Vital Information about Medicaid and Long-Term Care

Please read this crucial explanation of the importance of Medicaid to long-term care residents and their families from the Long Term Community Coalition:  ltccc-medicaid-middle-class

Repealing the Affordable Care Act

Without spin or editorializing on the issue, here are some facts from The Center for Medicare Advocacy,, about the program Congress plans to repeal:

  • The uninsured percentage of Americans under 65 is the currently the lowest in decades. Beginning in 2014, the rate dropped from 16.6% to 10.5%.
  • As of March 31, 2016, 11.1 million people have coverage through the ACA Marketplace.
  • As of 2015, 11 million people in 31 states and the District of Columbia had coverage through Medicaid expansion under ACA, out of a total of 81 million on Medicaid.
  • There are 19 states that did not expand Medicaid: Alabama, Florida, Georgia, Kansas, Idaho, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Texas, Tennessee, Utah, Virginia, Wisconsin and Wyoming.
  • However, the ACA resulted in 16,748,000 people becoming eligible for Medicaid as of September 2016.

Congress says it will replace the ACA with something better. Dare we hope?

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200

©2017 John B. Payne, Attorney

Quest for Quality Care

brooklyn-convalescent-home-therapy-roomWhen it becomes necessary to look for nursing home placement for a loved one, the Nursing Home Compare tool on the website is an important starting point for screening facilities. However, it is only a starting point and it has serious shortcomings. It is necessary to do further investigating and review prospective placements.

Effective February 20, 2015, the Centers for Medicare & Medicaid Services (CMS) made some changes to Nursing Home Compare. The Quality Measures (QMs) were recalibrated, antipsychotic drug use was factored into the QM star rating, and staffing criteria were changed. These changes made the tool better, but far from excellent.

Three measures are rated: (1) health survey measure, based on unannounced annual surveys and complaint surveys conducted by state survey agencies; (2) staffing, based on self-reported nurse staffing, and (3) QMs, based on resident assessments. The weakness in the rating system is reflected in the high scores prior to the latest round of improvements. Approximately 80% of facilities received four or five stars on their QMs because high scores on the self-reported staffing measure and QMs will inflate a facility’s overall rating. According to The New York Times there was considerable gaming of the rating system. Katie Thomas, “Ratings Allow Nursing Homes To Game System; Medicare’s Five Stars; Data Taken at Face Value Often Fails to Reflect Real Conditions,” The New York Times, page 1 (Aug. 25, 2014),

The new changes include recalibration of the QMs to identify the number of points to achieve different star ratings. CMS claims that the change will raise the standard for skilled-care or long-term care facilities and differentiate the facilities to make the system more accurate. In 2009 only one in ten facilities received five stars and one- through four-star ratings were roughly equal. By 2013, one-star ratings had decreased by approximately 85% and five star ratings had increased from 10% to 35%. This is like a school that consistently awards A grades to 35% of the students. No matter how you slice it, no more than half of any student body can be above average and no more than half of LTCFs should be graded at three stars or better. After recalibration, half of all facilities will still be receiving four or five stars on QMs, which indicates a rigged system.

Four-star staffing ratings are awarded to facilities that score four stars on both the registered nurse component and the staffing category. A facility cannot receive a four-star staffing rating if either of the individual measures is three stars. Staffing had been self-graded by the facilities, which made it an unreliable measure of quality, but CMS has announced that it would require facilities to submit direct-care staffing information electronically.

All this suggests that ratings may not be relied on exclusively in choosing a nursing home. The ratings are very approximate and are based on sporadic inspections by an under-staffed federal agency.

It is necessary for the family to investigate beyond looking at the ratings. This involves visiting facilities, talking to residents’ families and employees, checking reviews on the Internet and consulting a geriatric care manager if the family can afford it.

It is not sufficient to rely on the hospital social work staff. Hospital discharge planners are generally overworked and may be under great pressure to empty hospital beds for new admissions. On Friday afternoons, discharge planners are expected to clear as many beds as possible for weekend admissions. At such times, discharge “planning” often consists of finding the first skilled nursing facility that will take the patient.

Presumably, the Joint Commission provides a standard for discharge planning, but there is almost no way for someone who is not in hospital administration to review the standard and demand that the service be properly delivered. This places the responsibility for finding a good rehabilitation facility or nursing home squarely on the shoulders of the patient’s family and friends.

While visiting skilled care and nursing facilities, try to observe resident-staff interactions, as well as the cleanliness of the facility. Take time to talk to residents and see whether those who appear distressed receive prompt care.

