sitting in Hinds County Chancery Court this morning waiting to see the judge, I ran across an old friend representing an estate that is a good example of what happens when proper planning is not done.  His client died at age 44, leaving behind a wife and two minor children.  He owned a business which owed more in debt that it had in assets, and had a modest amount of assets of less than $50,000.  Unfortunately, a tort action was pending against the decedent, which now continues against the estate.  Because of the modest size of the estate, the suit would usually be of little concern, except for one additional fact.  The decedent had a sizable life insurance policy and did not name a beneficiary, meaning that his estate is the beneficiary.  Because of the lawsuit, the proceeds of the life insurance policy are now at risk to the plaintiff as a creditor of the estate. 

Because of this loving father's failure to plan, his life insurance intended to protect and provide for his family is at risk. Additionally, even if the lawsuit is ultimately won or dismissed, the proceeds of the estate, including the life insurance proceeds, will have to be divided equally between the wife and two children.  The children's share will be required to be in a guardianship, under court supervision.  This means that, in all likelihood, the children's assets will be limited to investment in CD's or other insured accounts, earning a minimal amount of interest, be subject to costly annual accountings, and be subject to court approval for all withdrawals.  If this decedent had simply named his wife as beneficiary of this policy, all of these results could have been avoided.   

Mississippi AG Opposes Nursing Home Ratings System

The Mississippi AG along with AG's from 29 other states, has sent a letter to the Center for Medicare and Medicaid Services asking that it suspend its current state by state nursing home rating system.  Under the current rating system, nursing homes within a state are compared against one another for various criteria on a rating scale of 1 to 5.  The AG's have requested that the standards for this rating scale be set on a national scale under the theory that a state by state comparison is confusing to consumers.  What the request fails to recognize, however, is the reality that almost all nursing home searches by families are limited to a single state, due to residency requirements for Medicaid and proximity to family.  A national standard would likely result in a flat-lining of rankings within a given state, making it much more difficult for consumers to tell the best nursing homes within a given state from the worst.  While a nationalized standard for ratings would make it easier for a consumer to compare a facility in Mississippi to a facility in California, the reality is that few consumers have the luxury of actually choosing between homes in different states.  The current system is much better for the overwhelming majority of consumers who are looking within a single state, and it holds nursing homes accountable by comparing them to others within their same market. 

Child's Claim Probated Against McNair Estate

Steve McNair's two oldest sons have gone to court demanding their share of his estate.

Steven L. McNair Jr. and Steven O'Bryan McNair filed claims Thursday in the Probate Division of Davidson County Circuit Court.  Steve McNair did not have a will, and his estate will be divided under Tennessee's intestacy law.  The estate is estimated to be in excess of $19 Million.  A large portion of this will be unnecessarily paid in estate taxes to to McNair's failure to plan.