Saturday, November 26, 2011

New law will limit future Medicaid eligibility for seniors on Social Security

A little known provision in a law signed last week changes a method of calculating eligibility for Medicaid that would eventually have benefited middle-income seniors on Social Security.  It will reduce the future ability of many seniors to qualify for Medicaid based health care benefits.  

On November 21, 2011, H.R. 674, which includes the “3% Withholding Repeal and Job Creation Act,” was signed into law by President Obama. Unusual for this Congress, the Act was enacted with strong bi-partisan support. 

The main feature of the Withholding Repeal Act was the repeal of a tax policy set to take effect on January 1, 2013. That policy would have required federal and state government agencies to withhold 3% of their payments to contractors for many products and services. For example, 3% of the amount due from Medicare to a nursing home for providing Medicare covered services to a resident would have been withheld. Amounts withheld would have been credited against the income taxes ultimately due from the nursing home, but one can easily imagine that cash flow and other problems would be created for the contractor. 

Healthcare provider groups lobbied hard for repeal of 3% withholding. The American Medical Association argued that the 3% withholding was an additional burden on physicians who treat Medicare beneficiaries. The American Health Care Association described repeal as a victory for both providers and nursing facility residents. To help ensure passage the repeal measure was bundled in H.R. 674 with a very popular measure that provides tax credits for companies that hire unemployed veterans.

The withholding requirement had been intended to improve tax compliance by some government contractors. The estimated cost of its repeal is $11.2 billion over the 2012-2021 period. The question for Congress was how to pay for the repeal without increasing the deficit. Democrats originally proposed funding the repeal by reducing corporate tax breaks for the US oil and gas industry, but this was rejected by the Republican-controlled House. Eventually, the House funding provision was adopted – it involves doing away with a perceived “glitch” in the Affordable Care Act (ACA) that would have allowed some middle-class couples to enroll in Medicaid starting in 2014.  

Under the ACA, non-taxable Social Security income was not to be included in the calculation of income for purposes of determining Medicaid eligibility. This meant that a couple with income (including non-taxable Social Security) as high as $60,000 per year could have become dually eligible for both Medicare and Medicaid. Now, under the Withholding Repeal Act, non-taxable Social Security benefits will be included as income when calculating income for purposes of determining Medicaid eligibility.

Since the ACA provision for exempting non-taxable Social Security income for purposes of Medicaid had not yet taken effect, the change in methodology has received little notice. Easy come, easy go, I guess. 

Tuesday, November 22, 2011

Pennsylvania Persian Gulf Conflict Veterans should apply for bonus

An estimated 20,000 Pennsylvania military veterans have not yet applied for a state-run bonus program recognizing their service in the Persian Gulf in 1990-91, according to the Department of Military and Veterans Affairs. The benefit was authorized by Act 29 of 2006, the Persian Gulf Conflict Veterans’ Benefit Act.

Since World War I, the Commonwealth has recognized its war veterans by paying a veterans' benefit, commonly called a ''bonus,'' to veterans who served honorably during specified war or armed conflict periods. These bonus payments have been funded by bond issues that were approved by the voters of this Commonwealth. For the Persian Gulf Conflict (August 1990 to August 1991), the General Assembly passed legislation establishing the Program in April 2006, and the funding for the bonus payments was approved by the voters of this Commonwealth in the November 2006 general election.

The bonus pays $75 per month for qualifying, active-duty service members, up to a $525 maximum. Payments are calculated in accordance with a formula set forth in the statute. For personnel who died through illness or injury received in the line of duty, there is an additional $5,000 available to the surviving family. Service members who were declared prisoners of war may also be eligible for an additional $5,000.

To qualify the veteran must have:

· Served with the U.S. Armed Forces, a reserve component of the U.S. Armed Forces or the Pennsylvania National Guard.

· Served on active duty in the Persian Gulf theater of operations during the period from Aug. 2, 1990 until Aug. 31, 1991, and received the Southwest Asia Service Medal.

· Been a legal resident of Pennsylvania at the time of active service.

Individuals who received a bonus or similar compensation from any other state are not eligible for the Pennsylvania program. The deadline for applying for benefits under this program is Aug. 31, 2015. 

For detailed instructions on how to apply, visit

Many veterans are unaware of the many benefits that may be due them as a result of their service. For example, many older veterans who are over are 65 and who have high health care related costs are unaware that they may qualify for a pension. See my earlier post Over age 65 and a Veteran? Don't miss out on VA Pension Benefits for more information on the VA pension program as it applies for older veterans.  

Friday, November 18, 2011

Local Healthcare Program For The Elderly Saves Lycoming/Clinton Taxpayers More Than $1.5 Million

[The following guest column was written by By Shaun T. Smith, President & CEO, Albright Care Services]

Healthcare costs are a constant topic of discussion—these discussions quickly pick up speed and intensity when said healthcare is paid for by federal or state monies. Adding fuel to the fire is when cuts need to be made and the time comes to figure out how to provide optimal care with less funding. It does beg the question, it is possible to actually do more with less?