The 1987 Nursing Home Reform Law includes many guaranteed rights for nursing home residents:

A) The right to be fully informed of available services and the charges for them, facility rules and regulations, including a written copy of resident rights, contact information for the state ombudsman and state survey agency, state survey reports and the nursing home’s plan of correction, advance notice of a change in rooms or roommates, assistance if a sensory impairment exists, and the right to receive information in a language they understand.

B) The right to present grievances without fear of reprisal and with prompt resolution by the facility, to complain to the ombudsman program, to file a complaint with the state survey and certification agency, and to participate in the resident’s own care.

C) The right to receive adequate and appropriate care, to be informed of changes in medical condition, to participate in assessment, care-planning, treatment, and discharge, to refuse medication, chemical and physical restraints, and treatment.

D) The right to private and unrestricted communication with anyone regarding medical, personal, or financial affairs, and to refuse visits.

E) The right to remain in the nursing facility unless a transfer or discharge is for good cause and is preceded by adequate notice and due process.

F) The right to be treated with consideration, respect, and dignity, free of mental and physical abuse, corporal punishment, involuntary seclusion, and physical and chemical restraints, to self-determination and security of possessions, and to visits by the resident’s personal physician, representatives from the state survey agency and ombudsman programs, and by relatives, friends, and others of the residents’ choosing.

hospitalWhen visiting facilities, enquire of the admissions and administration representatives, other visitors, and staff about the facilities’ attention to resident rights. Most facilities allow free access to lobbies and common areas in the facility. It should be possible to talk to a variety of staff, contractors providing services, and other visitors. If the facility restricts access, that may be a sign that the care they provide is substandard.

Almost no one wants to go to a nursing home, but there is a high probability that the patient in skilled care will go to an LTCF at the end of rehabilitation, not home. One of the most important criteria in choosing a rehabilitation or skilled-care facility (SNF) is whether all beds are certified for both Medicare and Medicaid. Many SNFs use up the patient’s highly-profitable Medicare days, then tell the family to search elsewhere for a Medicaid bed. This makes it very difficult to find a preferred placement. Facilities are eager to accept patients who are eligible for the 20 to 100 days of skilled care that Medicare covers, but will turn away persons who rely on Medicaid.

Finding good care is a complex process. Engaging a fee-paid geriatric care manager is worth many times the cost. They can be located through the National Association of Geriatric Care Managers.  An experienced elder law attorney can also be very helpful.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200

©2016 John B. Payne, Attorney

Vicious House Bill

A particularly curmudgeonly Medicaid “reform” has been introduced in Congress. Medicaid receives heaps and mounds of criticism, particularly related to nursing-home coverage. The coverage is expensive, both on an individual basis and as a program. However, individuals in nursing homes need that care and Medicaid is the last resort if they lack the ability to pay for it. The new bill is an unwarranted and unfair swipe at the “truly needy” that conservatives claim they want to protect.

“Medicaid planning,” advising potential or current nursing home residents and their families about legal financial plans to qualify for Medicaid while preserving income and assets, is particularly a target of derision of the long-term care insurance industry, conservative commentators and legislators, and welfare administrators. For example, in a Fordham Law Review article Milan Markovic strains to demonstrate that Medicaid planning is unethical. Milan Markovic, “Lawyers and the `Secret Welfare State,’” 84 Fordham L. Rev. 1845 (2016).

Timothy Takacs and David McGuffey, however, argue that Medicaid planning is a fair and reasonable response when dealing with a prohibitively expensive segment of the health care industry that is bound only by the rules of supply and demand and loosely-enforced regulations. Timothy L. Takacs & David L. McGuffey, “Medicaid Planning: Can It Be Justified?: Legal and Ethical Implications of Medicaid Planning,” 29 Wm. Mitchell L. Rev. 111, 131 (2002).

In my paper, the public-policy arguments that Medicaid should be reserved for the “truly needy” and that it is unethical to exploit loopholes in Medicaid law are addressed. John B. Payne, Ethical and Public Policy Considerations Related to Medicaid Planning, Pennsylvania Bar Association Quarterly, p. 139, October 2013, I urge that the citizen is as entitled to receive the benefit of favorable statutes in public benefits law as in tax law. I also argue that judges must apply the law as written, not according to their perception of public policy.

