Monthly Archives: February 2016

CMS Makes It Official That Medicaid Home Health Recipients Need Not Be Homebound

February 11, 2016

On February 2, 2016, the Centers for Medicare and Medicaid Services (CMS) will issue a final rule clarifying that Medicaid beneficiaries do not need to be “homebound” in order to receive home health services.  In addition, the final rule, which revises Medicaid home health regulations (42 C.F.R. § 440.70(c)(1-2)), makes clear that Medicaid home health services are not limited to home settings.

As Gene Coffey, formerly an attorney with the National Senior Citizens Law Center (now called Justice in Aging), wrote in the January 2010 issue of Caring magazine, “Medicaid’s coverage for home health services plays a critical role in helping individuals stay in their homes and communities while also helping states meet their responsibilities under the [Americans with Disabilities Act].”

According to Justice in Aging, which has been at the forefront of efforts to bring federal and state regulations into compliance with federal law in this area, the final rule “codifies longstanding agency policy, previously articulated in a 2000 letter to state Medicaid directors, that a Medicaid homebound requirement for home health services violates the Americans with Disabilities Act (ADA), as articulated in Olmstead v. L.C., 527 U.S. 581 (1999).”  Despite this, some states have required that recipients be homebound.

Justice in Aging notes that the final rule does not change Medicare’s homebound requirement, although CMS acknowledges the challenges this poses for dual eligible recipients and notes in its rule commentary that “we would permit states the flexibility to authorize additional hours of home health services to account for medical needs that may arise out of the home.” (pg. 56)

The rule will take effect July 1, 2016.  However, to ensure that states and providers are implementing the rule appropriately, CMS is delaying compliance with the rule for up to two years, depending on a state’s legislative cycle.

For more details from Justice in Aging, click here.

Our thanks to California ElderLawAnswers member attorney Gene Osofsky for bringing this development to our attention.  

Medicaid Applicant’s Irrevocable Trust Is an Available Resource Because Trustee Can Make Distributions

February 11, 2016

An Alabama appeals court rules that a Medicaid applicant’s special needs trust is an available resource because the trustee had discretion to make payments under the trust. Alabama Medicaid Agency v. Hardy (Ala. Civ. App., No. 2140565, Jan. 29, 2016).

Denise Hardy inherited a one-half interest in a house and placed it in an irrevocable trust. The trust instrument stated that the trustee could distribute income to Ms. Hardy at the trustee’s discretion and that the trust was intended to be a special needs trust. Ms. Hardy entered a nursing home and applied for Medicaid. The state determined that the trust was an available resource.

Ms. Hardy appealed, and an administrative law judge agreed that the trust was an available resource. Ms. Hardy appealed to court, arguing that the trust was not available because it was irrevocable and could not be altered. The trial court reversed the state’s decision and ordered the state to pay Ms. Hardy benefits. The state appealed.

The Alabama Court of Civil Appeals reverses, holding the trust is an available resource. According to the court, a trust is an available resource if there is any circumstance under which payments can be made to the beneficiary, and that in this case, “if the house was sold and half of the proceeds of the sale were placed in the trust, the trustee could then make distributions as required by the terms of  [Ms.] Hardy’s trust.”

For the full text of this decision, go to: https://acis.alabama.gov/displaydocs.cfm?no=713449&event=4JX0KDU8D

Unfair Trade Practices Claim Against CCRC That Sold Charitable Annuity to Resident May Continue

February 11, 2016

A Connecticut trial court refuses to dismiss an unfair trade practices claim against a continuing care retirement community (CCRC) that sold a charitable annuity to one of its residents. Roscoe v. Elim Park Baptist Home, Inc. (Conn. Super. Ct., No. NNHCV146049541S, Dec. 22, 2015).

John Roscoe paid an entrance fee to move into a CCRC. Mr. Roscoe subsequently married and needed more liquid assets. The CCRC’s director of planned giving convinced Mr. Roscoe to transfer money from his entrance fee account to purchase a charitable annuity. During the sales process, the CCRC allegedly represented that the annuity was a more valuable product than it actually was and the sales representative did not take into account Mr. Roscoe’s financial circumstances or possible need for Medicaid planning.

