Sunday, March 18, 2018

Mistakes Retirees Make - Failing to Plan for Beficiaries with Special Needs

[Pennsylvania retirees often make legal and estate planning mistakes because of a lack of accurate information and guidance. These mistakes can impact the retirees’ financial security and prevent them from achieving important goals.] 
The existence of a child, grandchild, or other potential beneficiary with a disability (often referred to as “special needs”) complicates the estate planning of a parent or grandparent.  Proper planning of your will, trusts, and beneficiary designations becomes even more crucial to protecting your heirs. 
 With wise advance planning, you can provide for all of your family members without jeopardizing a special needs individual’s current (or potential) eligibility for important government benefits such as Supplemental Security Income (“SSI”) and Medicaid.  These “needs based” government programs can provide substantial support for your special needs beneficiary but only if you set things up so that the beneficiary will be able to meet the programs’ financial standards.
 The rules are complicated and it’s easy to make a mistake.  Here are some of the common mistakes I see retirees making when planning for a special needs beneficiary: 
(1) Making outright distributions from a will, trust, insurance policy, annuity, or retirement plan to the special needs individual.  The receipt of this kind of outright inheritance will likely make the beneficiary ineligible for continued SSI and Medicaid benefits;
  (2) Disinheriting the special needs person – which may leave an already vulnerable beneficiary even more dependent upon the uncertain future generosity of the government. 
 (3) Leaving property to another family member with an “understanding” that they will use the funds to take care of the special needs individual – this plan is fraught with danger and complexity.  What if the other family member dies, runs into medical or financial or marital difficulty, or becomes estranged from the special needs person?  
(4) Establishing a “support trust” for a special needs beneficiary - which may force the trust’s funds to be spent down before public benefits become available. 
There are much better ways to plan. One effectibe planning tool is the “Special Needs Trust” which can be created to take effect either during your lifetime or upon your death.  A Special Needs Trust can provide for the beneficiary’s continuing eligibility for government benefits, protect the inheritance from claims for government reimbursement, and protect the inheritance from loss to third parties, including siblings, grandparents, aunts, uncles and friends who may have the best of intentions.   
 The Special Needs Trust must be carefully drafted by a lawyer who is familiar with this area of law.  A wrong word can make all the difference between creating a fund that will enhance the beneficiary’s life by supplementing public benefits, and a fund that will quickly be exhausted replacing those government benefits.

Saturday, February 17, 2018

POLST End-Of-Life Bills Deserve Support

The Pennsylvania Legislature is considering two bills intended to improve the use of doctor’s orders for end-of-life medical treatment. House Bill 1196 and Senate Bill 623 would standardize POLST orders and provide guidance and education to health care providers. 
What is a POLST order
 The acronym POLST usually stands for "Physician Order for Life-Sustaining Treatment."  But the Pennsylvania bills change the name to “Pennsylvania Orders for Life Sustaining Treatment.” A POLST orders is intended to direct treatment so that patients receive only appropriate and desired care at the end-of-life. This is achieved by creating an actionable medical order that directs care that is consistent with the patient’s goals and preferences for end-of- life treatment. A POLST order is provided in a form that can transfer with the patient as he or she moves between medical providers (such as from a nursing home to a hospital.)

POLST is a tool for translating patients’ goals of care into medical orders in a highly visible, portable way. Following the protocol, health care professionals must discuss with seriously ill patients (or their surrogates) the available treatment options in light of their current condition—and help clarify the patients’ preferences. Then clinicians must document those preferences on a standardized medical order form and ensure that it travels with the individual if he or she changes settings of care. POLST differs from an advance directive (living will or health care power of attorney) in that it is an actionable medical order dealing with the here-and-now needs of patients—it can build on an advance directive but can be created for patients without advance directives.
POLST enables patients to choose from a full range of care options, from aggressive treatment to limited interventions to comfort care. Recent academic research documents POLST’s success in improving the documentation and honoring of patient preferences, whatever they may be. Management of pain and symptoms remains comparable to that of patients without POLST. Improving Advanced Illness Care: The Evolution of State POLST Programs, AARP Public Policy Institute, April 2011 (page v).

Act 169 of 2006 required the Pennsylvania Department of Health to consider, in consultation with an advisory committee, adoption of a standardized form for a POLST which would provide for continuity of DNR and other life sustaining treatment orders from one treatment setting to another.  On November 16, 2010, the Department of Health posted a standard form (but not mandatory) for voluntary statewide use on its website. But much more has been needed.
 Education and Training are Key
 Right now, the use of POLST orders in Pennsylvania is largely unregulated. There is no provision in current law regarding training of the personnel who are advising patients. Facility staff who have received little or no training may be the ones guiding patients in understanding, determining and documenting their treatment preferences. As a result, a patient’s POLST order may be the end result of a lack of understanding by the patient and facility staff and may not reflect the patient’s actual treatment preferences. It may, in effect, constitute a medical order based on uninformed or misinformed consent.
 If enacted the current legislation will help remedy the situation. The bills require the Department of Health to develop recommendations for training of health care practitioners and others who educate patients about POLST or assist in completion of a POLST form. (See HB 1196, Section 5498.1(c). While providers may not technically be required to follow the recommendations and train their staffs, the existence of recommendations and material should help that happen.  
  The House and Senate bills are at this point virtually identical. Both call for creation of a mandatory POLST form and the development of educational materials on POLST orders. The bills create standards for a valid POLST order and provide immunity to health care providers who follow an order in good faith.
 Other Provisions
 The legislation sets forth requirements for emergency medical services personnel regarding their compliance with a POLS order. It also provides for involvement by a patient’s surrogate health care decision makers, who are defined in Section 5493 as: “A health care agent, health care representative, guardian of the person or parent of a minor who is legally authorized to make a health care decision for a patient.”
 Responsibility for implementation is given to the Department of Health which is directed to create a POLST Advisory committee to assist it. The form and educational materials will be available online.
  The bills create an alternative to the normal regulatory process. Notice and opportunity for public comment are required when the mandated POLST form is created or modified but the normal regulatory process is avoided.
 This legislation was drafted by a committee of stakeholders who had to claw their way through a number of divisive end-of-life issues. The bills move the ball forward without attempting to resolve all contentious issues. Much is delegated to the Department of Health and its advisory committee. I think this is a reasonable approach if you actually want to pass legislation in this area.
 My overall impression is that this is well considered and articulated legislation that is deserving of support. Perhaps it does not go far enough in some respects – for example, it appears that providers will be encouraged but not required to get educational training for their POLST involved staff. But it is a step in the right direction if you believe that patients end-of-life decisions should be better counseled, supported and implemented.   