Congress has made many changes to Medicaid long-term care benefit eligibility over the last three decades. In 1988, the asset rules were changed to protect the financial security of non-institutionalized spouses of nursing home residents. The utility of asset-protection trusts was severely curtailed in 1993 and 2006. Furthermore, the divestment penalty rules were greatly toughened in the Deficit-Reduction Act of 2005, which was enacted in 2006. Congress knows how to find and revise Medicaid law. If opportunities for planning remain, the citizen should be able to rely on the law as written.brett guthrie

A House bill has been introduced that is presumably intended to curtail Medicaid planning. However, it is as related to Medicaid planning as a pitch pipe is to a pitchfork. The only effect of this bill would be to hurt citizens who need and qualify for Medicaid. The bill, HR-5626, introduced by Rep. Markwayne Mullin (R-OK) and Vice-Chair of the Energy and Commerce Subcommittee on Health, Brett Guthrie (R-KY), would eliminate the three-month retroactive eligibility period preceding the month of application for Medicaid.

Presumably, Mullin and markwayne mullinGuthrie believe that the three-month retroactive eligibility period represents a Medicaid-planning opportunity. While some states allow applicants to create asset eligibility retroactively by purchasing a funeral contract or paying medical bills, most others close the book on prior months. In those states, the applicant can only be approved for Medicaid benefits in the retroactive benefit period if he or she was below the income and asset limitations in each month for which Medicaid is requested. The applicant cannot go back and cure an asset problem. Therefore, the retroactive benefit period is only useful for applicants who were already eligible for the months in question.

The three-month retroactive eligibility period is far from a planning opportunity. It is a partial failsafe to go back and pick up lost eligibility due to honest mistakes or omissions when applications are submitted. It is also a way to recover from bureaucratic delays and Medicaid worker incompetence or obstructionism.

The 45-day standard of promptness is a joke in many Medicaid offices. Even within a state the typical processing time for a Medicaid application can vary from two weeks to 20 or more weeks. In some Michigan and Pennsylvania counties Medicaid applications lie dormant for upwards of two months before a worker takes a first look at a case. Colleagues in other states make similar complaints. Retroactive eligibility is a vital facet of the Medicaid program because it is a way for applicants to recover from ill treatment by the local offices.

Many provisions in Medicaid policy manuals intended to require fair treatment for applicants are ignored in practice. Further, the deck is often stacked heavily in favor of the Medicaid agency if the applicant requests a “fair hearing.” It is not unusual for a perfectly eligible Medicaid applicant to re-file two or more times before the case is approved. The applicant may lose far more than three months of eligibility due to worker error.

One particular applicant filed for Medicaid in September, but the worker did not process the case until April. The worker improperly denied the case because she did not deduct the current month’s income from the asset total. The family requested a hearing, which was scheduled for August. Shortly before the hearing, the family hired me. At the hearing, I demonstrated the worker’s mistake and Medicaid was approved based on the original application date. It was fortunate that the worker had made a mistake and doubly fortunate that the administrative law judge was fair. Otherwise, there could have been a year of nursing care that Medicaid would not cover.

Another case took three applications, two administrative hearings and three trips to court over ten months before the State admitted its mistake and approved coverage back to the first application date. Each of these applications should have been open-and-shut approvals.

The three-month retroactive Medicaid eligibility period provides crucial protection against mistakes and worker intransigence. It would be shameful for Congress to pass the bill introduced by Reps. Mullin and Guthrie. It would not address medicaid planning. It would only hurt those most in need. Let your member of Congress know that punishing the innocent serves no good purpose.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200

©2016 John B. Payne, Attorney

Surviving Spouse as Medicaid Victim

Estate recovery has been mentioned in this blog several times, most recently “Heavy-Handed Estate-Recovery.”  The following excerpt from Payne, Michigan Probate discusses the special case of the spouse of a nursing home resident who dies while on Medicaid, leaving an estate that must be probated:

The estates of deceased Medicaid recipients who are survived by their spouses present a special problem. Federal Medicaid law states that estate recovery “may be made only after the death of the individual’s surviving spouse, if any, and only at a time when he has no surviving child who is under age 21, or . . . is blind or permanently and totally disabled.” 42 USCA § 1396p(b)(2). Michigan Medicaid policy similarly states that recovery “will be made only after the death of the individual’s surviving spouse, and only when the individual has no surviving child who is either under age 21, blind, or disabled.” BAM 120, p 8 (January 1, 2016).

One would expect this limitation to poleax estate recovery where there is a surviving spouse. It is difficult to see how an estate-recovery claim would survive closure of the probate estate of the deceased Medicaid recipient after the residue is distributed, but that circumstance is not deterring the assistant attorneys-general representing DHHS Medical Services Administration from filing civil complaints for estate recovery.

