Monday, September 28, 2015

Pass the Special Needs Trust Fairness Act



The Special Needs Trust Fairness Act was approved by the US Senate on September 9th and is now under consideration by the House of Representatives. The Act corrects an error in existing law that creates needless delay and legal expenses for many people with disabilities.
Disabled individuals who want to live active lives can face extraordinary costs to pay for what others are able to accomplish as a matter of course – from getting out of bed, taking a bath, or feeding or clothing oneself – to more complicated tasks – travel, reading and writing, or working productively. While Medicaid benefits may cover some medical and remedial costs there are many more expenses incurred during everyday living. And Medicaid has strict limits on the amount of assets that a beneficiary can own that can prevent an individual from saving for these non-covered expenses.
Congress recognized the limits of Medicaid in 1993, when it authorized two types of special needs trusts that allow funds to be set aside to pay for the supplemental care and non-medical needs of disabled individuals without jeopardizing their Medicaid eligibility. But that law requires that an individual special needs trust “must be established by a parent, grandparent, legal guardian of the individual, or a court.” 42 USC §(d)(4)(A). By leaving out the words “the individual” it fails to allow competent individuals from establishing their own special needs trust.
While this was likely just an error in drafting, it suggests that Congress believes that ALL persons with disabilities do not have the mental capacity to handle their own affairs. It results in unnecessary legal and court fees for those who wish to establish a special needs trust but do not have parents or grandparents to help them set up these trusts. In these instances, the individual is forced to petition the court to set up the trust.
H.R. 670, the Special Needs Trust Fairness Act is a commonsense fix. This bi-partisan legislation was introduced by Pennsylvania’s Glenn ‘GT’ Thompson (PA-5) and Frank Pallone, Jr. (D-NJ). A hearing was held on September 17th before the House Energy and Commerce Subcommittee on Health.
In a statement submitted to the Committee, Representative Thompson noted:  
This simple, bipartisan, bicameral measure would eliminate a current prohibition on a disabled individual from creating his or her own Special Needs Trust, or SNT. These trusts enable assets to be saved on behalf of disabled individuals while protecting their eligibility for means- tested benefits.
Under current law, individuals who are or become disabled must have a parent, guardian, or the courts create their SNT. This places an undue monetary and logistical burden upon individuals who are seeking to secure their financial future, and runs counter to what has already been established by Congress. Individuals with disabilities have always been able to set up their own pooled trust accounts (created by Congress in 1993 and administered by non-profit organizations) and can create their own tax-free savings accounts under the recently passed ABLE Act. . . .
The perspectives of those directly impacted by this legal discrepancy coupled with my experience as a certified recreational therapist, a hospital manager and licensed nursing home administration has solidified my stance on this matter. I have had the honor of working with a number of individuals as they set out to rehabilitate their level of functioning and independence following an accident or illness. As a result, it is hard for me to find a palpable reason why we should continue to complicate their journey to self-sustainability.
As I previously mentioned, the Special Needs Trust Fairness Act of 2015 is a largely bipartisan initiative. For that I thank my colleague and ranking member, Representative Frank Pallone, who has continued to partner with me on this issue. He has consistently acknowledged that individuals facing life changing diseases or disabilities are not being treated fairly and has sought to correct this legal inequity.
In conjunction with Mr. Pallone, I respectfully ask for the support of the Committee of jurisdiction as we approach an opportunity to enable individuals living with a disability to stabilize their financial future, by advancing H.R. 670 through the legislative process, so these individuals facing disability can be treated equally under the law.
Credit to Representatives Thompson and Pallone for recognizing that after 22 years it is time for Congress to finally correct this demeaning and costly drafting error. Please contact your Congressional Representative and express your support for H.R. 670. Directions on how to contact your Representative can be found here.  