After Mr. Roscoe died, his estate and widow filed several claims against the CCRC, including claims for violating fair trade practices, misrepresentation, and civil theft. The CCRC filed a motion to dismiss, arguing that Mr. Roscoe’s estate did not allege substantially aggravating circumstances to support a fair trade practices claim.

The Connecticut Superior Court denies the motion to dismiss with regard to the unfair trade practices claim, the misrepresentation claim, and the civil theft claim. According to the court, there was evidence that the CCRC “misrepresented the nature of the agreement with [Mr. Roscoe] based on factual predicates that the [CCRC] knew or should have known were untrue.” The court rules that while a standard breach of contract claim can’t support a fair trade violation claim, the allegations of misrepresentation and civil theft were substantial aggravating circumstances.

For a summary of the ethics opinion and brief commentary by Penn State Dickinson Law professor Katherine C. Pearson, click here.

For the full text of this decision, click here.

Can Social Security Benefits Be Garnished to Pay Debts?

February 4, 2016

istock_000016699226_small_opt_smIf you don’t pay your debts, creditors can get a court order to garnish your wages, but what if your income comes from Social Security? The answer is that it depends on the kind of debt.

For most types of debt, including credit cards, medical bills, and personal loans, Social Security cannot be garnished to pay the debt. If you owe money to a creditor, the creditor can go to court and get an order to take money from your bank account. If your Social Security check is directly deposited in the bank, the bank is required to protect Social Security benefits from garnishment. When a creditor tries to freeze a debtor’s bank account, the bank is required to look at the debtor’s previous two months of transactions to determine if the debtor received any Social Security benefits by direct deposit. For example, if you receive $1,500 a month in Social Security, the bank is required to allow you to use up to $3,000 in your account.

If you receive a Social Security check and deposit it in the bank yourself, the bank can freeze the entire amount in the account. You would be required to go to court and prove the money in the account came from Social Security.

There are certain debts, however, that Social Security can be garnished to pay for. Those debts include federal taxes, federal student loans, child support and alimony, victim restitution, and other federal debts. If you owe federal taxes, 15 percent of your Social Security check can be used to pay your debt, no matter how much money is left.

For student loans and other non-tax debts, the government can take 15 percent of your Social Security check as long as the remaining balance doesn’t drop below $750. There is no statute of limitations on student loan debt, so it doesn’t matter how long ago the debt occurred.  (In fact, student loan debt may be the next crisis facing elderly Americans. In 2015, bills were introduced in the House and Senate, HR 3967 and S 2387, to stop the government from garnishing the wages of elderly and disabled Social Security recipients.)

The rules for child support and alimony vary depending on the law in your state. The maximum amount that can be garnished is 50 percent of your Social Security benefit if you support another child, 60 percent if you don’t support another child, or 65 percent if the support is more than 12 weeks in arrears.

These rules do not apply to Supplemental Security Income (SSI). SSI is protected from garnishment even if the creditor can garnish regular Social Security. Social Security Disability Insurance can be garnished in the same way that Social Security is garnished.

If you feel your Social Security is being improperly garnished, contact your lawyer.

For more information about Social Security, go here: http://www.elderlawanswers.com/social-security.

The Benefits and Drawbacks of Buying an Annuity Doubler to Pay for Long-Term Care

February 4, 2016

istock_000016546286_small_smAs long-term care insurance premiums keep rising and fewer companies are offering policies, seniors are looking for other ways to help pay for long-term care. Annuity “nursing home doublers” have emerged as a new long-term care option. These doublers can be beneficial, but as with any annuity product, customers should use caution before purchasing.

An annuity is a contract with an insurance company under which the consumer pays the company a certain amount of money and the company sends the consumer a monthly check for the rest of his or her life, or for a certain term. Immediate annuities are a way to receive a guaranteed income for life and can be useful in Medicaid planning.

Many insurance companies that sell annuities are now offering “nursing home doublers” to help pay for long-term care. If the beneficiary of such an annuity needs long-term care, the insurance company will make double payments for five years or until the annuity’s cash value is depleted. To activate the doubler, the annuitant needs to be unable to perform two of six activities of daily living (i.e., eating, bathing, dressing, transferring, toileting, and continence). Once the five years are up and if the annuity still has a cash value, the insurance company would go back to making regular payments.