Friday, January 12, 2018

New Medicare Cards are being Issued - Here is what you Need to Know

Your Medicare card is being replaced.
For many seniors their red white and blue Medicare card is one of their most important possessions. The card lists your name and related Social Security Number and shows the dates you became eligible for health overage under Medicare Parts A and B. The card is your entry ticket for services by hospitals, physicians, and other health care providers.
Beginning in April 2018 Medicare will start issuing new cards. The new cards will replace the Social Security number on the card with a new Medicare number. You should receive your new card sometime between April 1, 2018 and April 1, 2019.
Here are some things you should know about these new cards.
  • You don’t need to take any action to get your new Medicare card.
  • The new card won’t change your Medicare coverage or benefits.
  • Medicare will never ask you to give them personal or private information to get your new Medicare Number and card.
  • There's no charge for your new card.
The new cards are being issued as a result of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. That law requires Medicare to remove Social Security Numbers from all Medicare cards by April 2019. They will be replaced by a new 11-character Medicare Beneficiary Identifier (MBI) which will be used for Medicare transactions like billing, eligibility status, and claim status. 
Your new card should look something like this:

The new MBI numbers and cards are being issued in order to fight identify theft.
The cards will be mailed out on a geographic basis. There will be a transition period during which you can use either your old SSN based claims number or your new MBI. The transition period will end on December 31, 2019.
After the transition period ends on January 1, 2020, you will generally need to use your MBI on Medicare claims.
Medicare health and drug plans (e.g. Medicare Advantage plans) will also have to change your ID claim number if the existing numbers include whole or parts of the beneficiary’s Social Security Number
Watch out for scams
Be very careful if you are contacted about your new Medicare card. Medicare warns that scam artists may try to get your current Medicare Number and other personal information by contacting you about your new Medicare card. They may claim to be from Medicare and use various scams to get your Medicare Number. Medicare beneficiaries should expect that scammers will try to take advantage of confusion surrounding the issuing of new cards. For example, scammers may call you:
  • Asking you to confirm your Medicare or Social Security Number so they can send you a new card.
  • Telling you there's a charge for your new card and they need to verify your personal information.
  • Threatening to cancel your health benefits if you don’t share your Medicare Number or other personal information.
These will be fraudulent calls. Do NOT give out your Social Security Number, MBI, or other personal information to the caller. If someone calls you and asks for your Medicare Number or other personal information, HANG UP. If you want you can report the fraudulent call to Medicare at 1-800-MEDICARE (1-800-633-4227).
What you Should Do
  • Make sure your mailing address is up-to-date. If your address needs to be corrected, contact Social Security at gov/myaccount or 1-800-772-1213. TTY: 1-800-325-0778.
  • Remember Medicare will never ask you to give them personal or private information to get your new Medicare number and card.
For the most updated information on the New Medicare Card please go to

Friday, January 5, 2018

PA Medicaid Penalty Divisor Set at $330.19 for 2018

For many Pennsylvania families qualification for Medicaid long-term care benefits is critical to meeting the cost of care for a frail family member. But, an applicant for this government assistance may be made ineligible for benefits if he or she has disposed of assets for less than fair market value during a five year look-back period.
Imposition of a transfer penalty denies benefits for individuals who otherwise need and qualify for Medicaid long term care benefits. A denial can also effectively make an individual’s children liable for the costs of the needed care. See: Law Can Require Children to Pay Support for Aging Parents.
The transfer penalty applies when a transfer was made by the individual applying for Medicaid long-term care benefits, or their spouse, or someone else acting on their behalf.
Unless the transfer is for some reason exempt, if an asset was transferred for less than fair consideration within the look-back period, then a period of ineligibility is imposed based on the uncompensated value of that transfer.
New Penalty Divisor for 2018
The length of the penalty period is calculated by taking the uncompensated value of the asset transfer and dividing it by the average private patient cost of nursing facility care in Pennsylvania at the time of application for benefits. The average cost to a private patient of nursing facility care is often referred to as the “private pay rate” or the “penalty divisor.”
The penalty divisor is revised each year as nursing facility care costs increase. As of January 1, 2018, the penalty divisor is set at $330.19 per day. This means that the PA Department of Human Services has calculated that the average monthly nursing facility private pay rate in Pennsylvania is $10,043.28 a month.This is a 2.56% increase from 2017. [The penalty divisor is different in states other than Pennsylvania].
Uncompensated transfers made during the look-back period will be calculated at one day of ineligibility for every $330.19 transferred away. In Pennsylvania, a transfer penalty will be imposed when the value of transfers made in a month exceeds $500.
The rules are complicated. Seniors considering making gifts or other transfers of assets are well advised to consult with an experienced elder law attorney before completing the transaction.