We just won another Medical Assistance appeal issue. In this case, Medical Assitance was initially denied for nursing home benefits and the son of the Medical Assistance applicant was handed an invoice from the nursing home for over $100,000. Needless to say, he was upset. We were able to successfully argue that that the transactions at issue were not Medicaid Penalty transfers and that full Medical Assistance benefits should have been granted from day 1. We received the Administrative Law Judge opinion today removing approximatley 98% of the penalty. Client is happy.
A very common situation for my clients (or potential clients) find themselves in is the chaotic situation of transferring their parent from a hospital to an area nursing home for rehabilitation. It is in this situation, when emotions are high, people are tired, that the nursing home will, at the last second, wants the son or daughter admitting the parent to sign a 60+ page nursing home contract. Of course, the nursing home contact (usually the nursing home admissions director) is very friendly and advises that “don’t worry” this is just for your parent’s assets and does not obligate you to use your own funds for nursing home expenses. Often times the nursing home will demand that the contract be signed before admission (even if the hospital is in the process of discharging from the hospital). Often times this is an extremely hectic situation and the last thing that is on the son’s or daughter’s mind is a careful review of the nursing home contract. To be clear: under no circumstances should the contract be signed until an elder law attorney reviews the contract. It is a very routine question to ask the nursing home to allow time for their elder law attorney to review the contract. No matter how friendly the director of admissions person is, if there is a shortfall in payment or the Medical Assisstance application goes awry, the nursing will look for however signed the contract to pay the nursing home bill in full. I had a recent case where the nursing home assured the son that there was nothing to worry about and had him sign the contract in his name. The nursing home handeled the Medical Assistnace application. Unfortunately, the Medical Assistance application was denied. The next day, the nursing home delivered an invoice to the son for immediate payment for $100,000 for unpaid nursing home bills. Nursing home contracts are sophisticated documents with good attorneys hired by the nursing home that will use this contract against you. It is absolutely critical that an elder law attorney review that contract as soon as possible. If the contract is already signed, then the situation becomes more complex. In either event, a competent elder law attorney should be immediately contacted.
Medicaid Spousal Impoverishment Figures for 2012
The new minimum community spouse resource allowance (CSRA) is $22,728, and the new maximum CSRA is $113,640. The new maximum monthly maintenance needs allowance is $2,841. The minimum monthly maintenance needs allowance remains $1,838.75. This has yet to be implemented for Maryland. It is expected to come out shortly. It is unclear if this will be retroactive to January 1, 2012.
In part, what this means is that the community spouse of a Medical Assistance applicant can have no more than $113,640 in countable assets at the point when she is seeking eligiblity for the nursing home spouse. The prior maximum amount allowed was $109,560.
According to the newly published survey by Metlife, the average cost of long term care continues to rise. According to the report the average room nursing home rates rose nationwide by 4.4 percent to $87,235 a year or $239 a day, while assisted living facility costs jumped 5.6 percent on average to $41,724 a year or $3,477 a month.
According to the Metlife survey, Baltimore area nursing homes ranged in monthly costs (for a semi private room) from $6,944 to $9,424 a month. The Baltimore area average assisted living costs grew to $3,830 a month. The Baltimore area average home health aide charged $19/hour.
From a Maryland perspective, once an individual is eligible for long term care Medical Assistance, all of his or her income must go to the nursing home except for certain deductions. Notably, the deductions are health insurance, personal needs allowance (currently at $71/month), and possibly a spousal allowance. While there may be other needs for the nursing home resident, a question often poised is can the resident’s income be used to pay for private nurses? The answer here in Maryland is “no.” If private duty nurses or aids are going to be employed they must be paid for by other resources, typically, the surviving spouse or other family members.
So, it came as no surprise that in a recent out-of-state case, that this court also held that private nurse costs could not be deducted from the nursing home resident’s income (once they were on Medicaid). In Re Pitman v. Daines (N.Y. Sup. Ct., App., Div., No. 2011 NY Slip Op 08681, Dec. 1, 2011). In that case, the nursing home resident paid for private nurses to provide 24-hour care. After the resident died, the resident’s executor sought to have the decedent’s net available monthly income reduced for Medicaid eligibility purposes by the amount the decedent paid for
the nurses, but the state refused.