The benefit of a doubler is that it is relatively inexpensive. Many insurance companies offer the doubler at no additional cost beyond the lifetime income rider fee. If there are additional fees, the fees are usually low. The double payments are not designed to cover the full cost of long-term care, but the double payments can help defray the cost.

Before purchasing an annuity, you should fully research the product. While annuities—particularly immediate annuities–can be a valuable retirement product, annuity salespeople have come under scrutiny for targeting older Americans with deceptive sales tactics. Before purchasing an annuity with a doubler, find out whether it covers home care in addition to nursing home care. In addition, using a doubler depletes the cash value of your policy, which means there would be less left in the annuity to leave to your heirs. Also, if you purchase a joint annuity, the doubler will only cover one spouse’s long-term care.

Before making any purchases consult with your elder law attorney to find out the best way to plan for long-term care.

Medicare Now Covers Conversations About End-of-Life Care

February 4, 2016

istock_000004826482_small_smMedicare beneficiaries may now discuss options for care at the end of life with their health care providers.

Beneficiaries of course were already free to talk about advance care planning with their doctors or other qualified health professionals, but the practitioners could be reimbursed for such discussions only during a patient’s “Welcome to Medicare” visit, a time when the topic may not seem very relevant. As of January 1, 2016, Medicare will pay physicians for speaking at any time with Medicare beneficiaries and their families about different options for care and treatment at the end of life.

These purely voluntary conversations will help enable patients to end their lives on their own terms. Patients are often unable to express themselves when a crisis is at hand and a decision needs to be made about how much or little care they want when facing a terminal illness. According to the Kaiser Family Foundation, one-quarter of Medicare’s budget is spent on patients in their last year of life.  For many patients, life-prolonging medical procedurs are unwanted and unwelcome.  A 2011 study found that when medical personnel know what kind of care a patient wants at the end of life, Medicare can be spared significant sums and the patient is more likely to die at home rather than in a hospital in some areas.

Now that discussions about advance care planning are a regular Medicare benefit, seniors and other Medicare beneficiaries will be able to learn about health care options that are available for end-of-life care, such as advance directives, palliative care and hospice care.  They can then determine which types of care they would like to have, and share their wishes with their practititioners and family.  After sufficient conversations with their doctors and other health professionals, the beneficiaries may be ready to execute legal documents, such as advance directives or “POLST” forms, and name a health care proxy to ensure that their wishes will be carried out. Studies have found that 40 percent of people over age 65 have not written down their wishes for end-of-life treatment.

An early version of the Affordable Care Act (aka “Obamacare”) would have allowed Medicare to pay for these patient discussions, but former vice presidential candidate Sarah Palin and other opponents of health reform characterized them as government “death panels,” and the provision never made it into the final health care legislation. The Obama administration tried again in 2011, enacting a Medicare regulation that would have reimbursed doctors for discussing end-of-life planning with patients during their annual checkups, but quickly reversed course and withdrew the regulation, apparently fearing that it would revive the specter of  “death panels” at a time when the health reform law was under fierce attack from Republicans.

Under the new regulations, the advance care planning discussions can take place during the annual wellness visit or at a separate appointment.  They are a reimbursable benefit under Medicare Part B and there will be a copayment if the conversation is not part of the annual wellness visit.

Talk to your elder law attorney about drawing up the documents to help ensure you receive the end-of-life medical treatment you want — no more and no less.

How Would the Presidential Candidates Change Social Security?

February 4, 2016

istock_000008687939_extrasmall_smMillions of Americans rely on Social Security for some or all of their retirement income, and millions more are paying into the system in the expectation that it will be there for them when they retire.  What changes should be made to the current Social Security system, if any, to keep it solvent and ensure that retirees do not live in poverty?

The 2016 presidential candidates have a wide range of proposals, from raising the full retirement age (most of the Republican candidates) to increasing the minimum benefit (Bernie Sanders and Martin O’Malley).  As a way to increase revenue, all three Democratic candidates favor lifting the payroll tax cap; currently, no Social Security tax is paid on income over $118,500 (in 2016).

The Center for Retirement Research of Boston College has compiled a chart comparing the candidates on their proposed Social Security changes.  Four GOP candidates, including Donald Trump and Carly Fiorina, have not proposed changes to the program.

To view the chart, click here.