Friday, September 18, 2015

Details of Change to Managed Care for Medicaid LTSS



In February 2015, Pennsylvania Governor Wolf directed the Departments of Human Services (DHS) and Aging to develop a plan to shift Pennsylvania’s method of administering Medicaid Long Term Services and Supports (LTSS) to a managed care model. This means that the Pennsylvania will soon begin to hire private insurers (managed care organizations or “MCOs”) to administer the state’s Medicaid funded long term care services.
Medicaid is a federal and state funded benefit program which can pay for the cost of nursing home care and other long term care services if level of care and financial requirements are met. Medicaid is a primary source of public funding of nursing home and other long term care services for older adults.
On September 16th the Commonwealth issued a “Concept Paper” which describes the features of the new managed care approach – to be called “Community HealthChoices” (CHC). The plan represents a significant change that will impact an estimated 450,000 Pennsylvanians including 130,000 older persons and adults with physical disabilities who are currently receiving LTSS in the community and in nursing facilities. It is hoped that the managed care approach will result in reduced long term care costs while adding coordination to the current fragmented system and allowing more participants to receive services in more independent home and community based (HCBS) settings.
The new program will roll out in three phases over three years, beginning in January 2017.
The Concept Paper states the goals of CHC as follows:
1. Enhance opportunities for community-based living. There will be improved person-centered service planning and, as more community-based living options become available, the ability to honor participant preferences to live and work in the community will expand. Performance incentives built into the program’s quality oversight and payment policies will stimulate a wider and deeper array of HCBS options.
2. Strengthen coordination of LTSS and other types of health care, including all Medicare and Medicaid services for dual eligible individuals. Better coordination of Medicare and Medicaid health services and LTSS will make the system easier to use and will result in better quality of life, health, safety and well-being.
3. Enhance quality and accountability. CHC-MCOs will be accountable for outcomes for the target population, responsible for the overall health and long-term support for the whole person. Quality of life and quality of care will be measured and published, giving participants the information they need to make informed decisions.
4. Advance program innovation. Greater creativity and innovation afforded in the program will help to increase community housing options, enhance the LTSS direct care workforce, expand the use of technology, and expand employment among participants who have employment goals.
5. Increase efficiency and effectiveness. The program will increase the efficiency of health care and LTSS by reducing preventable admissions to hospitals, emergency departments, nursing facilities and other high-cost services, and by increasing the use of health promotion, primary care and HCBS.
The CHC population will include the following:
  • Adults age 21 or older who require Medicaid LTSS (whether in the community or in private or county nursing facilities) because they need the level of care provided by a nursing facility or an intermediate care facility for individuals with other related conditions (ICF/ORC);
  • Current participants of DHS Office of Long Term Living (OLTL) waiver programs who are 18 to 21 years old; and
  • Dual eligibles [qualified for both Medicare and Medicaid] age 21 or older whether or not they need or receive LTSS.
Persons included in the CHC population will be required to enroll in CHC. However, persons who are eligible for the LIFE program will not be enrolled into CHC unless they specifically ask to be enrolled.
CHC-MCOs will be accountable for most Medicaid-covered services, including preventive services, primary and acute care, LTSS (home and community-based services and nursing facilities), prescription drugs, and dental services.
Participants who have both Medicaid and Medicare coverage (dual eligible participants) will have the option to have their Medicaid and Medicare services coordinated by the same MCO. 
The estimated total statewide enrollment of dual eligibles, older persons, and adults 21 and older with physical disabilities for CHC is 450,000. The CHC population will include individuals with Medicaid-only coverage who receive or need LTSS, and individuals with full Medicare and Medicaid coverage (dual eligible), including those with and without LTSS needs. The CHC population will not include Act 150 program participants, individuals receiving their services through the lottery-funded Options program, persons with intellectual/developmental disabilities (ID/DD) who receive services through the DHS Office of Developmental Programs, or residents of state-operated nursing facilities, including the State Veterans’ Homes.
This shift to managed care is a work in progress. The state is actively seeking comments from participants, advocacy organizations, providers, managed care organizations, care coordination agencies, legislators, family members, and other interested members of the public. Feedback received will be used to finalize the program design and issue a Request for Proposals (RFP) in November 2015.
Feedback is due by 5:00 p.m. on Friday, October 16, 2015.
Please submit your written feedback by mail or e-mail.
By mail, please address to:
April Leonhard Office of Long-Term Living Bureau of Policy and Regulatory Management P.O. Box 8025 Harrisburg, PA 17105-8025
By e-mail, please send your comments to:
RA-MLTSS@pa.gov and include “Community HealthChoices” in the subject line.