After a hearing, New York State Department of Health found for the state, and the executor appealed.
The New York Supreme Court, Appellate Division, held that the amount the resident paid for private nurses could not be subtracted from his monthly income for Medicaid eligibility purposes. According to the court, “private 24-hour nursing care may have provided the deceased with ‘optimal care’ but was not ‘essential’ care that was ‘medically necessary’ for purposes of Medicaid reimbursement.”
If this same case were heard here in Maryland, it is my opinion that the court here would come to the same conclusion.
A good portion of our clients engaged in virtually no planning (before they came to our office) when faced with a parent or loved one entering a nursing home. Even in this late stage of the game, there are plenty of opportunities to protect a parent’s or loved ones’ assets from nursing home related costs. The key document to this process is the financial power of attorney for the nursing home resident. Without a doubt, this document will be key to the asset protection process. Ideally, this power of attorney was drafted by an attorney and, if recently executed, conforms with the new Maryland provisions relating to financial powers of attorney. Without this document, the next question is whether or not the nursing home resident can sign a new financial power of attorney. Even if this person cannot sign (or should not sign), then seeking court authorization will be neccessary. The absolute key is that just because one enters the nursing home do not assume that you can’t save assets at that point. That assumption is totally incorrect.
What is cited below is another jurisdictional case which illustrates the limits of what a State may do to accomplish a Medical Assistance (i.e. Medicaid) recovery on community spouses’ assets. In this case, an attempt was made to put a Medicaid lien on the estate of a recently deceased community spouse at a time when the nursing home spouse continued to receive Medicaid benefits. In this case the court ruled that the State was prohibited from reaching into the spouses’ estate for recovery.
An Idaho district court rules that the state cannot recover assets from the estate of a Medicaid recipient’s spouse that were transferred to the spouse before the Medicaid recipient died. In Re: Estate of Perry (Idaho Dist. Ct., 4th Dist., No. CV-IE-2009-05214, March 16, 2011).
Martha and George Perry owned property together. Mrs. Perry entered a nursing home, and Mr. Perry transferred the property into his name. Mrs. Perry then began receiving Medicaid benefits. Mr. Perry died before Mrs. Perry, and the property was sold. After Mr. Perry’s death, the state filed a claim against his estate seeking recovery of more than $100,000 in Medicaid benefits it had so far paid on Mrs. Perry’s behalf.
The state asserted that, because Mrs. Perry previously had an interest in the property during the marriage, the state could recover an amount equal to her ownership interest. The estate’s personal representative countered that the state was entitled only to recover an amount equal to Mrs. Perry’s interest in the home at the time of her death. Because Mrs. Perry was still alive at the time of the transfer, the personal representative argued the state could not recover any amount. The magistrate ruled that the state’s ability to recover costs was limited to assets that were transferred to the recipient’s spouse at death, not to inter vivos transfers. The state appealed. (Mrs. Perry died while the appeal was pending.)
The Idaho District Court affirms, holding the definition of “estate” in federal Medicaid law does not permit the state to recover property interests the Medicaid recipient divested before death. The court determines that there is a conflict between state and federal law because state law would allow the state to recover from the spouse’s estate so long as the property was once community property, but the court concludes that federal law preempts state law.
There is no question that a financial power of attorney holds what is called a “fiduciary duty” to act in the best interests of the grantor. But what if that power of attorney holder breaches that duty and takes “mom’s” funds for herself? What if her taking of mom’s funds caused mom to be disqualified from Medical Assistance (i.e. Medicaid)? Can she be found liable?
An interested case in Indiana answered that quesion in the affirmative.
An Indiana appeals court rules that a woman breached her fiduciary duty to her mother when, among other things, she refused to cash out a life insurance policy in order to qualify her mother for Medicaid and later profited from the policy. Shaw v. Covenant Care Waldron Home (Ind. Ct. App., No. 73A04-1005-SC-317, March 2, 2011) (unpublished).