A population that stands out during these times of healthcare crisis is seniors, especially those who have many medical needs and have trouble managing their care. Sadly, seniors tend to have the most healthcare needs but are the least positioned to manage them. If they no longer drive, how will they get to medical appointments? If they have trouble seeing, how will they take the right pills? If their memory isn’t so good, will they remember when to take their medicine? If they fall a lot, do they have the right equipment at home to keep them safer? Are they doing an exercise program that helps them stay strong? Unfortunately, when seniors are not able to fully manage their own care, their health declines at a faster rate, creating additional needs on top of the ones they are already having trouble managing. As a result, they go to the emergency room more. They fall more, leading to surgeries and/or hospital and nursing home stays. They don’t always see their doctors when they should, and new health issues lay dormant and old issues are not followed up on.

Pennsylvanians are fortunate to live in a state that funds an innovative program for seniors that addresses their increasing healthcare needs while helping them continue to live at home. LIFE. Living Independently For Elders. LIFE programs are based upon the PACE (Program of All Inclusive Care for the Elderly) care model, which began in California in the early 1970’s to help seniors continue to live independently in the community while receiving help with their social, medical, emotional, spiritual and nutritional needs. 40 years later, there are now more than 156 PACE programs in 30 states.

Williamsport is home to one of these programs—Albright LIFE, located at 901 Memorial Avenue. Albright LIFE offers a wellness model that focuses on preventative measures, education and close monitoring of chronic conditions that helps seniors 60 and older continue to live in their own home. Since opening in June 2008, Albright LIFE has cared for more than 90 seniors with advanced medical needs who would have otherwise needed to go to a nursing home to receive integrated care. The PACE model of care enables Albright LIFE to oversee every aspect of a participant’s medical care, ensuring that participants are: seen by the program’s medical director, Dr. William Keenan, as often as they need to, transported to specialty medical appointments, receiving regular physical and occupational therapy at LIFE’s Adult Day Health Center, taking their medicine, and are able to call one of the LIFE program’s nurses 24/7/365 if they have a question or concern. This care approach enables LIFE staff to recognize health issues sooner--before things become critical--which delays or altogether prevents nursing home placement.

By providing this wellness model of comprehensive support and services, LIFE saves tax dollars. If the LIFE participants had chosen to go to a skilled nursing facility rather than enroll in the LIFE program, the state would have had to pay an additional $1.5 million for care to these Lycoming and Clinton County seniors. By focusing on education and prevention, LIFE saves tax dollars. Why not prevent a health scare, provide a better quality of life for seniors and be fiscally responsible at the same time? It’s a model where everyone wins.

Thursday, November 10, 2011

Protecting Older Investors

AARP’s Public Policy Institute has just issued a report entitled “Protecting Older Investors - The Challenge of Diminished Capacity.”

“As the Baby Boom Generation enters retirement, the incidence of Alzheimer’s disease and other dementias will grow. Individuals in this generation and beyond will be largely responsible for their own retirement security—yet their ability to manage investments may decline due to diminished financial capacity. This report shares original research findings about financial services industry practices and protocols to address diminished capacity and makes recommendations for stakeholders and policy makers.”

Among the recommendations in the report is the following:

Enact or strengthen legislation to promote acceptance of powers of attorney and prevent, detect, and redress power of attorney abuse. When an investor loses capacity to make financial decisions, the best remedy for all concerned is for a trusted individual to step into the shoes of the incapacitated person and handle the account in accordance with the principal’s preferences and interests. States should ensure that their power of attorney laws enhance autonomy by facilitating appointment of an agent and the acceptance of POA documents by third parties such as financial services firms. At the same time, these laws should safeguard the principal against power of attorney abuse. The 2006 Uniform Power of Attorney Act (UPOAA) includes provisions to meet both of these goals. Ten states and the U.S. Virgin Islands had enacted the UPOAA by mid-2011, but most other state laws fall short at least in part. Cognitively impaired investors will be better served if states strengthen provisions for acceptance of POAs and to address POA abuse, either by adopting the UPOAA or drafting their own measures that are at least as protective.”

Here is a link to the Report:

The Pennsylvania Association of Elder Law Attorneys (PAELA) has been working hard to encourage adoption of legislation that would update Pennsylvania’s POA laws in a manner consistent with the above Report’s Recommendation.  PAELA has been seeking legislative adoption of provisions based on the UPOAA in regard to acceptance of documents by third parties, the authority of an agent to make transfers of the principal's assets, and related protections of a principal against abuse. 