Monday, September 14, 2015

Medicaid and Nursing Home Costs

The Medicaid program is the largest single source of payment for nursing home costs. It can pay for most of the cost of your nursing home care. If you are facing a nursing home admission, you need to know about Medicaid. 
To get Medicaid benefits a nursing home resident must require the level of care provided in a nursing home and qualify under the strict financial requirements of the state Medicaid program. Medicaid program rules differ from state to state. The Pennsylvania version of the Medicaid program is called “Medical Assistance.”
One of the primary advantages of Medicaid is that unlike Medicare, the Medical Assistance program will pay for non-skilled long term nursing home care over extended periods of time.
Not everyone qualifies. An applicant for Medicaid nursing home benefits must have limited available financial resources and a doctor must certify that they need the level of care provided by a nursing facility. An assessment is completed to confirm that the resident requires a nursing home level of care. The financial qualification rules are complicated and include a requirement that neither the applicant nor his or her spouse have made disqualifying transfers of assets within the prior five years.  
Long term care refers to a range of personal assistance services that people need over an extended period of time. The help may involve fundamental tasks like bathing, dressing, using the toilet, incontinence, transferring to or from a bed or chair, and eating. Other common long term care services involve help with other everyday tasks such as housework, managing money, taking medication, preparing meals, and shopping.
Studies show that most people will come to need long term care assistance over an extended period of time as they age. When our care needs grow beyond what our families can provide, we need to turn to paid help. That help is very expensive. For example, nursing home costs can easily exceed $100,000 a year. 
This is why planning for the high cost of long term care (whether provided in the home, a nursing home, or another facility) is a crucial element of estate and financial planning for all but the wealthiest seniors. As life expectancy and long term care costs continue to rise, we all need to consider how we will be able to pay for the services we will most likely need someday. 
Few people can afford to pay the cost of nursing home care for long. Those who are able to pay privately at the start, typically find that their life savings are quickly depleted. Fortunately, the Medicaid program is there to help if you qualify. Unfortunately, because Medicaid is limited to those who can demonstrate financial need, applicants must meet the program’s complex financial eligibility requirements.
The Medicaid qualification requirements/limitations are constantly changing. But optimizing your Medicaid benefits is too important to ignore, or to leave to nursing home staff or others who are not necessarily looking out for your financial best interests. Expert help from an experienced elder law attorney is needed by those seeking to preserve some savings and financial security and dignity for themselves and their families. The sooner you plan, the more options are available.
Once long term care is required, an elder law attorney can help you determine how to get the best care in the most appropriate setting without going broke. If you reside in Pennsylvania, please talk with one of the experienced elder law attorneys at Marshall, Parker & Weber (www.paelderlaw.com). 

Friday, September 11, 2015

Great Recent Movies About Aging

I’m looking forward to seeing the movie The Intern which opens later this month. Robert DeNiro stars as a 70 year old widower who tires of retirement and goes back to work as an intern in a fashion business run by Anne Hathaway’s character. I like both DeNiro and Hathaway. And as I have moved into my 70s I find that I have become much more interested in movies with characters facing issues related to aging.

The DeNiro/Hathaway movie is being heavily promoted, so its backers must think that this movie about an older guy will be a success. I’m not sure if it’s because the “Baby Boomers” have now become older adults, but there seem to be a lot of good movies lately about aging.
Here is a list of a dozen recent ones. (Links are to the IMDB description). I particularly recommend “The Passage of Time” a thoughtful documentary which is available free online at Vimeo. Please comment (or email me at Webmail@paelderlaw.com) if you have additions to suggest.
Alive Inside (2014)
Amour (2012)
Lullaby (2014)
Philomena (2013)
Quartet (2012)
Still Alice (2015)
Still Mine (2012)
The Passage of Time (2013) a documentary (available on Vimeo)
And here is a link to an academic paper on portrayals of aging in recent American films: “Back in the Saddle Again: Ethics, Visibility, and Aging on Screen.” Downloadable for free: http://anthro-age.pitt.edu/.../anth.../issue/view/23/showToc.