Joni Shaw admitted her mother to a nursing home. Ms. Shaw signed the admission agreement on behalf of her mother as her attorney-in-fact. Ms. Shaw applied for Medicaid on her mother’s behalf, but the application was denied due to a life insurance policy. Ms. Shaw refused to cash out the policy, and the Medicaid application was never approved. In addition, Ms. Shaw withdrew funds from her mother’s account and deposited them into her sole account. After her mother died, her brother, who was the beneficiary of the life insurance policy, gave her $8,000 from the proceeds of the policy.
The nursing home had an outstanding balance of $5,709.40, which Ms. Shaw refused to pay. The nursing home sued, alleging breach of contract and breach of fiduciary duty. It argued that an attorney-in-fact who breaches a duty to the principal is liable to third parties as though he or she were the principal. The small claims court found in favor of the nursing home, and Ms. Shaw appealed.
The Indiana Court of Appeals affirms, holding that Ms. Shaw breached her fiduciary duty to her mother. According to the court, because Ms. Shaw profited from refusing to cash in the life insurance policy and she transferred funds from her mother’s account to her own account, it was clear that Ms. Shaw was acting in her own self-interest to the detriment of her mother.
The interesting question from a Maryland point of view is what right does the nursing home have to sue the attorney-in-fact. Can other interested family member’s sue on behalf of mom? The answer to that question is “yes.” However, court action will need to be started to give that family member standing to recover the stolen assets.
The basic premium for Medicare Part B will be $115.40 a month in 2011, up from $110.50 in 2010 (a 4.4 percent increase). But because there will be no cost of living benefit increase for Social Security recipients for 2011, most beneficiaries will be exempted from paying this increase and will instead pay the same $96.40 premium amount they have paid since 2008.
A “hold-harmless” provision in the Medicare law prohibits Part B premiums from rising more than that year’s cost of living increase in Social Security benefits. Since there is no Social Security increase, most beneficiaries — about 73 percent — will not have to pay any increased Part B premiums because of the hold-harmless provision. Those covered by the provision will continue to pay Part B premiums of $96.40 per month in 2011.
But this hold-harmless protection does not apply to the other 27 percent of beneficiaries — about 12 million in all — who either:
- do not have their Part B premiums withheld from their Social Security checks, or
- pay a higher Part B premium surcharge based on high income (see below), or
- Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $161.50.
- Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $230.70.
- Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $299.90.
- Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $369.10.
- Those with incomes between $85,000 and $129,000 will pay a monthly premium of $299.90.
- Those with incomes greater than $129,000 will pay a monthly premium of $369.10.
The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary’s premiums. So the income reported on a beneficiary’s 2009 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2011. Income is calculated by taking a beneficiary’s adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary’s MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium.
As directed by the 2003 Medicare law, higher-income beneficiaries will pay higher Part B premiums. Following are those amounts for 2011:
- Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
- Basic Part B premium: $115.40/month
- Part B deductible: $162 (was $155)
- Part A deductible: $1,132 (was $1,100)
- Co-payment for hospital stay days 61-90: $283/day (was $275)
- Co-payment for hospital stay days 91 and beyond: $566/day (was $550)
- Skilled nursing facility co-payment, days 21-100: $141.50/day (was $137.50)
All Medicare beneficiaries will be subject to the new deductibles and co-payments. Medicare Part B covers physician services as well as qualifying out-patient hospital care, durable medical equipment, and certain home health services, among other services.
Source: from www.elderlawanswers.com
Metlife recently released their study confirming that nursing and assisted living rates increased nationwide between 2009 and 2010. For Maryland, in the Baltimore region nursing home costs for semi-private rooms ranged from $6,200/month to $8,742/month. Nursing home costs for private rooms ranged from $6,510/month to $11,005/month. Statewide, assisted living costs in 2010 ranged from $2,800/month to $$8,250/month with the average assisted living cost at $4,122/month.