While the State may impose a lien on, for example, the marital home before the surviving spouse’s death, the lien must provide for release on the surviving spouse’s demand for a sale or mortgage. The lien must provide clear and unequivocal notice that it is limited to the government’s interest in the property and must include mandatory release provisions. Dept. of Human Resources v. Estate of Ullmer, 120 Nev. 108, 87 P.3d 1045 (2004). These limitations would severely hamper the enforceability and utility of such a lien on real estate. Pursuing recovery from a financial account would be far more difficult.

As of this writing, the estate-recovery program is such a recent development that it was not possible to locate any case where this type of claim has been resolved in the probate court, let alone tested in the court of appeals. If the state develops a viable mechanism for enforcing estate recovery claims against the estates of surviving spouses, the potential reach is quite broad.

In addition to Nevada, courts in Minnesota and Ohio have ruled that federal Medicaid law authorizes recovery from the surviving spouse’s estate of assets in which the deceased Medicaid recipient had a legal interest at the time of death. In re Estate of Barg, 752 N.W.2d 52 (Minn., 2008). This includes the value of assets that were marital or jointly owned property at any time during the marriage. In re Estate of Jobe 590 N.W.2d 162, 164 (Minn. App.,1999). See also Ohio Dept. of Job & Family Serv. v. Tultz 152 Ohio App.3d 405 N.E.2d 1262 (Ohio App. 9 Dist., 2003). However, the Illinois Supreme Court reached the opposite conclusion, holding that estate recovery is prohibited by federal law when there is a surviving spouse and the state may not file a claim for estate recovery from the estate of the deceased surviving spouse. Hines v. Department of Public Aid, 221 Ill.2d 222, 850 N.E.2d 148 (2006). Accord, In re: Estate of Bruce, 260 S.W.3d 398 (Mo. App. 2008).

The evolution of Michigan’s estate recovery program will be a challenging adventure for the personal representatives of deceased Medicaid recipients and their attorneys, as well as AAGs representing MSA. Where the decedent is survived by a spouse, the issues are likely to be particularly thorny.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200

©2016 John B. Payne, Attorney and Thomson Reuters

Medicaid Processing Delays Hurt Applicants and Nursing Homes

Kansas Public Radio reports that Kansas nursing homes are being financially hamstrung by six- to eight-month delays in Medicaid approvals. If they accept residents who have not been approved for Medicaid, they may be stuck caring for them for months without being paid. As a result, nursing homes try to avoid accepting prospective residents unless they are already approved for Medicaid or have sufficient funds to pay for their own care. This makes it tough for families to place their loved ones where they can be properly cared for.

Residents of nursing homes who are pending Medicaid cannot be required to pay for their care at the rate charged residents who are paying privately. In most states, nursing homes charge upwards of $8,000 per month for care. However, Medicaid applicants and recipients do not pay more than their income – usually less than $2,000 per month. A six-month delay leaves the nursing home out on a limb for $36,000 or more per resident. Add to this the possibility that the resident may be determined ineligible for Medicaid due to a small asset discovered late in the application process and it is easy to see why Kansas nursing home operators are as nervous as Col. Sanders at a PETA rally.

The Kansas problem resulted from two bone-headed bureaucratic decisions that were not quite as catastrophic as Flint’s switch in water sources, but equally lame. The decisions also exacerbated serious fiscal and administrative problems in the state Medicaid program, which Gov. Sam “Trickle-down” Brownback privatized in 2013.  Last July the state made a botched switch to new eligibility determination software and this January – while the software change had the application process tied up in knots – eligibility processing was moved from the Department for Children and Families to the Kansas Department of Health and Environment. The unreasonable delays are not likely to end soon.

Michigan Medicaid pulled an equivalent blunder two years ago when it decreed that all applications and eligibility documents for the whole state should be transmitted to a Lansing fax number. The idea was to make the eligibility process paperless, but the software used was woefully inadequate to processing the volume of documents coming in. The system choked on the massive flow of data and much of what was sent in got lost in a virtual labyrinth for months. As later happened in Kansas, thousands of Medicaid applicants in nursing homes were subjected to months of delay or were wrongfully denied. To make matters worse, the “smart” system devised to sort the pages sent in did not recognize the types of verification it was seeing. Therefore, carefully organized applications with dozens of attachments went to the workers a jumbled mess.