Current House Bill 1905 may offer a platform which, when amended appropriately, can facilitate the acceptance of POA documents by banks and other third parties, while preserving the autonomy of the principal and protecting the principal from abuse. But we are not quite there yet.  

Sunday, November 6, 2011

Obama Administration Approves new California Medicaid cuts while Supreme Court Decision on prior cuts is pending

[Note: See the February 2012 Update at the end of this post]

In 2008 the state of California imposed a 10% across the board reduction in payments to its Medicaid providers. Providers and advocates for consumers fought back by filing a federal lawsuit that argued that the reduction violated the equal access mandate. In July 2009, the 9th Circuit Court of Appeals upheld an injunction that was issued to prevent California from implementing the cuts. California appealed that decision to the United States Supreme Court. The Court opened its October 2011 term by hearing arguments in that case: Toby Douglas v. The Independent Living Center of Southern California

While a decision on the 2008 Douglas case is pending, the Federal Government has now approved a new request by the state of California to amend its Medicaid plan for additional reductions in Medicaid payments to hospitals and other health care providers. The 10% cuts which were approved by The Centers for Medicare and Medicaid Services on October 27th of this year may actually be higher since they are based on payment rates in effect two years ago. The cuts "will have a devastating effect on access to care" according to California Hospital Association President Duane Dauner.  State officials have projected that the new cuts will save $623 million.

As a result of the new cuts, the California Hospital Association filed suit on November 1. The 2011 case is California Hospital Association v. Toby Douglas, 11-9078, U.S. District Court, Central District of California (Los Angeles).

Both the 2008 and the 2011 Douglas cases involve Medicaid. (Toby Douglas is the Director of the California Department of Health Services). Medicaid provides health coverage for over 50 million poor and disabled Americans including millions of seniors. While a majority of Medicaid funding comes from the federal government, each state administers its own program. But to get the federal funding, a state must comply with certain federal requirements. One requirement, known as the equal access mandate, is that a state must reimburse Medicaid providers at levels that are sufficient to enlist enough providers to ensure that care and services are available to the program’s beneficiaries. 42 U.S.C. §1396a(a)(30)(A).

The most important issue in the Douglas-2008 case is not whether the 10% cuts were contrary to the federal law. Instead, the most critical question in the case is the preliminary issue of whether providers and consumers are allowed to sue at all when a state action conflicts with this mandatory provision of Medicaid law.  

In Douglas-2008, the State of California is arguing that while the federal government can enforce the equal access provisions of Medicaid law, providers and consumers cannot. If California is right, Medicaid providers and beneficiaries have no “private right of action” and cannot sue the state even if they will be hurt by the state cut in reimbursements. California’s position is supported by the Obama Administration. Other states, seeking ways to reduce their budgets, are watching the case closely. 

What if California wins? Is it realistic to expect that the federal government will take the action needed to force states to follow Medicaid laws?  Providers and Medicaid beneficiaries don’t think so. They argue that the federal government “utterly lacks the financial, legal, logistical and political wherewithal” to enforce this and similar Medicaid provisions. If the providers and consumers most affected by a state’s decisions are not allowed to sue, no one will. As a result, a decision in favor of California could set a precedent that will allow states to effectively disregard federal law in order to achieve state budgetary savings.  

The inability of consumers and providers to sue to enforce Medicaid’s reimbursement rules may ultimately make it more difficult for low-income people to obtain health care and drive some nursing homes and other Medicaid providers out of business. But the federal government and most states (31 of whom, including Pennsylvania, joined in filing an amicus brief in support of California) do not want state reductions in reimbursement rates to be challenged by private parties.  Look for a decision in the Douglas-2008 case in early 2012.   
Update: On February 22, 2012, the US Supreme Court vacated the lower court's decision in Toby Douglas v. The Independent Living Center of SouthernCalifornia and sent the case back for further consideration in light of the federal government's approval of cuts. Justice Breyer, writing for the majority of the court stated:

The federal agency charged with administering the Medicaid program has determined that the challenged rate reductions comply with federal law. That agency decision does not change the underlying substantive ques­tion, namely whether California’s statutes are consistent with a specific federal statutory provision (requiring that reimbursement rates be “sufficient to enlist enough pro­viders”). But it may change the answer. And it may require respondents now to proceed by seeking review of the agency determination under the Administrative Pro­cedure Act (APA), 5 U. S. C. §701 et seq., rather than in an action against California under the Supremacy Clause.

However, four of the nine Justices would have reversed the lower court and found that:
When Congress did not intend to provide a private right of action to enforce a statute enacted under the Spending Clause, the Supremacy Clause does not supply one of its own force.
Thus, the issue of whether private parties have standing to sue states to enforce federal Medicaid standards remains open for now - at least temporarily. But in general things don't look good for  private plaintiffs.  

See also: 
Supreme Court Sends California Medicaid Case back to Lower Court
For earlier information on the two Douglas cases see