Reader Comments
A movie I enjoyed is “5 Flights Up”, with Morgan Freeman and Diane Keaton as a couple married 40 years who are considering selling their apartment, because they are having problems navigating the 5 flights of stairs (no elevator).  It’s available on DVD or Blu-ray. R.S.

A light-hearted addition to your Movie List for the aging, is A Walk in the Woods, starring Robert Redford, Nick Nolte, and Emma Thompson. Very funny. P.S.

Friday, September 4, 2015

Court Approves Use of Short Term Annuities in Medicaid Planning

[On September 2 the Federal Third Circuit Court of Appeals issued a decision approving an important Medicaid qualification planning technique which involves the use of short term annuities. The following guest article was written by Matt Parker a principal with Marshall, Parker and Weber in Wilkes-Barre, Pennsylvania. It is reprinted here with his permission. An article written by Mr. Parker and myself was quoted by the Court in its opinion.]

In a strongly worded opinion, the United States Court of Appeals for the Third Circuit ruled that short term annuities are a legitimate Medicaid planning tool that can help applicants for Medicaid address ineligibility periods caused by a gift. The decision reverses a District Court holding that had cast some doubt on the use of short term annuities in the Medicaid planning field.
Medicaid Annuities are valuable planning tools for helping couples and individuals qualify for Medicaid. Spousal annuities help to shelter additional resources for a community spouse when one spouse is entering a nursing home.  Annuities purchased by the institutionalized person can help pay through an Medicaid ineligibility period caused by a gift made during the five (5) year look back period.
Pennsylvania’s Department of Human Services (DHS) has occasionally taken issue with the use of annuities in Medicaid planning. Over the years, various policies and regulations of DHS have been challenged in court, resulting in decisions favorable to applicants. See Mertz v. Houstoun, 155 F.Supp.2d 415 (E.D. Pa. 2001); James v. Richman, 465 F.Supp.2d 395 (M.D. Pa. 2006), aff’d, 547 F.3d 214 (3d Cir. 2008); Ross v. DHS, 936 A.2d 552 (Pa.Cmwlth. 2007); Weatherbee v. Richman, 595 F.Supp.2d 607 (W.D. Pa. 2009), aff’d, 351 Fed. Appx. 786 (3d Cir. 2009).
In the latest court case of Zahner v. Secretary Department of Human Services, DHS challenged the use of Medicaid annuities on new grounds. In the Zahner case, two applicants for Medicaid had purchased single premium, irrevocable, immediate annuities to help them pay through an ineligibility period for Medicaid caused by a gift.  The payment from the annuities (along with other income sources) was used to pay the nursing homes during the ineligibility periods. The ineligibility periods were short - 14 and 12 months – and thus the term of the annuities coincided with these short terms.
DHS contended that the annuities in these cases: a) Did not constitute annuities due to the short terms; b) Must have terms of at least two (2) years to constitute a valid annuity; c) Do not meet the definition of an actuarially sound annuity since the terms were not reasonably related to the life expectancy of the applicant; and d) Should be considered trust-like devices and not annuities.
The Court of Appeals dismissed each argument made by DHS:
1) The Court found that there is no minimum term required for a Medicaid compliant annuity. In addition, the fees charged for the purchase of an annuity do not have an impact on the definition of an annuity; and the annuitant's motive in purchasing the annuity is not determinative.
2) The term of the annuity complies with Medicaid rules if it is for any period that does not exceed the life expectancy of the annuitant as defined by Social Security life expectancy tables;
3) The Court also dismissed the trust-like device argument, finding that commercial annuities cannot be defined as trusts.
The opinion is strongly worded in favor of the use of annuities under the terms and conditions that Congress and the Federal agencies have set forth, rebuking efforts by DHS and the District Court to create restrictions on the use of Medicaid Annuities beyond the provisions in the Federal law.
Those who are interested in the use of annuities in Medicaid planning and how they may help you or your clients, are encouraged to visit the website of Pennsylvania Care Management (PCM)* at www.paannuity.com. PCM helps elder law attorneys in Pennsylvania identify and purchase the most appropriate Medicaid Annuities for their clients. (In its opinion the Zahner court actually quotes from a PCM website article written by Jeff Marshall and me that explains the relationship between annuities and the DRA. That article is posted on the PCM website.)