Why can governors and high-level state administrators not understand that effecting massive changes in state government functions is not as easy as modifying the organizational chart? They get bright ideas and implement them without proper planning. In some cases, they move agencies between departments to reward friends or punish opponents. In others, they make changes for no more significant reason than that it makes the chart appear more balanced. Changing the names of departments and other organizational components is a favorite amusement.

The problem is that governors do not want to hear bad news and they certainly do not want to hear that their ideas are not brilliant. Michigan governor Rick “Let Them Drink Pepsi” Snyder will probably duck blame for the Flint water crisis because he was not told about it directly. The responsible parties in the Department of Environmental Quality and Department of Health and Human Services knew better than to inform him of the aquatic catastrophe.

Assume that a governor says, “These school shootings make me wonder if we shouldn’t arm safety-patrol members.” His chief-of-staff and other aides will know better than to ask if he knows that safety-patrols are made up of 10-year-old fifth-graders. They will know that what he wants to see is feasibility studies proving that it is a great idea.  Blasé disregard of responsible management is unfortunately the rule, rather than the exception. It is the reason our state governments are always lurching from crisis to crisis. That, and the tendency of voters to elect politicians who are neither smarter nor more perceptive than a fifth-grader.

John B. Payne, Attorney
Garrison LawHouse, P.C.
1800 Grindley Park Street, Suite 6
Dearborn, Michigan 48124
313 563 4900

Pittsburgh Office:
9853 Old Perry Highway
Wexford, Pennsylvania 15090
800 220 7200

A Courtly Alternative for Community Spouses

The December 18, 2011 post, “Divorce Will Not Help to Pay the Nursing Home,” and the four follow-up posts described strategies to preserve marital assets for the healthy spouse of a person in a nursing home – home investment, annuity purchase, irrevocable sole-benefit trust and small-business investment. Seeking a court order was not discussed because, at least in Michigan, an irrevocable trust to protect the financial security of the spouse of a nursing home resident (the community spouse) was faster, easier and less risky. An August 20, 2014 Michigan Department of Human Services Memorandum drastically changed the treatment of sole-benefit trusts, making them unworkable to protect the community spouse.

Since the memo came out, Elder Law attorneys in Michigan have been seeking financial protection for community spouses in probate court. They ask for a “protective order” that assigns increased assets or income from the nursing home spouse to the community spouse for his or her financial security.  The legal foundation and judicial rationale for these community-spouse protective orders are explained in an outstanding article by eminent Elder Law attorneys David Shaltz and Sanford Mall, “Probate Court Orders and Medicaid Community Spouse Allowances.”

Before the August 20, 2014 memo, probate petitions to protect the community spouse’s resources were not generally contested by the Medicaid agency.  It was up to the judge to determine what was fair.  Some Michigan judges were more generous than others in how much they would allow community spouses to keep, but petitioners were allowed to keep all of the resources they asked for in a large majority of cases.

The Department’s abrupt curtailment of the use of federally-sanctioned community spouse trusts was not the only assault on the financial security of the spouses of nursing home residents. Starting in 2013, assistant attorneys general started appearing and contesting protective orders.  It became more risky to file a petition for a protective order in probate court than to use an immediate annuity.  For example, an Ottawa County judge’s support order giving a low-net worth, low-income community spouse a small allowance was bitterly contested and overturned by the attorney-general’s office.  Two cases filed shortly after the August 20, 2014 Memorandum were heard by different judges in Wayne County Probate Court.  In each case, an assistant attorney general appeared and objected to the petition.  Although the issues were nearly identical and the assets in question were relatively small, one judge granted all the relief requested and the other completely denied the petition.

The state has variously claimed that the probate court lacks jurisdiction to issue support orders, that the petitioner must file a probate petition before applying for Medicaid, and, paradoxically, that the petitioner must exhaust administrative remedies by requesting a hearing before an administrative law judge.  However, these objections have been overruled by trial judges or the court of appeals.

Filing a petition in probate court for a support order is now a viable means for protecting a community spouse from having to spend half or more of the marital assets before the institutionalized spouse will be approved for Medicaid.  The state’s jurisdictional challenges to support orders for community spouses have largely failed, but the attorney-general’s office continues to object to petitions based on the amount requested or on public policy grounds.

Many elder law attorneys are protecting the financial security of community spouses through probate spousal-support orders, but success depends on which judge hears the case.  Some judges are more concerned about the state treasury than about the financially-strapped citizen requesting relief.  At this time, in Michigan, as in Pennsylvania, an immediate, irrevocable, actuarially-sound annuity is the easiest and least risky way to preserve additional assets for the community spouse.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200

©2015 John B. Payne, Attorney